Big oil has their men in the White House and it's paid off handsomely-- but the 2006 election change

B

Bothrops Alticola

Guest
During his first month in office, President George W. Bush appointed
Vice President Dick Cheney to head a task force charged with
developing the country's energy policy. The group, which conducted its
meetings in secret, relied on the recommendations of Big Oil behemoths
Exxon Mobil, Conoco, Shell Oil, BP America and Chevron. It would be
the first of many moves to come during the Bush administration that
would position oil and gas companies well ahead of other energy
interests with billions of dollars in subsidies and tax cuts--payback
for an industry with strong ties to the administration and plenty of
money to contribute to congressional and presidential campaigns.

During the time that Bush and Cheney, both of whom are former oil
executives, have been in the White House, the oil and gas industry has
spent $393.2 million on lobbying the federal government. This places
the industry among the top nine in lobbying expenditures. The industry
has also contributed a substantial $82.1 million to federal
candidates, parties and political action committees, according to the
Center for Responsive Politics. 80 percent of the industry's
contributions have gone to Republicans.

Buying Pro-Industry Policy

This support has not gone unrewarded. In 2005, Bush, who has received
more from the oil and gas industry than any other politician, signed
an energy bill from the Republican-controlled Congress that gave $14.5
billion in tax breaks for oil, gas, nuclear power and coal companies.
The Energy Policy Act of 2005, which was based on recommendations by
Cheney's energy task force, also rolled back regulations the oil
industry considered burdensome, including exemptions from some clean
water laws. All of this transpired only one year after Congress passed
a bill that included a tax cut for domestic manufacturing that was
expected to save energy companies at least $3.6 billion over a decade.

"Political action committees, lobbyists and executives do not give
money to politicians or parties out of an altruistic support of the
principles of democracy," says Tyson Slocum, director of Public
Citizen's Energy Program. "They are savvy investors expecting a return
on their investments. Politicians routinely deliver on campaign
contributions that are provided to them... [by] giving goodies to the
industry." And the size of those contributions matters.

In comparison, environmental groups and alternative energy production
and supply companies, which didn't see similar benefits come out of
the Republican Congress's legislation, have made paltry contributions.
Environmental groups, such as the Sierra Club, League of Conservation
Voters and the Nature Conservancy, which often push for policy that is
punitive to Big Oil, have given nearly 11 times less than the oil
industry since 2001. The disparity is not a strategic difference, but
the financial reality for these smaller competing interests. Exxon
Mobil, for example, reported the largest annual profit on record for a
U.S. corporation in 2006, bringing in $39.5 billion. Comparatively,
the nonprofit Sierra Club Foundation--which funds organizations in
addition to the Sierra Club--reported income in 2006 of $29 million.

With members of Congress paying special attention to Big Oil, the
policy that elected representatives have developed does not reflect
the interest of the public, which wants "affordable, reliable, clean
sources of energy," Slocum says. A 2006 survey by the Pew Research
Center found a majority of Americans across the political spectrum
want an energy policy that emphasizes renewable and alternative
sources of energy.

"Energy companies have a right to have a say in energy policy. Do they
have a right to dictate energy policy, to be the only people at the
table? Absolutely not. That was the main problem with the Cheney task
force--[the industry] was the only one at the table," says Slocum.

To keep its prominent seat, the industry spends big sums of money on
hiring the top lobbyists in Washington to push its agenda on a variety
of issues, not just related to energy but on issues ranging from
education to real estate. After a few years of declining lobbying
expenditures, the industry spent $63.3 million in 2005, most of which
was probably related to the energy bill. (Lobbying reports don't
require lobbyists to itemize their spending related to specific bills
or amendments). In 2007, with a new energy bill in the pipeline, the
industry's lobbying expenditures are on track to exceed last year's
total of $73 million. Big Oil has spent seven times more than
environmental groups on lobbying since President Bush took office.

Marchant Wentworth, a lobbyist for the environmental advocacy group
the Union of Concerned Scientists, says money buys access. "I've been
working in the public interest environmental business for 30 years and
90 percent of the time I'm talking to staff," Wentworth said. "The oil
and gas industry talks to the members themselves. That is a huge
difference. Access is an important thing."

The Biggest Spenders and Takers


"With a new energy bill in the pipeline, the industry's lobbying
expenditures are on track to exceed last year's total of $73
million."

