WATCHING WASHINGTON ANOTHER THREAT FOR THE INDUSTRY

With Patrick Crow Although the oil industry has focused on President Clinton's BTU tax in recent months, another administration initiative threatens. On Apr. 21 Clinton pledged to cut U.S. greenhouse gas emissions to their 1990 levels by 2000, complying with goals set by the 1992 Earth Summit in Rio de Janerio. A major greenhouse gas is carbon dioxide, emitted as fossil fuels are burned. The administration plans to present its preliminary plan to an Aug. 16 international meeting on climate

July 5, 1993

3 min read

Although the oil industry has focused on President Clinton's BTU tax in recent months, another administration initiative threatens.

On Apr. 21 Clinton pledged to cut U.S. greenhouse gas emissions to their 1990 levels by 2000, complying with goals set by the 1992 Earth Summit in Rio de Janerio.

A major greenhouse gas is carbon dioxide, emitted as fossil fuels are burned.

THE ISSUE

The administration plans to present its preliminary plan to an Aug. 16 international meeting on climate change.

At a workshop last month, the White House's Climate Change Mitigation Group heard arguments about whether U.S. companies should be allowed to meet Washington's goals by reducing emissions in other countries.

Some witnesses said that would be the most cost effective way to make significant reductions. Others said the U.S. should set an example by first cutting emissions at home.

At a Senate energy committee hearing on the issue last week, Sen. Malcolm Wallop (R-Wyo.) said Clinton's actions were being driven by politics, not sound science.

Energy Sec. Hazel O'Leary said the administration wants to avoid needless costs, regulations, and bureaucracy.

She noted the 1992 Energy Policy Act contains a number of energy efficiency initiatives that may reduce greenhouse gas emissions 2040 million metric tons/year of carbon from the otherwise expected baseline levels by 2000. She said the administration's proposed BTU tax by promoting energy conservation, would lower greenhouse emissions of 20-25 million metric tons carbon equivalent by 2000.

She said, "If there is a broad based energy tax enacted that results in a year 2000 reduction of 25 million metric tons, the shortfall for returning to 1990 levels would still be 70-100 million metric tons."

And she warned if a broad based energy tax is not enacted, "the president's plan may require other, potentially more costly and less efficient policy mechanisms for needed greenhouse gas emissions reductions."

At a separate forum, Rep. Phil Sharp (D-Ind.), a key energy legislator, said industry has little reason to worry.

"I would be very surprised if we see major regulatory or tax proposals" to curb greenhouse gas emissions, he said, adding the U.S. also would not take major, aggressive actions unilaterally.

A KEY FLAW

Denise Bode, Independent Petroleum Association of America president, told a Houston group last week the issue illustrates a key flaw in federal environmental policy making: Regulations too often react to perceived crises, leading to many misguided actions.

"The BTU tax was a policy product of Rio. Behind it was the environmental agenda to encourage the so-called 'good fuels' and punish the so-called 'bad fuels'.

"We must commit ourselves to a new age of reason in public policy. We must reject fear and the language of crisis and embrace common sense and science as a criteria for action."