Exxon Mobil’s New CEO: Bring on a Carbon Price

February 24, 2017

Below, Exxon’s new Chairman Darren Woods calls for a price on carbon.

Wood’s predecessor Rex Tillerson, well known to viewers of these vids, has gone on to fame, of course as Russian,.. ahem, I mean, US Secretary of State.

Above, and below,  a good time for some reminders of what our expanding slate of options is, from Berkeley’s energy expert Dan Kammen.

Exxon – Energy Factor blog:

We all generally share similar aspirations: jobs and good health, comfortable and safe places to live and a clean environment. That’s true in U.S. cities like Dallas – where ExxonMobil, the company I now have the privilege to lead, is headquartered – and it’s true all over the world. What’s also true, and too often overlooked, is the vital role that energy and energy technologies play in fulfilling these shared aspirations.

Energy is the power behind everything – from our smartphones to our global economy. Growing U.S. energy production has spurred a manufacturing renaissance, adding $20 billion a year to the economy and hundreds of thousands of new jobs, according to estimates by the U.S. Chamber of Commerce. ExxonMobil’s new projects on the U.S. Gulf Coast are expected to generate more than 45,000 jobs alone.

Most forecasts project that many factors – including global population growth of nearly 2 billion, a doubling of worldwide economic output and a rapid expansion of the middle class in emerging economies – will raise global energy demand by an amount equivalent to the total energy used today in the entire Western Hemisphere.

This growing demand creates a dual challenge: providing energy to meet people’s needs while managing the risks of climate change. I believe, and my company believes, that climate risks warrant action and it’s going to take all of us – business, governments and consumers – to make meaningful progress. At ExxonMobil, we’re encouraged that the pledges made at last year’s Paris Accord create an effective framework for all countries to address rising emissions; in fact, our company forecasts carbon reductions consistent with the results of the Paris accord commitments.

The world already has powerful tools for meeting global energy demand while reducing emissions. One is natural gas. Today in America, nearly one-third of the electricity is produced using natural gas. Our role as the country’s largest producer of natural gas – which emits up to 60 percent less CO2 than coal for power generation – has helped bring CO2 emissions in the United States to the lowest level since the 1990s. Increasing use of natural gas means our overall energy mix is growing less carbon-intensive.

Greater energy efficiency is also essential. It might seem counterintuitive, but a big part of ExxonMobil’s business is developing products and technologies that help save energy. Examples include our advanced automotive materials that make cars lighter and more fuel-efficient, and improved plastic packaging that reduces the energy needed to ship goods around the world.

But the world also will need breakthrough clean-energy technologies such as carbon capture and storage (CCS). ExxonMobil is investing heavily in CCS, including research in a novel technology that uses fuel cells that could make CCS more affordable and expand its use.

Let’s stop for just a moment here in the spirit of keeping it real. Exxon does have a history with climate science that makes their current stand, well, ironic to put it mildly.

Ok, Exxon, please continue.

We’re also researching advanced biofuels, including biofuels made from algae – a potentially game-changing energy source that would place less stress on food supplies, land and fresh water than traditional biofuels while reducing emissions. All told, we’ve invested $7 billion to develop lower-emission energy solutions during the past decade and a half.

Governments can help advance the search for energy technologies by funding basic research and by enacting forward-looking policies. A uniform price of carbon applied consistently across the economy is a sensible approach to emissions reduction. One option being discussed by policymakers is a national revenue-neutral carbon tax. This would promote greater energy efficiency and the use of today’s lower-carbon options, avoid further burdening the economy, and also provide incentives for markets to develop additional low-carbon energy solutions for the future.

Below, an all star panel of conservative Republican economics and policy experts recently advocated a carbon price in a New York Times Op-ed.

Martin S. Feldstein was the chairman of the Council of Economic Advisers under President Ronald Reagan and N. Gregory Mankiw was the chairman under President George W. Bush. Ted Halstead is the founder and chief executive of the Climate Leadership Council.

New York Times:

Our co-authors include James A. Baker III, Treasury secretary for President Ronald Reagan and secretary of state for President George H. W. Bush; Henry M. Paulson Jr., Treasury secretary for President George W. Bush; George P. Shultz, Treasury secretary for President Richard Nixon and secretary of state for Mr. Reagan; Thomas Stephenson, a partner at Sequoia Capital, a venture-capital firm; and Rob Walton, who recently completed 23 years as chairman of Walmart.

Our plan is built on four pillars.

First, the federal government would impose a gradually increasing tax on carbon dioxide emissions. It might begin at $40 per ton and increase steadily. This tax would send a powerful signal to businesses and consumers to reduce their carbon footprints.

Second, the proceeds would be returned to the American people on an equal basis via quarterly dividend checks. With a carbon tax of $40 per ton, a family of four would receive about $2,000 in the first year. As the tax rate rose over time to further reduce emissions, so would the dividend payments.

