ConocoPhillips CEO Urges Balanced Energy Policy

President-elect Barack Obama's plan to create a "green energy economy" is designed to address the problems of energy security, climate change and job creation, but its cost could be greater than policymakers realize, the chief executive of oil company ConocoPhillips said Tuesday.

"We agree that we must reduce the environmental footprint of energy production and consumption. But we must be realistic about the cost of green energy ... (and) about its true potential and how long it will take for commercial-scale supply contributions," ConocoPhillips Chairman and CEO Jim Mulva said in a speech at the National Press Club.

To ensure prosperity, the U.S. economy needs quickly available energy, reasonably priced, he said. By restricting energy development domestically, the country exports dollars to buy oil from abroad, thereby also exporting jobs.

ConocoPhillips, the third-largest U.S. oil company, is a member of the U.S. Climate Action Partnership, a coalition of business and environmental groups calling for a mandatory national framework to slow and eventually reverse the growth of greenhouse gas emissions. The group is issuing recommendations for climate policy later this week.

Mulva leaned lightly toward institution of a cap-and-trade system to cut carbon dioxide emissions over a tax on them, though he added that "they both can work."

A cap-and-trade system — which allows a company with reduced emissions to sell a credit to another business that needs to exceed the emissions limit to operate — is more widely understood and has a better chance of working through the political process, he suggested.

But Exxon Mobil Corp. CEO Rex Tillerson last week called for a carbon tax, saying it would be transparent and effective, while a cap-and-trade system would require establishment of new markets to trade carbon credits and new regulators to monitor them.

Obama's nominee for energy secretary, Nobel Prize-winning physicist Steven Chu, promised Tuesday in his Senate confirmation hearing that he will aggressively pursue policies aimed at addressing climate change and achieving greater U.S. energy independence by developing clean energy sources.