How are oil companies hurt by CO2 emissions reduction policies?

Oil companies stand to lose trillions of dollars in future revenues if policy action is taken to slow carbon emissions. Their financial stake is colossal and undeniable (by honest and sensible people). In order to deal with this business challenge they have taken various measures, including deliberately helping to confuse people about climate science. This is a matter of historical fact.

Science, however, does not actually depend on anyone's confused misunderstanding of it, inability to understand it, or unwillingness to try to understand it.

As difficult as it is for this reality to penetrate dense craniums, science does not depend on ANY opinions or actions or psychological hangups of ANY human who has ever lived or who ever will.

Oil companies have helped confuse a lot of people about this, but you can be sure that they did not become large and successful by being confused themselves.

U.S. National Academy of Sciences, 2010:

http://books.nap.edu/openbook.php?record_id=12782&...

“Climate change is occurring, is caused largely by human activities, and poses significant risks for a broad range of human and natural systems.”

http://nationalacademies.org/morenews/20100716.htm...

“Choices made now about carbon dioxide emissions reductions will affect climate change impacts experienced not just over the next few decades but also in coming centuries and millennia…Because CO2 in the atmosphere is long lived, it can effectively lock the Earth and future generations into a range of impacts, some of which could become very severe.”

http://www.physics.fsu.edu/awards/NAS/

“The Academy membership is composed of approximately 2,100 members and 380 foreign associates, of whom nearly 200 have won Nobel Prizes...election to the Academy is considered one of the highest honors that can be accorded a scientist or engineer.”

http://www.huffingtonpost.com/bill-mckibben/the-gr...

"ExxonMobil, year after year, pulls in more money than any company in history. Chevron’s not far behind [but] their value is largely based on fossil-fuel reserves that won’t be burned if we ever take global warming seriously."

Edit: Re MIke: "Oil companies stand to lose trillions of dollars in future revenues if policy action is taken to slow carbon emissions. This is a common claim (trillions?). And this is the exact type of claim I am looking to see explained in economic terms."

Actually, Mike, you don't need to understand economics, or post longwinded anti-science "questions" here, you can get the explanation you claim to seek with Google & grade school multiplication:

1. There are about 1.5 trillion barrels of oil reserves globally http://www.bp.com/sectionbodycopy.do?categoryId=75... plus of course pockets under Arctic Ocean etc, not yet discovered, plus shale plus tar, etc. and it's clearly TRILLIONS of barrels.

2. Oil is now about $90 per barrel. The price varies, but the long term trend is up

http://en.wikipedia.org/wiki/2003_to_2011_world_oi...

3. Say oil company fossil fuel reserves are a conservative equivalent of 2 trillion barrels worth $80 per. Presto Mike: good old math from school, hated though it may have been: 2 x $80 = $160 trillion.

This is not exactly pocket change, even for scientists, and even if you believe they're rolling in carbon tax funds with Billy and Rothschild Reptilians on the hollow moon. http://answers.yahoo.com/question/index;_ylt=AoO8w...

http://www.atlanteanconspiracy.com/2012/03/dr-davi...

Edit2: To fully understand how & why the burden of a new cost or tax on a product is usually SHARED BETWEEN producer and consumer, a basic econ class would help. Or try: http://en.wikipedia.org/wiki/Tax_incidence

Probably. Oil companies and coal companies are not generally connected, by the way. You have to consider that cap-and-trade is not an isolated piece of legislation. For one thing, in the proposed bill there are provisions which invest in alternative fuel and renewable energy technology research and implementation. In other words, the oil and coal companies aren't just dealing with a price on carbon that they can just pass along to their consumers. They're also dealing with the emergence of electric cars and renewable energy options. If they raise their prices too much, people will have alternatives and go elsewhere. A lot of people are already consuming less gas by buying hybrids, driving less, etc. As for coal, the bill also has a requirement that utilities get 20% of their energy from renewable sources by 2020. There are going to be very few new coal plants built in the future, so I don't think there's any question that the coal industry will take a hit in profits, which will be passed on to the renewable energy industry. I'm sure it will be a combination where they pass some costs to the consumer and also take a hit in their massive profit margins. But it won't be like gas prices will suddenly skyrocket to $5/gallon or energy prices to 25 cents per kWh. If you raise prices, you also lower demand.

The stock price of oil companies is based on largely on perceived reserves in the ground and discounted cash flows derived from those reserves. The main goal of senior management is to increase the stock price by 1. finding more oil and 2. pumping it out of the ground as fast as possible. Restrictions on carbon emissions at the very least mean that oil will be used at a lower rate, thereby lowering the present value of the reserves. Oil companies are investing in renewable energy and adding renewable energy to their product mix. Some such as BP are re-branding themselves as energy companies rather than oil companies. However, oil companies don't want to cannibalize the returns from old investments in oil reserves by bringing renewable energy on stream too quickly. The current cost of adding 1 barrel of fossil oil reserves is about $90 and the current cost of producing 1 barrel of oil from biomass is about $60, on average.

