* Oil companies to continue lobbying for climate bill
* Companies said bill treats natural gas, fuels unfairly
* BP says bill would not create a liquid carbon market
(Recasts, adds background)
By Timothy Gardner
WASHINGTON, Feb 16 BP (BP.L) and ConocoPhillips
(COP.N) will drop out of a group lobbying for the U.S. climate
bill as proposed legislation would hurt the motor fuel and
natural gas industries, the companies said on Tuesday.
The oil companies and Caterpillar Inc (CAT.N) said they
will not renew their memberships in the U.S. Climate Action
Partnership, or U.S. CAP.
The coalition of companies and moderate environmental
groups formed a blueprint early last year outlining what they
wanted in U.S. climate rules.
The blueprint helped steer climate legislation passed in
the House of Representatives last June. But the bill has
stalled in the U.S. Senate, amid opposition from oil and coal
states, and faces an uncertain future.
BP said it still supports the blueprint which called for
a cap-and-trade market on emissions blamed for warming the
planet, but that the current legislation is plagued with
problems that would penalize the petroleum industry.
"We would expect to see an increase in (oil) product
imports, the closure of U.S. refineries, and the loss of jobs
if we move forward with a poorly designed climate bill," said
Ronnie Chappell, a BP spokesman.
President Barack Obama still wants a climate bill to cap
emissions and Senators John Kerry, a Democrat, Lindsey Graham,
and Joe Lieberman, an independent, are trying to hammer out
compromise legislation. They are expected to unveil the bill next
In a move designed to advance legislation, Obama on Tuesday
announced $8.3 billion in loan guarantees to help build the
first U.S. nuclear power plant in nearly three decades.
And U.S. CAP still includes energy heavyweights like Shell
Oil Co (RDSa.L) and Duke Energy (DUK.N), a big power generator,
and General Electric Co (GE.N).
But withdrawal of the companies from the group, which now
has 28 companies, is another blow to supporters of an energy
bill that would limit emissions across all sectors, including
the power industry, automobiles and heavy industry and force
all of them to partake into a cap-and-trade market.
COMPETITION AND CAP AND TRADE
U.S. CAP said it expects U.S. action on climate this year
and that it expects to add new members to the group in coming
But it has lost powerful friends in the oil companies who
have complained that the bill would hurt U.S. refineries
because they could face much tougher regulation than similar
plants in developing countries.
Jim Mulva, Conoco's chairman and chief executive, said in a
release that the bill passed in the House and climate proposals
in the Senate would hurt the transportation industry and saddle
drivers with higher fuel prices. He said domestic oil
refineries would be "unfairly penalized" compared to their
peers in developing countries which may not face strict
emissions limits in an international climate agreement.
The bill also ignores the big role natural gas can play in
cutting greenhouse gas emissions, said Mulva.
In addition, companies said the bill as written would not
create a functioning cap-and-trade market on emissions.
Chappell said the bill would give too many free credits to
to parties that would not need them to meet the emissions cap.
"The result will be a market that is volatile and the price
on carbon will be volatile as well," said Chappell.
(Reporting by Timothy Gardner; Editing by Marguerita Choy)