In one of the strongest signs yet that the U.S. industry anticipates
government curbs on global-warming emissions, Exxon Mobil Corp., long a leading
opponent of such rules, is starting to talk about how it would like them to be
structured.
Exxon, the world's largest publicly traded oil company by market value, long has
been a lightning rod in the global-warming debate. Its top executives openly
have questioned the scientific validity of claims that fossil-fuel emissions are
warming the planet, and it has funded outside groups that have challenged such
claims in language sometimes stronger than the company itself has used.
Those actions have prompted criticism of the company by environmentalists and by
Democrats, who recently gained control of the Congress.
Now, Exxon has cut off funding to a handful of those outside groups. It says
climate-science models that link greenhouse-gas concentrations to global warming
are getting more reliable. And it is meeting in Washington with officials of
other large corporations to discuss what form the companies would prefer
possible U.S. carbon regulations to take.
The changes in Exxon's words and actions are nuanced. The oil giant continues to
note uncertainties in climate science. It continues to oppose the Kyoto
Protocol, the international global-warming treaty that limits emissions from
industrialized countries that have ratified it. It also stresses that any future
carbon policy should include developing countries, where emissions are rising
fastest.
Still, the company's subtle softening is significant and reflects a gathering
trend among much of U.S. industry, from utilities to automakers. While many
continue to oppose caps, these companies expect the country will impose
mandatory global-warming-emission constraints at some point, so they are lining
up to try to shape any mandate so they escape with minimum economic pain.
Think-tank funding
Exxon has stopped funding the Competitive Enterprise Institute, a
Washington-based think tank that last year ran television ads saying carbon
dioxide, the main greenhouse gas, is helpful.
After funding them previously, Exxon decided in late 2005 not to fund for 2006
CEI and "five or six" other groups active in the global-warming debate, Kenneth
Cohen, Exxon's vice president for public affairs, confirmed recently in an
interview at Exxon's headquarters in Irving, Texas. He declined to identify the
groups beyond CEI; their names are expected to become public in the spring, when
Exxon releases its annual list of donations to nonprofit groups.
Myron Ebell, director of CEI's energy and global-warming program, declined to
comment about why Exxon didn't fund CEI last year. But he added: "Like any
company, they are concerned about both policies and image.
"We're not at the mercy of our funders for what we believe. But we are dependent
on them for funding to help promote our programs," he said. "Obviously, we would
like to find a lot more funding on energy and global warming than we've had."
Meetings of the mindss
More significant are the meetings between executives from Exxon and other
companies to discuss the potential structure of U.S. carbon regulations. Several
parallel tracks of discussions are under way, some sponsored by Washington think
tanks, including the Brookings Institution and Resources for the Future.
The meetings underscore the view within much of U.S. industry that the science
and the politics of global warming are changing. "The issue has evolved," Cohen
said.
Exxon says important questions remain about the degree to which fossil-fuel
emissions are contributing to global warming. But "the modeling has gotten
better" analyzing the probabilities of how rising greenhouse-gas emissions will
affect global temperatures, Cohen said.
Exxon continues to stress the modeling is imperfect; it is "helpful to an
analysis, but it's not a predictor," Cohen said. But he added, "We know enough
now — or, society knows enough now — that the risk is serious and action should
be taken."
What kind of action?
The question is what kind of action. The economic reality is that some companies
will win from a carbon constraint and some companies will lose, depending on how
regulations are written.
One question is whether a carbon tax or cap should be imposed upstream — on
producers of fossil fuels — or downstream, on the industries, and perhaps even
the individual consumers, who use those fuels. Another question is whether such
constraints should target just a few industries or should be applied across the
economy.
Such questions already are sparking fierce lobbying fights among industries in
Europe. There, countries have slapped carbon caps on several heavily emitting
industries. Now the countries are toughening those constraints.
A similar zero-sum fight appears increasingly likely in the U.S. California
adopted a broad global-warming cap last year, and now it has to decide which
companies, and perhaps which consumers, to stick with the responsibility for
meeting the targets. Other states say they plan to follow California's lead.
In Washington, meanwhile, Democratic congressional leaders say they will push
for some sort of federal carbon constraint.
"By all indications, we'll certainly see much more legislative activity at the
state and federal level going forward," Cohen said. Among the broad options
being debated, he said, "some look more favorable to us than others."
'Broadest possible base'
Exxon wants any regulation to be applied across "the broadest possible base" of
the economy, said Jaime Spellings, Exxon's general manager for corporate
planning. Exxon says avoiding a ton of carbon-dioxide emissions is, with certain
exceptions, less expensive in the power industry than in the transportation
sector.
Though solar energy remains expensive, reducing a ton of emissions by generating
electricity from essentially carbon-free sources such as nuclear or wind energy
is cheaper than reducing a ton of emissions through low-carbon transportation
fuels such as ethanol.
Exxon, like the U.S. government, also argues that any regulation should take
into account rising emissions from developing countries, too. Both Exxon and the
federal government oppose the Kyoto Protocol.
The fact that Exxon officials are beginning to lay out even these generalities
is significant, said Philip Sharp, president of Resources for the Future.
"They are taking this debate very seriously," said Sharp, a former Democratic
congressman long active in energy-policy debates. "My personal opinion of them
has changed by watching them operate."