Third, American companies exporting to countries without comparable carbon pricing would receive rebates on the carbon taxes they’ve paid on those products, while imports from such countries would face fees on the carbon content of their products. This would protect American competitiveness and punish free-riding by other nations, encouraging them to adopt their own carbon pricing.

Finally, regulations made unnecessary by the carbon tax would be eliminated, including an outright repeal of the Clean Power Plan.

Our own analysis finds that a carbon dividends program starting at $40 per ton would achieve nearly twice the emissions reductions of all Obama-era climate regulations combined. Provided all four elements are put in force in unison, this plan could meet America’s commitment under the Paris climate agreement, all by itself. Democrats and environmentalists may bemoan the accompanying regulatory rollback. But they should pause to consider the environmental value proposition.

These four pillars, combined, invite novel coalitions. Environmentalists should like the long-overdue commitment to carbon pricing. Growth advocates should embrace the reduced regulation and increased policy certainty, which would encourage long-term investments, especially in clean technologies. Libertarians should applaud a plan premised on getting the incentives right and government out of the way. Populists should welcome the distributive impact.

According to a recent Treasury Department study, the bottom 70 percent of Americans would come out ahead under a carbon dividends plan. Some 223 million Americans stand to benefit.

The idea of using taxes to correct a problem like pollution is an old one with wide support among economists. But it is our unique political moment, combined with the populist appeal of dividends, that may turn the concept into reality.

Republicans are in charge of both Congress and the White House. If they do nothing other than reverse regulations from the Obama administration, they will squander the opportunity to show the full power of the conservative canon, and its core principles of free markets, limited government and stewardship.

A repeal-only climate strategy would prove quite unpopular. Recent polls show that 64 percent of Americans are concerned about climate change, 71 percent want America to remain in the Paris agreement, and an even larger share favor clean energy. If the Republican Party fails to exercise leadership on our climate challenge, they risk a return to heavy-handed regulation when Democrats return to power.

Much better would be a strategy of “repeal and replace.” This would be pro-growth, pro-competitiveness and pro-working class, which aligns perfectly with President Trump’s stated agenda.

Meanwhile.

The Hill:

President Trump’s daughter Ivanka and her husband Jared Kushner, a senior White House adviser, pushed to exclude criticism of a global climate deal from a forthcoming executive order, The Wall Street Journal reported Thursday evening.

Several people familiar with the move told the newspaper that the language was axed from an earlier draft of the order after Ivanka and Kushner intervened.

Trump is expected to sign at least two orders within days aimed at unraveling former President Barack Obama‘s environmental and climate regulations, according to the newspaper.

One White House official told the Journal that Kushner and Ivanka Trump are considered to be a moderating influence on the president’s views on environmental issues and climate change.

Trump, who previously called climate change a hoax created by the Chinese, was highly critical of his predecessor’s environmental policy on the campaign trail and pledged to backtrack on the climate deal reached by the Obama administration and nearly 200 countries in Paris in late 2015.

White House press secretary Sean Spicer on Thursday declined to say whether Trump plans to withdraw from the accord, deferring to Secretary of State Rex Tillerson, who the Journal noted backed the Paris deal while serving as CEO of Exxon Mobil Corp.

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14 Responses to “Exxon Mobil’s New CEO: Bring on a Carbon Price”

  1. Betty Harris Says:

    Government should fund research for Exxon? Wait.. if our current government is run by corporate insides from the fossil fuel industry then government funding will come from the poor and shrinking middle class as these are just about the only folks who actually pay taxes… there seems to be a disconnect here.

  2. Gingerbaker Says:

    Exxon sells gasoline that goes in your car. They could care less if people pay a carbon tax, because people have to drive their cars. Period.

    You could double the retail price with a carbon tax, give all or none of it back to people, and it would be just like going back to the recent years of higher fuel cost. People would pay it because they have to.

    Except now they are going to hate environmentalists instead of Exxon. And considering how bloody little any carbon tax has done to actually build new renewable energy infrastructure, you really need to ask ourselves why in the world are people talking about a regressive carbon tax which won’t do anything,

    instead of sticking with – and hopefully increasing – targeted subsidies for renewable energy, where every single dollar pays for new RE and doesn’t take money directly out of people’s pockets?

    • funslinger62 Says:

      You’re overlooking the incentive a carbon tax generates toward the use of renewable energies. A carbon tax that is returned equally to all citizens will stimulate spending. And that spending will tend toward less carbon intensive products.

      The poor and middle class citizens who change their purchasing habits toward less carbon intensive products will actually have more money to spend. Those who don’t won’t. The choice is theirs to make.

      Strict regulations and costly subsidies can hamper economic growth. A revenue-neutral carbon tax is the best of both worlds because it encourages the purchasing of less carbon intensive products while allowing economic growth in the very technologies that reduce the reliance on carbon.

      A carbon tax combined with the ending of ALL subsidies will instantly make renewable energies the economically preferable choice.

