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Despite Big Oil Support, Trump Calls For Exit From Paris Accord

President Trump was not moved by pressure from the largest oil and natural gas producers in the United States, announcing Thursday the country would pull out of the global climate agreement negotiated by close to 200 countries in late 2015.

The president, who has called climate change a “hoax” perpetrated by the Chinese, had been buffeted by his closest advisers, split about whether the United States should remain in the pact with leading industrial nations and poorer countries or go it alone with a minority of countries that include Syria and Nicaragua.

“The United States will withdraw from the Paris climate accord...but we will begin negotiations to re-enter the Paris accord or a really entirely new transaction on terms that are fair to the United States, its business, it’s workers, its taxpayers,” Trump said to an audience in the Rose Garden at the White House.

“So we’re getting out. But we’ll start to negotiate and see if we can make a deal that’s fair. And if we can, that’s great, and if we can’t, that’s fine.”

To applause from supporters in the audience, Trump said, "I was elected to represent the citizens of Pittsburgh, not Paris.”

President Obama, who had signed off on the agreement last year, quickly criticized the decision, saying that Trump will "reject the future" by pulling away from the pact. "The nations that remain in the Paris agreement will be the nations that reap the benefits in jobs and industries created," he said. "I believe the United States of America should be at the front of the pack."

Trump supporters who opposed the deal were notified ahead of the announcement.

“The Paris accord is a BAD deal for Americans, and the president’s action...is keeping his campaign promise to put American workers first,” said a White House memo to supporters explaining the decision. “The accord was negotiated poorly by the Obama administration and signed out of desperation.”

The president was bombarded with entreaties to remain in the pact by most scientists, NASA and academia, as well as top U.S. companies, including tech leaders and many leading U.S. natural gas and oil producers, including No. 1 North American natural gas producer ExxonMobil Corp. Other big domestic operators BP plc and Royal Dutch Shell plc, both based in Europe, and ConocoPhillips also had lobbied to remain in the accord.

Meanwhile, critics and many on the Republican side of the aisle have claimed climate science is inexact and the pact will destroy jobs.

The climate pact was reached by more than 195 countries in December 2015 during the Conference of Parties to the United Nations (UN) Framework Convention on Climate Change. Participating nations are required to submit emissions reduction plans and review those plans every five years to lay the foundation for keeping a global temperature rise below 2 C (3.6 F) above pre-industrial levels.

In signing the accord, President Obama had pledged a 26-28% reduction in U.S. emissions by 2025, underpinned by federal mandates to reduce emissions from the electricity, transportation and fossil fuel sectors.

No Fast Exit

Because the accord was structured as an "agreement" rather than a treaty, it did not require congressional approval. President Obama signaled the United States would join in a short letter to the UN dated Aug. 29, 2016. Under its terms, President Trump only has to write a short letter and deposit it with the UN to reverse the action. In any case, pulling out of the agreement would not be immediate.

A clause in the Paris agreement does not allow President Trump to write his letter to the UN until three years after the pact is in force, i.e. Nov. 4, 2019. It then would take another year before the United States would be able to withdraw. That would put the official withdrawal date at Nov. 4, 2020, one day after the next presidential election.

ExxonMobil had doubled down on urging the Trump administration to remain in the pact.

ExxonMobil CEO Darren Woods during the annual meeting on Wednesday reiterated his support, noting he had sent two personal letters to President Trump imploring him to "maintain a seat at the negotiating table." Woods wrote in a letter last week, "The United States is well positioned to compete within the framework of the Paris agreement with abundant low-carbon resources such as natural gas, as well as innovative private industries including the oil, gas and petrochemical sectors."

During the annual meeting, Woods said global oil demand would increase over the coming decades regardless of the global agreement.

"Energy needs are a function of population and living standards," he told shareholders. "When it comes to policy, the goal should be to reduce emissions at the lowest cost to society."

Like its Big Oil peers and Woods' predecessor Rex Tillerson, who now is secretary of state, the ExxonMobil CEO long has pushed for building a low-emission future. In his first blog post after becoming CEO in January, Woods advocated for more use alternative fuels, carbon capture and biofuels.

ExxonMobil Not Alone

Houston-based ConocoPhillips, the world's largest independent, supported the climate agreement, spokesman Daren Beaudo told NGI.

