Big Oil Companies Want a Price on Carbon. Here’s Why.

Business News/Analysis, European Union (EU), International, Opinions, Policy, Sustainability

June 2, 2015

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by Ben Geman (National Journal) Natural-gas profits have Shell and BP, among others, calling for increased use of carbon-emissions fees ahead of a make-or-break climate summit in Paris.

Six oil and gas giants based in Europe have delivered an unusual joint message to organizers of United Nations climate talks: We want a price on carbon-dioxide emissions.

BP, Shell, Eni, Total, Statoil, and BG Group (a big gas company that Shell is acquiring) announced in a letter to Christiana Figueres, the top U.N. climate official, that they are joining forces for an initiative calling for carbon pricing, which is accomplished through emissions-trading systems or taxes.

Their effort reflects a strategic calculation for the companies that by engaging on the topic, they can help shape climate policies to benefit natural gas, which produces about half the carbon emissions of coal when burned to create electricity. Wider use of carbon pricing worldwide, depending on how stringent the policies, could benefit companies that produce gas and ship it around the globe in liquefied form. READ MORE / MORE and MORE (Think Progress) and MORE (New York Times editorial) and MORE (New York Times) Download letter

Excerpt from Think Progress: There are other reasons to be skeptical of any big oil company fighting for a price on carbon. For one, some companies have said they would support a carbon tax, but only if they can avoid other climate-related regulations. As David Roberts pointed out for Grist back in 2012, “the fossil fuel lobby would never give a carbon tax their OK unless EPA regulations on carbon (and possibly other pollution regs) were scrapped.” It’s also reasonable to assume that oil companies see profits increasing in the markets for low-carbon natural gas while the high-emitting coal industry tanks, and realize that coal would be hurt far worse by the policy.

In other words, it is great that some of the world’s biggest contributors to climate change want to be charged for the carbon they emit. But we still have a long way to go before big oil actually joins the fight. READ MORE

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