Dirty Money
Oil Companies and Special Interests Spend Millions to Oppose Climate Legislation
SOURCE: AP/Alex BrandonOil from the Deepwater Horizon spill makes a pattern in the waters of Chandeleur Sound, LA, on May 6, 2010. BP is spending $5 million a week on advertising to restore its image after its oil disaster. Meanwhile, Big Oil and its allies have spent more than $126 million on television ads this year to promote the expansion of offshore oil drilling and defeat efforts to eliminate their tax loopholes.
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See full data on how much energy companies and trade associations spent on oil lobbying for 2009-2010 (.xls)
There will be many bad memories from the summer of 2010. We’ve seen the worst oil disaster in U.S. history, record temperatures across the globe, calving ice chunks the size of Manhattan, record heat waves and wildfires in Russia, and floods in Pakistan submerging one-fifth of the country. These extreme weather events are consistent with scientists’ predictions about global warming, and they portend more catastrophes to come asgreenhouse gas pollution spews unchecked from power plants, vehicles, and factories [1].
But as the case for action grew more urgent Big Oil, Dirty Coal, and other energy companies redoubled their efforts to block congressional adoption of global warming pollution reductions. With that effort successful they are now scheming to stop the Environmental Protection Agency from following the law and setting reduction standards for the largest polluters.
Reductions would effectively establish a price on carbon pollution that would increase incentives to invest in clean energy technologies, create jobs, and enhance international competitiveness. The United States needs these investments now more than ever as it falls further behind international competitors like China that are forging ahead with investments in clean energy technologies that create jobs, stimulate economic growth, and increase their international competitiveness.
This occurs while the United States still suffers high unemployment and slow growth as we emerge from the worst recession in eighty years. Clean energy and climate legislation would create jobs and stimulate the growth of clean energy industries as well as hold polluters accountable for their emissions. Unfortunately, the Senate was unable to muster a supermajority of 60 votes to limit the danger of burning fossil fuels after the House passed the American Clean Energy and Security Act.
This failure is no accident. Big Oil, Dirty Coal, and other special interests like the American Petroleum Institute combined spent hundreds of millions of dollars lobbying lawmakers and filling their campaign coffers. So far, these dirty energy corporations have gotten their money’s worth.
Companies and trade associations have two powerful tools to defeat measures they don’t like. They can spend millions of dollars on lobbying to strong arm legislators into opposing measures that they believe will cost them money. And these special interests can bequeath campaign cash to legislators who support their agenda while funding the opponents of those willing to oppose them.
So just how much are these groups spending to defeat climate legislation? We created a preliminary “political pressure” measure that combines the funds companies and trade associations spent on lobbying and on their political action committee donations. This measure, however, significantly underestimates special interests’ total advocacy efforts because there are no public reporting requirements for spending on many traditional pressure tactics such as earned media, polling, rallies, and television advertising (which these companies and associations heavily engage in). Further, companies’ donations to trade associations are kept secret, and the recent Citizens United Supreme Court decisionempowers corporations to spend their money to elect or defeat candidates often without any disclosure or reporting requirements.
Lobbying activities ramped up in 2009 as the House of Representatives began debate on the American Clean Energy and Security Act. Senate deliberations began last fall and continued throughout 2010. The entire electric utility industry spent more than $264 million on lobbying alone in 2009 and the first half of 2010. Oil and gas interests spent a record $175 million lobbying in 2009—a 30 percent increase from 2008—and have spent $75 million already in 2010.
The oil, gas, and coal industries have spentover $2 billion lobbying Congress since 1999. These three industries combined spent a whopping $543 million on lobbying in 2009 and the first two quarters of 2010. Meanwhile, alternative energy companies spent less than $32 million on lobbying efforts in 2009 and have only spent $14.8 million this year.
The 20 biggest-spending oil, mining, and electric utility companies shelled out $242 millionon lobbying from January 2009 to June 2010 [2]. Trade associations that generally oppose clean energy policies spent another $290 million during this time. This is over $1,800 in lobby expenditures a day for every single senator and representative.
Six of the seven companies with the largest lobbying expenditures are Big Oil companies—ExxonMobil (1), ConocoPhillips (2), Chevron (3), BP (5), Koch Industries (6), and Shell (7). Their 18-month lobbying expenditures total $143 million. Their agenda varies among companies, but generally they oppose most proposals to reduce global warming pollution from oil refineries and transportation fuels. And they seek to limit companies’ liability for oil spills like the BP oil disaster.
Southern Company, a major utility with significant coal-fired power generation, was the fourth-largest lobbying company at nearly $20 million. The company is a longtime opponent of efforts to reduce global warming pollution. American Electric Power, or AEP, was eighth, spending nearly $10 million. AEP played a (somewhat) more positive role by attempting to shape clean energy and global warming legislation to its benefit. But it also supported efforts to prevent EPA from limiting global warming pollutants from the largest sources in the absence of congressional action.
