Last week the American Petroleum Institute announced an openness to the possibility of supporting some theoretical carbon pricing policy, if that policy were to meet some very specific conditions, which API correctly bet most reporters wouldn’t get into.
Interestingly, it was the more conservative outlets that explained what was happening most bluntly, with the Washington Times’ Haris Alic explaining that API’s carbon tax announcement was “a strategic maneuver by oil and natural gas companies to head off tougher regulatory actions by President Biden and the Democratic-run Congress.” Similarly, at the Washington Examiner, API’s CEO Mike Sommers told Josh Siegel that they’re trying “to pursue a more market-based approach” because “the administration is talking about command and control approaches.”
That wasn’t enough for most Republicans though. For example, see the response of Rep. Garret Graves, who one of the handful trying to “reclaim the narrative” on climate from Democrats, and who has been described as the Republican who’s actually worried about climate change” when selected to serve as the Republican ranking member of the House Climate Crisis Committee, because he said “just sitting around totally denying the science is an unsustainable position.”
In response to API’s announcement that it wouldn’t sit around totally denying the science, Graves called it “a cop-out approach to appease the radical left.”
That, despite one of the core elements of API’s list of demands for a carbon tax policy is the elimination of other environmental and public health safeguards, essentially allowing them to pay a little extra in order to keep selling their polluting products without any other environmental concerns or public health protections.
Which is why policy analyst Ed Mills told CNN that “it’s a triage response” to offer “something they can live with,” a sentiment echoed by Sommers, who told CNN that they “want to be a willing partner with the Biden administration and others in Congress who are serious about taking on this challenge.” But as InfluenceMap’s Dylan Tanner said in a quote accompanying the “F” rating of how API’s plan aligns (or not) with the Paris Agreement, "a statement of theoretical support for a market-based carbon price is a long way from agreeing to what will likely need to be strong, binding rules to limit fossil fuel usage & methane emission."
Instead, API would like to get more money from the government to pay it even more to capture methane and sell that gas instead of just letting it escape into the atmosphere. The same goes for carbon capture and hydrogen technology, two technological Hail-Marys the industry needs in order to reconcile its inherent pollution with the climate’s limited capability for Big Oil's trash carbon before becoming catastrophically dangerous.
That the industry wants subsidies is no shocker, but API’s also doing something sneaky here.
Timothy Cama’s coverage at E&E gets more into the details of API’s demands of a carbon price, where you can start to see the game they’re playing. For example, they want the industry to get credit for when fossil fuels are used in other products, which Cama writes “seems to indicate that producing petrochemicals like plastics would make those fossil fuels not subject to a tax or other price.” Because everyone knows there’s no pollution problem with plastics, right?
Another point Cama mentions, unlike most of the rest of the coverage, is that “API wants ‘transparency’ so consumers know how much the carbon price is costing them, including at the point of sale for gasoline and other transportation fuels.” In other words, the industry wants consumers to see and resent the additional cost we would have to pay at the pump every time because their product pollutes.
And that speaks to the larger, much more important piece of API’s demands that seemed to go unnoticed. In API’s greenwashing brochure laying out the “general parameters to begin the discussion” on a carbon price policy, they start by stating that the price on carbon should be “economywide,” so that it would apply to “all relevant sectors and all emitters,” which certainly sounds sensible.
But that’s an alternative to the carbon price being applied at the well-head or mine, where the industry would pay for it directly as it’s extracted from the ground, instead of passing the buck on to consumers to pay at the pump. API wants you, the consumer, to pay the carbon tax, while it sits back and profits. Of course, all things being equal in a theoretical Econ 101 classroom, where the tax is added shouldn't change the price to the consumer — but when have all things ever been equal when it comes to Big Oil's ability and desire to create and exploit loopholes and taxpayer subsidies?
And the oil and gas industry doesn’t want to actually reduce emissions down to zero, as the climate crisis demands. We know this (in addition to all the evidence presented by their past behavior) because API’s included some very careful language about the cost of a carbon tax remaining low enough that it “does not exceed the marginal cost of carbon emissions abatement.” This means the price of carbon would be determined by how cheaply the industry can reduce emissions, not by the damage it actually causes. In other words, API wants a price on carbon low enough the industry can just pay it and keep on polluting.
Taking all those things together — that API is calling for carbon pricing paid by consumers instead of the costs of carbon pollution being paid by the industry responsible — it’s hard not to see that API wants a seat at the table so it can slip plenty of poison pills into the meal. “The devil,” Democratic Senator Sheldon Whitehouse told E&E, “is in the details.”
Graves is right about it being a cop-out, but it’s certainly not the Left who’s falling for it.