Regulation & The Environment: Obama win notwithstanding, API thinks energy was an election winner

Barack Obama was clearly not the candidate of the American Petroleum Institute. But leaders of the organization profess not to be concerned by the President’s re-election. In this week’s Oilgram News column, Regulation & The Environment, Gary Gentile discusses why the API says it came out just fine from the election.

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After spending millions of dollars to target the Obama administration’s handling of the oil and gas industry and to promote positions championed by Mitt Romney and Republicans in Congress, the American Petroleum Institute issued the following post-election verdict: we won.

Huh?

“I’m encouraged by the prominent role energy played in campaigns throughout the country,” API President Jack Gerard said last week to reporters. “I’m encouraged by the president’s strong commitment to oil and natural gas development.”

This from the organization that has sued to block part of the government’s Renewable Fuel Standard regarding cellulosic ethanol, that has sued to block a Securities and Exchange Commission rule regarding reporting of foreign oil payments, and that in September said that “the administration’s policies on improving regulations and encouraging domestic oil and natural gas development continue to hamper energy production and job creation and threaten to leave the nation with a less secure energy future.”

“We spent multi-millions on our campaign and believe it was very successful,” Gerard said of the Vote4energy campaign, which sponsored print, TV and radio ads across the country.

“Energy was a big winner in this campaign cycle. It was interesting to watch during the debates, it almost became a question as to who could be the strongest proponent for oil and gas development here in the United States.”

It is true that the fossil fuel industry, which includes oil, gas and coal, was able to push Obama to tighten his embrace of traditional energy sources as the campaign progressed, noted Steve LeVine, a former energy journalist who now teaches energy and security issues and is on the staff of a new economic news website, Quartz.

“Jack is right when he says that the campaign forced Obama to make a tighter public embrace of shale gas drilling than he was doing,” LeVine said.

Obama’s public stance toward the oil and gas industry had been that profitable companies such as ExxonMobil and BP can take care of themselves without the aid of government tax incentives or increased access to federal lands. Government aid, Obama has said, should be directed to fledgling companies seeking to promote tomorrow’s energy sources, namely wind and solar.

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But the Romney campaign, which all but eliminated the gap in the final month or so before election day, forced Obama to change his rhetoric, LeVine said.

Obama’s enthusiastic support of an “all of the above” strategy, especially in the debates, was influenced greatly by the effort of the API, the US Chamber of Commerce, and other business and energy groups, LeVine said.

But on November 6, Obama’s need for the energy industry’s affection evaporated. Oil and gas companies, it seemed, had bet on the wrong horse.

“The evening of Nov. 6 was horrendous for the US fossil fuel industry, which spent more than $160 million in a largely one-sided bet against President Barack Obama and other Democrats,” Levine wrote in a recent Quartz column. “That was a combination of campaign ads ($158 million just as of September) and direct contributions to losing Republican candidate Mitt Romney (at least $5.7 million).”

Gerard rejects that conclusion, saying that the API’s campaign was nonpartisan and aimed to raise the profile of energy in the public debate.

“The president, in a shift of position, repeatedly talked about the need to produce the nation’s oil and natural gas as part of his ‘all of the above’ energy strategy,” Gerard said. “He has evolved on the oil and gas issue and today gives it a full-throated endorsement in terms of the need to produce it, to create jobs, get our economy back on track. We’re hopeful and will continue to believe, until we see otherwise, that President Obama will be the person people voted for.”

But what exactly did Obama commit to? His first five-year offshore leasing plan excludes drilling off the Atlantic and Pacific coasts. His Interior Department is poised to issue regulations on offshore safety and onshore hydraulic fracturing. And the Environmental Protection Agency, which had held off on regulating industry greenhouse gas emissions, is poised to begin issuing those regulations in the coming months.

“He’s not going to be friendly to the oil industry. He’s not going to open up federal lands, support faster issuance of permits in the Gulf of Mexico, have a hands off approach to federal regulation of hydraulic fracturing,” LeVine said. “All that is off the table.”

The oil and gas industry got Obama to endorse their strategy publicly, “but they didn’t get their wish list of more access,” LeVine said. “They didn’t get what they wanted and they won’t get it. Obama has no reason to go further than he’s already gone.”

–Gary Gentile in Washington


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  1. EnviroEquipment.com at November 13, 2012 2:49 pm

    Talk about putting a brave face, the API understands that it’s best not to burn all your bridges especially when there’s only one bridge left standing; Pres. Obama.

     

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