Big Business Jumps Ship from the S.S. Climate Change
The still-growing Climategate scientific fraud scandal has already started to move public opinion against global warming alarmism. And even people who believe in looming climate catastrophe aren't too happy about cap-and-trade legislation that would force them to pay more (and in reality, much, much more) for energy. What has kept cap-and-trade legislation alive in Congress is strong support from big business. Many major corporations have figured out that they can make billions of dollars in windfall profits if a cap-and-trade scheme is enacted that will give them free ration coupons and force consumers to pick up the bill.
Big business support began to crumble on Tuesday -- and in a big way. In separate announcements, BP America, Conoco Phillips, and Caterpillar dropped out of the main lobbying group for cap and trade, the U.S. Climate Action Partnership (USCAP). BP sent a letter to its fellow coalition members, Conoco Phillips sent out a press release, and Caterpillar had its name taken off the USCAP website and then confirmed that it was dropping out when media inquiries were made.
All three corporations say nice things about USCAP and how much their participation in it has meant to them. And they all say that they are still committed to working for policies to reduce greenhouse gas emissions. So why are they pulling out? Conoco Phillips was the most candid in its press release: "House climate legislation and Senate proposals to date have disadvantaged the transportation sector and its consumers, left domestic refineries unfairly penalized versus international competition, and ignored the critical role that natural gas can play in reducing GHG emissions," according to chairman and CEO Jim Mulva.
In other words, Conoco Phillips isn't going to make out like a bandit if the Waxman-Markey or Kerry-Boxer cap-and-trade bill is enacted. Conoco Phillips is a major oil and gas producer and owns major oil refineries. Cap and trade set up in the right way (that is, so as to benefit Conoco Phillips) would hit coal first because burning coal produces more carbon dioxide emissions per unit of energy produced than does gas or oil. Electric utilities would be forced to close coal-fired power plants. Since windmills and solar panels don't produce much electricity, the only feasible replacement for coal is to build natural gas-fired plants. Thus in the early years of cap and trade, natural gas demand would actually go up and oil wouldn't be affected much. Conoco Phillips (and most of the other petroleum companies, including BP) would do well for awhile -- and modern corporate executives don't think very far ahead. But Waxman and Markey in the House and Boxer and Kerry in the Senate had to give away most of the ration coupons to electric utilities in order to gain support from members of Congress from states that depend on coal for electricity. Which means that the utilities can keep their coal plants burning for the first fifteen years or so of a cap-and-trade regime.
BP America made similar but less explicit noises about why they were quitting the U.S. Climate Action Partnership. The more interesting case is Caterpillar. Company executives have never been able to explain why the major manufacturer of heavy equipment used in activities such as coal mining would want to join an effort designed to end coal use. On Tuesday, a Caterpillar spokesman said that the company had decided to "direct our resources toward the commercialization of technologies that will ... reduce carbon emissions." Caterpillar has joined the FutureGen Alliance, which is working to build a coal-fired plant that will capture its carbon dioxide emissions and store them underground. In other words, Caterpillar has finally realized that killing coal is not in its interests.
The global warming ship has run aground on some very nasty rocks. BP America, Conoco Phillips, and Caterpillar are only the first big corporations to decide to jump ship before it founders and sinks.