The oil and gas industry’s top lobbying group on Thursday endorsed a federal price on carbon dioxide emissions that contribute to global warming, a reversal of longstanding policy that comes as the Biden administration has pledged dramatic steps to address climate change.
The American Petroleum Institute (API), whose members include ExxonMobil, Chevron and other oil giants, announced the shift ahead of a virtual forum Thursday by the Interior Department as it launches a months-long review of the government’s oil and gas sales.
API also called for fast-tracking commercial deployment of long-sought technology to capture and store carbon emissions, as well as federal regulation of methane emissions from new and existing oil and gas wells, after strongly resisting such regulations proposed by the Obama administration.
“Confronting the challenge of climate change and building a lower-carbon future will require a combination of government policies, industry initiatives and continuous innovation,” API President and CEO Mike Sommers said in a statement.
The reversal comes as President Joe Biden has made tackling climate change a top priority, moving in his first days in office to suspend oil and gas lease sales from federal lands and waters and cancelling the contentious Keystone XL oil sands pipeline from Canada.
Biden said during the campaign he supports “an enforcement mechanism” that targets carbon pollution, and the White House has left open use of a carbon tax to help lower U.S. emissions of greenhouse gases. Treasury Secretary Janet Yellen has spoken in favor of the idea, telling the Senate Finance Committee, “We cannot solve the climate crisis without effective carbon pricing.”
While industry critics expressed suspicions over the sincerity of the move, Sommers emphasized that oil companies want “market-based solutions” such as a carbon tax or a cap-and-trade policy, rather than “heavy-handed government regulation.″ The oil industry played a key role in the defeat of proposed cap-and-trade legislation in the Senate a decade ago, and its endorsement of a carbon price and other federal action marks a turnaround after years of opposition to federal legislation to address climate change.