10-20-08 by dugan
Right after I finished the previous post, on hard evidence that green policies are solid job creators, I found the perfect illustration of how industry–especially the oil industry–tries to sabotage efforts to stem climate change. Chevron Corp and Shell Oil, which are building huge liquefied natural gas facilities offshore from Western Australia, are making veiled threats to cut back or pull out because of Australia’s proposed "cap and trade" system to cut greenhouse gas emissions. Cap and trade is what what Europe already has, and what U.S. policymaker are seriously proposing.
There is no way to slow global warming without requiring reductions in carbon emissions. The most efficient policy is a direct tax on carbon emissions. But in free-market economies like the U.S. and Australia, a more market-friendly scheme like cap and trade–industries buy so-called carbon credits tied to their emission levels and can then buy and sell credits–is easier to get past the corporate lobbies. Yet Chevron, which is spending tens of millions of dollars on marketing to make itself look greener and friendlier, won’t even tolerate cap and trade. It’s a picture of what the U.S. Congress will face when lawmakers get serious about carbon emissions.
Chevron wasn’t at all coy about its threat:
Roy Krzywosinski, managing director of Chevron Australia, said that the
proposed scheme could hike operating costs at Chevron’s [LNG] projects by as much as $200 million [in Australian dollars] each per year."This is an additional cost that could put the viability of these massive
investments in jeopardy," Krzywosinski said in a speech delivered to the Society
of Petroleum Engineers Asia Pacific Oil & Gas Conference and Exhibition in
Perth."There are a number of elements in the proposed scheme that could well be
obstacles to the further development of the Australian LNG industry," he added.
(Here’s Shell’s less explicit statement.)
Chevron’s argument that it should be exempted from most or all of the new carbon emission caps was based on the fact that natural gas emits less carbon than petroleum or coal. By that logic, the petroleum industry would ask for an exemption because it’s cleaner than coal. And the coal industry would demand an exemption because the cost of cap and trade would prevent it from developing the oxymoronic "clean coal."
Natural gas is still a fossil fuel, and liquefied natural gas is far dirtier, from a climate change perspective, than plain natural gas delivered through a pipeline. The increased emissions come in part from processing the gas into a liquid, storing it for transport under high compression at sub-zero temperatures and sending it across oceans in tanker ships, then reprocessing into a gaseous state for sale.
Oil companies, which are about to announce another round of record multibillion-dollar quarterly profits, can certainly accommodate a cap and trade plan, which will use the money reaped from selling carbon credits to pay for energy efficiency and green tech. But the companies are like dinosaurs fighting off a few giant crocodiles while failing to see the big meteor that’s about to annihilate them. Except that we can only wish legislators were as tough as giant crocs.