Trump administration is testing corporate environmental resolve

Trump administration is testing corporate environmental resolve
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The Trump administration is pressuring two industries that are the largest greenhouse gas emitters in the U.S. — the auto sector and the oil and gas industry — to climb on board its climate-change denial train and endorse rollbacks that make no environmental or business sense. 

It is hard to have sympathy for the pinch in which these industries find themselves. Their trade associations have been virtual co-conspirators with the administration in undermining legal constraints on tailpipe emissions from the auto industry and methane emissions from the oil and gas industry. 

Now that the true scope of the Trump administration’s environment- and business-damaging rollbacks have come into focus, however, the question is whether leading companies will stand up, embrace their corporate citizenship responsibilities, say no to the administration, and publicly rebuke and/or quit their retrograde trade associations.  

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The auto industry didn’t start out as a climate villain. In 2012, auto companies struck a deal with the federal government and the State of California to cut a major chunk out of the U.S.’s total annual greenhouse gas emissions by gradually increasing fuel economy for cars and light truck fleets to more than 50 miles per gallon by 2025. After the 2016 election, however, auto lobbyists, led by the Alliance of Automobile Manufacturers, suggested that President Trump revisit the agreement. The Trump administration, disdainful of climate change and Obama-era environmental initiatives, listened. It is discarding the agreed-upon plan and finalizing a replacement rule that will prematurely end emissions reductions and undermine California’s rights to impose stricter standards.  

To their credit, four companies — Ford, Honda, Volkswagen and BMW — have joined California to oppose the Trump retreat. Meanwhile, the industry’s trade association dithers and the majority of car manufacturers — including giants such as Toyota, General Motors, Fiat-Chrysler and Nissan — remain silent, empowering the administration to move forward with an irresponsible replacement plan that could prompt a massive loading of a billion or more additional metric tons of carbon into the atmosphere between now and 2035 — more than the current annual emissions from countries such as Austria, Bangladesh or Greece.

The oil and gas industry faces a similar test of its corporate resolve. Methane losses from the production, processing and transmission of oil and natural gas makes the industry the No. 1 source of methane emissions in the U.S. and globally. And because methane traps heat at roughly 84 times the rate of carbon dioxide, it is a particularly potent, “super-pollutant” greenhouse gas. Indeed, scientists estimate that around 25 percent of current global warming traces to methane. 

Leading oil and gas companies have recognized that concerns about methane losses pose a serious risk to their industry. Because of methane’s potency, methane losses can narrow or even eliminate natural gas’ climate advantage over coal. And the widespread venting and flaring of methane in the Permian Basin, the Bakken and other production areas (typically to get at higher-value oil deposits) is an obnoxious, wasteful practice. These concerns prompted some oil and gas companies to work collaboratively with the environmental community and Colorado  governor’s office to develop and enact sensible, legally-enforceable methane restrictions and reporting requirements.

On the federal level, however, the American Petroleum Institute consistently has cheered on the Trump administration’s moves to dismantle restrictions on the wasteful venting and flaring of methane from oil and gas operations on public lands, and on Clean Air Act-based leak detection and repair requirements. API’s scorched earth litigation strategy and loud advocacy against any government regulation of methane emissions has drowned out public statements by a few industry leaders, including BP, Shell and ExxonMobil, who know that railing against commonsense constraints on pollution is short-sighted, damaging to industry’s comparative climate advantage claims and, ultimately, to its social license to operate.    

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The Environmental Protection Agency’s (EPA) recent announcement that it is looking to wipe existing methane restrictions off the books entirely for the oil and gas industry has just raised the stakes and will put the oil and gas industry to the test. 

Will leading oil and gas companies double down on their call for responsible government regulation of oil and gas methane emissions? Will they file comments acknowledging that existing methane requirements are lawfully imposed under the Clean Air Act, and that oil and gas companies — regardless of their size — must respect the rule of law and act as responsible corporate citizens? Will they insist that EPA withdraw its proposal?  

There has never been a more important time than this for CEOs and boards of directors of leading companies in the automobile and oil and gas industries to stand up and be counted on the central issues of corporate responsibility and environmental integrity that now are squarely on the table for both industries. 

David J. Hayes is executive director of the State Energy & Environmental Impact Center at New York University School of Law. The center supports state attorneys general in their advocacy for clean energy, climate and environmental laws and policies. He served as deputy secretary and chief operating officer at the Department of the Interior for Presidents Barack Obama and Bill Clinton. Follow him on Twitter @djhayes01.