Participating with international partners "gives the U.S. the opportunity to participate in future climate discussions to safeguard its economic and environmental best interests as the Paris agreement is being implemented globally," Beaudo said. "It provides an opportunity for the U.S. to encourage other nations to incorporate technology development as a means of lowering emissions from fossil fuels into their commitments under the agreement.

"Switching to natural gas power is already occurring in the U.S.," driving economic development and greenhouse gas emission (GHG) reductions, he said.

"It's important to note that U.S. oil and natural gas companies like ConocoPhillips are already reducing their GHG emissions and building internal capacity to succeed in a carbon-constrained world."

Natural gas-heavy utility Consolidated Edison Inc. (ConEd) will continue to invest in gas, wind and solar power capacity to reduce emissions from its facilities, a spokesman said.

"Energy industry economics and investments have been moving for many years toward more renewables, smart technology and energy efficiency," a ConEd spokesman said. "We expect that direction to continue."

The U.S. Department of Energy estimated that three million Americans worked in the alternative energy sector last year. The International Renewable Energy Agency also estimated recently that the Paris pact would add $19 trillion to global coffers by 2050.

A decision to alter its international climate commitments "seems unlikely to significantly alter macro trends currently shaping the U.S. energy sector," according to ClearView Energy Partners LLC. "The administration's drive to relax energy sector regulations seems likely to continue."

Analysts said many of the reforms pushed by the administration "have potential to facilitate growth of natural gas supply as well as coal. Likewise, modest natural gas prices, coupled with state-level initiatives, federal renewable energy tax incentives and the falling cost of renewable energy seem likely to extend U.S. emissions reductions in the absence of significant load growth.

"Against the backdrop of such direct fundamental and political catalysts, a decision regarding the (still nonbinding) Paris agreement may contribute more to symbolism than substance," said the ClearView team. "Ironically, a federal departure from the international compact could potentially steel the resolve of U.S. states already in the process of augmenting their renewable energy and emissions reduction programs."

States Taking Lead to Reduce Emissions

For example, California and the Northeastern states already are evaluating how and/or whether to extend emissions trading programs beyond 2020. Oregon, Virginia and Washington also are considering whether to price carbon through initiatives that might link to California's Global Warming Solutions Act or the Northeast's Regional Greenhouse Gas Initiative.

"Paris could give new urgency to nongovernmental organizations targeting subnational governments for climate activism," the ClearView analysts said.

Some in the energy industry, particularly smaller operators or those that work only in the United States, had found little to like in the Paris agreement.

Texas Alliance of Energy Producers represents smaller oil and gas operators -- not companies the size of ExxonMobil. Climate change regulations threaten to impose more costs on the 3,000 members, said chief lobbyist Bill Stevens.

"We have a lot of respect for Exxon, but our primary membership is smaller independents," Stevens said. "They've been struggling for the last two to three years with oil prices, trying not to go into bankruptcy." Climate change is a "non-issue for them, and they'd as soon be out of Paris."

The energy industry-backed American Council for Capital Formation recently reported that the Paris accord would eliminate $3 trillion in gross domestic product (GDP) and 6.5 million jobs by 2040. Conservative group the Heritage Foundation last year predicted the Paris agreement would cause a GDP loss of $2.5 trillion and eliminate around 400,000 jobs.

Many U.S. Industry Leaders Discouraged

However, many U.S. industry leaders that sell products worldwide have been dismayed by attempts to roll back climate change initiatives. Tesla CEO Elon Musk said Wednesday he would resign from two White House advisory boards if the president withdrew from the agreement.

California's natural gas utility PG&E Corp. and National Grid joined tech giants Apple, Facebook, Google, Intel and Microsoft, as well as a bevy of other big U.S. firms, in full-page newspaper advertisements on Thursday to reiterate their support for the agreement. In an open letter to President Trump, the companies said the climate accord would generate jobs and economic growth.

"As businesses concerned with the well-being of our customers, our investors, our communities, and our suppliers, we are strengthening our climate resilience, and we are investing in innovative technologies that can help achieve a clean energy transition," the ad said. "For this transition to succeed, however, governments must lead as well. U.S. business is best served by a stable and practical framework facilitating an effective and balanced global response. The Paris agreement provides such a framework. As other countries invest in advanced technologies and move forward with the Paris agreement, we believe the United States can best exercise global leadership and advance U.S. interests by remaining a full partner in this vital global effort."

