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Why the Energy Industry Is Split on the Paris Climate Accord

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Inside Sources covers the energy industry's apparent split on the Paris Climate Accord.

As of Thursday, America is beginning to pull out of the Paris Climate Accord. Despite being a longstanding campaign promise by President Donald Trump, the move was contentious to say the least. Environmentalists lamented the announcement, while many conservatives hoped that leaving the climate agreement would provide a boost to the American economy. Somewhat unexpectedly, many major oil companies and other large corporations came out in favor of the agreement, reflecting the realities of shareholder pressure and operating an international business.

In a statement in the Rose Garden on Thursday, Trump stressed that the Paris Climate Accord hurt the American economy and American workers. Citing a study by the National Economic Research Associates, he said that the terms of the accord could cost America as many as 2.7 million lost jobs by 2025, and close to $3 trillion in lost GDP.

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Some industry observers take a cynical view of the situation, saying that oil and gas companies have an incentive to promote clean energy standards that will force out coal.

“The only way to get the price of gas back up is to kill coal. The Paris Agreement kills fossil fuels, but it kills coal first,” Myron Ebell, director of the Center for Energy and Environment at the Competitive Enterprise Institute, told The Daily Signal.

For the time being, the only certain prediction is increased uncertainty. Although the regulatory environment has recently become more friendly to coal, natural gas remains low and provides a cheap way to produce clean electricity. Meanwhile, investor pressure and the uncertain future of Trump’s regulatory changes make companies hesitant to make dramatic investment shifts.

Read the full article at Inside Sources.