We have expanded the list of climate policies we assess company engagement with to incorporate land-use related policy, referring to legislative or regulatory measures to enhance and protect ecosystems and land where carbon is being stored. Assessments under this category are currently underweighted in terms of their contribution to the overall company metrics. This weighting will be progressively increased over the next 6 months.
We adjusted the terminology used to describe the queries running down the left-hand side of our scoring matrix and added additional explanatory text to the info-boxes. This has no impact on the scores and methodology. It has been done following user feedback to improve clarity.
Climate Lobbying Overview: The American Petroleum Institute (API) is broadly hostile to climate policy in the US. Since 2016, the association has actively pushed for a deregulatory agenda over ambitious climate action and continues to advocate in favor of oil and gas expansion in the US.
Top-line Messaging on Climate Policy: The API has largely negative top-line messaging on climate policy. The association’s January 2021 State of American Energy report vaguely refers to global climate goals as “aggressive” without taking a clear position on limiting temperature rise in line with IPCC recommendations. In July 2022, following the US Supreme Court verdict on West Virginia vs EPA, API appeared in an interview with CBS News where the API representative appeared to not support government regulation and instead advocated for an industry-led, voluntary response to climate change. In March 2021, Fox Business reported on the API’s new position supporting carbon pricing as “the primary government climate policy instrument to reduce CO2 emissions” while still opposing other "prescriptive regulatory action." Further, in a speech from January 2022, API CEO, Mike Sommers, appeared to include policies to increase oil and gas production in its support for climate-related regulations. In a press release from April 2021, Sommers stated general support for the ambitions of the Paris Agreement, without taking a clear position on the country’s new Nationally Determined Contribution to the agreement.
Engagement with Climate-Related Policy: API appears strongly opposed to specific climate-related policies, including carbon taxes, renewable standards, and GHG emissions regulation. Despite an apparent shift in March 2021, API’s position supporting carbon pricing stopped short of explicitly endorsing a carbon tax. API also opposed the methane tax set in the Inflation Reduction Act in a joint-letter to US Congress leaders in August 2022.
API also appears to oppose regulation of GHG emissions. In February 2022, API’s comments to the EPA on methane regulations opposed the regulations, several of which API referred to as “unnecessarily burdensome.” In this letter, API also contested EPA’s legal authority to apply methane standards on existing sources. API’s comments to the EPA on GHG emissions standards for Light-Duty Vehicles in September 2021 did not support the tailpipe emissions regulations, and advocated for an economy-wide price on carbon instead. It also opposed GHG standards for medium- and heavy-duty trucks in Connecticut.
API has been particularly active in its opposition to the Renewable Fuel Standard (RFS). The group called for repeal of the RFS in January 2021. It tweeted in April 2020 that “it is time to get rid of this broken mandate,” and in November 2019, directly advocated against the EPA’s proposed increases in biofuel blending requirements under the program.
Positioning on Energy Transition: The API does not appear to support the transition of the energy mix in line with IPCC scenarios for 1.5C, and continues to advocate for expanding oil and gas production in the US. In June 2022, API released a “10-in-2022 Plan” outlining 10 policy recommendations for the US federal government to support oil and gas production. This included lifting the oil and gas development restrictions in the US federal lands and waters by resuming the 5-year leasing program and the revising the National Environmental Policy Act (NEPA) permitting process to swiftly approve infrastructure permitting processes. Further, in its 2021 State of American Energy Report, the API argues against a ban on fracking, and supported the weakening of NEPA and the renewal of the Nationwide Permit 12 program, both of which appear to make permitting approval processes for oil and gas infrastructure quicker and easier.
The API does not appear to support the electrification of transport. In a letter to the Connecticut government in March 2022, API opposed electrification of transport, and argued that policy should allow all types of vehicles to compete in the market. In its 2021 State of American Energy report, the group opposed policies designed to incentivize the uptake of electric vehicles, arguing that subsidies, credits, and sales mandates that favor electric vehicles - like those in California - would “hinder America’s progress.”