Exxon: Carbon Tax Would ‘Play A Significant Role In Addressing Rising Emissions’

President Obama indicated yesterday in a press conference that a carbon tax is not high on his Administration’s priority list. Nor does the policy have much support from leading Republicans in the House of Representatives.

But with chatter about carbon taxes in both conservative and progressive Washington political circles growing into a serious bi-partisan conversation, influential players are chiming in with their support.

Speaking to Bloomberg News, oil and gas giant Exxon reiterated its support for a carbon tax yesterday. A spokeswoman for the company said that the tool could “play a significant role in addressing the challenge of rising emissions.”

“Combined with further advances in energy efficiency and new technologies spurred by market innovation, a well-designed carbon tax could play a significant role in addressing the challenge of rising emissions,” Kimberly Brasington, a spokeswoman for the company, said in an e-mail. “A carbon tax should be made revenue neutral via tax offsets in other areas,” she added.

Exxon’s political action committee gave nearly $1.2 million to political candidates in the past two years, 93 percent of it to Republicans, according to the Center for Responsive Politics.

Exxon is the biggest U.S. natural-gas producer. A carbon tax could boost demand for natural gas in U.S. power plants, as gas emits half the carbon dioxide as coal when burned to make electricity.

This is not a new policy stance. The company came out in favor of a carbon tax in 2009 so that it could point to something it did support while lobbying against the cap and trade program being considered in Congress at that time.

“As a businessman it is hard to speak favorably about any new tax,” said Exxon CEO Rex Tillerson in January of 2009. “But a carbon tax strikes me as a more direct, a more transparent and a more effective approach.”

Exxon appears to be sticking to its original position now that there are more serious discussions underway about how to price carbon.

Earlier this week, anti-tax advocate Grover Norquist said that swapping a carbon tax for a cut to the income tax might be acceptable to conservatives — a position that he has expressed before. However, Norquist walked those statements back a day later while facing pressure from the American Energy Alliance, a fossil fuel advocacy think tank supported by the Koch Brothers.

14 Responses to Exxon: Carbon Tax Would ‘Play A Significant Role In Addressing Rising Emissions’

  1. Mike Roddy says:

    Exxon is OK with a tax as a way to help their natural gas business, since they recently paid $30 billion to buy a gas firm.

    The future battle is likely to be over the size of the tax. Tillerson assumes that people won’t change their driving habits with a modest tax, and that more natural gas plants will get built. A tax large enough to drive a move away from all fossil fuels is what is needed.

    The fossil fuel companies will fight desperately to keep that from happening, and based on the current composition of our government they will succeed. We should welcome this battle, because more Americans will become aware of what is actually at stake- assuming that the media finally decides to do its job.

  2. Bob M says:

    According to the World Energy Outlook 2012, America will surpass Saudi Arabia as the world’s largest oil producer in 2020 and Russia as the world’s largest natgas producer by 2015. Exxon doesn’t care whether America taxes carbon or not – they’re more than happy to dump their product on the world market, where other people’s cars will largely negate any progress made on reducing carbon here.

    Propose a fee-and-dividend approach, which taxes carbon at the source, and watch the Exxon’s hackles get raised very quickly. It’s the only way to make a real difference in terms of climate change.

  3. Exxon knows its days of selling oil are limited. Their oil production continues to decline as the years go by. They spend billions of profits on buying back stock instead of plowing it into increasing oil production. oil is a short-medium term play for them. there is a reason they spent $30b on methane instead of more oil production projects.

    There will be more of a carbon price fight from the carbonistas that don’t have a plan B…like the Kochs. See “Grover Grovel” for an illustration.

    The positive point about Exxon announcement is that more and more of corporate America is seeing their interests align with carbon pricing vs climate damages. Every company that shifts, even slightly, tips the scales towards action.

  4. Joan Savage says:

    Shrewd move by Exxon, given their role as biggest US natural gas producer.

    The EIA compares carbon dioxide emissions per million BTU of energy produced. Exxon’s natural gas and petroleum are well positioned to be less-hit by a carbon tax.

    EIA “How much carbon dioxide (CO2) is produced when different fuels are burned?”

  5. Mike Roddy says:

    Yeah, but we have to get off gas, too. Even if it’s half the emissions of coal (and it’s likely to be much more than that) this is way too much.

  6. Joan Savage says:

    So true.

  7. Joan Savage says:

    Note that Mobil Exxon’s Brasington echoes Norquist in tying a carbon tax to a revenue-neutral scheme “via tax offsets in other areas,” so that provokes issues of regressive taxation and confusing negotiations about amount of ‘offset.’

  8. prokaryotes says:

    Though my guess is that the main reason to switch- produce less, is because of decline in productivity.

    Saudi Arabia reveals plans to be powered entirely by renewable energy
    World’s biggest oil producer says it wants to make a 100% switch from fossil fuels to clean energy

  9. prokaryotes says:


    Shale Gas And The Overhyping Of Its CO2 Reductions

    Natural gas cannot be credited with the reductions in the US CO2 emissions observed in the last half-decade. Most reductions, nearly 90%, were caused by the decline in petroleum use, displacement of coal by mostly non-price factors, and its replacement by wind, hydro and other renewables. Where low price of natural gas saved some CO2 by displacing coal, it was quickly offset by its increased use in other sectors—highlighting the pitfall of justifying the current market for natural gas as a “bridge” or an interim phase of transition towards clean energy.

  10. prokaryotes says:

    A psychologist perspective on introducing policy legislation, a Carbon taxation.

    Video: Possible new climate policies

  11. Daniel Coffey says:

    Taxes on carbon are another way to slow-walk a shift to non-carbon systems for energy extraction and production like wind, geothermal and large-scale solar.

    Whenever you give governments (local, county, state or federal) a reason to keep a product flowing in order to derive revenue from it, other policies which might actually reduce its use will be weighed against revenue losses.

    For those who are advancing taxes on carbon, remember that any such tax will be passed on and will tend strongly to sustain the status quo use of carbon-based fuels.

  12. Daniel Coffey says:

    Joan: Excellent point. However, also note that I think the better measure is not the emission factor for the energy (BTU) content , but rather the pounds of CO2 produced for each Kwhr generated. A particular generating electricity technology may be less able to convert heat energy content into actual electricity.

    Take a look at

  13. Daniel Coffey says:

    Agreed. The bridging concept is another version of slow-walking which hopes to extend existing technology and investment, even as we will later be required to shift again as the interim technology continues the same problem other carbon-based fuels create.

    Maybe biting the bullet and spending our dollars one time instead of twice does not make sense to oil/natural gas companies, but it does from a risk and double cost standpoint. A bridge invites us to pay twice while raising the risk of run-a-way Greenhouse effect which no amount of effort will contain. That is a fool’s bet.

  14. Mike Roddy says:

    I agree with Exxon about the tax. Why let bankers skim off big cash for doing very little, and enable questionably designed offsets for the likes of ethanol and timber producers?

    The key will be the details. Exxon is OK with a $20 tax, but if it rises rapidly, they will bring out their lobbying troops and fight it. That battle may be where our future will be decided.