In a sign that companies are taking the initiative to shape expected legislation, ConocoPhillips is the first U.S.-based oil major to voice its support for a federal greenhouse gas (GHG) emissions cap.
The Houston-based producer said it is joining the U.S. Climate Action Partnership (USCAP), which was formed earlier this year by a group of corporations calling for a U.S. emissions cap (see Power Market Today, Jan. 22). The only other oil company now in USCAP is BP America, a subsidiary of London-based BP plc.
"We believe that the science is quite compelling and that climate change is certainly attributed to human activity and to the substantial use of fossil fuels," CEO Jim Mulva said. "While we believe no one entity can alone address the environmental, economic and technological issues inherent in any solution, ConocoPhillips will show leadership in finding pragmatic and sustainable solutions."
Mulva said ConocoPhillips' management team believes "it is important that business should step forward to help devise practical, equitable and cost-effective approaches to address the concentration of greenhouse gases in the atmosphere at both a national and international level."
Developing a mandatory national regulatory framework that links to international programs "is most likely to achieve meaningful impact on global greenhouse gas emissions," said Mulva.
The ConocoPhillips CEO said the regulatory framework should be transparent and "clearly communicate the cost of carbon to consumers."
Among other things, Mulva said the GHG emissions regulatory framework should "be structured to avoid increasing the volatility of energy prices, and encourage energy efficiency. It also should be paced to match the speed at which technology can be developed and deployed in order to avoid undue impact on the economy, including any impact on the number and location of jobs. The most likely and prudent approach will result in a slow, stop, reverse pattern."
ConocoPhillips already has begun building the potential long-term cost of carbon into its capital spending plans for each of its major projects around the world and is improving energy efficiency in its facilities, including a 10% improvement in energy efficiency at its U.S. refineries by 2012. In addition, the company is developing internal targets for GHG emissions from its operations.
"Meeting the twin challenges of taking action on climate change and providing adequate and reliable supplies of energy will require technical innovation, resource commitments and responsible stewardship by energy producers and consumers alike," said Mulva. "ConocoPhillips intends to meet these challenges."
ConocoPhillips earlier this week announced it would fund a $22.5 million research program on biofuels at Iowa State University. The company will make an initial $1.5 million grant in 2007 and an additional $3 million per year for seven years.
Chevron Corp. is funding similar research at the Georgia Institute of Technology and the University of California at Davis, and ExxonMobil Corp. is one of the sponsors of the Global Climate and Energy Project at Stanford University. In addition, BP chose the University of California at Berkeley and the University of Illinois at Urbana-Champaign to house a $500 million Energy Biosciences Institute.
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