Ground Shifts Under Oil/Gas Industry as Biden Takes Office – American Petroleum Institute welcomes more regulations & U.S. Chamber of Commerce seeks carbon tax
The American Petroleum Institute said Thursday that it supports the direct federal regulation of methane, a potent greenhouse gas, from current and existing oil and gas operations.
The position is a shift and concession by the largest oil and gas trade group, which is trying to position itself as willing to cooperate with certain aspects of President Biden’s aggressive agenda to combat climate change while opposing other efforts to limit fossil fuel production.
Methane, the main component of natural gas, is a greenhouse gas more potent but shorter-lived in the atmosphere than carbon.
“This is a new position for API, but we think given where the industry is at this time and the continued importance of reducing methane, it was critical we update this position as the administration changes,”
API CEO Mike Sommers told the Washington Examiner in an interview. “We look forward to working with the Biden administration in the right way to regulate methane, and we welcome the opportunity to be in the room as they make this new regulatory regime a priority.”
API previously backed the Trump administration’s elimination of direct regulation of methane, arguing that existing regulations that indirectly capture methane, along with state rules and voluntary actions by companies, are sufficient. That position drew the ire of big oil majors, some of API’s own members, who argued a lack of methane rules undermines the U.S. natural gas industry’s future as it seeks to play a role in the transition to cleaner energy.
WASHINGTON — In a shift, the U.S. Chamber of Commerce said Tuesday it would support a “market-based” approach to reducing greenhouse gas emissions, adding momentum to increasing calls for a tax on carbon emissions.
“We believe that durable climate policy must be made by Congress, and that it should encourage innovation and investment to ensure significant emissions reductions,” the chamber’s statement on climate change now reads. “U.S. climate policy should recognize the urgent need for action, while maintaining the national and international competitiveness of U.S. industry and ensuring consistency with free enterprise and free trade principles.”
The statement comes the day before President-elect Joe Biden is set to take office, amid wider appeals from U.S. corporations for a federal carbon tax that would apply to emissions from all industries.
Last year the Climate Leadership Council, which includes companies such as Exxon Mobil, JPMorgan Chase and AT&T, pitched a carbon tax plan to Republicans and Democrats in Congress that would create a $40-per-ton tax on all carbon emissions.
One of the officials they enlisted was Janet Yellen, the former chair of the Federal Reserve whom President-elect Joe Biden plans to nominate as Treasury Secretary.
“This is the most cost effective and market friendly way to reduce carbon emissions. It creates powerful incentives for businesses and households to switch to lower carbon energy sources and reduce energy use,” Yellen said last year. “It replaces the need for more cumbersome environmental regulations.”
The Chamber of Commerce did not specifically endorse a carbon tax, with Marty Durbin, the groups senior vice president of policy, writing, “this update to our climate position is not intended to exclude any of those options, but rather to strengthen overall support for market-based solutions.”