    • lesliegraham1 Says:

      I think you mean the COULDN’T care less.


    • They don’t have to drive gasoline-fueled cars. They really do not. There are alternatives.

    • webej Says:

      The (gradually incrementing) carbon tax will leverage market forces to favor renewable energy where it is cheaper. This should appeal to the right as well as the left. The revenue neutral tax credit will give the lower incomes more back than they will be taxed, which is appealing to progressives. And virtually all climate change activists favor a tax which expresses the true cost of fossil fuel burning, which is presently being offloaded as an externality on other people, especially future generations.

      Of course we should be doing a lot more, if we can. We should be spending €400 billion a year on research into renewables, battery technology, CSP, superconducting and super capacitance, and any other initiative that promises to get us off fossil fuels. We should be treating this with budgets of the same order of magnitude as the military, since the existential threat is greater. And we could, because we are already wasting all this money preparing for wars which will get us even further off target.

      As for the carbon capture, I favor enhanced weathering technology: low tech, doable, also combats ocean acidification, easy to fund from present military spending. Hi-tech is sexier and gets all the research funding, partly because it’s built into smoke stacks that we need to be getting rid of, but it will remain marginal for economic reasons. Enhanced weathering is simply speeding up a natural process that is already taking place anyways.

  3. Andy Lee Robinson Says:

    Coal is dead.
    http://oilprice.com/Energy/Energy-General/Battery-Wars-China-Beating-Tesla-in-The-Gigafactory-Race.html
    Note to fossil fuel investors: Get out or go down.

  4. lracine Says:

    Below is a link to a article with a good description of the economic health of the various large oil companies… it is a blood bath….

    “….. showing the continued financial disintegration at these top three oil companies suggests that the U.S. energy sector is in serious trouble. We must remember, the top oil companies are supposed to be the most profitable. However, if we take a look at what is taking place in the top shale oil and gas producers, the situation is even more dire. ”

    Beware.. a carbon “tax” might be a way for these “boys” to get themselves out of the hole they are in… aka another government subsidy for the oil patch…..

    I smells a RAT!!!

    http://peakoilbarrel.com/the-blood-bath-continues-in-the-u-s-major-oil-industry/#more-14876

  5. redskylite Says:

    Personally I have doubts on the effectiveness of a Carbon Price, the cost will be passed on to the consumer and Ginger Baker makes a lot of sense on that. It’s the Carrot & Stick. Alternatives to burning fossil fuel must be made more attractive by marketing and media with support from industry and governments.

    Exxon still can redeem themselves and could play a big part, and there are plenty of shareholders to give them even more pressure.

    Let’s hope and pray something gives, before it is far too late.

    This year, New York State and the Church of England are back with a bigger coalition. Investors worth US$4 trillion support their call for climate risk disclosure from the outset, compared to a $300bn club floating the 2016 resolution.

    “As investors, we are concerned that, unlike many of its peers, Exxon has not taken the steps necessary to demonstrate its resilience in a lower carbon future,” said Thomas DiNapoli, comptroller of NY State’s retirement fund.

    http://www.climatechangenews.com/2017/02/23/exxon-mobil-shareholders-renew-call-for-2c-climate-analysis/

    • funslinger62 Says:

      A vast number of economists agree that a carbon tax will probably be the single most effective measure to reduce carbon emissions.

      Our goals should be 1) to reduce carbon emissions and 2) to punish those who have made the problem worse. We should not reject policies that help to solve goal 1 just because they don’t accomplish goal 2. Goal 1 is the more important goal.

      Statoil is currently removing a large amount of CO2 during the extraction process and pumping it back in the ground. They favor a carbon tax because they believe it will force other oil companies to do likewise to lower the impact of such a tax.

      The free market is a very strong motivator. A carbon tax will make carbon intensive products less economical and thus push the market toward renewables and efficiency.

      There are existing carbon taxes that are working beyond expectations.

      http://thinkprogress.org/amp/p/7a245cde7dc4

      And others that are changing habits.

      https://nytimes.com/2012/12/28/science/earth/in-ireland-carbon-taxes-pay-off.html

  6. Mark White Says:

    If he truly believes in a carbon tax, he’ll stop all political contributions to candidates, PACs, and advocacy organizations that don’t support it. When will that be announced?

  7. andrewfez Says:

    He wants a Goldilocks carbon tax – strong enough to kill off coal, weak enough to leave oil and gas alone. I propose a leaked methane tax.


  8. Slightly OT,
    But

    http://www.inquisitr.com/opinion/4010589/muslim-national-security-adviser-quits-8-days-into-donald-trump-administration/

    From her interview the NSA is becoming chaotic with substantial resignations, guess ripe for a neo nazi/white Supremist/ Authoritarian takeover of the top Security Advisory organisation.

    The ramifications are horrendous and should make any other nation extremely cautious in having dealings with the US


  9. […] And, does that mean Trump and Exxon are on the same page in favor of a carbon tax? […]


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