"We have concerns with a wide range of provisions in this lengthy and complex legislation; however, our major issues at this time relate to the treatment of the transportation sector within the allocation provisions of the bill. Specifically we support the equitable treatment of transportation fuel consumers relative to electricity and natural gas consumers, fair and adequate protection for U.S. refining as an energy-intensive, trade-exposed industry and full recognition of refinery complexity in the distribution of allowances among refineries. We believe ACESA falls short of these goals.
"Further, we recognize that the complex bill has both positive and negative implications for the U.S. natural gas industry. We will continue to evaluate the legislation in this light and will bring forward recommendations aimed at ensuring that U.S. energy and climate legislation takes full advantage of the environmental and energy security benefits of domestic natural gas production.
"ConocoPhillips remains committed to continuing its constructive role in the policy process aimed at advancing federal climate legislation."
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Meanwhile, Jim Mulva, chairman and CEO of ConocoPhillips, told attendees of "The Realities of the U.S. Energy Future: A Producer Perspective," a part of the National Summit Energy Town Hall at the Detroit Economic Club on June 16, 2009, that "Washington's apparent beliefthat we can choose between renewable energy and fossil fuelsis mistaken. We will need more of all energy sources. So our path forward must include five steps: One, encouraging conservation; two, diversifying our energy supplies by developing alternative and renewable energy; three, developing our domestic oil and gas resources; four, encouraging imports from secure producers; and last but not least, addressing climate change."
"With these points, I've just committed blasphemy in some people's minds. As an oil and gas producer, I've endorsed conservation and supply diversity. I've referred to the 'inconvenient secret' that the U.S. still has a lot of undeveloped oil and gas. I've touched the third rail by suggesting that we will still need imports. And also by acknowledging that climate change is a serious issue."
He said, "There is much that the U.S. government must do to ensure that our country remains competitive in the global race for energy. Unfortunately, we are running this race while dragging anchors behind us."
"First, it must encourage greater efficiency, by setting energy performance standards throughout the economy. Its actions must be cost effective, since they would increase the cost of cars, buildings and appliances. But conservation alone is not enough.
"We've said for decades that the U.S. needs an inclusive national energy policy. One that supports investment in all forms of energy, including fossil fuels."
He added, "While there is much that government can do, it should resolve first to do no harm.
It must not create unrealistic expectations for new energy sources. Neither should it attempt to pay for them at the expense of fossil fuels.... Further, government should not try to pick 'winning' technologies. Its job is encouraging overall progress. Then, to let the market decide the best and most cost-effective sources. Consumers and investors are very good at that."
"Government must also resist a fallacy. And that is that so-called 'green jobs,' created by alternative energy development, will drive an economic recovery. In reality, since these sources will cost more than fossil fuels, energy prices will rise. This could actually hurt the economy and cost jobs by making the U.S. less competitive against countries with cheaper energy.
"Further, government must resist the 'raise taxes' mentality. Our industry already pays a U.S. income tax rate of over 40%, compared to less than 27% for all manufacturing. Last year, ConocoPhillips paid $13 billion in income taxes, $5 billion in other taxes, and several billion in royalties to government. The Administration's proposed 2010 budget contains tax provisions that will reduce our ability to invest in increasing production. This would cause greater oil and gas imports, higher fuel prices, and reduced competitiveness. It could also cost many of the 6 million direct and indirect jobs supported by our industry.
"We caution too against enacting unnecessary regulations. We believe that fair, balanced and well-coordinated regulatory processes are necessary and appropriate; however, the benefits of proposed regulations should equal or exceed their cost to the public in terms of making domestic energy more expensive."
Click hereto view his complete remarks.
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