Vox has a very interesting analysis of the reasons Exxon and other oil and gas companies might support a carbon tax. Some of them are counterintuitive. Some of them are greenwashy ways to convince the public they’re part of the solution. Others are cynical gambits to get other environmental deregulation passed. Still others are smart defensive ploys that take aim at dirtier industries. And some of them are just postponing the inevitable.
It is the nature of an economy-wide tax on carbon — and a virtue, according to economists — that it hits the most carbon-intensive sources first. Think of a rising tax like rising sea levels; low-lying areas, i.e., the most carbon-intensive, are most at risk.
The low-lying region in this analogy? Coal. In fact, coal is more like a string of Pacific islands — a rising tax threatens to wipe it out entirely. It is far and away the most carbon-intensive source of energy (not to mention the most intensive source of local air and water pollutants) and thus will suffer first and most from a tax.
When coal gets more expensive, the primary beneficiary is, you guessed it: natural gas. The proximate effect of an economy-wide carbon tax will be to accelerate a switch from coal to gas. That will, at least for a while, prop up oil and gas companies.
Of course, natural gas faces the same carbon reckoning as coal and oil, so a shift from the latter to the former only delays things a bit. But it’s a breather for the industry.