The American Petroleum Institute, the largest fossil-fuel lobby, is joining the call for pricing carbon as a way to lower U.S. emissions and slow global warming.
In its release out Thursday, API said it backs “sensible legislation that prices carbon across all economic sectors while avoiding regulatory duplication.”
The stance marks a shift for the oil and gas industry, but is largely positioned as a substitution for other, stricter regulations on the industry, analysts said.
It’s also a “market-focused” response to the push at the company level and by the federal government to work toward net zero emissions in coming decades.
A carbon price could take the form of a tax or cap-and-trade program.
The industry needs to do its part to cut emissions while providing more energy to the world, said API President Mike Sommers during a briefing.
Lawmakers and industry groups who most vocally express concern about an aggressive U.S. climate-change stance have typically stressed newly acquired U.S. energy independence and the significance of that leadership role as the nation navigates tough geopolitical and trade challenges. Lower energy costs are also cited.
But the U.S. is also seen as lagging major economic powers in combating climate change and the Biden administration returned the U.S. to the voluntary Paris Climate pact in a reversal of Trump administration policy.
The API endorsement was part of a broader policy framework of industry and government actions on climate change it released Thursday as President Biden holds the first news conference of his administration and ahead of the U.N.-organized 26th Conference of the Parties (COP26) on climate change to be held in Glasgow in early November.
API also indicated it backs more uniform reporting of emissions from the natural gasNG00 and oil industryCL00, which reflects a broader push from industry and financial regulators, as well as investor lobbies, to make clearer the risks facing the nation from climate-change exposure.
“Confronting the challenge of climate change and building a lower-carbon future will require a combination of government policies, industry initiatives and continuous innovation,” Sommers said.
“America has made significant progress in reducing emissions to generational lows, but there’s more work to do, and there’s nobody better equipped to drive further progress than the people who solve some of the world’s toughest energy problems every day,” he said.
He reiterated the position of the trade group and many of the mostly Republican lawmakers representing traditional energy states who want “market-based policies that foster innovation, including carbon pricing.”
In September, the Commodity Futures Trading Commission led a multigroup effort among regulatory bodies to advance recommendations for the financial system on climate change. Included was a call for a national price on carbon pollution. Such a “tax,” as some critics call it, would require congressional approval. U.S.-based carbon pricing has so far been a regional effort, and with mixed results.
API and its members support climate actions that would fast-track the commercial deployment of carbon capture, utilization and storage (CCUS). Carbon capture has been a key feature of most GOP-led efforts in this area.
API also supports hydrogen technology, innovation and infrastructure and agrees that more regulation for leaky methane could be supported. Read the full proposed framework.
In 2018, carbon dioxide (CO2) emissions from fossil fuels burned for energy were equal to about 75% of total U.S. anthropogenic greenhouse gas emissions (based on 100-year global warming potential) and about 93% of total U.S. anthropogenic CO2 emissions. That’s the most complete annual data available currently on the Energy Information Administration site.