The American Petroleum Institute is preparing for a major battle against oil and gas taxes it expects the Clinton administration to propose as part of a campaign to combat purported global warming.
Exxon Corp. Chairman Lee Raymond, who also is API chairman, called the issue "the greatest long-term threat to our industry" at the association's annual meeting last week in Washington, D.C. It was attended by 705 persons.
API officials said the group's public policy committee agreed the global climate change should top the agenda when API sets its legislative priorities in January.
Greenhouse treaty
The United Nations Framework Convention on Climate Change, signed in Rio de Janerio in 1992, proposed countries reduce emissions of so-called greenhouse gases such as carbon dioxide and methane that some scientists have sought to link to a 1° rise in global temperatures during the last century. So far, 160 nations have ratified the treaty.
A Conference of Parties (COP) is administering implementation of the treaty. A COP meeting in Berlin last year called for strengthening the pact and requiring industrialized countries to commit to emissions reductions after 2000.
At a COP meeting in Geneva last July, the U.S. agreed to medium-term targets for greenhouse gas reductions. A COP meeting in Japan next year is expected to reach agreement on reductions from industrialized nations.
API Executive Vice Pres. William O'Keefe said all of the proposals on the table would require deep cuts in energy use, some by the year 2005, causing "severe economic damages to countries, without environmental benefits."
Charles River Associates, Washington, D.C., briefed the API meeting on a computer model it has developed that suggests a wide range of nations (including developing countries) would suffer economically from emissions limits.
Common sense urged
Raymond said the U.N. is acting to reduce the use of fossil fuels "based on the unproved theory that they affect the earth's climate.
"In July, the U.S. administration, without full public discussion and debate, made a proposal that surprised almost everyone. It proposed a binding agreement requiring only developed nations to reduce greenhouse gas emissions after the year 2000. It committed the U.S. to such an agreement.
"Proponents of the global warming theory say that higher levels of greenhouse gases-especially CO2-are causing world temperatures to rise and that burning fossil fuels is the reason. But scientific evidence remains inconclusive as to whether human activities affect global climate.
"Everyone agrees that burning fossil fuels releases CO2 and that such concentrations in the atmosphere are rising. But it's a long and dangerous leap to conclude that we should therefore cut fossil fuel use."
Raymond said 96% of the CO2 entering the atmosphere is produced by nature and is beyond human control.
"I'm not proposing we dismiss the possibility of climate change. But I am asking that we apply common sense to the debate. Many scientists agree there's ample time to better understand climate systems and consider policy options. So there's simply no reason to take drastic action now."
Raymond said reducing fossil fuel use to the levels the administration advocated in Geneva could add 60¢/gal to the price of gasoline and raise the price of other fuels 50%.
"To make matters worse, the U.S. has also called for the use of 'tradable permits' for fuel usage-which is just another term for rationing."
Government by stealth
API President Charles DiBona said the U.N.'s Intergovernmental Panel on Climate Change (IPCC) is an example of what he called "government by stealth"-actions by unelected government working groups and task forces.
"Most government stealth groups are dedicated to the pursuit of some single value, so they have little interest in cost-effectiveness or even in costs, period. They do not balance competing objectives. They work closely with selected private organizations. This gives the appearance of outreach and public involvement, but generally the contacts are focused on private groups that have the same agenda as the government."
He said, "IPCC is composed mainly of people employed by governments. It has produced for these governments a facade of scientific justification for proposing binding targets for reductions in emissions of carbon dioxide. These targets could mandate cuts of 20%, 50%, or possibly even more, in U.S. energy use over the next few decades.
"When anyone expresses doubt over the role of the IPCC, the standard response is that it has no real power, that any treaty imposing reductions would have to be ratified by the U.S. Senate."
But DiBona said by claiming to be impartial and apolitical, the IPCC can push through recommendations that lack scientific basis.
He said the Ozone Transport Assessment Group (OTAG) is another example of government by stealth. The Environmental Protection Agency established OTAG, with representatives from 37 states and the District of Columbia, last year to study the ozone transport problems in nonattainment areas.
DiBona said the OTAG recommendations will shape state implementation plans.
"OTAG contains no elected representatives. The process by which recommendations will be adopted is not specified. Industry was told it can participate, but it has no voting rights. Rather, OTAG claims it operates through 'consensus.' But you can be sure the iron fist of EPA rulemaking power is somewhere behind all this.
"We have good reasons to believe that OTAG is leaning toward approaches that are indifferent to cost-effectiveness. It seems to think that everyone should share the pain caused by emissions reductions.
"Thus nitrogen oxide reductions from automotive fuels costing $60,000/ton would be regarded as just as desirable as reductions from stationary sources costing $1,500/ton."
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