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Energy & Environment

Stream of New Lobbying Money Helped Climate Bill Flow Through House

Published: July 30, 2009

Major global-warming legislation that squeaked past the finish line in the House last month attracted millions of dollars in new lobbying money.

The fresh cash came from a combination of new groups and existing companies ramping up their payments to hired advocates in the second quarter of 2009. Entities hiring climate lobbyists for the first time shelled out more than $1.5 million overall from April to June and included a new natural-gas coalition and an arm of former Vice President Al Gore's nonprofit empire.

Corporations with a long-term presence in the nation's capital also opened their coffers specifically to push lawmakers on the cap-and-trade bill sponsored by Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.), which passed the House 219-212 last month. For example, Energy Future Holdings, a Texas-based firm, hired the Madison Group to push lawmakers on the bill and paid the firm's lobbyists $80,000.

At the same time, sectors with a stake in the measure, such as oil and gas and coal, upped their spending this spring by millions of dollars from the same period last year, according to the Center for Responsive Politics.

"Lobbying goes in fits and spurts," said Kenneth Green, an analyst at the American Enterprise Institute, a conservative think tank. "There's a low level that happens all the time. Only when legislation is sitting there and threatening people do they pull their wallets out."

In some cases, companies and associations welcomed last-minute changes in legislative language that worked in their favor. Others pledged to fight on in the Senate to ensure their requests are heard in coming months.

The money flow spotlights which industries are unhappy with current plans for a cap on greenhouse gases, as well as who is searching for financial gain and who is holding clout as the political debate heads to the next stage in Congress.

A bill 'all about lobbyists'

"This bill was all about lobbyists," said Tyson Slocum, director of the energy program at Public Citizen. "Lobbyists from big environmental groups hooked up with utilities."

One of the biggest sources of new climate money in the quarter came from the Blue Green Alliance, a coalition launched by the Sierra Club and the United Steelworkers to promote "green" jobs.

The 3-year-old organization recently changed its tax status to allow for direct lobbying and earmarked $720,000 to do so, according to official documents filed with the U.S Senate. Simultaneously, it blasted the airwaves with advertisements praising the climate bill as a green-jobs machine.

The six-figure amount allowed the alliance to get "input into the bill," according to Executive Director Dave Foster. Several items pushed by the group made it into the legislation late in the process, including an amendment added by two Ohio congressmen. That measure, from Reps. Zack Space (D-Ohio) and John Boccieri (D-Ohio), establishes a $30 billion revolving fund for small companies to retool their operations for clean-energy products.

Foster said the alliance would be spending "perhaps more" in the months ahead, and would like to see a strengthening of renewable power and efficiency mandates. It is stepping up town hall meetings with union members to push for passage of the energy and climate bill, which would curb heat-trapping gas emissions 83 percent by 2050.

Fulcrum BioEnergy, a company converting waste into ethanol, also found much to cheer about.

The California-based business is pleased that the final bill counted municipal solid waste in its definition of renewable biomass, said Ted Kniesche, a vice president of business development at Fulcrum. The biomass language came as part of a deal hammered out with House Agriculture Chairman Collin Peterson (D-Minn.) to bring more farm-state members on board as the Waxman-Markey plan neared a final vote.

The company doubled its lobbying payments from $60,000 in the first quarter to more than $140,000 in the second.

"We just hope the definition that was passed will carry over to the Senate," said Kniesche. "We're not looking for special treatment."

New coalition of gas producers ponies up late

The new America's Natural Gas Alliance (ANGA), a coalition of 27 independent natural gas companies, also showed its financial weight with $300,000 paid in lobbying fees this spring. The organization has been running full-length advertisements in newspapers like the Washington Post in recent days, proclaiming that natural gas is 50 percent cleaner than coal in terms of carbon dioxide emissions.

The organization got little in the House plan, since it developed a Capitol Hill presence late in the process, said Rod Lowman, president and CEO of ANGA. But it plans to ramp up its lobbying in months ahead, he said, to ensure that natural gas gets more incentives in the Senate version of a carbon cap.

Smaller dollar amounts came from the Climate Protection Action Fund, an arm of Gore's Repower America, which paid $60,000 in the quarter. Gore's spokeswoman, Kalee Kreider, fielded calls to another Gore-formed group, the Alliance for Climate Protection, which did not respond to several requests for comment.

During a slew of House climate hearings, though, staffers wearing "Repower America" T-shirts distributed papers in the hallways of a Capitol Hill building.

The CCS Alliance, a 2008-formed entity including well-funded groups like the National Rural Electric Cooperative Association, made its debut with a $60,000 payment to Hunton & Williams, a Washington, D.C.-based firm. It is trying to influence liability regulations surrounding future carbon capture and sequestration projects, which would trap CO2 emissions from power plants and store them underground.

International businesses jumped into the K Street fray, as well, particularly to press for changes in bill language governing carbon offsets. Offsets pay for greenhouse gas-reducing projects like tree plantings that companies can use to meet emission targets outside of their own factories.

Losers rearm for Senate round

Under the Waxman-Markey proposal, emitters can satisfy their carbon caps by relying on 2 billion metric tons of such offsets, with half of those coming from overseas.

Gujarat Fluorochemicals Ltd., a firm in India that sells offsets in the European market, paid $80,000 to a Washington-based firm. The company incinerates HFC-23, a potent greenhouse gas, and sells the resulting emission reductions as carbon credits overseas. Under the current legislation, the destruction of that gas is excluded as an eligible offset.

The HFC-23 destruction practice received much bad press in Europe for being an overly expensive mechanism.

Despite the flush of cash from various corners, Green argued that the money only goes so far. The success of one lobbyist often comes at the expense of another, he said.

"The people who lost out in the last round are the ones who are going to be fighting the hardest this round," he said. In his view, that industry most likely will be oil, since the transportation sector accounts for a third of domestic emissions but didn't receive many financial breaks in the bill in comparison to other industries.

In an interview, Red Cavaney, senior vice president of government affairs at ConocoPhillips, said his company would be pushing for transportation consumers to get more "equitable" treatment in the Senate, perhaps via new tax incentives.

Similarly, some biofuels groups are unhappy with the current bill, even as they upped their dollar payments to lobbyists this spring.

Some biofuels wield more clout

The Advanced Biofuels Association, which supports companies working to produce gasoline substitutes out of things like sugarcane, is displeased with last-minute language spearheaded by Peterson, the House Agriculture Committee chairman. Those changes exempted some biofuels, but not all, temporarily from greenhouse gas controls established in a 2007 energy bill.

"This completes the effort by first-generation biofuels to essentially exempt themselves," said Michael McAdams, the president of the association. "Only advanced biofuels now will have to reduce greenhouse gases to the threshold levels in the law."

The association, like many of its member companies, quadrupled its lobbying dollars to six figures in the last quarter. Even so, McAdams said advanced-biofuels companies don't wield the same influence as the ethanol industry, which benefited from the Peterson deal.

Some analysts predict that the climate debate on the Senate side will be more transparent and less susceptible to outsider demands. The House process was unusual in that a large bill with more than 1,500 pages moved quickly, with rapid changes hashed out in private rooms, said Slocum of Public Citizen.

He noted that only one committee in the House, the Energy and Commerce Committee, vetted the legislation thoroughly with an extensive markup process.

"I don't think you're going to see [Montana Democrat] Max Baucus do the same thing in the Senate," Slocum said, referring to the chairman of the Senate Finance Committee, which has jurisdiction over climate legislation.

Copyright 2009 E&E Publishing. All Rights Reserved.

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