The energy companies that spend the most on lobbying the federal
government also tend to be those that give the most to politicians for
their campaigns. Since 2001, Exxon Mobil, Marathon Oil, Shell Oil,
Chevron and BP America--many of which provided guidance to Cheney's
task force--have spent the most among energy companies on lobbying.
Exxon Mobil and Chevron, in addition to El Paso Corp and Koch
Industries, have been among the most generous campaign contributors
within the industry during Bush's time in office. The American
Petroleum Institute, which represents the oil industry in Washington,
declined to comment for this story, and a spokesman from the national
trade group the Independent Petroleum Association of America was
unavailable for comment.

Lawmakers, who live in areas that depend on oil production for their
economy, are likely to be among the largest recipients of
contributions from the oil and gas industry--and to vote in favor of
legislation that helps it. The top three members of Congress to
receive money from Big Oil during the Bush administration are all
Republicans and are, not surprisingly, all from oil-rich Texas. The
big names include Sens. John Cornyn and Kay Bailey Hutchison, both of
whom have supported subsidies for gas and oil exploration and drilling
in the Arctic National Wildlife Refuge (ANWR). Also is Rep. Joe
Barton, who sponsored the 2005 energy bill and was chair of the House
Energy & Commerce Committee at the time. Fellow Texan Tom DeLay, who
was the House Majority Leader in 2005 and was instrumental in pushing
the energy bill through, also ranks among the top to receive money
from the industry during Bush's two terms. Of the 50 members of
Congress who have received the most contributions from oil and gas
companies since 2001, only six are Democrats.

Campaign contributions don't always get the oil industry desired
results. Many of the oil industry chieftains, who were pushing to open
ANWR for exploration, were disappointed when the 2005 energy bill came
out of conference committee without that provision. Nor, do campaign
contributions always get the industry's favorite candidates elected.
Four of five of Big Oil's most favored candidates--all Republicans--lost
their re-election races in 2006, despite hefty campaign contributions
from oil and gas employees and PACs that cycle. The losers included
Sens. Rick Santorum of Pennsylvania, Conrad Burns of Montana, George
Allen of Virginia and James Talent of Missouri.

Battles on the Horizon

With Democrats now in control of Congress, the oil and gas industry is
finding that it's getting less for its money on Capitol Hill. Other
industries with competing interests and far less cash to spread
around, such as environmental groups and alternative energy producers,
are now finding more support for their legislative goals. For example,
the Clean Energy Act of 2007 seeks to repeal the 2004 and 2005 tax
breaks to Big Oil and re-direct the money to renewable energy efforts.

Because of the change in power, the oil industry faces the possibility
of stricter oversight and fewer goodies from Congress. The industry
"definitely has to be worried that there will be anti-oil legislation
of all types, and also possibly regulations, depending on who takes
over the White House," says David Victor, a law professor at Stanford
University and a senior fellow on the Council for Foreign Relations.
Victor was part of the council's task force on energy security.

"I think [the new leadership] generally puts the issue on the agenda
for legislative action. It puts it higher on the agenda. But it's not
clear Congress will actually be able to do very much in terms of
getting the votes for legislation, because energy policy in reality is
very controversial and often very expensive," Victor said. "That's
something that both parties have a difficult time dealing with."

So far Congress has been slow to push through comprehensive energy
legislation, in part because issues related to renewable energy
standards and fuel efficiency standards differ by region, rather than
political party, which means not all democrats are on board, says
Frank O'Donnell, president of the environmental advocacy group Clean
Air Watch. "Some of the southern-based coal burning power companies
have killed or delayed efforts to set a renewable energy requirement
for electric companies. Michigan Reps. and others influenced by the
car industry have also managed to put off any kind of tougher
requirements for fuel economy." O'Donnell says. "John Dingell is a
democrat but doesn't see eye to eye with [Speaker of the House] Nancy
Pelosi in some of these issues and so far you've seen somewhat of a
stalemate."

Dingell has consistently defended the auto industry, which is fighting
against stricter fuel economy standards. These standards have not been
changed since the 1980s. The auto industry is a major player in
Dingell's home state of Michigan, which relies heavily on the industry
for jobs and is the corporate home of General Motors, Ford and the
domestic division of DaimlerChrysler. Among all members of Congress,
Dingell has received the second most in contributions from the auto
industry at $869,200, just behind Republican Spencer Abraham, a former
Michigan senator. The industry has been one of Dingell's largest
contributors during his career--second only to electric utilities.

