Big Oil Calls For Carbon Pricing
By Paul Homewood
You may have heard about the letter, sent to the Financial Times this week by Shell and five other oil majors calling for the introduction of widespread carbon pricing, and wondered why turkeys are voting for Xmas.
This is the letter:
As we gather in Paris for the World Gas Conference, just months ahead of crucial UN talks on climate change in this same city, we write to highlight the major role natural gas can play in addressing climate change. We believe the pragmatic step of implementing a widespread and effective pricing of carbon emissions is critical to realising the full and positive impact natural gas can have.
As a group of business people, we are united in our concern about the challenge – and the threat – posed by climate change. We urge governments to take decisive action at the UN climate change summit in December. We are also united in believing such action should recognize the vital roles of natural gas and carbon pricing in helping to meet the world’s demand for energy more sustainably.
Renewable energy has an increasing role to play – and our companies have significant investments in renewable energy too. However, the need to cut emissions is so essential that we have to pursue all options to lower carbon while providing the energy the world needs to meet demand from a growing population seeking better living standards. Natural gas can help deliver this.
For natural gas, the case is simple: when burned to make electricity, it typically generates around half the carbon emissions of coal. In addition, gas can provide the electricity base load that is required and can be a flexible partner to renewable as efforts continue to improve the storage of electricity produced by intermittent solar or wind. This benefit is enhanced when natural gas emissions all along the value chain are controlled and reduced, a matter we are actively addressing with peers.
However, our request to policy-makers as they prepare for the UN talks is not to ask for special treatment for any resource, including natural gas, or any single route to a lower- carbon future. It is rather to ensure that the outcome of these talks leads to widespread carbon pricing in all countries.
Carbon pricing policies in every country will stimulate all forms of low-carbon technologies. It will drive energy efficiency as rapid urbanisation increases demand from our cities. It will benefit all sectors including power, mobility, heating and energy-intensive industries along with renewable energy and natural gas, the cleanest-burning fossil fuel. Market forces will operate to favour the least expensive and most efficient ways of reducing carbon in each country or region. Pricing carbon obviously adds a cost to our production and our products – but a stable, long-term, global carbon pricing framework would provide our businesses and their many stakeholders with a clear roadmap for future investments, and a clear role in securing a more sustainable future.
We have detailed our view on carbon pricing in a letter sent to the UNFCCC Executive Secretary and the COP21 President.
We owe it to future generations to seek realistic, workable solutions to the challenge of providing more energy while tackling climate change. We urge governments to create the incentives that will encourage all potential contributors to a more sustainable future.
Signed by: Helge Lund, BG Group plc; Bob Dudley, BP plc; Claudio Descalzi, Eni S.p.A.; Ben van Beurden, Royal Dutch Shell plc; Eldar Sætre, Statoil ASA; Patrick Pouyanné, Total S.A.
Perhaps the first thing to realise is that Shell and the rest won’t end up standing the cost of any carbon tax themselves, they will simply pass it on to consumers. The reason why they are actually quite keen on one is evident in the letter.
A carbon tax will put coal at a severe disadvantage in comparison to natural gas, which, of course, is hugely important to Shell and co. Also, as they say, the six companies also have “significant investments in renewable energy”, so it is really a win/win situation for them.
The losers, other than the coal industry, are the poor old consumers who will be saddled with the bill.
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NOT A LOT OF PEOPLE KNOW THAT 
Yet more enrichment through environmental stealth, seems like everyone is trying to feast on the honeypot, while the poor who need cheap energy to progress and lift themselves out of poverty will be the losers again!
Water vapor pricing The Next Big Thing, water vapor being the main greenhouse gas is something we must look forward to, CH4, UF6, N2O, SF6 ….
Another group of thieves trying to get rich from the poor and vulnerable using a myth to enrich their coffers. It is past time for these people learned something about capitalism and the free market. We already have more than enough government interferance in the market. Incidentely, we already pay more than enough in to cover such externallities according to the Stern Paper.
It is Oil & Gas trying to kill off their biggest Energy Generating Competitor.
If they can stop the use of Coal then Gas will totally dominate and guess who will control the prices.
I am constantly telling people the “Big Oil” conspiracy is a lie. Oil and gas companies are right there in line to sop up the billions in government subsidies for so-called renewables. Many, many oil and gas companies also have wind plants. Where else can you get free handouts to build the plant and a guarantedd 20 year contract price for the electricity, often whether you generate it or not? There’s also the need for back-up natural gas plants for every so-called renewable installation. Another win. Consumer pays for the cost increase. Add to that knocking coal out of the market and what’s not to love? Big Oil’s only conspiracy, if you insist on calling it that, is cashing in on everything the enviros are doing right now.
Switching from coal to gas means more money for Big Oil (Big Gas). Why shouldn’t they be for it? –AGF
Killing your main competitor while improving public perception of your industry, what is there not to like about this letter. Big coal would have done the same.