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The Oil Industry’s Next Climate Moves – Should More U.S. Companies Push for Carbon Pricing?

by Axios | Updated on 10.10.18

ExxonMobil's pledge Tuesday to put $1 million into carbon tax lobbying is the latest of several industry moves lately — including Exxon and Chevron joining the wider Oil and Gas Climate Initiative and more low-carbon energy investments by some big players.

Reality check: With the big UN report highlighting the unprecedented global energy transition needed to limit the extent of global warming — something far more seismic than the changes occurring today — now is a good time to explore what further steps the industry could take in the near(ish) term.

What to watch: Among other topics, we are keeping an eye on the following questions:

  • Lobbying and advocacy: Will more U.S. companies — including Chevron — be willing to join Exxon and several European majors pushing for U.S. carbon pricing?
  • Low-CO2 energy: Europe-based majors — Shell, BP, Total and Equinor — have been making a series of moves in the renewable power and electric vehicle charging space. "All of us know we have to help renewables push coal out of the power sector," BP CEO Bob Dudley said at a London conference today. As Bloomberg NEF discusses here, will U.S. counterparts eventually follow?
  • Scale: Consider last year's pledge by Shell, one of the more aggressive players, to spend $1 billion–$2 billion annually on its new energies division through 2020. That's a very small fraction over their overall budget, so keep an eye out for whether the majors increase their scale.
  • Lobbying and advocacy, part 2: Another sign that the majors are getting more serious about climate would be if they put pressure on powerful K Street trade groups to reverse opposition to climate regulations.
  • States: As Axios' Amy Harder writes here, Shell is sitting out the Washington State ballot fight over a CO2 tax, while BP and other oil companies are opposing the proposed tax. Let's see how the industry plays things in similar fights that could surface in other states in the future.

Meanwhile, another important dynamic is the disconnect over the role of natural gas in the future.

  • This Reuters piece gets into how the industry is bullish on expanding demand for natural gas for decades. As one executive puts it, it's not a transition fuel but a "destination fuel."

Yes, but: The new UN analysis of what's likely needed to hold the global temperature rise to 1.5ºC above preindustrial levels shows that steep reductions in fossil fuels are needed.

  • That includes natural gas, even though it emits less CO2 when burned than coal or oil.
  • Check out this UN comparison of "pathways" for staying within 1.5ºC (or this explainer from Carbon Brief).
  • In a nutshell, steep cuts in the share of gas in the global energy mix will be needed by mid-century absent major deployment of carbon-trapping technologies.

-Ben Geman

Axios

Written by Axios

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(24)
  • burrkitty
    Voted Yes
    10/10/2018
    ···

    Considerably more than that needs to be done, but we need to get started, like a decade ago.

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  • James
    Voted No
    10/10/2018
    ···

    This whole universe is made from one basic element! Carbon! To include the Human beings and plants and all things. Carbon is Ashes! From ash you came and to ashes you will return until called up for judgement!

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  • C
    10/10/2018
    ···

    Sure, but probably too little to late.

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  • Jorge
    Voted Yes
    10/10/2018
    ···

    Phase out fossil fuels ASAP or we are all dead. Half-@ssed measures won't do it.

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  • TexasTRex
    Voted No
    10/11/2018
    ···

    1-Carbon...all living organisms contain carbon 2-“Climate Change” is full of faulty data collection methods and biased interpretations of said data. It is yet another way to control lives and choices. We should be responsible, but promoting fear and control through lies is not only wrong, but takes away free choice and thinking. Why is my right to think for myself and get the positive or negative consequences overridden?

    Like (3)
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  • burrkitty
    Voted Yes
    10/10/2018
    ···

    Considerably more than that needs to be done, but we need to get started, like a decade ago.

    Like (4)
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  • Marc
    Voted Yes
    10/11/2018
    ···

    Government needs to propose a carbon tax with the proceeds going to encourage renewable energy development and put it into action

    Like (2)
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  • Andrea
    Voted Yes
    10/10/2018
    ···

    Has anyone checked out the UN report on climate change?

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  • Michaelene
    Voted Yes
    10/11/2018
    ···

    To all the money grubbing congressionals that don’t believe in climate change: you can go to sleep tonight picturing what you are doing to your grandchildren and great grandchildren by not controlling climate. Will your children and grandchildren die in the next flood? Maybe the next fire. Do you realize that money cannot buy them out of this. You can leave them all the money in the world but it won’t keep them alive In These catastrophic events. You are sentencing your descendants to death. Is your money really that important to you?

    Like (1)
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  • JamieD
    Voted Yes
    10/10/2018
    ···

    I’d like to see companies push for a larger percentage, not a fixed amount, of their annual budgets to go toward carbon sequestration, renewable technologies and job transitioning strategies for people working with nonrenewables. Maybe if industry leads, our elected representatives might follow. (Joe, Todd And Larry?)

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  • Mark
    Voted Yes
    10/11/2018
    ···

    “Every extra bit of warming matters, especially since warming of 1.5º C or higher increases the risk associated with long lasting or irreversible changes, such as the loss of some ecosystems,” said Hans Otto Pörtner, Co-Chair of IPCC Working Group II. We should put a price on carbon as a means of slowing global warming. At the same time we need to move to renewable energy, like solar, thermal and other solutions.

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  • A
    Voted Yes
    10/11/2018
    ···

    You must do something to protect the future of the human race. Your kids won’t care about the deficit (which you’re also increasing btw) but they will care that they have no clean water or ability to grow food.

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  • Rehanna
    Voted Yes
    10/11/2018
    ···

    If you still think that Global Warming is a joke, then I feel so sorry for your kids and the stupidity that seems to be in your genes and will spill into them because this is where you need to open your eyes and accept that this planet was never made for us. So by destroying it at every chance we get, we slowly still prove that we’re monsters.

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  • David
    Voted Yes
    10/11/2018
    ···

    It’s past time for business to get serious about climate change and their impact. Republicans believe more pollution the better, but then they eat and breathe money not oxygen.

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  • Kimberly
    Voted Yes
    10/11/2018
    ···

    Do whatever it takes to break the power cycle and dependence on petroleum.

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  • Linda
    Voted Yes
    10/11/2018
    ···

    Anything to stop the imprint these companies are making on our planet.

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  • Robert
    Voted Yes
    10/13/2018
    ···

    Too little too late.

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  • Azrael
    Voted Yes
    10/11/2018
    ···

    Yes

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  • Andrew
    Voted Yes
    10/11/2018
    ···

    Florida is the Sunshine State. We should be leading the nation in solar energy and phasing out fossil fuels. We should also impose regulations that protect our coastlines, waterways, wetlands - all major factors in the state economy with tourism.

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  • Andrew
    Voted Yes
    10/11/2018
    ···

    Florida is the Sunshine State. We should be leading the nation in solar energy and phasing out fossil fuels. We should also impose regulations that protect our coastlines, waterways, wetlands - all major factors in the state economy with tourism.

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