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BP, ConocoPhillips Quit Climate Action Partnership

February 22, 2010
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BP America Inc. and ConocoPhillips, along with Caterpillar Inc., last week said they would quit the U.S. Climate Action Partnership (USCAP), the high-profile alliance of businesses and environmental groups lobbying for cap-and-trade legislation to curb U.S. greenhouse gas (GHG) emissions.

USCAP early last year issued a detailed "Blueprint for Legislative Action" for the then-incoming Obama administration that, among other things, called for a cap-and-trade system to cut 2005 GHG emissions levels 42% by 2030 and 80% by 2050 (see NGI, Jan. 19, 2009).

The group was considered instrumental last year in helping the House pass its version of cap-and-trade legislation last summer (see NGI, June 29, 2009). However, the Senate has yet to vote out a bill, and its chances of passage this year appear to be dwindling. However, in a move that may possibly advance compromise legislation, President Obama on Tuesday announced $8.3 billion in loan guarantees to help build the first U.S. nuclear power plant in almost 30 years.

BP spokesman Ronnie Chappell said the company's decision to drop out of USCAP had nothing to do with the alliance's goals.

"We believe USCAP has done some fine work, and our goal was to work with other NGOs [nonprofit governmental organizations], other partners to establish a legislative framework," Chappell told NGI. "We think USCAP's Blueprint for Legislative Action is a very good piece of work...high-level work..toward the principles that ought to be adhered to when designing a good bill."

For now BP plans to move forward on its own to encourage a national cap-and-trade policy, said Chappell.

"We are supportive of comprehensive climate change legislation that would put a price on carbon...and treat all energy producers and all energy consumers in a fair manner," he said. "We will continue to engage with members of Congress, EPA [Environmental Protection Agency], and others to achieve that goal. What we've decided is that we can be more effective in that conversation if we do it as BP and not as part of a bigger organization..."

The cap-and-trade debate has become "more policy specific in individual areas, and as it becomes more focused on specific policy proposals, we think we can be more effective as BP to do this on our own," said Chappell. The "current plan is to continue to engage on these issues," but he said it was unknown whether BP would continue to operate alone or join another group to promote revised cap-and-trade legislation.

ConocoPhillips CEO Jim Mulva said one of the reasons his company was ending its alliance with USCAP was because the current House bill isn't good enough.

"House climate legislation and Senate proposals 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 greenhouse gas emissions," said ConocoPhillips CEO Jim Mulva.

"We believe greater attention and resources need to be dedicated to reversing these missed opportunities, and our actions today are part of that effort. Addressing these issues will save thousands of American jobs, as well as create new ones."

ConocoPhillips was opposed to the House version of cap-and-trade legislation after it passed. Last summer ConocoPhillips sent an estimated 250 employees to the Energy Citizens rally in downtown Houston, which was promoted by producers and business organizations that wanted to stop passage of the climate change bill then before Congress (see NGI, Aug. 31, 2009). BP ignored the rally, and management said at the time that it was fully supportive of USCAP. ConocoPhillips also last year encouraged visitors to its website to contact their representatives to oppose the cap-and-trade legislation.

By dropping out of USCAP, the three companies recognized "that cap-and trade legislation is dead in the U.S. Congress and that global warming alarmism is collapsing rapidly," said Myron Ebell, who directs Energy and Global Warming Policy for the Competitive Enterprise Institute. "We hope that other major corporations will soon see the light and drop their support for cap-and-trade and other energy-rationing legislation."

Shell Oil Co. now is the only oil and gas producer that is a member of USCAP, and it has no plans to drop out, said President Marvin Odum.

Shell "has long supported a market-based approach to addressing energy supply and (carbon dioxide) emissions" and is "pleased to continue our association with USCAP." The producer "will remain engaged in advocating for federal legislation that will protect existing jobs, create new jobs via development of domestic oil and gas resources allowing the U.S. to be more self-reliant, incentivize the development of lower carbon energies, and reduce greenhouse gas emissions."

USCAP members also include utilities FPL Group, Duke Energy, NRG Energy, PG&E Corp., PNM Resources and Exelon Corp.

In response to the loss of the three heavyweight members, USCAP issued a statement noting that membership changes are normal.

"USCAP is a CEO-led organization whose membership changes periodically," said the alliance. "In fact, over the past seven months USCAP has added three new corporate members -- most recently in late October -- and expects to add new members in the coming months."

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