Body blow to climate change legislation?
Published: February 16, 2010
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The Wall Street Journal has reported that ConocoPhillips (COP) said Feb. 16 that it will not renew its membership in the U.S. Climate Action Partnership and will instead focus on reducing near-term greenhouse gas emissions by developing its natural gas operations.
The integrated oil giant joined more than two dozen other companies, organizations and environmental groups asking the federal government to form policies to reduce greenhouse gas emissions and to invest in lower-emitting technologies. Other members include U.S. divisions of major oil companies BP PLC (BP) and Royal Dutch Shell (RDSA) as well as utility, industrial and manufacturing companies.
ConocoPhillips' announcement to leave to the partnership comes as climate legislation in Washington has stalled and there are mounting concerns about the burden proposals in the House and Senate will have on domestic refiners and U.S. consumers.
The proposed bills "to date have disadvantaged the transportation sector and its consumers, left domestic refineries unfairly penalized versus international competition, and ignored the critical role that natural gas can play in reducing GHG emissions," said ConocoPhillips Chief Executive Jim Mulva in a press release. Instead, the company will focus on developing natural gas, a lower-emission fuel, as an opportunity to reduce emissions and create jobs.
The major oil company is one of U.S's largest refiners. The refinery industry has been plagued by high oil prices and persistently low demand due to poor economic conditions. Without a substantial recovery in demand, compressed refining margins are expected to remain compressed as higher biofuel-blending requirements and fuel-efficiency standards kick in.
One Washington think-tank said it welcomed the Conoco Phillips announcement. Myron Ebell, director of energy and global warming policy for the Competitive Enterprise Institute, said, "In dropping out of the U. S. Climate Action Partnership, BP America, Conoco Phillips, and Caterpillar are recognizing that cap-and-trade legislation is dead in the U. S. Congress and that global warming alarmism is collapsing rapidly. We hope that other major corporations will soon see the light and drop their support for cap-and-trade and other energy-rationing legislation. These announcements are most welcome, but they do not mean that we can relax our efforts to defeat and roll back energy-rationing legislation and regulations. Many policies and proposals that would raise energy prices through the roof for American consumers and destroy millions of jobs in energy-intensive industries still pose a huge threat. These include the EPA’s decision to regulate greenhouse gas emissions using the Clean Air Act, environmental pressure group efforts to use the Endangered Species Act to stop energy production and new power plants, the higher fuel economy standards for new passenger vehicles enacted in 2007, presidential executive orders, and bills in Congress to require more renewable electricity, higher energy efficiency standards for buildings, and low carbon transportation fuel standards."
