IE 11 is not supported. For an optimal experience visit our site on another browser.

Exxon cuts ties to global warming skeptics

Oil major Exxon Mobil Corp. is engaging in industry talks on possible U.S. greenhouse gas emissions regulations and has stopped funding groups skeptical of global warming claims.
/ Source: staff and news service reports

Oil major Exxon Mobil Corp. is engaging in industry talks on possible U.S. greenhouse gas emissions regulations and has stopped funding groups skeptical of global warming claims —  moves that some say could indicate a change in stance from the long-time foe of limits on heat-trapping gases.

Exxon, along with representatives from about 20 other companies, is participating in talks sponsored by Resources for the Future, a Washington, D.C., nonprofit. The think tank said it expected the talks would generate a report in the fall with recommendations to legislators on how to regulate greenhouse emissions.

Mark Boudreaux, a spokesman for Exxon, the world’s biggest publicly traded company, said its position on climate change has been “widely misunderstood and as a result of that, we have been clarifying and talking more about what our position is.”

Boudreux said Exxon in 2006 stopped funding the Competitive Enterprise Institute, a nonprofit advocating limited government regulation, and other groups that have downplayed the risks of greenhouse emissions.

CEI acknowledged the change. “I would make an argument that we’re a useful ally, but it’s up to them whether that’s in the priority system that they have, right or wrong,” director Fred Smith said on CNBC’s “On the Money.”

Last year, CEI ran advertisements, featuring a little girl playing with a dandelion, that downplayed the risks of carbon dioxide emissions.

Since Democrats won control of Congress in November, heavy industries have been nervously watching which route the United States may take on future regulations of carbon dioxide and other heat-trapping gases scientists link to global warming. Several lawmakers on Friday introduced a bill to curb emissions.

President Bush has opposed mandatory emissions cuts such as those required by the international Kyoto Protocol. He withdrew the United States, the world’s top carbon emitter, from the Kyoto pact early in his first term.

Sen. Harry Reid of Nevada, the new Senate majority leader, has said he wants new legislation this spring to regulate heat-trapping emissions. Other legislators also are planning hearings on emissions.

Scenarios studied
The industry talks center on the range of greenhouse gas policy options such as cap-and-trade systems and carbon taxes, said Roy Kopp, head of the climate program at RFF. There also will be debates on whether rules should focus on companies producing oil, gas and coal, which release CO2 when burned, or consumers who use the fuels.

To spur open industry discussion, RFF said the talks, which began in December, exclude nongovernmental organizations.

Some see Exxon’s participation in the talks, coupled with its pledge to stop funding CEI, as early signs of a possible policy change.

“The fact that Exxon is trying to debate solutions, instead of whether climate change even exists, represents an important shift,” said Andrew Logan, a climate expert at Ceres, a coalition of investors and environmentalists that works with companies to cut climate change risks.

Exxon’s funding action was confirmed this week by its vice president for public affairs. Kenneth Cohen told the Wall Street Journal that Exxon decided in late 2005 that its 2006 nonprofit funding would not include CEI and "five or six" similar groups.

Cohen declined to identify the other groups, but their names could become public this spring when Exxon releases its annual list of donations to nonprofit groups.

Scoring oil
In a report last year on how oil majors are addressing global warming emissions, Ceres gave Exxon a 35 — the worst of any company. Oil majors BP and Royal Dutch Shell got 90 and 79, respectively.

“Given how large and influential Exxon is and that they are basically the last big industry climate skeptic standing, even small moves can have a very big impact,” said Logan.

But he said it was too early to tell the substance of the change. “The devil is in the details,” he said.

Cohen told the Wall Street Journal that while questions remain about the degree to which fossil fuels are contributing to warming, the computer modelling on what the future may hold “has gotten better.”

And, he said, “we know enough now — or, society knows enough now — that the risk is serious and action should be taken.”

Peter Fusaro, a carbon markets expert, noted that Exxon already must comply with Kyoto regulations in other countries, and said the company may want to simplify compliance standards throughout its international operations.

“Multinational companies are under the gun to comply with Kyoto,” he said. “It’s starting to crystallize that companies can’t have dual environmental standards.”

Philip Sharp, president of Resources for the Future, told the Wall Street Journal that he was impressed by Exxon. “They are taking this debate very seriously,” said Sharp, a former Democratic congressman. “My personal opinion of them has changed by watching them operate.”