The largest trade association working to defeat clean energy and global warming legislation is the umbrella lobby organization the Chamber of Commerce, which spent nearly $190 million during this year and a half [3]. The Edison Electric Institute, which represents investor owned utilities spent $18 million—a million dollars a month—lobbying on global warming legislation. EEI was occasionally supportive of some proposals, but it strongly advocates halting EPA from reducing global warming pollution.
The American Petroleum Institute, or API—the trade association and lobbying arm for the biggest oil and gas producers—spent $11 million to lobby Congress to defeat pollution reductions and maintain their tax loopholes. The New York Times reported on some of their activities with their story, “Oil and Gas Interests Set Spending Record for Lobbying in 2009.”
API certainly got its money’s worth since no legislation was passed and the tax loopholes are still in place. Their spokesman Bill Bush said: “We had a lot of work to do trying to educate people on these issues…We hope we were successful."
Lobby reports show that oil companies lobbied on a number of clean energy and global-warming-related issues. These included:
- The Blowout Prevention Act, H.R. 5626, to prevent future oil disasters
- BP federal royalty payments for oil captured from the Deepwater Horizon blow out, Spilled Oil Royalty Collection Act, H.R. 5513
- Clean Air Act pollution reduction requirements
- Efforts to cut global warming pollution: American Clean Energy and Security Act, H.R. 2454 and the American Power Act
- Opposition to closing tax loopholes that save oil companies $45 billion
- Opposition to a “Community Right to Know” requirement that shale gas producers publicly report on the toxic chemicals they use to “frack” rock to produce natural gas, Fracturing Responsibility and Awareness of Chemicals Act, H.R. 2766
- Restrictions on the use of oil produced from highly polluting “tar sands
- Increases in energy efficiency and deployment of wind, sun, and other renewable energy sources
- Other public health, job creation, oil reduction, and environmental protection policies
Twenty-first century campaigns are outrageously expensive. Senators and representatives must raise millions of dollars in campaign cash for their contested reelection campaigns. Legislators’ need for money combined with special interests’ access to cash makes campaign contributions a potent weapon in the hunt for votes. Trade associations, businesses, and their employees donate thousands of dollars to legislators willing to do their bidding.
Political action committees, or PACs, from the oil and gas industry gave $6.6 million to federal candidates from January 2009 to June 2010, with two-thirds going to Republicans. The mining industry donated $1.6 million so far, with $3 of every $5 going to Republicans.
The most generous individual energy PACs belong to Koch Industries and ConocoPhillips, who doled out $700,000 and $600,000, respectively. And this does not include Koch’s recent $1 million donation to pass Proposition 23 in California, which would repeal the state’s landmark clean energy and global warming law.
But the lobbying and campaign expenditures capture only part of the influence of spending by the oil, coal, utility, and other traditional energy industries. Many of these companies and trade associations are also spending millions of dollars that need not be reported to run expensive television, radio, and print “message” ads that do not explicitly mention energy or global warming legislation but are still designed to shape legislators and voters’ views.
BP, for example, is spending $5 million a week on advertising to restore its image after its oil disaster in the Gulf of Mexico. Between April and July BP spent $93 million, which is more than three times the amount it spent on ads during the same period last year. Meanwhile, Big Oil and its allies have spent more than $126 million on television ads this year to promote the expansion of offshore oil drilling and defeat efforts to eliminate their tax loopholes.
Companies are not required to report these expenditures like they are for lobbying or campaign spending. API, Koch, and others have also funded Astroturf rallies to spread their anti-global-warming and anti-safety-regulation platforms. These expenses are unreported, too.
The energy interests’ successful efforts to block clean energy investments, oil use reductions, and global warming pollution limits have real costs. It’s not clear, for example, whether or when there will be a declining limit on global warming pollution that establishes a carbon price. This doubt has in turn led investors to husband rather than invest their capital in the research, development, deployment, and commercialization of clean energy technologies. Fewer investments mean fewer jobs.
And while the United States dithers other nations continue to build their clean energy industries to bid for their share of the $1 trillion we’ll see in the worldwide clean energy market by 2030. For instance, China knocked the United States down to second place as the most attractive market for investing in renewable energy according to Ernst and Young’s new “Renewable Energy Country Attractiveness Indices.” Ernst and Young cite lack of clean energy policies like a renewable electricity standard and long-term stable incentive structures as reasons for the takeover.
The United States has economic, national security, and environmental imperatives to increase energy efficiency and renewable energy generation, reduce oil use, and cut global warming pollution. What’s more, Americans overwhelmingly support these measures, asmany recent opinion polls demonstrate.
Yet the Big Oil and Dirty Coal lobbies are working hard to stop reforms so that they can protect their enormous profits. Legislators must ignore the pleadings of special interests and adopt comprehensive clean energy and global warming policies to enhance our economic competitiveness, safeguard our national security, and protect public health and our environment.
Daniel J. Weiss is a Senior Fellow and Director of Climate Strategy, Rebecca Lefton is a Researcher, and Susan Lyon is a Special Assistant for Energy Policy at American Progress.
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