Clash over car rules led Shell to spurn refining group

Source: Maxine Joselow, E&E News reporter • Posted: Thursday, April 4, 2019

Royal Dutch Shell PLC made waves yesterday by ending its membership in American Fuel & Petrochemical Manufacturers, citing disagreements over climate change policy.

Overlooked in some news reports about the move, however, was the role of Obama-era fuel efficiency standards for cars.

The two organizations have taken sharply different stances on the standards, which represented some of President Obama’s most consequential climate rules and which President Trump is poised to dramatically scale back.

As part of its efforts to become more environmentally conscious, Shell filed regulatory commentsopposing the Trump administration’s rollback of the car rules last fall (Climatewire, Oct. 29, 2018).

John Reese, downstream policy and advocacy manager with Shell Oil Products U.S., wrote in the comments that the rollback would ratchet up dangerous planet-warming emissions.

“The proposal’s own analysis of the proposed roll backs acknowledge that the changes will increase emissions,” Reese wrote. “The roll back of the standards to 2020 levels will increase vehicle carbon dioxide emissions by 713 million metric tons. Shell does not support this roll back in the standards.”

Shell’s position was particularly notable because the rollback stands to increase its profits at the pump.

Under the Trump administration’s proposal, Americans will use 20 percent more gasoline per year by 2035, according to an analysis by Energy Innovation, a San Francisco-based energy and environmental policy firm.

In direct contrast with Shell, AFPM expressed broad support for the rollback in its own regulatory comments. Richard Moskowitz, general counsel for the trade association, wrote that the rollback would increase safety on the nation’s roads and better account for “weak consumer interest” in electric vehicles.

AFPM’s advocacy didn’t end there. The New York Times reported in December that AFPM and Marathon Petroleum Corp. — the nation’s largest refiner — also waged a stealth campaign to weaken the car rules on Capitol Hill, in statehouses nationwide and on social media.

The efforts involved taking out Facebook ads urging people to back weaker car rules. The ads featured a picture of Trump alongside the slogan “SUPPORT OUR PRESIDENT’S CAR FREEDOM AGENDA!”

The Facebook ads were paid for by Energy4US, which purported to be “a coalition of consumers, businesses and workers” promoting affordable energy. In reality, Energy4US was a front group created by AFPM, the Times reported.

In a report released yesterday, Shell acknowledged AFPM’s regulatory comments on the car rules rollback but not the campaign.

“AFPM supports the EPA’s proposed rollback of fuel economy standards in the USA, which Shell opposes,” the company wrote, providing footnotes with links to both organizations’ regulatory comments.

Luke Tonachel, director of clean vehicles and fuels at the Natural Resources Defense Council, commended Shell for its stance on the car rules.

“Shell clearly understands that the administration’s rollback of clean car standards is a big problem,” Tonachel said in an email. “It will increase pollution, threaten our climate and make driving more expensive. It’s time for all oil companies to embrace a clean energy future.”

To be sure, the car rules were not the only factor motivating Shell not to renew its membership in AFPM. Other factors included different stances on the Paris Agreement, carbon dioxide emissions pricing and government intervention to support low-carbon technologies (Greenwire, April 2).

Shell spokesman Curtis Smith declined to comment for this story. “I don’t think we have anything more to add to yesterday’s news,” he said in an email. “The statements in the report and any correspondence filed with regulators should make clear our position.”

AFPM spokesman Raleigh Miller said the trade association would also decline to comment, pointing to a previous statement from CEO Chet Thompson.

“Like any family, we aren’t always fully aligned on every policy, but we always strive to reach consensus positions on policies that are in the best interest of our membership and the communities and consumers that rely on us,” Thompson said.