During former President Bill Clinton's administration, Congressional
Democrats who supported more rigid standards missed a chance to pass
such legislation, but they had to grapple with a Republican-controlled
Congress largely unsympathetic to the idea. Congress just adjourned
for the Thanksgiving break without voting on an energy bill that
would, among other things, boost the fuel efficiency of the nation's
vehicles. Speaker Pelosi had hoped but failed to bring the measure to
a vote, largely because negotiations stalled over the fuel economy
standards.


"With Democrats now in control of Congress, the oil and gas industry
is finding that it's getting less for its money on Capitol Hill."

The Changing Climate for Energy Policy

As Congress wrestles with the comprehensive energy legislation, the
oil and gas industry is not only fighting off repeals of its tax
breaks, but is pushing again for increased domestic production of
energy, specifically permission to drill in certain coastal areas that
have been off limits. The companies are also trying to prevent
democrats from prosecuting them for jacking up prices excessively and
they publicly oppose the bill's mandated use of alternative fuels. The
industry joined the fight for coal-to-liquid fuel, in which oil
companies have investments, but the controversial provision to
encourage creating diesel fuel from domestic coal has already been
eliminated from both the house and senate's versions of the bill. The
legislation is also meant to correct an error by the interior
department during former President Bill Clinton's time in office that
allowed many companies to drill in deep waters without paying
royalties. [for more on the royalty issue, see NOW reports "The
Royalty Treatment" and "Crude Awakening"]

The best Big Oil can do right now is slow down the legislation,
Wentworth of the Union of Concerned Scientists says. "The
[legislation] is being held up because the oil and gas industry is
concerned about closing loopholes for offshore drilling," he says.
"They're fighting this tooth and nail. This is slowing down the clean
energy solutions that the public wants."

Environmentalists, who had very little influence in Congress when
Republicans were in control, are now seeing the lawmakers seriously
consider their positions. This includes environmentalists' support of
fuel efficiency standards, a mandate for electric utility companies to
produce 15 percent of electricity from renewable sources and their
opposition to coal-to-liquid fuel development. Nowhere is this change
in tides more evident than in the Senate Committee on Environment and
Public Works, which is heavily involved in energy legislation.
California Sen. Barbara Boxer, considered one of the environment's
biggest champions, has chaired the committee since her party assumed
control of the Senate in the 2006 election. Boxer replaced Oklahoma
Sen. James Inhofe, a Republican who has received $572,000 from the oil
and gas industry since President Bush took office--more than all but
three other members of Congress. Since 2001, Boxer has received less
than $13,000 from the industry and nearly 69 times more from
environmental policy groups than Inhofe.

"The oil and gas industry, like almost every other industry, will
shift some donations from Republicans to Democrats," says Eric Smith,
a political scientist who researches environmental policy at the
University of California-Santa Barbara. "It's clear that the industry
strongly prefers to have Republicans in power, but industries
generally focus on short-term advantages. In the short term--now and
presumably after the 2008 elections--Democrats hold congressional
majorities. So to win the short-term battles, the industry must try to
persuade Democrats in Congress to go easy on them."

Big Oil, which has always contributed heavily to Republicans, isn't
likely to defensively switch its contributions to favor Democrats. But
so far this year, 27 percent of the industry's contributions have gone
to Democrats, up from 18 percent in the 2006 election cycle, when
Republicans were still in power. In the presidential race, the
Democrats' share is even higher--Democratic hopefuls for president have
so far received 30 percent of the industry's contributions. Among
Republicans, presidential candidate Rudy Giuliani has so far collected
the most from the industry, while presidential candidate Hillary
Clinton raised the most from the industry among Democrats.

The Democratic Congress has made clean energy legislation a priority
because of rising gas prices and concerns about the nation's
dependence on foreign oil sources, in addition to a scientific
consensus that human activity is the root cause of today's global
warming. Many Republicans, too, are on board and looking for
solutions. "The single most important thing that's happened in the
last five years is the price of oil has shot up," Stanford's David
Victor says. "That run-up has changed the politics and incentives for
people to take an interest in conservation, and that's completely
bipartisan. There are people in the left wing and the right wing that
say we need to do something about this problem."

Total includes all contributions greater than $200. The Federal
Election Commission does not require recipients to itemize smaller
donations.
 
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