Tuesday, December 8, 2009

Why I wrote that USCAP economic impact story

I like it when OGJ readers let me know what they think about my articles and columns. It shows that they care. I also appreciate being told that they think I’m wrong, and why. But my short article last week about the US Climate Action Partnership’s analysis of economic impacts of its own climate change legislation proposals produced some unusually angry e-mails. I think it’s necessary to respond.

I try to tell every side of a story, whether it involves proposals to federally regulate hydraulic fracturing or to penalize federal oil and gas leaseholders if they don’t demonstrate they are diligently developing the tracts they hold. Global climate change is probably the single biggest story I’m covering, and there are some huge differences of opinion about it, particularly the question of whether the United States should institute its own carbon cap-and-trade program in the very near future.

Opponents say that doing so would place what amounts to a heavy tax on US industries, which their foreign competitors wouldn’t bear, in a seriously weakened domestic economy. Proponents say that it would make the US a leader in addressing global climate change by establishing a price on carbon emissions and beginning a real transition from fossil fuels to renewable and alternative energy sources. I was trained to simply report what happens when I write a story and suppress my personal opinions. That doesn’t mean I don’t have any, and that I don’t have to make judgment calls.

That’s what I did with the USCAP cap-and-trade economic analysis story. Although I was not surprised that the examination of its own proposals supported them, I thought that it deserved to be passed on to OGJ readers because the organization is not some narrow special interest group but a coalition of businesses and other organizations which includes three multi-national oil companies: Shell, BP, and ConocoPhillips. The group’s members have said that they believe they need to offer specific proposals to constructively participate in global climate change policy discussions. These include a US cap-and-trade program.

When I spent some time with John Barry, Shell Exploration & Production’s vice president of unconventionals and EOR, a few weeks ago, he acknowledged that other oil companies disagree with Shell’s support of cap-and-trade (notably Exxon Mobil, which has indicated that a carbon tax would be more effective). He also said that Shell believes governments will develop and implement possibly aggressive policies to address climate change, and that the company plans to be a commercial leader in technologies such as carbon capture and storage where it feels it has the most to contribute (and, implicitly, the greatest chance to create a new profit center).

That might surprise Nancy Pelosi, Barbara Boxer, and other congressional leaders who seem to cling to an idea of “Big Oil” as a monolithic entity with companies marching in lock-step. The industry has never been that way, and it certainly isn’t now. Ideas are presented, considered, tried, and adopted or discarded when they succeed or fail. It can be messy, but it has made the oil and gas business grow and prosper. It’s also the best approach for politicians and government regulators (which, regrettably, they don’t always embrace) as they formulate and enforce policies. And it’s what I’ll continue to try and emphasize in my reporting from Washington.

I do periodically fall short, however, so keep your e-mail messages coming. Even when I disagree with what you say, I still appreciate hearing from you.


Post a Comment

Subscribe to Post Comments [Atom]

<< Home