With the C.E.O. of Exxon Mobil now officially the president-elect’s nominee for Secretary of State, the oil and gas giant is being cast as a kinder and gentler fossil fuel behemoth. Here’s the New York Times’ weekend take:
[Rex] Tillerson assumed the role of chairman and chief executive of Exxon Mobil in January 2006, and during his tenure the company acknowledged, for the first time, the science underlying climate change. It has said it supports the creation of a carbon tax, which most Republicans have opposed, and it also supported the Paris climate agreement, a major focus of Mr. Kerry’s time in office. Mr. Trump has vowed to abandon the climate pact. In May, Mr. Tillerson told shareholders that “we believe that addressing the risk of climate change is a global issue,” adding that it would require the cooperation of governments, businesses and individuals. (Rex Tillerson, Exxon Chief, Is Expected to be Pick for Secretary of State, Dec. 10, emphasis added)
Missing in this creampuff thumbnail, of course, is #ExxonKnew, the revelations from Inside Climate News and others that Exxon executives suppressed company scientists’ findings in the late 1970s warning of possible catastrophes from the greenhouse effect, and then led a propaganda campaign to block solutions. Also missing — and the subject of this post — are any specifics as to the carbon tax level Exxon supposedly endorses.
A modest carbon tax, say $20 to $40 per ton of carbon dioxide emissions, would aid lower-carbon natural gas in substituting for high-carbon coal, an outcome that would dovetail with Exxon’s gas-heavy but coal-light resource base. Whereas a robust carbon tax, one that would ramp up briskly and reach triple digits within a decade, would not only kayo coal but deal a heavy blow to oil and gas, partly by giving a big lift to carbon-free renewables, and also by shrinking overall energy demand.
Needless to say, there’s zero evidence that Tillerson or anyone associated with Exxon has ever voiced support for a robust carbon tax.
Indeed, it’s nearly impossible to find even a single Exxon statement specifying the amount of a carbon tax the company would support. This morning we combed a bunch of stories reporting on Exxon’s support for carbon taxing:
- Guardian, Exxon Chief Backs Carbon Tax Jan. 10, 2009
- Wall Street Journal, Exxon Touts Carbon Tax to Oil Industry, June 30, 2016
- Fortune, Why ExxonMobil Is Supporting a Carbon Tax Now, July 10, 2016
- Dallas Morning News, As Exxon ramps up support of carbon tax, imagine the possibilities, July 6, 2016, editorial
- Dallas Morning News, Exxon proud of its role in climate change dialogue, May 24, 2016, op-ed by Suzanne McCarron, Exxon Mobil v-p of public and government affairs
Not one of these news stories or opinion pieces mentioned a tax level. To model the Exxon carbon tax shown in our graphic, we went back in time to a 2009 D.C. meeting at which a couple of Exxon “governmental relations” officials sat down with carbon tax advocates. The off-the-record session was short on specifics, but the Exxon reps floated a $20 a ton figure. I’ve raised that to $25, generously capturing seven years of inflation, but have kept the tax level flat in real terms over time.
The graph makes apparent how little such a modest tax would reduce carbon emissions. The “robust” carbon tax shown — modeled after the McDermott carbon tax that would start at $11.34 per ton of CO2 and increase by $11.34/ton annually — would, by 2040, be eliminating 4-5 times as much CO2 from U.S. smokestacks and tailpipes as the “Exxon carbon tax.”
In carbon taxing, as elsewhere, the devil truly is in the details.
Original graphic has been revised to include two different “Exxon carbon taxes.” Model them, or your own, using CTC’s carbon-tax spreadsheet (Excel file).