Major foreign oil companies are gearing up to embrace the Left’s climate agenda publicly.
With the price of gasoline now averaging $4.12 across the United States, Europe’s largest oil companies want to see a national energy tax imposed on Americans. According to the Wall Street Journal, oil giants including Royal Dutch Shell and British Petroleum are pressuring America’s largest oil industry trade group to back a national carbon tax. Both Shell and BP appear to be threatening to leave the American Petroleum Institute unless the institute backs the tax plan.
The numbers matter here.
The carbon tax under consideration would start at upwards of $50 per ton, roughly amounting to a $2 trillion tax hike that would increase gas prices by nearly 46 cents per gallon, according to the Congressional Research Service. The tax would be pegged to increase with inflation.
Paradoxically, this tax effort comes at a time when the oil and gas industry is banging the table to lift barriers to U.S. energy production in response to Russia’s invasion of Ukraine. The lobbying push for the tax hike is conveniently timed to launch after the midterm elections, when Republicans are expected to win in a wave election. At this point, these companies could begin blaming Republicans for inaction on climate legislation while pointing to their own work lobbying for a carbon tax. That would allow them to deflect fire from environmental activists and the media.
If all this seems overly cynical, consider that Shell seemed perfectly comfortable with the “social cost of carbon” when it purchased Russian crude oil at a record discount as the Russian military was bombing Ukrainian civilians, paying $28.50 a barrel below the international benchmark price. Shell’s purchase of Russian crude ran counter to the behavior of other Western oil and gas companies that abandoned billions of dollars in investments in Russia. The episode forced Shell to issue an embarrassing public apology.
These companies should note that conservatives are increasingly fed up with corporate hypocrisy. Their embrace of trillion-dollar energy taxes under the guise of countering climate change would be a disastrous political strategy. Moreover, most Republicans have rejected carbon taxes. Lobbying interests who try to convince them otherwise will quickly wear out their welcome.
House Minority Whip Steve Scalise, a Louisiana Republican, made this painfully clear on Thursday, issuing a shot across the bow of corporate trade associations embracing “radical policy positions like a national energy tax,” warning they will quickly find themselves “alongside other fading organizations who lost their way.”
Scalise’s comments were a thinly veiled reference to the Chamber of Commerce, which began advocating a carbon tax in January of 2021. Since that time, the chamber has made itself persona non grata with the Republican leadership.
If this is the path energy companies want to go down, then there is no shorter way to get there than backing a carbon tax.
Mike Palicz is the federal affairs manager at Americans for Tax Reform, a nonprofit organization advocating limited government and lower taxes.
