January 26, 2016

Energy Lobbyists Gather, Blame Obama and the Pope


Last week, on the day after the National Oceanic and Atmospheric Administration reported that 2015 was by far the hottest year on record, the energy industry’s chief lobbyists gathered in a downtown Washington ballroom to tell each other that the real problem was not global warming, but rather efforts by the Obama Administration — and Pope Francis — to contain global warming.

The remarks of these lobbyists suggested that many of them live on a different planet, where climate change is not an urgent challenge but rather is the obsession of ideological malcontents.

The meeting, held annually, is sponsored by the United States Energy Association, whose chieftains are not the CEOs of America’s oil, coal, and gas companies. Rather, they are the heads of the Washington-based trade associations that lobby against regulation of greenhouse gases and toxic pollution. They mostly are former corporate lawyers or Capital Hill functionaries who worked their way up and now receive enormous-for-DC salaries to serve at the beck and call of actual energy executives.

I think most of us are grateful to the men and women of America’s energy companies for providing the power that fuels so much of our lives. The question is, now that the evidence of human-made global warming is overwhelming, what do these companies want to do about it? Will they continue to deny the dangers of climate change and vilify those who seek to slow it? Or can they instead change course and devote more of their skills and resources to innovations for cleaner energy, innovations that could make their companies, not to mention the Earth, more sustainable in the long term?

From the words of their monochromatic lobbyists, spoken at the podium of the State of the Energy Industry Forum, it seems that many in the industry plan to keep fighting for another century of dirty energy.

The first speaker, and the king of the room, based on obsequious interactions during the breaks and on his league-leading $14,103,475 annual compensation package, was Jack Gerard, CEO of the tax-exempt, non-profit American Petroleum Institute. Gerard mostly looked down to read his remarks, but he got somewhat more engaged when he decried an Obama “political ideology” that “ignores the foundational role of fossil fuels in our modern society” and attacked “almost 100 federal regulations designed to thwart American energy production.”

Gerard was followed by Chet Thompson, the new President of the American Fuel & Petrochemical Manufacturers, and formerly a Bush EPA official and, more recently, a corporate lawyer at Crowell & Morning.  He centered his talk on a recent question from his 10-year-old: “Are you representing the good guys?”

Perhaps his 10-year-old had picked up some things on the playground. But for Thompson, the answer was unequivocally: Yes! “AFPM’s members,” he said, “make the world a better place.”

Thompson then told the room, if not his child, who the bad guys are. The Obama Clean Power Plan, Thompson said, “sets a bad precedent for everyone in this room.”  The energy industry, he added, has “had to take on, dare I say, the Pope and many other people waging a war on fossil fuels.”

Thompson offered some good news, for him at least, via Powerpoint. Despite the declining price of oil, the “crack spread” — product price minus crude price — remains “strong” at $17 a barrel. The US is now “one of the most affordable countries for petrochemical production.” And, of course, Congress gave the industry a huge Christmas present by lifting the long-standing ban on oil exports.

But that wasn’t nearly enough for Thompson, who, like Jack Gerard, called on Congress to repeal the Renewable Fuel Standard, an anti-global warming measure that requires gasoline and diesel suppliers to offer a minimum volume of renewable fuels.

Thompson added that President Obama, in his State of the Union address, touted the improved economy but failed to say that the recovery was “driven by the energy sector.” So, Thompson concluded,  “Yes, we are the good guys, and I hope our policymakers remember this when they debate climate change in the months ahead.”

Next up was Dave McCurdy, head of the American Gas Association (salary: $2,199,451). The former congressman from Oklahoma went for self-inflating humor: When he brings his tall, big-gray-haired presence to China, people shout at him, “Bill Cwinton! Bill Cwinton!” He didn’t mention how his home state has recently seen a huge increase in earthquakes that have coincided with gas fracking operations and the deposit of oil and gas wastewater in the ground.

Instead, McCurdy opined that the Obama Administration’s rules — of the kind that might make Oklahoma shake less — are not always “science-based.”

Dena Wiggins, CEO of the Natural Gas Supply Association, didn’t express the same hostility to the Obama Clean Power Plan; she said that gas “has the ability to flourish” under the new regulation.

She also said that, after some holdups, the long-awaited first cargo of exported U.S. liquid natural gas would head overseas in the next few weeks — greenlighted by the Obama Administration after many visits from Democratic lobbyists.

But as Wiggins celebrated this transformation of the U.S. into an energy colony — communities fracked to sell gas overseas — she criticized efforts by the Administration to regulate methane, the main component of natural gas and a toxic, highly flammable substance that is at least 25 times more powerful as a greenhouse gas than carbon dioxide. A disastrous methane leak from a natural gas storage well near Los Angeles has forced thousands of people from their homes and highlighted the lack of effective rules for this danger. Yet Wiggins suggested that voluntary reforms by industry were all that was needed.

For Wiggins, it seemed, the danger was not escaped methane but free speech. She presented a PowerPoint slide asserting that the Federal Energy Regulatory Commission “Faces Unprecedented Environmental Activism” and showing protestors. She spoke of  “people protesting, disrupting meetings, lying on the ground.” She made it sound awful.

