The American Petroleum Institute will support carbon pricing as part of its oil and gas industry policy framework to address the risks of climate change, the leading US petroleum industry group said March 25.
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API said it wanted to build on the industry's progress in driving emissions to generational lows, and will advocate, along with a carbon price policy, the acceleration of technology and innovation, the further mitigation of emissions from operations, and the advancement of cleaner fuels.
API is not endorsing a specific price on carbon, but rather a "set of principles" on which carbon pricing can be based, API President and CEO Mike Sommers said during a press conference.
"It could encompass an economy-wide transparent carbon tax or a cap on emissions, like the cap and trade program," Sommers said. "We want to help inform the debate and give lawmakers options as they pursue different paths to addressing climate change."
API is working with its members to advocate for a carbon price policy that reflects "sensible" legislation that prices carbon across all economic sectors and avoids duplicate regulation.
Voluntary carbon markets have increasingly been embraced around the world as a way to finance emission reductions. S&P Global Platts on Jan. 4 began publishing the world's first daily "CORSIA-eligible" carbon credit price assessments. The International Civil Aviation Organization's CORSIA program created a carbon mechanism to allow airlines to credibly offset their emissions.
"We think a market-based approach will lead to more emissions reduction than a heavy-handed government approach," Sommers said.
API's plan envisions different approaches to carbon capture, he said.
"We'll advocate for federal funding for low-carbon research, development and deployment through the Energy Act of 2020, which authorizes a lot of spending but doesn't exactly fund those programs," he said, adding API will advocate federal funding for the programs.
The energy industry is focused on meeting the "dual challenge" of supplying the world's energy needs – which the International Energy Agency says will increase 40% by 2050 – and meeting the demands of a growing population, he added. The challenge is doing that while ensuring greenhouse gas emissions are lowered.
Oil and gas to persist for decades
However, Sommers noted that even if every country meets its goals under the Paris Climate Accords, global oil and gas will still comprise 46% of the energy mix by 2040.
API does not support retraining programs for workers, Sommers said.
He also stated that the oil and gas industry pays twice as much as the average American job, and many of those are union jobs.
"The plan we're outlining today has the support of major US labor unions," he said. "They understand the importance of these ... jobs, and the oil and gas industry supports more than 10 million jobs."
In addition, API supports the direct regulation of methane for new and existing sources, Sommers said.
"We want to work with the Biden Administration as they develop new regulations," he said. "We'll work through the EPA [Environmental Protection Agency] as they develop those new regulations and want to make sure the voice of oil is heard as [they] are developed."