ExxonMobil confident on passage of US CO2 regulations

09 December 2009 22:30  [Source: ICIS news]

HOUSTON (ICIS news)--US ExxonMobil said on Wednesday it was confident that the US government will pass a form of emissions legislation in the near future

In its Outlook for Energy: A View to 2030 report, the Irving, Texas-based oil and petrochemical giant included energy usage forecasts wherein government regulations tack costs on CO2 emissions of $30-60/tonne by 2010. That was the first time Exxon factored emission costs in its annual energy forecasts reports.

Those numbers, calculated by looking at European carbon trading schemes and current climate bills pending in the US Congress, reflected the company’s growing confidence that the US will pass emissions legislation sooner rather than later, ExxonMobil spokeswoman Cynthia Bergman said.

“That’s where we expect the cost to evolve over the next 10 years,” Bergman said.

Exxon has considered carbon emissions legislation in its annual forecasts since 2007, but this was the first year the company attached specific cost numbers to CO2 emissions, Bergman said. The company publicly released this year’s forecast on 8 December.

Exxon’s stance is at odds with the one held by most of the chemical industry. Groups such as the National Petrochemical & Refiners Association (NPRA) have lobbied hard against cap-and-trade becoming law, while Exxon president Stephen Pryor went as far as to advocate a carbon tax for developed countries to combat climate change.

Chemical companies are heavily dependent on natural gas for a feedstock and power generation. If cap-and-trade becomes law, global natural gas demand could jump as much as 55% over 2005 levels as more companies use it instead of coal to ensure they meet emission limits, Exxon said. In turn, that would dramatically increase the price.

The House voted for a version of cap-and-trade when it passed HR-2454 in June. The Senate said it would not act on its version of the bill, S-1733, until next year.

The Exxon report also predicts total energy usage in 2030 will be about 35% higher than in 2005, spurred by a 65% jump in energy demand from developing countries such as China, India and others.

($1 = €0.68)

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By: Ben Lefebvre
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