On April 11, ConocoPhillips became the first major U.S. oil company to join a corporate-environmental coalition urging Congress to require limits on greenhouse gases tied to global warming.
The decision could give the company an important voice in helping to guide legislation that might alter the way the industry produces fuel — and almost certainly make that production more costly, analysts say.
ConocoPhillips became the newest member of the U.S. Climate Action Partnership, an alliance of big business and environmental groups that in January told President Bush that mandatory emissions caps are needed to reduce the flow of carbon dioxide and other heat-trapping gases into the atmosphere.
Other companies that belong to the partnership include the American arm of London-based oil major BP and General Electric, the U.S. industrial products and media conglomerate.
“We recognize that human activity, including the burning of fossil fuels, is contributing to increased concentrations of greenhouse gases in the atmosphere that can lead to adverse changes in global climate,” said Jim Mulva, ConocoPhillips’ chairman and chief executive.
Mulva said the company was allocating “significantly more resources” to help develop alternative and renewable sources of energy and was committed to reducing emissions at its own plants. ConocoPhillips has said it will spend $150 million this year to research and develop new energy sources and technologies — a 50 percent increase in spending from 2006.
Stance changed since January
Mulva’s call for mandatory limits on greenhouse gases is an abrupt departure from his views on the issue as recently as January.
Mulva acknowledged in an interview at the time that all types of efficient energy sources were needed, but said market forces and consumer preferences, not federal requirements, should determine how they’re used.
“We believe very strongly the best way of meeting those metrics is to determine what they are and then let the industry ... come up with the resources and plans to meet those, (rather) than have mandates saying specifically, ‘You have to do it this way and that,’” he said.
Now, he says ConocoPhillips believes a “mandatory national framework” is the most likely way to reduce global greenhouse gas emissions, though he said it was too soon to say what type of caps should be imposed.
John Parry, a senior analyst at energy consulting firm John S. Herold Inc., said ConocoPhillips’ new stance accomplishes two things for the company: it conveys to the public the oil company is concerned about global warming, and it gives it the chance to help shape any legislation related to emissions caps or other measures.
“I think what they’re saying is let’s not leap into this without really analyzing what the unintended consequences are when we’re at the forefront of providing the world its energy,” Parry said.
Ethanol part of Conoco’s agenda
Mulva said ConocoPhillips is focused on finding ways to produce ethanol, an alternative already in use, and renewable diesel fuel more efficiently.
He said the company was building the potential long-term costs of reducing emissions into its capital spending plans for each of its global projects and was developing internal targets for carbon emissions at its operations.
The company also has committed to improving energy efficiency at its U.S. refineries by 10 percent by 2012.
ConocoPhillips shares fell 27 cents to close at $69.18 on the New York Stock Exchange. The shares have traded in a 52-week range of $54.90 to $74.89.
BP, the other oil major in the partnership, is considered a leader among its peers for its investments in new energy sources. The company has said it plans to spend $8 billion over the next decade developing alternative energy using wind, hydrogen and other means.
Exxon says warming serious issue
Exxon Mobil Corp., the world’s largest publicly traded oil company, spends less heavily on such projects. It has acknowledged the risks of climate change to society and its ecosystems could prove to be significant.
ExxonMobil spokesman Dave Gardner said April 11 the company neither supports nor opposes proposed federal emissions caps. He said the company would consider any proposal that would ensure a uniform and predictable cost of reducing carbon dioxide, promote global participation and adjust to new developments in climate science.
“We recognize it’s a serious issue and actions need to be taken,” Gardner said. Members of the U.S. Climate Action Partnership group include chief executives of Alcoa Inc., DuPont Co., Caterpillar Inc. and Duke Energy Corp. The executives said mandatory reductions of heat-trapping emissions can be imposed without economic harm and would lead to economic opportunities if done across the economy and with provisions to mitigate costs.
Many of the companies already have voluntarily moved to curb greenhouse emissions, they said. But the executives noted they don’t believe voluntary efforts will suffice.
