Thursday, 06 April 2017

Three Big Coal Companies Ask Trump to Honor Unratified Paris Climate Agreement

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Executives from three of the largest U.S. coal companies — Cloud Peak Energy, Arch Coal, and Peabody Energy — have reportedly asked the Trump administration to reconsider President Trump’s vow to pull out of the Paris climate agreement. The climate agreement, which was made within the United Nations Framework Convention on Climate Change (UNFCCC), was negotiated by representatives of 195 countries at the 21st Conference of the Parties of the UNFCCC (COP21) in Paris and adopted by consensus on December 12, 2015. At least 55 parties to the UNFCCC had to ratify the agreement for it to take effect. It was opened for signature on April 22, 2016 (Earth Day) at a ceremony at the UN and former Secretary of State John Kerry signed the treaty for the United States on that day.

Despite Kerry’s signature, the major media usually ignore a significant fact: The U.S. Senate was never given the opportunity to ratify the deal as required by the Constitution, meaning that, as far as the United States is concerned, the UN climate agreement is legally meaningless. 

The Paris Agreement is the first climate deal that purports to bind all the world’s governments, rich and poor, to a commitment to cap “global warming,” which the UN, former President Obama, and a host of climate “experts” beholden to the environmental lobby allege is caused by the burning of coal, oil, and gas.

Though the fact that the Senate has never ratified the agreement casts doubt on exactly what the U.S. role in its implementation is, the coal companies based their plea on the faulty assumption that U.S. participation is already a given. 

An April 4 Reuters report on this topic quoted a U.S. official who asked not to be named because he was not authorized to speak publicly on the issue of the U.S. role in the climate deal, who argued in favor of continued U.S. participation in the COP21 agreement.

“The future is foreign markets, so the last thing you want to do if you are a coal company is to give up a U.S. seat in the international climate discussions and let the Europeans control the agenda,” said the official.

“They can’t afford for the most powerful advocate for fossil fuels to be away from the table,” the official said.

Reuters quoted Cloud Peak's vice president of government affairs, Richard Reavey, who asserted that staying in the COP21 agreement and trying to encourage “a more balanced, reasonable and appropriate path forward” on fossil fuel technologies among signatories to the accord seems like a reasonable stance. 

During a March 30 press briefing, White House Press Secretary Sean Spicer referred to a question asked the previous day about the administration’s position on the Paris climate treaty. Spicer said: “We are currently reviewing issues related to the agreement, and expect to have a decision by the time of the G7 Summit, late May-ish, if not sooner.”

Politico reported on March 30 that Peabody, Arch, and Cloud Peak — which together mine more than 42 percent of the coal produced in the United States — “hope to see their policy priorities reflected in the reworked domestic climate plan that the Trump administration would probably submit if it decides to stay in the 2015 Paris deal.”

The report quoted Arch spokeswoman Logan Bonacorsi, who praised the administration for reconsidering former President Obama’s climate change regulations for power plants and focusing instead on “driving progress on advanced, low-emissions fossil fuel technologies that will provide far greater benefits over time.” However, Bonacorsi did not directly address the company’s position on the Paris agreement.

Another coal industry leader is opposed to continuing in the climate deal, however. Murray Energy CEO Robert Murray, who has close ties to the Trump administration, called the deal “illegal” and a waste of taxpayer money during a February speech in Miami. Murray Energy is the largest private coal company in the country and the fifth-largest overall producer.

Following the presidential election last November, Murray pressed Trump to withdraw the United States from all international agreements on climate change and stated “so-called global warning is a total hoax.”

That statement reflected Murray’s longtime views. In a 2007 speech to the New York Coal Trade Association, Murray called former Vice President Al Gore “the shaman of global gloom and doom” and added “he is more dangerous than his global warming.”

Murray has long opposed global warming legislation in Congress, saying:

We produce a product that is essential to the standard of living of every American because our coal produces 52 percent of the energy in America today, and it is the lowest cost energy, costing one third to one fourth the cost of energy from natural gas, nuclear and renewable energy resources. And without coal to manufacture electricity our products will not compete in the global marketplace against foreign countries because our manufacturers depend on coal, low cost electricity and people on fixed incomes will not be able to pay their electric bills. Every one of those global warming bills that have been introduced into Congress today eliminates the coal industry and will increase your electric rates, four to five fold.

Murray joined Trump on March 28 when the president signed an executive order that (among other things) revoked Obama’s Executive Order 13653 of November 1, 2013 (Preparing the United States for the Impacts of Climate Change). The order also states:

It is the policy of the United States that executive departments and agencies immediately review existing regulations that potentially burden the development or use of domestically produced energy resources and appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law. 

The question remains as to why three of the largest coal companies would favor participation in an agreement (even though it has not been ratified and is legally meaningless) that, if adhered to, would place a burden on the coal industry in order to achieve its goals to reduce carbon emissions.

The main point to consider is that regulatory burdens do not affect all companies equally. The larger the company, the more resources it has to absorb the cost of complying with the regulations. Smaller companies, in contrast, are less able to afford the cost of compliance, putting them at a competitive disadvantage and perhaps forcing them out of business entirely. 

What is true of the coal industry has long been true in the oil industry as well. The giants of the industry, including ExxonMobil and its predecessor companies, often supported environmental regulations that they could afford to comply with, but which their smaller competitors could not. This may explain what was reported by CNN on March 29 — that ExxonMobil sent a letter to the White House on March 22 stating that company executives believe the Paris agreement is an “effective framework for addressing the risks of climate change” and that the United States should remain a party to it.

CNN reported that ExxonMobil has also been a consistent public supporter of the Paris agreement.

“We welcomed the Paris Agreement when it was announced in December 2015, and again when it came into force in November 2016. We have reiterated our support on several occasions,” the report quoted from the letter that Peter Trelenberg, ExxonMobil’s environmental policy and planning manager, wrote to the White House.


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