Carbon Emissions A carbon tax would impact oil refineries

Published on July 1st, 2016 | by Steve Hanley

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ExxonMobil Talking Up Carbon Tax Idea To Congress

July 1st, 2016 by  
 

ExxonMobil is talking up the idea of a revenue-neutral carbon tax to members of Congress. Revenue-neutral means any tax on carbon emissions would be offset by a corresponding decrease in other taxes. Why has ExxonMobil seen the light?

ExxonMobil profits Q1 2016

First, many question the company’s sincerity. A carbon tax would make coal more expensive, a result that would work to the energy giant’s advantage. It is the largest producer of natural gas in the US. Higher coal prices would make natural gas more attractive to energy consumers. Second, the company is pushing back hard against investigators seeking to determine if ExxonMobil knew about the dangers of climate change from burning fossil fuels decades ago and conspired to keep that information from the public.

It has actually sued the attorney general of Massachusetts, Maura Healey, in an effort to force her office to shut down its investigation. It claims Healey’s efforts violate its right to free speech. Presumably, its argument is that corporations are protected by the First Amendment if they choose to lie or commit fraud. We will have to wait how this bizarre legal claim plays out in the courts, but we can thank the justices of the Supreme Court for declaring that corporations are “persons” as defined by the Constitution.

ExxonMobil’s position is at odds with the prevailing mood in a Republican-controlled Congress, which is bitterly opposed to taking any action that might affect the flow of campaign contributions to its members. If millions of Americans have to suffer illness and premature death to satisfy the greed of the fossil fuel industry, that is perfectly fine with the likes of Mitch McConnell and James Inhofe.

But the fossil fuel industry is reading the tea leaves and seeing a possible shift in the political landscape come November. If the Democrats are able to wrest control of Congress back from Republicans and another Democratic president is elected, things could become uncomfortable for the industry.

It has to contend with pressure brought to bear by the COP21 climate change agreements entered into by all the nations of the world last December in Paris. It also has to contend with the divestment movement that calls upon major investors and pension fund managers to sell their holdings in fossil fuel companies. ExxonMobil may simply be positioning itself for what it perceives as a “worst-case” scenario.

For the past six months, Exxon has been asserting its position more in meetings within trade associations, including the American Petroleum Institute and American Fuel and Petrochemical Manufacturers, according to multiple reports from people who have attended meetings with Exxon officials. “Of the policy options being considered by governments, we believe a revenue-neutral carbon tax is the best,” Suzanne McCarron, the company’s vice president of public and government affairs, wrote in May in the Dallas Morning News.

“Previously Exxon’s positioning on a carbon tax had been passive. ‘Hey, we’re not loving it, but we’re not going to get in the way of it’,” said Michael McKenna, president of the energy lobbying firm MWR Strategies. Its clients include oil and refining companies, but not Exxon. “In just the last six months, there’s been an uptick in how they are asserting themselves in meetings about how to address this issue.”

A carbon tax would put a price on each ton of carbon emitted. But the devil is in the details, as they say. Where in the production and consumption process the tax would be levied depends on individual proposals. What ExxonMobil has in mind is a system where no new money flows to the government. But that misses the point of a carbon fee.

Transitioning from a fossil fuel–based economy will require massive investments in new technology. Workers who used to work in fossil fuel industries will need to be retrained so they can find employment in the clean energy sector. Investment in the infrastructure to support clean energy will need to be made. The carbon tax should fund all those activities.

Some advocates of strong climate policy like Senator Sheldon Whitehouse are skeptical Exxon’s shift signals a deeper change. “We’ve seen so little movement out of any of their lobbying front groups.” He introduced a bill to enact a carbon tax last year but it has gone nowhere, thanks to hostile and extreme GOP Senate leadership. His staff recently met with Exxon lobbyists, but the senator said, “The meeting was more just an exploratory feeler to see about further conversations.”

Perhaps ExxonMobil is feeling around, trying to decide what the best way is for it to deal with the gathering storm. Most other US energy companies are drawing a line in the sand and refusing to consider adapting their positions to help the earth survive. If the fossil fuel industry is the highest expression of the wonders of capitalism, then we need to find a new system. A properly configured carbon fee would help offset the worst ravages of a system that always puts profits ahead of people.

Related: US Carbon Tax “Close To Inevitable,” Conservative Leader Proclaims — Moral Disgrace Of Ignoring Global Warming Too Strong

Source: The Wall Street Journal | Image via CNN





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I have been a car nut since the days when Rob Walker and Henry N. Manney, III graced the pages of Road & Track. Today, I use my trusty Miata for TSD rallies and occasional track days at Lime Rock and Watkins Glen. If it moves on wheels, I'm interested in it. Please follow me on Google + and Twitter.



  • Eco Logical

    Hey Steve, Alberta has enacted it’s CLIMATE LEADERSHIP PLAN which was praised by President Obama during his recent visit to Canada for the 3 Amigos (USA, Mexico, Canada) meetings. The new NDP gov’t in Alberta hired a consultant to get ALL INDUSTRIES on board including oil, health, and environment. It’s a carbon neutral CARBON LEVY on all emitters (including natural gas, gasoline & diesel). All the revenue goes back to clean energy producers. Also, coal generation will be completely phased out by 2030 starting next year.

    • Steve Hanley

      Sounds like Alberta is light years ahead of the US Congress!

  • John Smith

    I am thinking that big people from such companies are buying shares at an energy companies because they understand that fuel is going to be avoided from use soon so thus is the reason why they push projects that have a big advantage for energy industry. But. I am sure they are supporting only those companies and technologies that can damage them seriously only after loooooong time or not sicnifigantly damage them. And they attack other better techs and projects. For example i heard about attack to a german scientists like Holger Thorsten Schubart who are researching neutrino energy. So what big fuel companies are interested to do is only supporting stupid techs and companies for first of all to save their money, secondly to push their projects and not give a way for other better techoplogies and companies and thridly to have a control of those companies and people which can damage their multitrillion industry.

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