How The Oil Lobby Greases Washington's Wheels
Clout in Washington isn't about winning legislative battles -- it's about making sure that they never happen at all. The oil and gas industry has that kind of clout.
Despite astronomical profits during what have been lean years for most everyone else, the oil and gas industry continues to benefit from massive, multi-billion dollar taxpayer subsidies. Opinion polling shows the American public overwhelmingly wants those subsidies eliminated. Meanwhile, both parties are hunting feverishly for ways to reduce the deficit.
But when President Obama called on Congress to eliminate about $4 billion a year in tax breaks for Big Oil earlier this year, the response on the Hill was little more than a knowing chuckle. Even Obama's closest congressional allies don't think the president’s proposal has a shot.
"I would be surprised if it got a great deal of traction," Senator Jeff Bingaman (D-N.M.), chairman of the Senate energy committee, told reporters at the National Press Club a few days after Obama first announced his plan.
Rep. Earl Blumenauer (D-Ore.), co-author of a House bill that closely resembles Obama's proposal, nevertheless acknowledges that it has slim chances of passing. "It will be a challenge to get anything through the House that includes any tax increase for anyone under any circumstance," he told The Huffington Post.
The list goes on: "It's not on my radar," said Frank Maisano, a spokesman for Bracewell Giuliani, a lobbying firm with several oil and gas industry clients. "It's old news and it's never going to happen in this Congress. It couldn't even happen in the last Congress."
Indeed, the oil and gas industry's stranglehold on Congres is so firm that even when the Democrats controlled both houses, repeal of the subsidies didn't stand a chance. Obama proposed cutting them in his previous two budgets as well, but the Senate -- where Republicans and consistently pro-oil Louisiana Democrat Mary Landrieu had more than enough votes to block any legislation -- never even took a stab at it.
Now that the House is controlled by the GOP, Obama's proposal is deader than an oil-soaked pelican. Over the last decade in particular, the Republican Party's anti-tax policies and pro-drilling campaign rhetoric have become nearly indistinguishable from those of Big Oil.
"Obama's been proposing to get rid of these subsidies since his first budget in February 2009," said Tyson Slocum, director of the energy program for the consumer watchdog group Public Citizen. "The obstacle has been the petroleum industry. The American Petroleum Institute has dug in their heels and is fighting tooth and nail to retain these subsidies."
The American Petroleum Institute (API) is the industry's enormously powerful lobbying and trade association.
"API is very focused on making sure that we have a voice in policy debates," said Martin Durbin, the organization's executive vice president for government affairs. "Certainly I hope we're having some role in the debate here."
Is he pleased at the industry's success in heading off this particular debate? "I feel that we are successfully getting the point across, successfully educating policy-makers about the importance of our industry throughout the economy," he said.
Even before Obama's 2011 State of the Union address, API president Jack Gerard used his "State of American Energy" speech to cast the repeal attempt as a tax increase and a job-killer. "The way I see it, our policy-makers are at a crossroads," Gerard said. "They face two choices: One leads us forward and promotes jobs, investments, revenue and growth -- or one that takes us backward, threatening the progress we've made and closing the door on future opportunities."
Gerard was speaking to a receptive audience. As Time noted, "Republican Fred Upton, the new chairman of the House Energy and Commerce Committee, was in the front row of the audience for Gerard's speech." Upton did not return calls for comment.
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First Posted: 04/06/11 06:38 PM ET Updated: 06/06/11 06:12 AM ET