Climate report hounds energy
Industry could face new rules as state’s vulnerability in focus
A dire government report on the far-reaching impact of climate change could increase pressure on the energy industry to curb greenhouse gas emissions and political leaders to act more decisively to reduce the use of fossil fuels, analysts said.
No one expects such actions while Republicans control the White House and the Senate. President Donald Trump quickly dismissed the report — produced by his own administration — telling reporters Monday, “I don’t believe it.”
But, analysts said, the report’s uncompromising findings that the pace of global warming is accelerating and human activity — the burning of fossil fuels such as oil, coal and natural gas — is most responsible will make it harder for the Trump administration to roll back Obama-era restrictions aimed at cutting greenhouse gas emission from power plants and oil and gas drilling.
The 1,656-page report, required by Congress, offers the most comprehensive scientific study yet of climate change’s impact on the U.S. economy, public health, coastlines and natural resources. Its message is clear: Climate change, in the form of increasingly devastating hurricanes in the Southeast, deadly wildfires in California, and more intense heat waves, already have pummeled the country. And more climate change catastrophes are coming.
The direction of climate change polices, of course, have large implications for Houston, whose economy is driven by the oil and gas industry. The sector accounts for more than 200,000 energy-related jobs and supports thousands of other jobs that provide goods and services to the industry and its workers, according to the Greater Houston Partnership, a business-financed economic development group.
Rising sea levels and hurricanes on the Texas Gulf Coast could threaten much of the na-
tion’s energy refining capacity and inflict as much as $20.9 billion in coastal property damage from flooding by 2030, the report said. By 2050, about $30 billion of property along the Gulf Coast will be under the high-water mark.
The report underscores the unique position of Texas. It produces more carbon emissions than any other state, but also ranks among the most vulnerable to extreme weather events, such as Hurricane Harvey, and other climate disasters, noted Katharine Hayhoe, co-author of the report and professor Texas Tech University. Hayhoe is one of hundreds of scientists who worked on the climate assessment, including government scientists from 13 federal agencies.
Many energy terminals and refineries along the coast are at risk of storm surges, the report said. Globally sea levels are expected to rise 1 to 4 feet, but that the Texas Gulf Coast could see double the average increase in sea levels.
Even as energy companies face threats to their own facilities from climate change, Hayhoe said, “the number one reason why climate is changing is because we’re digging up and burning coal, gas and oil.”
Climate change is potentially an existential issue for the oil industry. Companies have already come under pressure from shareholders, calling on executives to account for the impact of climate change on their businesses and plan for policies aimed at addressing it.
The New York Attorney General recently sued Exxon Mobil, alleging that the company misled investors on how climate change would affect the company — a claim that Exxon Mobil denies. Environmental and other groups have filed lawsuits seeking to hold fossil fuel companies responsible for climate change and the damage it causes.
The climate report estimated that climate change could drain hundreds of billions of dollars from U.S. economy every year, starting in the second half of the century. In the worst case scenario, the costs could reach 10 percent of the nation’s annual economic output — which today would equal about $2 trillion.
Delaying, stopping rollbacks
Analysts said the new climate report and its unequivocal conclusions could bolster legal arguments in climate change cases, particularly in challenges to the Trump administration’s moves to undo Obama-era rules around fuel efficiency standards, power generation and methane emissions from oil and natural gas production.
Victor Flatt, an environmental law professor at the University of Houston, said that these and other regulations are based on the EPA’s finding that carbon dioxide and other greenhouse gases pose a danger to public health and safety. That requires the federal government to control greenhouse gas emissions from vehicles, stationary sources (including power plants and some drilling) as well as from sources already regulated under the Clean Air Act.
The government’s climate assessment could support the legal underpinnings of the endangerment finding which “makes it harder to get rid of any existing regulation on climate change,” Flatt said.
It should also provide ammunition for Democrats after they regain control of the House of Representatives in January. Democrats are expected to scrutinize the Trump administrations efforts to unravel environmental regulations and cast doubts on climate science.
Luke Metzger, executive director of Environment Texas, said energy companies should plan on stricter pollution reduction requirements. “I do expect the House (to have) vigorous oversight that might lead to some of these rollbacks being delayed or stopped.”
Metzger noted that major energy companies such as Exxon Mobil, Royal Dutch Shell and Chevron that have announced efforts to cut methane emissions from oil and gas production. Methane, one of the most powerful greenhouse gases, is released in the air when producers burn excess gas in a process called flaring or when it leaks at wells, pumps and pipelines.
Companies such as Shell, Exxon and BP have voiced their support of carbon tax initiatives, a market-based approach to provide incentives to choose fuels that produce less carbon dioxide. Exxon, the largest U.S. oil company, donated $1 million toward backing a carbon tax advocacy group, although it is fraction of what the company spends on lobbying.
A case for carbon taxes
Flatt said the government’s climate assessment could build the case for carbon taxes by providing specific estimates for economic costs of climate change and “continue to put pressure on at least setting the tax to reflect that (cost).”
That could accelerate the industry’s shift to natural gas. The world’s biggest oil companies already are investing billions of dollars to produce, process and transport natural gas, which emits fewer greenhouse gases than coal or oil-based products. The American Petroleum Institute pointed to government findings that North American emissions from fossil fuel combustion dropped by an average of 1 percent annually over the last decade, largely because of the shift from coal to natural gas as a major power source and better fuel efficiency standards in cars and trucks.
“The bottom line is that natural gas and oil production in America is among the cleanest in the world,” said Kyle Isakower, vice president for Regulatory and Economic Policy at the American Petroleum Institute, in a statement. “Our industry continues to demonstrate that meeting record demand and protecting the environment are not mutually exclusive,”
John Tintera, president of Texas Alliance of Energy Producers, didn’t think report would be a turning point for climate policy. but that it would add to the growing body of research available to regulators.
“There is no way — without doing severe harm to quality of life — that you could simply make oil and gas industry not function. The negative impact on society would be horrendous,” Tintera said. “Over the next five to 10 years oil and gas (industry leaders) are going to demonstrate how helpful it can be as part of the solution.”