Sep 26, 2018

Scoop: Shell sits out Washington carbon fight

Photo: Vincent Isore/Getty Images

Royal Dutch Shell is sitting out a multi-million dollar fight over a carbon fee proposal in Washington state even as nearly all other oil companies with operations there rally to oppose it.

Why it matters: It’s a sign of the oil industry’s uneven, years-long evolution toward supporting policies that put a price on carbon emissions. And whether Washington State voters support the initiative, which is on the state-wide ballot this Election Day, will be a bellwether for other attempts at big climate policy.

Driving the news: In an interview with Axios on the sidelines of a conference in New York Monday, Shell CEO Ben van Beurden criticized aspects of the proposal, but nonetheless said his company isn’t going to fight it. He indicated Shell won't join an industry campaign, funded by BP and others, to oppose it.

“ It’s a price on carbon, so it ought to be a good thing. This fee has some imperfections. It doesn’t, in my mind, win any beauty contests the way it has been designed. ... But we’re not going to fight it. Let me be very clear on that as well.”
— Ben van Beurden, CEO, Shell

Between the lines: van Beurden’s comments reflect a subtle but significant shift. It may seem trivial to casual observers when stakeholders in any fight opt to not oppose something. But it’s a sign of evolving stances and could make a difference in the overall outcome, both because of the lack of monetary support and also the symbolism of Shell opting not to fight it.

He said he didn’t like how the proposal excludes several other major emitters, including aluminum plants and a coal plant. That’s one big reason why BP, which like Shell has a refinery in the state, is helping fund a campaign fighting the proposal. Other companies funding the campaign include refiner Phillips 66 and Chevron.

  • The industry campaign has more than $20 million in contributions so far.
  • The campaign supporting the initiative has roughly $5.6 million in contributions. Organizers of the effort say the coal plant is already set to shut down, and some industries particularly vulnerable to trade competitiveness are exempted to ensure that related jobs remain in Washington.

Yes, but: Shell's decision to abstain from the fight is unlikely to win it much praise from critics. Many environmentalists say that despite oil executives rhetorically supporting carbon prices for years and backing groups that do, the companies don’t push for the policy on Capitol Hill or anywhere else where it’s a live issue — like in Washington state.

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