Wiggins said that some critics “are in the ‘nope’ category” — even expensive energy lobbyists and public relations firms can’t persuade them. But, for people in communities with legitimate questions, “I think we’ve got good answers.” Wiggins was confident that industry “education efforts” could explain that gas “really is a valuable resource, and we can’t allow it to just sit in the ground.”

Donald Santa (compensation: $2,295,419), CEO of Interstate Natural Gas Association of America, which lobbies for the pipeline industry, decried “a lot of opposition to pipelines today both by land owners and by people whose motivations are ideological.” He noted that after the 2010 pipeline explosion in San Bruno, California, his board of directors set an admirable goal — zero incidents.  He also predicted that 2016 would be “a tremendous year for pipeline construction.”

Tom Kuhn, President of the Edison Electric Institute (compensation $3,607,927), which represents private electric companies, did say, “I see us leading the way in becoming cleaner,” but he also referred to “clean coal,” suggesting he might have a low threshold for what constitutes “cleaner.”

Kuhn said he drives an electric vehicle, which, he argued, was superior in a snowstorm, like the one that was about to pound the East Coast. If he’s right, other CEOs might want to look into these vehicles, because new research suggests that climate change is making East Coast blizzards more severe.

Marv Fertel, CEO of the Nuclear Energy Institute (compensation $3,761,026), said that nuclear power was being “squeezed by gas and renewables.” He promised to take up with his group a question about overseas financing that was posed by an audience member, Marsha Freeman of Executive Intelligence Review. If Fertel was aware that Freeman’s publication was founded by the bizarre convicted felon Lyndon LaRouche, he didn’t let on.

Hal Quinn, yet another lawyer and the CEO of the National Mining Association (compensation $1,531,118) said that 2015 was the safest year in the mining industry’s history. That was good to hear in the wake of the recent criminal conviction in West Virginia of former Massey Energy CEO Donald Blankenship, under whose leadership 29 workers died in a 2010 incident.

Quinn attributed the recent bankruptcies of U.S. coal companies, including Alpha Natural Resources, to those businesses overpaying to acquire other companies when the market was higher, and then taking on too much debt.

But he also blamed, of course, Obama, whose policies, he said, posed “existential risks” to his industry. He said that the Administration’s just-announced moratorium on new leases for coal mining on federal lands was based on “fiction peddling.” He insisted that the current lease program already accounts for the societal costs of carbon emissions from coal and that coal companies were paying above-market rates for the leases.

Quinn also complained about the EPA’s rule to limit emissions of mercury and other toxic pollutants from coal plants. The Supreme Court, by a 5-4 vote, knocked down that regulation last summer, which has forced the agency to scramble to formulate a new cost-benefit analysis to justify its action. But Quinn said that the Supreme Court’s nullification of the rule came too late; the harm to the industry was already done.

Nevertheless, Quinn predicted that demand for coal would rise in 2017.

When Quinn finished, a reporter rose to ask a question, which she prefaced by informing Quinn, and the room, of breaking news: The U.S. Court of Appeals had just declined to stay Obama’s Clean Power Plan, pending final review. The industry had hired scores of lawyers to argue for that stay. The room got a little sadder, and Quinn hemmed and hawed for a bit.

The ballroom crowd, seating at round tables, started to thin out as the bad legal news sunk in, the afternoon dragged on, and the three lowest-paid CEOs concluded the program.  Even a promised post-event cocktail hour couldn’t stop the exodus.

Dan Dolan, President of the New England Power Generators Association (a bargain $257,082 salary), said the Obama Clean Power Plan “is a complete non-event in New England” because carbon mandates imposed by some New England states go well beyond what the EPA is requiring.

Yet another lawyer / CEO,  Sue Kelly of the American Public Power Association ($384,314) presented a busy Powerpoint slide full of federal regulatory issues that concerned her, including, again, the dreaded Clean Power Plan.

Finally, when it appeared as if all the energy had been sapped out of the room, Rhone Resch ($627,348), CEO of the Solar Energy Industries Association, bounded up to the podium. In contrast to the somewhat hunched and lethargic men who make up much of the fossil lobby CEO population, Rhone Resch was tall and ramrod straight in a pressed suit, with the hair, face, and voice of an actor. Maybe he was our energy future.

Resch then reported that solar energy has just reached 1% of total U.S. power generation – up from .1 % 5 years ago.

That announcement seemed to make little impression on the audience. But all kinds of knowing looks and whispers were exchanged at the event’s conclusion when the head of the U.S. Energy Association announced that D.C.’s subway system would be shutting down for the impending massive snowstorm.

It seemed as if the crowd was generally unimpressed with Washington’s public transportation system.  But I don’t think it worried the energy lobby CEOs. Based on the views they expressed, they likely have cars and SUVs waiting for them.

When it comes to moving toward clean energy policies, the U.S. still has a lot to overcome.

This article also appears on Huffington Post.

Correction: This article originally stated that Dave McCurdy of the American Gas Association criticized EPA rules. In fact, McCurdy was discussing the Department of Energy’s Notice of Proposed Rulemaking on Energy Conservation Standards for Residential Furnaces, not an EPA regulation. I regret the error.