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Pouring on the fossil fuels

THE BALTIMORE SUN

AFTER WEEKS of meetings with energy industry executives and their top lobbyists, Vice President Dick Cheney has outlined a national energy strategy that shuns conservation and calls for heavier reliance on oil, natural gas, coal and nuclear energy.

Cheney, who heads a Cabinet-level energy taskforce, views conservation and alternative energy sources such as wind and solar power as unrealistic responses to the nation's energy problem. He favors reviving the nuclear power industry and moving to increase production of the old standbys - fossil fuels such as oil, natural gas and coal.

Later this month, the task force is expected to give the president its suggestions for an energy plan that would include a mix of legislative proposals, executive actions and private-sector incentives.

While the plan is being crafted, representatives from the oil and natural gas industry and coal and nuclear power interests have enjoyed access to the White House and the task force members.

Cheney previewed the task force's recommendations on Monday during the annual meeting of the Associated Press in Toronto. He called for building 38,000 miles of natural gas pipelines and exploration in protected areas such as Alaska's Arctic National Wildlife Refuge.

Cheney wants to build electric generating plants at the rate of one per week for two decades including coal-powered plants that would use "clean-coal" technology to cut pollution. Coal use has been linked to acid rain, global warming and other environmental problems.

Cheney says nuclear power is safe and clean. His support gives new life to the nuclear power industry, which was badly hurt by the near-meltdown at Three Mile Island in 1979.

But with California facing power shortages and gasoline prices rising, the administration is touting its energy proposals, which dovetail well with oil, coal and nuclear industry wish lists, as the answer to a national "energy crisis."

Though Cheney played down conservation in his talk, President Bush on Thursday ordered federal agencies in California and 500,000 federal buildings nationwide to adopt conservation measures.

But overall, the administration's energy policies tilt heavily toward fossil-fuel interests. Further, oil and coal lobbyists have been pressing the energy task force to propose modifications to Clean Air Act regulations that they say limit production.

On March 21, Cheney and Archie Dunham, chairman and chief executive officer of Conoco Inc., the Houston-based oil company, met at the White House. The meeting underscores the input that Cheney and other task force members, including its executive director, Andrew Lundquist, have had from the oil industry.

During the session, Dunham stressed the need to accelerate oil and gas exploration and to relax rules and regulations, including environmental ones, that slow construction of oil refineries and gas pipelines.

Dunham was preaching to the converted. Before Cheney became vice president, he ran the Dallas-based oil services giant, Halliburton Co. Last year, Dunham led the Bush campaign's efforts to round up hard dollars in oil country.

The oil and gas industry has a strong ally in President Bush, who was involved in oil ventures in Texas and abroad in the 1980s.

During the presidential campaign, Bush said the nation lacked an energy plan for the eight years of former President Bill Clinton's administration.

The oil and gas industry cemented its ties to the White House with a record $25.6 million in contributions to the GOP, compared with $6.6 million to Democrats during the 1999-2000 election cycle.

Now, after years of feeling neglected by the Clinton administration, the oil and gas industry is eager to move forward on its wish list and has notched a couple of big victories. Oil lobbyists teamed with mining and electric utility interests to help prod Bush to reverse his campaign pledge to limit carbon dioxide emissions from power plants, which many scientists say contribute to global warming.

And the White House pleased many leaders in the same industries when Bush announced, to the dismay of European allies, that he was abandoning the Kyoto treaty to limit global warming.

But despite their strong White House links, oil and gas lobbyists face obstacles to realizing several of their other key goals.

Many Democrats and several moderate Republicans have said that the administration is stressing supply-side solutions at the expense of energy efficiency and conservation measures, while playing down the importance of environmental protections.

"They have to pay more attention to renewable [sources], conservation, and energy efficiency," says Rep. Sherwood Boehlert, a New York Republican who chairs the House Science Committee.

Fights in Alaska and Florida

Meanwhile, environmental groups have had little input into the task force's deliberations. Several leading environmental groups are working hard to keep the Alaska refuge off-limits and are trying to raise about $3 million for a lobbying and public relations offensive.

"There are much better choices available to us," said Carl Pope, executive director of the Sierra Club.

Pope, who is leading an environmental coalition drive to block drilling in the Arctic refuge, contends that better energy and environmental results would be achieved by boosting production in existing oil and gas fields, using more renewable fuels, and installing energy-efficient technologies in homes, cars, and offices.

Facing such opposition, oil industry lobbyists from the American Petroleum Institute and other groups have intensified their lobbying efforts.

