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Sydney Morning Herald: Exxon may be warming to greenhouse gas rules

January 12, 2007

Oil major Exxon Mobil Corp is engaging in industry talks on possible US greenhouse gas emissions regulations, a move experts said could indicate a change in stance from the long-time foe of limits on heat-trapping gases.

Exxon, along with representatives from about 20 other companies, is participating in talks sponsored by Washington, DC nonprofit Resources for the Future. The think tank said it expected the talks would generate a report later this year with recommendations to legislators on how to regulate greenhouse emissions.

Mark Boudreaux, a spokesman for Exxon, the world’s biggest publicly traded company, said its position on climate change has been “widely misunderstood and as a result of that, we have been clarifying and talking more about what our position is.”

Since Democrats won control of Congress in November, heavy industries have been nervously watching which route the United States may take on future regulations of carbon dioxide and other heat-trapping gases scientists link to global warming.

President George Bush has opposed mandatory emissions cuts such as those required by the international Kyoto Protocol. He withdrew the United States, the world’s top carbon emitter, from the Kyoto pact early in his first term.

Senator Harry Reid of Nevada, the new Senate majority leader, has said he wants new legislation this spring to regulate heat-trapping emissions. Other legislators also are planning hearings on emissions.

The industry talks center on the range of greenhouse gas policy options such as cap-and-trade systems and carbon taxes, said Roy Kopp, head of the climate program at RFF. There also will be debates on whether rules should focus on companies producing oil, gas and coal, which release CO2 when burned, or consumers who use the fuels.

To spur open industry discussion, RFF said the talks, which began in December, exclude nongovernmental organizations.

Boudreux said Exxon in 2006 stopped funding the Competitive Enterprise Institute, a nonprofit advocating limited government regulation, and other groups that have downplayed the risks of greenhouse emissions. Last year, CEI ran advertisements, featuring a little girl playing with a dandelion, that downplayed the risks of carbon dioxide emissions. Kopp said Exxon’s participation in the talks does not indicate a changed policy on greenhouse emissions. But some environmentalists see Exxon’s participation in the talks, coupled with its pledge to stop funding CEI, as early signs of a possible policy change.

“The fact that Exxon is trying to debate solutions, instead of whether climate change even exists, represents an important shift,” said Andrew Logan, a climate expert at Ceres, a coalition of investors and environmentalists that works with companies to cut climate change risks.

In a report last year on how oil majors are addressing global warming emissions, Ceres gave Exxon a 35 – the worst score. Oil majors BP and Royal Dutch Shell got 90 and 79, respectively.

“Given how large and influential Exxon is and that they are basically the last big industry climate skeptic standing, even small moves can have a very big impact,” said Logan. But he said it was too early to tell the substance of the change.

“The devil is in the details,” he said.

Peter Fusaro, a carbon markets expert, noted that Exxon already must comply with Kyoto regulations in other countries, and said the company may want to simplify compliance standards throughout its international operations.

“Multinational companies are under the gun to comply with Kyoto,” he said. “It’s starting to crystallize that companies can’t have dual environmental standards.”

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