Energy

Foreign-Based Oil Companies Praise GOP Lawmaker’s Carbon Tax Bill

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Michael Bastasch Energy Editor

Three major foreign-headquartered oil companies have signed onto a letter supportive of a Republican lawmaker’s bill to tax carbon dioxide emissions, according to multiple sources.

Sources told Axios that European-based oil companies Royal Dutch Shell, BP and Equinor signed onto the letter praising Florida Rep. Carlos Curbelo’s bill “and its role in jumpstarting a long dormant policy conversation in Congress.”

The letter supporting Curbelo’s bill “is still circulating among companies and other parties,” Axios reported.

Curbelo unveiled his carbon tax legislation on Monday. The bill would slap a $23 per ton tax on emissions that would increase at a rate above inflation every year and replace the federal gas tax and some regulations.

Most Republicans won’t support the bill and conservative groups already formed a coalition to oppose it. Curbelo’s bill has zero chance of passing, but oil companies hope this is just the first salvo.

The letter does not explicitly endorse Curbelo’s legislation, despite all three of those companies’ vocal support for carbon pricing, including taxes and cap-and-trade. However, it’s not the first time these multinational oil majors voiced their support for a carbon tax

Netherlands-based Shell and London-based BP joined ExxonMobil in supporting the Climate Leadership Council, a group started by former Republican officials to build conservative support for a carbon tax. Exxon has not yet signed onto the letter supporting Curbelo’s bill, according to Axios.

Shell, BP and Equinor (formerly known as Statoil) wrote to the United Nations in 2015, calling for a global price on carbon dioxide.

Shell CEO Ben van Beurden is on record urging the Trump administration to stick with the Paris Agreement, which aims to keep future global warming below two degrees Celsius by 2100. The U.S. is slated to withdraw from the accord in 2020.

Van Beurden stressed “consistency” in policies across Europe and the U.S., meaning he wants climate policies on both continents to be more aligned. But of course, there’s also another aspect to taxing CO2 that would benefit oil and gas companies. (RELATED: Carbon Tax Bill Hits US Congress As Canadians Revolt Against Trudeau’s Climate Policies)

Natural gas is less carbon-intensive than coal, meaning a carbon tax would displace more coal-fired power in favor of natural gas, nuclear and renewables. At least in the short-run, natural gas is expected to be a major beneficiary of a carbon tax.

BP and Shell are heavily invested in gas, including in the U.S. where shale production is booming. Norway-based Equinor has production activities in the Marcellus Shale play that’s turned Pennsylvania into a natural gas powerhouse.

BP, Shell and Equinor are also increasingly investing in green energy technology, like wind turbines and solar panels. In fact, Equinor changed its name from Statoil to reflect its planned energy “transition” away from oil.

Euinor wants up to 20 percent of its assets to be in “new energy solutions” by 2030, and the company has increased its holdings in offshore wind power and solar panels in the past four years.

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