The Hill: Oil industry lobbyists in fits

Posted by Brad Johnson Tue, 24 Jul 2007 01:28:00 GMT

From The Hill: Lobbyists face energy bill dilemma. In short, oil and gas lobbyists, long in the GOP camp, are struggling to kill Titles 1 and 2 of Nick Rahall’s bill (H.R. 2337), which repeal the massive tax breaks for oil companies in the Republican Energy Policy Act of 2005. Their best friends on the Democratic side are Blue Dogs Charles Melancon of Louisiana and Jim Matheson of Utah. Also in question is whether there will end up being time for a vote on the legislation, with the farm bill (with which agribusiness is happy enough), commerce, justice and science (CJS) appropriations, transportation appropriations, and children’s health insurance also on the docket before the August recess.

By Jim Snyder July 24, 2007 One of the toughest decisions a lobbyist makes is when exactly to lobby against something. Do you try to stop a bill in committee, marshal opposition on the floor, or wait for the relative secrecy of a congressional conference committee to let loose the arrows in your quiver?

It may be easier to stop an offending provision before the Government Printing Office ink is dry. But sometimes it’s better to allow an opponent an early win, especially if one of your opponents is the Speaker of the House, before a final defeat.

Oil and gas lobbyists, playing defense all session, are weighing how hard to push their backers on Capitol Hill to draw a line in the sand on energy legislation.

On the floor, House members this week take up two major spending bills— transportation and commerce, justice, and science (CJS)— as well as a farm bill that, in contrast to the energy bill, has broad support among industry lobbyists. The Senate takes up a higher education reauthorization bill.

Pelosi’s Leadership
But behind the scenes, lobbyists describe a furious effort under way to shape energy legislation in the final stretch before August recess.

House Speaker Nancy Pelosi (D-Calif.) last week met with “oil patch” members, often the most conservative elements of her diverse caucus, to try to smooth over intra-party differences that are delaying one of the party’s biggest priorities.

Pelosi urged the members to try to work with Rep. Nick Rahall (D-W.Va.), chairman of the House Natural Resources Committee, to find compromise on his energy bill, one of several measures likely to be linked together on the floor.

Will Titles 1 and 2 Survive the Lobbyists?
Oil and gas lobbyists have never been thrilled about Rahall’s contribution. Titles 1 and 2 of the bill would repeal sections of the Energy Policy Act of 2005 designed to encourage more domestic production. But energy lobbyists disagree over how aggressively to lobby against those sections.

“There are some in industry that would go along with a compromise and some in the industry think [the Rahall bill] is so bad that they wouldn’t go along with any compromise,” said one Democratic energy lobbyist, who argues for flexibility.

Even assuming the House bill passes, “there is still a long way to go,” the lobbyist said, referring to the conference with the Senate. The Senate is seen as largely supportive of the energy provisions that passed two years ago.

Marc Smith, executive director for the Independent Petroleum Association of Mountain States, said he doubted a compromise could be found.

“I don’t think there is any way to fix those two titles,” Smith said. “Both would be counterproductive to America’s energy security.”

Smith plans to come to Washington later this week to lobby against the bill.

Environmental groups are lobbying just as hard in support of the legislation, arguing that the Rahall measure is needed to ensure adequate environmental safeguards.

Blue Dogs: Green, Gonzales, Melancon, and Matheson
As among industry lobbyists, there are apparently divisions on Capitol Hill among House Blue Dogs, the group of moderate to conservative members that business often reaches out to in times of crisis.

Reps. Gene Green and Charlie Gonzalez, two Texas Democrats, are viewed as being more amenable to a compromise. In contrast, Democratic Reps. Charles Melancon of Louisiana and Jim Matheson of Utah are “leading a more aggressive stance,” according to another Democratic energy lobbyist.

Robin Winchell, Melancon’s spokeswoman, said her boss favors an amendment to strike the first two titles of the Rahall bill. The titles are “too detrimental to his district,” Winchell said.

But Melancon is working to find some compromise, Winchell said, adding that the staffs of the congressman and the Speaker are in daily conversation.

Will There Be a Vote?
In the meeting with members last week, Pelosi restated her intention of having an energy bill on the floor before recess. The oil and gas provisions are just one obstacle.

The party is also split on how aggressively to raise fuel mileage standards for cars and trucks, a debate in which Blue Dogs are again playing a key role.

Given the uncertainty and the upcoming debate on the spending measures, the farm bill and a children’s health insurance measure, the deadline for energy legislation could once again slip, lobbyists said.

Out of Control
While there is an art to lobbying against something without causing a lasting bitterness among your opponents, who may soon be your friends, the oil and gas industry has never been shy about signaling the party it prefers.

“The industry is dominated by Republicans. There is no getting around that,” a Democratic energy lobbyist said.

Still, even an industry that gave 80 percent of its contributions to the GOP the past three cycles is not monolithic. With Democrats in control of Congress, campaign contributions are moving closer to an even split.

Part of the division within the industry is due to the fact that oil and gas companies often are divided among themselves.

Large, integrated oil companies are more focused on a tax package that may pass separately or as part of the energy policy provisions, energy lobbyists said, leaving the fight over Rahall’s measures to smaller, so-called “independents” that do most of the domestic drilling. The tax package would block companies from claiming a manufacturing tax credit that is worth more than ten billion to oil companies over the next ten years.

Agribusiness Likes The Farm Bill

There are no similar divisions within the agribusiness community to hamper passage of the farm bill, which the House Agriculture Committee passed unanimously last week.

Although there was nervousness about how steep the income limits on farm subsidies would cut, the final compromise that Pelosi fashioned with Agriculture Committee Chairman Collin Peterson (D-Minn.) appears to have won support from the majority of commodity groups.

Jon Doggett, a lobbyist for the National Corn Growers Association, said his group is “very supportive” of the bill. The measure includes an association-backed reform that bases payments on revenues instead of the market price of corn, as current policy dictates. Basing payments on farm revenues “provides stability when it’s needed most,” Doggett said.