The managers of oil companies are not fools. $10 K is all that Patrick Michaels is worth. A good scientist would want at least $100 K for a paper and would not lend his/her name to a pseudo scientific publication. Oil company managers give higher priority to buying politicians.

1) They're not. The consumer is hurt. Oil companies don't pay any additional money; they just raise the price of gas. It's all one big tax on the common man.

2) There's no guarantee they'll come out on top in the new market.

3) No idea. Probably their equivalent of propagandists.

4) It's all politics. The truth is the earth is getting warmer. Anything can be politicized, but especially something like this. Some claim doomsday is upon us and therefore we need a democratic socialism across the world. Others deny the facts or say something along the lines of, "It might be true, but that doesn't necessarily mean it's bad." I think the truth is somewhere in-between.

The oil companies are not hurt. Some of them even go for the greenie agenda because it increases their profits. For example, these additives which are supposed to retard pollution are many times pushed by oil companies. It just increases their profits.

Even though the US gasoline usage is down the oil companies are just putting the excess gasoline in tankers and selling it abroad. The oil companies can give the gasoline away and still make a profit since gasoline is a byproduct of crude. At onetime it was totally useless and companies were dumping it into creek, rivers and the ocean. The government makes more per gallon than the oil companies.

The oil companies' profits always work on a percentage. Let us say their percentage of profit is 10%, just to make it easy. If they pay $10 a barrel their profit is $1.00. If they pay $100.00 a barrel their profit is $10.00. So if the greenies think they can hurt the oil companies by making them pay more for a barrel they are being foolish.

The will also benefit from subsidized renewable energy, such as ethanol. They sell more gas. Ethanol only has approximately 60% of the power so it reduces the mileage of vehicles. The vehicles will use more gas to go a mile.

Regarding 3: This is analyzed on a high corporate level. You can see on this site where the oil companies are called greedy and causing GW. Don't you think they would want a scientific response, especially if it were not true? It is only reasonable that they take part in the conversation with unbiased scientific evaluation.

Regarding 4: If there were any evidence like that you can be sure it would be spread across the front page of the New York Times and Washington Post.

In Europe we have had to endure many CO2 taxes that are linked to energy use I guess to help fund the likes of the inefficient wind farms that have littered our one beautiful countryside or the silly offshore wind farms both of which will pay for themselves in 50yrs. I guess the oil companies never really lose out as there is no alternative to real energy. The losers are the citizens of Europe who have to fork out massive global Warming Taxes. For example the UK now collects over $260B in Global Warming taxes from its citizens equivalent to two NASA budgets all whilst the country is crippled by the previous governments socialist ideologies.

1) How are oil companies hurt by climate policy from an economic point of view?

As above I'd say they weren't affected it's mostly the citizens of each country that pay massive taxes. The oil companies find a way around these taxes by registering in the Caymen Islands, etc

2) How are they not going to benefit from climate policy by embracing subsidized renewable energy markets?

Good question their are massive government grants for organisations that want to invest in Greentech funded by the taxpayers $260B slush fund they would be silly not to try and get a slice of the market and money.

3) When money was given from oil companies to skeptics and groups, who in the company made those decisions and what process and/or company budget guided those decisions?

I would imagine if this takes place that the oil companies felt that the other side of the argument was being massive shut out due to lack of funding and therefore decided to help try to balance the argument. It is likely that if this business is ongoing that they would use 3rd parties.

4) Is there any evidence like emails, internal memos, recorded conversations, etc. which directly show that an oil company was giving money to a person or group specifically to cause misinformation or denial?

I have not seen any evidence of any funding to sceptical or denial groups.

They have to spend money to reduce carbon dioxide emissions in places such as refineries and to 'influence' politicians not to pass more laws that allow them to pollute without penalty.

The refining process creates lots of CO2. The less refined oil, the lower the profits.

When you want to spend spend spend other people's money, you have to lie steal and cheat. Part of that is pretending not to tax consumers by increasing taxes on corporations, particularly oil companies. They would simply pass it along. It is just a gimmick. Carbon credits hurt coal more than oil and gas and so oil companies might gain some advantage for that reason alone. Very large companies have teams of lawyers, accountants, and lobbyists to insure they are protected and probably too often they work hand in hand with politicians to make sure they come out on top.

Putting a price on Carbon would not hurt the oil company's or Coal company's .

They would pass it on as higher rates , Higher gas per gallon , Electric bills and gas bills.

Its like some liberals wanting to raise corporate taxes to make them stay in the USA .

They would pass the tax down to a higher price on product .

Putting a price on Carbon is stupid because its everywhere .