The institute helped Senate Energy and Natural Resources Committee Chairman Frank H. Murkowski, an Alaska Republican, craft his omnibus energy bill that was introduced this year. The bill contains many elements dear to oil and gas interests, including opening about 1.5 million acres of the Alaskan refuge to oil exploration.

The oil companies face an uphill fight in their effort to drill in the refuge. The Murkowski bill has come under fire from many Democrats, including Sen. Joseph I. Lieberman of Connecticut, who has introduced a measure that would bar any drilling in the arctic refuge.

At a March 29 press briefing, Bush acknowledged the growing opposition by saying, "it doesn't matter to me where the gas comes from ..." Bush added that the United States might have to look to Canada and Mexico if domestic drilling is curbed.

A nonprofit industry group called Arctic Power is leading the lobbying drive to open the Alaska refuge. The Alaska Legislature has appropriated about $1.85 million to Arctic Power for a media and grass-roots lobbying campaign aimed heavily at moderate Republican and Democratic senators who could be crucial swing votes. Arctic Power hopes to raise another $2 million to $3 million from oil companies operating in Alaska, such as BP Amoco, Chevron, and Phillips Petroleum Co.

Oil and gas lobbyists are also in a fight that pits them against Florida Gov. Jeb Bush, the president's brother. At issue is a 6-million-acre field in the Eastern Gulf of Mexico, which is thought to hold rich oil and gas reserves. An oil-lease sale, which was backed by the Clinton administration, is scheduled for December. Energy industry lobbyists were stunned in late January when Jeb Bush, citing environmental risks and other issues, opposed the sale in a letter to the Interior Department.

Governor Bush restated his strong objection in a February meeting with Interior Secretary Gale A. Norton. For Gov. Bush, who's up for re-election next year, the stakes in blocking the auction are high: The state's powerful tourism industry and Florida environmental groups oppose it.

The oil and gas industry lobbyists have scrambled to get public backing from other Gulf Coast states. The Mississippi congressional delegation, including Senate Majority Leader Trent Lott, has written to President Bush urging him to proceed with the sale. The White House has been coy, saying only that it will pay close attention to state concerns.

Oil from Iran, Libya

Access to more overseas resources is also a top oil industry priority, and U.S. companies are lobbying hard to do business again in Iran and Libya. They've been barred from doing so since 1995 by a series of executive orders. Foreign energy firms have been limited by the Iran-Libya Sanctions Act, which Congress passed in 1996.

The sanctions act is up for reauthorization in August, and many lobbyists hope that Secretary of State Colin L. Powell and Cheney will support ending the sanctions.

"We need more investment of U.S. oil companies in Iran and Libya," said Conoco's Dunham, adding that the sanctions "put U.S. companies at a distinct disadvantage," to foreign competitors who are still doing business there.

"We're encouraged by what several administration officials have said so far about sanctions," said Halliburton Co. lobbyist Don Deline, who chairs USA Engage, a coalition of 670 companies that opposes unilateral sanctions.

But the American-Israel Public Affairs Committee, which has strong congressional ties, has begun a vigorous effort on Capitol Hill to ensure that the sanctions act is extended for another five years.

The American-Israel Public Affairs Committee argues that Iranian backed terrorism remains a threat to Israel and the West, and its lobbyists note that Iran recently concluded a strategic alliance with Russia.

President Bush, who renewed the executive orders in March, said last month that he wasn't prepared to lift sanctions against either Iran or Libya. But industry lobbyists remain hopeful: They say that Iran's presidential elections next month could create political room for the White House to reverse the executive orders.

Closer to home, the industry is likely to reap some faster dividends from its aggressive lobbying to obtain regulatory changes to speed up permitting processes that affect almost every segment of the industry, from pipelines to refineries to fuel sources.

The National Petrochemical and Refiners Association is one of several groups that has been raising the permitting issue in talks with energy task force members.

The Interior Department and the Environmental Protection Agency can make many of the permitting changes sought by industry without new legislation, and the energy task force is expected to support such fixes.

So far, oil executives seem pleased with the administration's heavy supply-side focus on new production.

"We need to diversify sources of supply both domestically and internationally," said Red Cavaney, president of the American Petroleum Institute, who also did fund raising for the Bush campaign.

That message is likely to be amplified by a new group called the Alliance for Energy and Economic Growth that has been formed by the American Petroleum Institute, the National Mining Association, the U.S. Chamber of Commerce and several other business powerhouses. The goal: build public and congressional backing for broad energy legislation that's expected to move forward in Congress this year after the administration's task force releases its energy recommendations.

The coalition has raised about $1 million, according to industry sources, but hopes to corral as much as $10 million for a national lobbying and media blitz later this year to back a comprehensive energy bill.

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