Three Firms Quit USCAP

BP America, Caterpillar, and ConocoPhillips have pulled out of the U.S. Climate Action Partnership (USCAP), an alliance of business and environmental groups that has been pushing for cap-and-trade legislation.

BP America and ConocoPhillips, major oil companies that quit the three-year-old climate coalition on Monday, cited concerns about the effect a climate bill could have on the oil refining industry.

Oil industry leaders have complained that the Waxman-Markey bill, which passed in the U.S. House last June, would give away only 2% of emissions allowances to refiners—an amount that would cover only about half the annual emissions from the refining process. According to the American Petroleum Institute, this could make refiners responsible for 44% of U.S greenhouse gas emissions.

Jim Mulva, CEO of Houston-based ConocoPhillips, said in a statement that the House climate legislation and Senate proposals to date “disadvantaged the transportation sector and its consumers, left domestic refineries unfairly penalized versus international competition, and ignored the critical role that natural gas can play in reducing (greenhouse gas) emissions.”

BP spokesman Ronnie Chappell, meanwhile, told reporters that his company still supported USCAP’s initial blueprint but that BP thought that congressional proposals fell short. BP was better positioned to shape climate change legislation independently, he said.

Caterpillar, which reportedly quit the coalition last week, said the company wanted to focus on supporting clean technologies such as FutureGen, a gasified coal plant with carbon capture and storage that has been proposed for Mattoon, Ill. Caterpillar joined an international consortium looking to build that project last week. “We have decided to direct our resources toward the commercialization of technologies that will promote and provide sustainable development and reduce carbon emissions,” Kate Kenny, a company spokeswoman, said in an e-mail to POWERnews.

The three companies’ departure now brings USCAP’s membership to 28 companies. Several foreign entities—Alstom, AREVA, and Siemens Energy—remain part of the alliance that in January 2009 had released its “Blueprint for Legislative Action” (PDF). That document articulates the need for a cap on greenhouse gas emissions and provides specific guidelines for the Obama administration and Congress to enact a federal carbon cap-and-trade program.

The Waxman-Markey bill that narrowly passed in the U.S. House on June 26, 2009, was based on USCAP’s blueprint, as Congressmen Henry Waxman (D-Calif.) and Edward Markey (D-Mass.) have publicly stated. Interest in the document was evident at the very first hearing—on Jan. 15, 2009—held by the House Committee on Energy and Commerce in the 111th Congress. That hearing, titled “The U.S. Climate Action Partnership,” focused solely on the perspectives of members of the alliance, including ConocoPhillips’ CEO Jim Mulva.

In a statement downplaying the three companies’ decisions not to renew their memberships in the coalition, USCAP said that its “membership changed periodically.” The organization recently added three new corporate members, including AES, Alstom, and Honeywell, and it expects to add new members in the coming months, it said.

The group had recently embarked on a massive advertising campaign focusing on the connection between climate and energy legislation and U.S. jobs, the economy, and energy security. As part of the campaign, a dozen USCAP CEOs were expected to meet with congressional leaders to discuss the status of legislation.

Last week, executives of Duke Energy, General Electric, Honeywell, the Environmental Defense Fund, and the World Resources Institute reportedly met with Treasury Secretary Timothy Geithner and White House Director of Energy and Climate Change Policy Carol Browner. The group also met with Senators Susan Collins (R-Maine), George Voinovich (R-Ohio), and Lindsey Graham (R-S.C.) to emphasize the need for regulatory certainty and discuss Republican concerns on climate change policy.

Sources: USCAP, ConocoPhillips, BP, Caterpillar, POWERnews

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