Big firms drop support for US climate bill

Barack Obama suffered a setback to his green energy agenda yesterday when three major corporations – including BP America – dropped out of a coalition of business groups and environmental organisations that had been pressing Congress to pass climate change legislation.

The defections by ConocoPhillips, America's third largest oil company, Caterpillar, which makes heavy equipment, and BP rob the US Climate Action Partnership of three powerful voices for lobbying Congress to pass climate change law.

They also undercut Obama's efforts to cast his climate and energy agenda as a pro-business, job-creation plan.

Only hours earlier, Obama and other cabinet officials had made a high-profile announcement that $8.3bn (£5.3bn) was being awarded in loan guarantees for a company building the first new nuclear reactors in America in nearly 30 years.

But the loan decision in favour of Southern Company, which was framed by the White House as a kick-start for new nuclear plants, was upstaged by the departure of the big three firms from the climate partnership.

Officials from BP and ConocoPhillips said that the proposals before Congress for curbing greenhouse gas emissions did not do enough to recognise the importance of natural gas, and were too favourable to the coal industry.

The House of Representatives passed a climate change bill last June, but the effort has stalled in the Senate.

"House climate legislation and Senate proposals to date have disadvantaged the transportation sector and its consumers, left domestic refineries unfairly penalised versus international competition, and ignored the critical role that natural gas can play in reducing GHG emissions," said the ConocoPhillips chairman and chief executive, Jim Mulva, in a statement. "We believe greater attention and resources need to be dedicated to reversing these missed opportunities, and our actions today are part of that effort."

Opponents of climate change legislation said the departure of the big three companies had all but killed off Obama's last chances of pushing his agenda through Congress.

"Cap-and-trade legislation is dead in the US Congress and that global warming alarmism is collapsing rapidly," said Myron Ebell, director of global warming for the Competitive Enterprise Institute.

Obama this week is stepping up White House pressure on Congress with a series of events intended to show the job-creating potential of his green energy agenda.

His announcement at a Maryland job training centre of the new nuclear loan guarantees was a key part of the strategy.

"Even though we haven't broken ground on a new nuclear plant in nearly 30 years, nuclear energy remains our largest source of fuel that produces no carbon emissions," he said. "To meet our growing energy needs and prevent the worst consequences of climate change, we'll need to increase our supply of nuclear power. It's that simple." The guarantees would commit the US government to repaying Southern's loans if the company defaulted. They cover some 70 per cent of the estimated $8.8bn cost of building two reactors at the company's Vogtle plant, east of Atlanta.

White House officials said yesterday's announcement reinforced Obama's pledge in his state of the union address last month to expand America's use of nuclear energy and to open up offshore drilling.