Fossil Fuel Companies Push “Market-Based Solutions” to Climate Change

The planet’s concentration of heat-trapping carbon dioxide has reached its highest levels in 3 million years, rekindling the heated political debate over man-made climate change and what to do about it.

Outspoken Democrats have been vocal about their plans, hyping up their Green New Deal resolution, and 2020 presidential candidates like Washington Gov. Jay Inslee, former Rep. Beto O’Rourke (D-Texas) and Sen. Elizabeth Warren (D-Mass.) have unveiled their own unique climate change plans.

But fossil fuel companies have their own solutions in mind. And with federal funding and generous tax credits potentially available to fund emission-reducing technology, they’re eager to tell lawmakers about them.

A new coalition of 13 Fortune 500 companies and four environmental groups, named the CEO Climate Dialogue, launched this week to call for action on climate change. Some of the prominent industry names include BP, Ford and BASF, along with environmental groups like the Nature Conservancy and the Environmental Defense Fund. The involved companies and groups have significant influence in Washington, spending a combined $55.8 million on lobbying last year.

As major oil companies have publicly accepted the reality of man-made climate change amid growing investor pressure, they’re now calling for “market-based” solutions to lower emissions. Several major oil companies, including ExxonMobil, which is embroiled in lawsuits over allegations that the company hid its knowledge of climate change, have lobbied in support of increased investment toward carbon capture, one of the industry’s favored methods for reducing emissions.

Carbon capture technology traps greenhouse gas as its emitted, preventing it from entering the atmosphere, then either stores it underground or uses the captured carbon dioxide as a resource.

Energy giants reportedly invested more than $1 billion in the three years following the Paris Climate agreement to sell lawmakers and the general public on gradual climate policy such as an expansion of carbon capture and natural gas.

Their efforts may have paid off, as increased investment in carbon capture draws bipartisan support. The USE IT Act would support and encourage carbon capture projects, opening up $25 million worth of prize money for direct air capture technology and setting aside another $50 million of federal funding for carbon capture research.

Its Senate cosponsors range the political spectrum from environmentalists like Sens. Sheldon Whitehouse (D-R.I.) and Brian Schatz (D-Hawaii) to more fossil fuel-friendly members such as Sens. Shelley Moore Capito (R-W.V.) and James Inhofe (R-Okla.).

Inhofe has received $1.9 million from the oil & gas industry throughout his career. He gained notoriety in 2015 for bringing a snowball onto the Senate floor to dispute the existence of climate change, a move that brought a fierce response from Whitehouse, now a fellow co-sponsor of the carbon capture legislation.

Rather than putting his chips behind progressive climate bills, Whitehouse has focused on finding Republican support for legislation that gradually reduces emissions. He helped lead the charge to pass major tax incentives for companies to use carbon capture technology. He told the Washington Examiner that moderate climate policies are the best way forward because the fossil fuel industry has the Republican Party “pretty much by the throat.”

The oil & gas industry gives almost all of its money to Republicans and conservative outside groups, but support for the industry crosses party lines when it employs large numbers of constituents.

Democrats representing energy-reliant states, such as Sens. Joe Manchin (D-W.V.) and Jon Tester (D-Mont.) have joined Republicans in backing the Carbon Capture Modernization Act, which would relax efficiency requirements for new and retrofit coal projects if they include sufficient carbon capture technology.

The political possibilities for carbon capture have several companies excited. Carbon Engineering, a Canadian company funded by fossil fuel companies such as Occidental Petroleum, BHP and Chevron, began lobbying at the federal level for the first time in 2019, spending $20,000 in the first quarter. The company boasts its direct air capture technology can capture up to 1 million tons of carbon dioxide per year for each commercial facility.

The Carbon Capture Coalition, supported by the AFL-CIO, United Steel Workers and the International Brotherhood of Electrical Workers, along with oil company Shell, The Nature Conservancy, National Audubon Society and NRG Energy, among many others, has endorsed the USE IT Act.

Shell and NRG both are already using carbon capture technology, though their efforts have been minimal so far. Shell says it plans to remove 3-4 million tons of carbon dioxide a year — a fraction of its total emissions — and NRG made use of a $190 million grant from the U.S. Department of Energy to build and activate what they deem to be the world’s largest carbon capture facility.

Carbon capture isn’t the fossil fuel industry’s only preferred solution. Companies also support another long-standing bipartisan proposal popular in other countries — implementing a carbon tax. The likes of Exxon and Shell have lobbied on the issue regularly for years, joining separate ventures like the Americans for Carbon Dividends (AFCD). The AFCD is affiliated with conservative consultants and has the support of former Federal Reserve Chairs Janet Yellen and Ben Bernanke.

So far in 2019, the AFCD spent $150,000 on lobbying, half of the total they spent in all of 2018. The carbon tax the group specifically backs, created by former Secretaries of State James Baker and George Shultz, was discussed at a recent hearing of the House Ways & Means Committee.

Implementing a carbon tax is fairly popular with the American public too. A Yale poll found that 68 percent of adults nationwide support the idea.

Still, there’s already evidence that moderate proposals such as carbon capture and a carbon tax — intended not to greatly disrupt the energy industry — won’t sit well with progressive Democrats gaining traction within the party.

Several Democrats pounced on a recent Reuters report that Joe Biden would seek a “middle ground” solution to climate change that would please climate change advocates and blue collar workers. As part of that policy, Biden’s team would be supportive of alternative low emission plans such as nuclear energy and carbon capture, Reuters reported.

“Blaming ‘blue collar’ Americans as the main opponents to bold climate policy is gas lobbyist 101,” Rep. Alexandria Ocasio-Cortez (D-N.Y.) tweeted. In criticizing Biden on Thursday, Inslee reiterated his stance that the U.S. needs to reduce and eventually eliminate its reliance on fossil fuel energy to make real progress.

The carbon capture has already found opposition from progressive Democrats and environmental interest groups that share a deep-seated distaste for fossil fuel companies. The prospect of providing new government subsidies for energy companies that attributed to rising emissions has already created a divide among environmental groups.

A February 2018 bill that made it into Congress’ budget and expanded tax credits for projects that capture carbon dioxide drew opposition from the Natural Resources Defense Council, which said it doesn’t support subsidies for oil companies when the need is “to reduce our dependence on those fuels.” Sierra Club objected to a provision that more than tripled the tax credit for enhanced oil recovery, calling it the “the single biggest subsidy to the fossil fuel industry in the United States.”

Carbon capture advocates have also found some opposition from the Trump administration. Trump’s Environmental Protection Agency (EPA), led by a longtime energy industry lobbyist, has rolled back a litany of emissions standards, including a standard that all new coal plants be built with carbon capture technology.

But with a push from industry lobbyists and lawmakers, the administration’s stance is already shifting. One day after a bipartisan group of 12 senators sent a letter to appropriators asking for more carbon capture development funding, Trump administration officials anonymously told McClatchy the administration would begin promoting carbon capture, marking a rare admission from the administration that rising emissions are a cause for concern.