Tom Borelli

It’s a bad omen for free enterprise, prosperity and liberty when normally warring special interest groups such as big business and progressive activists agree on public policy.

During President Obama’s first term big business interests led by the pharmaceutical industry joined the union lobby in successfully making ObamaCare the law of the land.

Shortly after Obama’s re-election, history may be repeating itself this time regarding energy policy.

While it’s known that politics makes strange bedfellows none can be more bizarre than former White House green jobs czar Van Jones and Exxon Mobil CEO Rex Tillerson agreeing on a carbon tax.

Coincidentally, just ten days after the presidential election, Van Jones co-authored a commentary, “To end the fiscal showdown, tax carbon,” and on the same day Bloomberg News wrote an article, “Carbon tax: Exxon backs Obama plan to impose climate change fees.”

In the latter story an Exxon spokesperson said, “Combined with further advances in energy efficiency and new technologies spurred by market innovation, a well-designed carbon tax could play a significant role in addressing the challenge of rising emissions.”

As we witnessed with ObamaCare, the key to progressive legislative victory is converting a powerful opponent to a potent ally.

Transforming Exxon into a lobbyist for the left-wing’s war on fossil fuels is a huge coup for progressives and it’s been years in the making.

After hammering Exxon as the enemy of the environment for more than a decade and the public relations headaches that it brings to the board room – the company was ripe for waving the white flag.

Exxon faced the full armada of the environmental advocacy complex. Activist shareholders and protests at the company’s annual shareholder meetings were part of the advocacy targeting the company.

Activist groups also tracked Exxon’s financial support for conservative public policy organizations that conflicted with their view that industrial activity is responsible for global warming.

In an effort to repair its public image and lower its public profile Exxon ended its financial support of many conservative organizations and the company went soft on its global warming position.

A carbon tax meets both Exxon’s financial and public relations needs which also meshes with Obama’s war on coal.

Since coal emits twice as much carbon dioxide than natural gas, coal would be preferentially harmed by a carbon tax and open the door for Exxon – the largest producer of natural gas in the U.S. – to fill the void for electricity generation.

In a recent post on Seeking Alpha – a financial website – John Mylant described how a carbon tax would benefit Exxon.

“There is strong competition between coal and natural gas to generate electricity. It's really simple-if coal costs more, natural gas will look more appealing.”

Mylant also said, “Some believe the carbon tax will be a knockout blow for the thermal coal industry and a boon for the natural gas industry. Thus, a huge revenue benefit to Exxon.”

The goal for progressive activists and Exxon is to eliminate the coal industry through government and not through free market competition.

The coal industry is already on the ropes because of President Obama’s war on coal. The Environmental Protection Agency has issued regulations that dramatically increase the cost of using coal for electricity generation and a proposed rule for greenhouse gases, if finalized, would in effect stop the construction of new coal-fired power plants.

A carbon tax would certainly devastate the domestic coal industry and eliminate competition for power generation.

If passed, Exxon and other natural gas producers would likely profit from a carbon tax but it would come at a great cost to hardworking Americans.

A carbon tax would raise the cost of energy harming manufacturing, domestic energy production and push jobs overseas.

Higher energy prices are regressive harming those least able to pay such as lower and fixed-income households.

These adverse consequences will not affect the environmental progressive elites such as Jones or negatively impact Tillerson, his leadership team and Exxon board members.

Exxon is not alone in seeking ways to reduce the use of carbon based energy by making it more expensive. Oil giant Royal Dutch Shell and more than 100 other corporations signed a policy statement supporting, “a clear, transparent and unambiguous price on carbon emissions

must be a core policy objective, as part of a broader policy framework.”

While Obama rejected the idea of a carbon tax during his first press conference following the election, he could easily initiate the plan if a coalition of progressives and Exxon would lead the way.

Recall Obama’s first attempt to tax fossil fuels through cap-and-trade failed. Executing a carbon tax in his second term would add to his big government and anti-free enterprise legacy.


Tom Borelli

Tom Borelli, Ph.D., is a Senior Fellow with FreedomWorks.

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