US refiners should spread message against cap-and-trade – oil exec

23 March 2010 18:25  [Source: ICIS news]

PHOENIX (ICIS news)--The US oil and gas refining industry needs to establish a grassroots effort to combat government cap-and-trade proposals, Murphy Oil executive director Claiborne Deming said on Tuesday.

Speaking at the 108th annual meeting of the National Petrochemical and Refiners Association (NPRA), Deming said the oil industry’s message that cap-and-trade is detrimental to the American economy must be stepped up.

“We need to ramp up engagement and show the facts - Americans really don’t want to pay more for energy,” Deming said.

A cap-and-trade mandate would impose increasing limits, or caps, on US industrial emissions of carbon dioxide (CO2) and other greenhouse gases (GHG). It would also sell emissions credits to manufacturers, who could then trade the permits to other producers whose emissions exceed allowances.

“Ultimately, that cost will be passed on to the consumer,” Deming said.

Eighty-five percent of global energy use will still be fossil fuel-driven by 2030, Deming said, implying that carbon-cutting efforts to reduce global warming are ultimately fruitless as energy usage in emerging economies, such as China and India, will continue to grow rapidly.

“It’s unlikely the Chinese will stop using coal,” Deming said.

If the US economy were to convert all of its energy usage to alternative fuels, including nuclear, wind and solar power, it would cost the US approximately $15,500bn (€11,470bn), he said.

The challenges facing the industry are not all above ground, either, Deming said. He noted that oil consumption passed discovery back in 1980, and that the rate of oil discovery is decreasing rapidly.

“Regardless [of declining oil production], fossil fuels will maintain a significant market share for decades,” he said.

Technological advancements made by the oil and gas sector will continue to extend the life of existing oilfields, while efficiency and exploration investments will lead to further discoveries and more economic usage of oil and gas, Deming said.

($1 = €0.74)

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By: Steven McGinn
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