To replace the U.S. emissions reductions if the United States were not to participate internationally, several states and business leaders are taking things into their own hands. One idea said to be under consideration is modeled after the Paris accord's "nationally determined contributions," which countries submitted as part of their pledge to cut emissions. Individual U.S. pledges by states, municipalities and businesses could prove to the international community that climate action would continue.

Meanwhile, 21 Democratic members of Congress representing West Coast states sent a letter to the governors of California, Oregon and Washington on Wednesday urging policies that would signal support for international action.

"In our home states of California, Oregon and Washington, we could see catastrophic impacts from rising sea levels on our coastlines to delicate ecosystems torn apart by higher temperatures, changing streamflows and increases in pests and disease," the letter said. "In order to send a signal to the international community and to uphold our obligations to current and future generations, we encourage you to continue to aggressively address the threat of climate change and abide by this international effort."

‘You Can’t Fight Reality With A Tweet’

California Gov. Jerry Brown said the president's intentions to withdraw from the accord were "outrageous" and predicted the effects would not last. In fact, Brown said, the president may build the movement he may be attempting to undermine. "You can't fight reality with a tweet," he said in an interview.

"With the U.S. outside the agreement, we have no further say in the targets," said Bob Brecha, research director of the University of Dayton Hanley Sustainability Institute. "The rest of the world is on board with the Paris agreement, including China and India, which are moving away from coal -- the worst source of greenhouse gas emissions -- more quickly than expected.

"If China takes the lead along with Europe and perhaps even India in implementing renewable energy and energy efficiency technologies, that will be to the long-term (and perhaps even short-term) detriment of the U.S. economy," Brecha told NGI. "The energy transformation to renewables and away from carbon-based energy is moving ahead rapidly, with or without the U.S. federal government. In fact, within the U.S., state and local governments, as well as private energy, consumers are leading the way.

“Withdrawing from the Paris agreement will needlessly undermine U.S. relations with our allies and undercut international efforts to address climate change,” said Bipartisan Policy Center President Jason Grumet. “Nearly 200 other nations will move forward with this agreement regardless of our participation. By exiting the process, President Trump forfeits America’s opportunity to shape the global economic transition that is already underway.

“A majority of U.S. business leaders have called for America to remain in this agreement, as have many current and former elected leaders from both parties. President Trump has rightly asserted that the United States cannot be expected to act alone on climate change. It is hard to square this appreciation for collective action with the decision to isolate U.S. interests from one of the dominant issues motivating global collaboration.

“Protecting American interests in a complex, connected, and unfortunately dangerous world requires partnerships and reciprocity. This decision has troubling implications far beyond the climate issue.”

Europe, China Grow Closer

World leaders pledged they would continue to cooperate on climate policy regardless of U.S. participation.

"China is a big country, and thus China will adhere to its international responsibility,” Chinese Premier Li Keqiang said Thursday. He was in Berlin to meet with German Chancellor Angela Merkel. According to a German translation of his remarks, he said China "will continue to stick to our promises in the framework of the Paris climate protection agreement."

China is the world's largest carbon emitter, followed by the United States.

European officials said the United States would cede some global influence to China if it were to withdraw from the accord. They also suggested that if the United States were to exit, they would work more closely with China to meet the goals of the agreement.

"If the U.S. decides to retreat, the vacuum it leaves needs to be filled," European Commission President Jean-Claude Juncker said at an event in Berlin, according to his spokeswoman. "I am a trans-Atlanticist, but if the American president said in the next hours or days that he wants to get out of the Paris climate deal, then it is the duty of Europe to say, 'No, that's not how it works...Eighty-three countries run into danger of disappearing from the surface of the Earth if we don't resolutely start the fight against climate change."

The European Union (EU) and China are expected on Friday to call for stepping up the shift from fossil fuels to renewable energy. According to the draft document that was to be signed by the parties, "The EU and China underline their highest political commitment to the effective implementation of the Paris Agreement. They call on all parties to uphold the Paris agreement."

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