Imagine if the chief executive of a big U.S. oil company were to come to Washington to call for federal regulation of carbon dioxide emissions, strong legislation to promote energy efficiency, long-term tax credits for solar and wind power and an end to the tariff keeping Brazilian ethanol out of this country.
You donâ€™t have to imagine it. It happened last week. Jim Mulva, the CEO of Conoco Phillips, gave a speech to the U.S. Chamber of Commerce in which he strongly endorsed federal legislation to curb global warming, improve conservation and promote renewables.
â€œWe need leadership that looks beyond the wishes of special interest groups,â€ Mulva said, â€œand instead chooses to address the needs of American citizens.â€
Before we recommend Mulva for membership in Greenpeace, know thisâ€”he also says we need more domestic oil and gas exploration, more nuclear power and government price guarantees to promote â€œalternative oil or liquid fuel production.â€
Yes, heâ€™s still an oilman.
But heâ€™s an oilman worth listening to, if only because his thinking reflects the way the energy and environment debate is shifting in Washington.
Just last week:
–The Business Roundtable issued a statement, signed by the CEOs of ExxonMobil and Peabody Coal, and about 160 other chief executives called for action (albeit unspecified) on climate change. Still, thatâ€™s progress. â€œToday marks the first time that a broad cross-section of business leaders from every sector of the U.S. economy have reached consensus on the risks posed by climate change and the need for action,â€ John J. Castellani, the Business Roundtableâ€™s president, said in a statement.
–Xerox and NRG Energy joined the U.S. Climate Action Partnership, an alliance of big companies and big environmental groups (NRDC, Environmental Defense, etc) supporting meaningful reductions in carbon emissions. Ford General Motors, Chrysler and Conoco Phillips have all joined since the group was launched in January.
Partly this is pure, pragmatic politics. As the climate debate intensifies, companies want to join in. Just saying no wonâ€™t cut it. As they say in Washington: â€œIf you donâ€™t have a seat at the table, youâ€™re lunch.â€
But the shift in the discussion in big business also reflects the recognition (finally!) that we donâ€™t have a sensible energy policy in this country, that we canâ€™t depend on fossil fuels to meet our needs, and that we need to stop wasting energy and turning towards renewables.
This is essentially Mulvaâ€™s position. He sat down with a group of reporters before making his speech, and came across as a low-key, thoughtful guy who is frustrated by the partisanship that has made it so hard for Congress to do anything useful about energy or the environment. â€œWe havenâ€™t had an energy policy, nor do we have one today,â€ he said. â€œWeâ€™ve got to get out of the mode of placing blame.â€
Americans, he said, will have to get used to higher energy prices. The costs of getting oil out of the ground and refining it are rising. Whatâ€™s more, carbon regulation will lead to higher prices for oil and electricity. â€œWhether we like it or not, the cost of energy is going up,â€ he said.
But that doesnâ€™t mean that we will necessarily have to pay more to drive our cars, heat our offices and homes or run TVs, computers and air conditioning. All those things can be done more efficiently, providing that the government and industry get the incentives right.
For instance, the government could encourage people to drive more efficient cars by establishing â€œfeebates.â€ Mulva asked: â€œWhy arenâ€™t we putting a surcharge on vehicles that are not very efficient, and then giving rebates for vehicles that are efficient, and then keep moving the standards up?â€
Smart electricity meters and time-of-day pricing could encourage customers to use power when it is most abundant, and conserve when it is scarce.
Efficiency, he said, â€œis the most effective way to reduce our carbon footprint, stretch our supplies and improve energy security.â€
He said the governmentâ€™s support for energy researchâ€“whether into renewables, or biofuels, or clean coalâ€“is inadequate. â€œWe should approach this more like a Manhattan Project. We should be dedicating billions of dollars. I donâ€™t think hundreds of millions of dollar is going to do the job.â€
By the way, Conoco Phillips, although not nearly the size of ExxonMobil, BP or Shell, is a big entityâ€“$190 billion in revenues last year and $15.5 billion in profits. Itâ€™s based in Houstonâ€“Bush country. For its CEO to be talking about carbon regulation, renewables and efficiencyâ€“well, in the news biz, thatâ€™s what we call a man bites dog story.