Saturday, April 21, 2007

American Petroleum Institute Talks Energy with Bloggers

Like other companies and industries wanting to "tell their side of the story" about energy and global warming solutions, the American Petroleum Institute (API) held its second conference call for bloggers on April 18th. API is the national trade association of the U.S. oil and natural gas industry. It represents more than 400 companies that work in areas such as exploration, refining, production, marketing, and transportation.

I was invited to join the call, hosted by API President and CEO Red Cavaney. I represented Maria Energia and Green Options. Other invited bloggers included folks from Treehugger, The Oil Drum, EcoGeek, NewsWatch: Energy (the Houston Chronicle), the Wall Street Journal Energy Roundup, Fortune/CNNMoney.com, ShopFloor.org (National Association of Manufacturers), and Wired.com's Autopia. Unfortunately I was not able to be on the call, but did submit questions in advance. The full, 18-page transcript is online and a podcast is also available.

Because of the length of the discussion, I'll focus here on the questions that relate most closely to Maria Energia's topics of energy policy and global warming solutions:

Energy efficiency is the fastest, easiest, and cheapest way to cut our global warming emissions, and it was one of the first questions that came up. Tom Fowler of the Houston Chronicle asked whether API has a specific position on efficiency improvements for vehicles and appliances. Cavaney responded that energy efficiency needs to be the cornerstone of a national energy policy, but API doesn't comment on any specific sector other than to say that everyone has a responsibility:

...so we don’t comment in great detail about how one might go about addressing CAFÉ [Corporate Average Fuel Economy Standards for vehicles], but we do feel that the transportation sector, like any other, has a responsibility to become more energy efficient....It’s the easiest way to add additional capacity is the barrel...So we find also that that message resonates very well with the individual consumer, but what we also find with the exception, generally, of California – the consumer hasn’t had a lot of recent experience on this and isn’t well-educated on it..."

I was surprised by this statement. It seems like every time gas goes up 2 cents, we're bombarded with fuel-saving tips from the media. Perhaps not enough credit is being given to the consumer, or perhaps I just notice the tips more because I watch for them.

Later, one of my submitted questions was asked: Where is the United States' biggest opportunity to increase energy efficiency? Transportation? Electricity?

Again, Cavaney didn't comment on any particular sector, explaining that API takes the position of "not sticking our nose in other people's business." But he did say that the private sector should work with government on energy efficiency solutions:

"...I think that we’ll end up getting surprising gains in every sector because to the business community, in most cases, energy efficiency is money that drops to the bottom line."

Cavaney also had a comparatively optimistic view of peak oil. He said that even after the world's oil production hits its peak, the fall of production will probably be gradual, rather than steep. He also believes that much of the world is "under-explored."

Jeff McIntire-Strasburg of Treehugger asked about API's stance on federal global warming regulations, like carbon dioxide (CO2) caps. Cavaney responded that API wants to continue with voluntary measures to cut emissions, because "that's how you push the technology." However, if CO2 regulations are coming down the pipeline (as some companies believe and have indeed asked for), API has no preference for a carbon tax versus a cap-and-trade policy, but went on to explain their opinion on the development of any carbon regulation in four parts:

"...we want to be at the table, and we want to share our experience, we’re willing and open to listen to others and we think, number one, that the government should not pick winners and losers in advance of that discussion getting underway, number two, we think that the market is the best place to solve and sort of all these varying things, number three, we think that multiple approaches and multiple opportunities, rather than one, is going to help get us there more cost-effectively. We think, number four, that the problem needs to have global participation, not just U.S. participation; it’s not going to be sufficient."

This reminded me of the frustration I felt when listening to ExxonMobil's Vice President of Public Affairs, Ken Cohen, answer a similar question. We get the same sort of circular answer: Yes, climate change is important. Yes, it requires action. But we don't have a position on the best action, but we should be involved, but it shouldn't just be required of our sector, and we have to make all the countries in the world do it, or it won't work. This sort of vague explanation shows a lack of leadership. We can't sit around waiting for other nations to get on board (while so many others have already). Global warming demands solutions now.

However, I am encouraged that API is reaching out to talk about energy issues and solutions. Many thanks to Red Cavaney for his invitation to be on the call and for his willingness to discuss these very tough issues. I hope that we see real leadership, partnership, action, and change from an industry absolutely critical to the fight against global warming.

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