Top U.S. oil trade group drafts carbon tax proposal

 

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The American Petroleum Institute has drafted a proposal urging Congress to adopt a carbon tax, although some members of the biggest U.S. oil industry trade group want to delay action until after the midterm elections, fearing it could alienate Republican lawmakers, the Wall Street Journal reported this week.

The API proposal calls for assessing gasoline wholesalers, power plants and others a tax starting at $35-$50/ton for carbon dioxide generated by the fossil fuel they sell or use, with adjustments for inflation and other factors, according to a document reviewed by WSJ.

The draft says a carbon tax is “the most impactful and transparent way to achieve meaningful progress on the dual goals of reducing greenhouse gas emissions while simultaneously ensuring continued economic growth.”

Some API members, such as European-based producers Shell (SHEL) and Equinor (EQNR), reportedly want fast action, while companies including Hess (HES), Marathon Petroleum (MPC) and Phillips 66 (PSX) are said to believe a delay is needed to help the industry avoid political blowback because a carbon tax has become unpopular among both conservatives and liberals.

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Last month, the SEC unveiled a draft rule that would require companies to disclose GHGs not just from their own facilities but also the emissions generated by partners and end-users outside the company’s direct control.