The American Petroleum Industry announced the U.S. oil and natural gas sector spent billions of dollars last year on environmental programs. The energy lobby said it estimates that about 20 percent of all investments in low-carbon technology came from private energy companies. At the most recent international climate conference, world environmental negotiators were too ensnared by their own governmental interests to make any major breakthroughs. Groups like API, however, adhere to the adage that markets are more adept at innovation when freed from burdensome government regulations. But without at least some federal persuasion or economic incentive, it’s uncertain what 2013 holds for a low-carbon future.
API said the oil and natural gas industry spent around $13 billion last year on green initiatives under the current tax regime. A chunk of that investment targeted matters like spill remediation and corporate environment programs. Howard Feldman, API’s director of regulatory affairs, said about 20 percent of that money is going directly to low-carbon energy alternatives.
“One of every five dollars invested in alternative energy technologies like wind and solar is from the oil and natural gas industry and we are committed to doing more,” he said in a statement.
In September, Feldman said the federal government was embracing policies that could jeopardize some of that private money by throwing up roadblocks to domestic oil and gas development. In a global market, rules that target only the U.S. energy sector aren’t conducive to growth. When the Environmental Protection Agency proposed a higher biofuel mandate for 2013, API sued the regulator, arguing the mandate was “unworkable.”
EPA Administrator Lisa Jackson this week announced she was leaving the Obama administration as it enters its second term. During her tenure, the EPA enacted sweeping new limits on power plant emissions and introduced the first-ever greenhouse-gas standards for vehicles. By the next decade, thanks to Jackson, new passenger vehicles will be required to get more than 50 miles per gallon, up from the 28.6 mpg requirement for 2011.
I will leave the EPA confident the ship is sailing in the right direction,” said Jackson.
Her pending departure gives groups like API and its supporters cause for celebration. In a March letter to Jackson, Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee, suspected the EPA was collaborating with groups like the Sierra Club in environmental litigation against other federal agencies. Meanwhile, Bill Raney, head of the West Virginia Coal Association, said Jackson’s so-called war on coal was hurting the state’s economy.
“There’s been a lot of criticism directly to her specifically in court decisions and Congress,” he said.
U.S. President Barack Obama, however, said Jackson’s EPA was “sensible” in its environmental stewardship. API, in its 27-page report on green investments, said voluntary green investments in air pollution alone exceed federal requirements. Obama, meanwhile, cut short his holiday vacation to resume negotiations over the so-called fiscal cliff. Without some of the tax credits currently on the books, the wind energy industry says new installations will likely grind to a halt. While the API’s report is long on monetary figures, it’s short on energy or environmental statistics. Presumably, without tax credits to support a low-carbon economy and without an “overzealous” EPA administrator, private investments in renewables for 2013 will plummet.
By. Daniel J. Graeber of Oilprice.com