World oil majors' climate call exposes US-Europe rift on carbon price
Published on Thu, 04 Jun 2015 46 times viewed
Reuters reported that the failed attempt by the world's oil majors to speak on climate change action with one voice has laid bare disagreement between US and European companies on putting a price on carbon.
The world's top oil companies have struggled for years to form a joint front in the face of growing criticism for not taking leadership against climate change.
This week's letter calling for a global carbon pricing by Europe's Statoil, Total, BP, Shell as well as ENI and BG showed first signs of such an agreement, albeit without the support of U.S. peers Exxon Mobil and Chevron.
Setting a price for each ton of carbon that emitters produce is meant to encourage companies to adopt cleaner technologies and shift away from using fossil fuels, primarily coal.
Mr Robert Franklin, VP of Exxon Mobil, at an industry conference in Paris said that "While we have had discussions with European majors, and we wish them well, we don't believe we need to join this scheme."
Another source confirmed Chevron had also been approached to join the initiative but that there was no enthusiasm for the proposal, saying a domestic US agreement on carbon pricing was still light years away.
Nonetheless, Mr Rex Tillerson, CEO of Exxon, said at an OPEC seminar in Vienna that if a carbon tax was imposed it had to be revenue-neutral as most economies around the world are unable to shoulder the cost burden of a carbon tax.
Separately, Chevron and Exxon both work with trade group International Petroleum Industry Environmental Conservation Association to develop a common position for climate change mitigation.
The IPIECA said that it will put out a consensus view from its members on carbon pricing later this month.
For Europe's oil majors, under growing pressure to act against climate change, introducing carbon price systems where they are lacking is a more pressing issue.
At home, they are already subject to the European Trading System that puts a market price on every tonne of carbon emitted and ties national governments to legally binding targets to reduce emissions.
Mr Bob Dudley, BP Chief Executive, said at the same event that "We got together as a group in Europe very quickly and made a lot of progress in a short period of time."
After months of discussions that started at the World Economic Forum in Davos in January and continued at a roundtable meeting of chief executives in Oslo, the European companies' joint statement was finally agreed at last month's meeting of the Oil and Gas Climate Initiative in Paris, a forum for oil majors created last year ahead of UN climate talks this December.
Source : Reuters