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Obama's Fossil Fuel Policies Poised To Frustrate Industry Through Second Term

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An oil rig in North Dakota. | Getty Images

As it relates to energy and the environment, the 2012 presidential fight was, by almost any measure, historically expensive and deeply bitter, pitting environmental and climate-action groups allied with President Barack Obama against assorted climate change skeptics and the well-heeled lobbying machinery of the fossil fuel industry, which found more to like in the now-defeated Republican challenger, Mitt Romney.

So while environmental groups celebrated Obama's reelection on Wednesday, many of the forces that would have liked to see the president unseated -- some of which spent an estimated $270 million on fossil fuel-friendly campaign ads over the last two months, according to one analysis -- were issuing grudging statements of congratulations to the incumbent, even as they began contemplating how to confront four more years of policies that they view as hostile to American business in general and to oil, coal and gas interests in particular.

"With the election behind us, the real work for our nation begins," said Philip Ellender, president of Koch Companies Public Sector, the lobbying arm of the Witchita-based oil and chemical conglomerate Koch Industries. David and Charles Koch, the brothers who head the company, founded and provided much of the financial backing for the group Americans For Prosperity, which unleashed a $27 million advertising blitz against Obama in the waning days of the campaign. "Our elected representatives," Ellender continued in an emailed statement, "need to work together to balance the budget, rein in unbridled government growth and spending, end cronyism, and create an environment that rewards principled entrepreneurship and strives for economic freedom and opportunity for every American."

Benjamin Cole, a spokesman for the American Energy Alliance, a nonprofit lobby group led by Thomas Pyle, a former director of federal affairs for Koch Industries and erstwhile lobbyist for the National Petrochemical and Refiners Association, sounded a more explicit note of disappointment at last night's election outcome.

The American Energy Alliance spent heavily on its "Stand With Coal" campaign.

"I think what's disappointing," Cole said, "is that the policies that have seen gas prices rise and electricity rates skyrocket, and which basically worked to kill the coal industry -- I think it's disappointing that those policies will continue to be in place."

The American Energy Alliance spent roughly $1.3 million over the last six months on its "Stand With Coal" advertising campaign.

"We expect more of the same in the next four years from the Obama administration," Cole said, "and the Obama administration can expect more of the same from us."

Other opponents of Obama were far less conciliatory.

"Ronald Reagan, when facing an election, always put his faith in the American people to make the right choice," said Jim Lakely, the communications director for the Heartland Institute, a free-market think tank that routinely supports research that is at odds with established climate science, and which The Economist magazine described as "the world's most prominent think tank promoting skepticism about man-made climate change."

"I believe they made the wrong choice on Tuesday," Lakely said, "and we will all live with the consequences."

Among the consequences that Obama's critics most lament or fear: increased fuel efficiency for cars and trucks; tough emissions standards for new power plants and the looming promise of similar regulations on existing plants; new regulations for hydraulic fracturing on federal lands; restrictions on oil and gas prospecting on the Atlantic coast; expanded support of clean technologies; a possible end to certain subsidies for the oil and gas industries -- and a host of other initiatives that are either underway or that could conceivably be pursued during Obama's second term.

Given a hopelessly gridlocked Congress, all of these initiatives have been pursued through Obama's regulatory agencies rather than via legislation, and taken together would have the effect of reducing air pollutants and greenhouse gas emissions -- dividends welcomed by environmental groups that, indeed, would like to see even more.

But while Obama's "all of the above" energy strategy nominally supports all forms of domestic energy production -- including oil, gas, coal and nuclear power, in addition to renewables -- fossil fuel companies have typically regarded this as disingenuous, and have bristled at what they view as a regulatory assault on their interests. Perhaps not surprisingly, groups affiliated with these industries unleashed a flurry of spending in the 2012 campaign in an attempt to force a change in direction.

According to an analysis of data compiled by Kantar Media's Campaign Media Analysis Group, Noreen Nielsen, energy communications director with the Center for American Progress Action Fund, a progressive advocacy outfit in Washington, found that organizations linked to fossil fuels spent more than a quarter-billion dollars on television advertisements targeting a variety of federal races, as well as general industry ads "promoting oil, gas, and coal interests," in the last two months of the campaign season.

From the analysis:

In addition to dirty energy groups' direct spending on specific electoral campaigns, they also pumped millions of dollars into generic "branding" campaigns promoting oil, gas, and coal interests, such as the American Petroleum Institute's "I'm an Energy Voter" campaign. From September 1 through November 5, for example, the American Coalition for Clean Coal Electricity and the American Petroleum Institute spent $5.5 million on these types of ads.

"It's clear that the voters have spoken and rejected these special interest appeals to keep special tax breaks for Big Oil and their allies and reject pollution reductions," Nielsen wrote. "Now it's time to move forward with a clean energy and clean air agenda that protects our health, creates American jobs, secures our energy future, and addresses climate change."

Representatives of the fossil fuel industry, of course, see the costs and benefits of such a "clean energy and clean air" agenda differently. Speaking for the National Mining Association, Carol Raulston said in an email message that the election had changed little in terms of the organization's policy strategies, but suggested that Obama's regulatory ambitions would force a continued shedding of jobs in coal mining country.

"I am hopeful the administration will look at the recent Bureau of Labor Statistics report that confirmed our numbers on coal jobs lost -- BLS says 6,000 since spring, with most of those losses in Appalachia," Raulston said. "We expect about 1,000 more before year end," she added, noting that Worker Adjustment and Retraining Notifications had already gone out to hundreds of mine workers.

Environmental advocates have routinely countered such claims by pointing out that the coal industry is shrinking anyway -- not as a result of regulation, but rather due to market competition from natural gas, which is quickly supplanting coal as the nation's dominant fuel source for generating electricity. And there is precious little sympathy for complaints from major oil and gas producers, who have reaped billions of dollars in profits even as gas prices have spiked.

Still, the sting of Obama's victory was palpable among the full complement of his fossil fuel and free-market opponents. In reelecting the president, Heartland's Jim Lakely said, voters "have chosen the empowerment of government over the liberty of the individual and free markets. I believe we'll find that such a profound rejection of the benefits of free enterprise, economic freedom, and personal liberty will not bring us to the promised utopia." Lakely continued, "It will bring us only the misery we have experienced since 2009. And Americans have now made it harder than ever to reverse."

Ben Cole of the American Energy Alliance was a bit less polemical.

"The president worked very diligently to try to, in the last eight months, scale back the first three and a half years of his administration when it comes to energy policy, to somehow present himself as favorable to oil and natural gas development, to somehow present himself as favorable to a re-invigorated nuclear energy industry, when everything he has done in the first three and a half years was completely and diametrically opposed to that," Cole said. "And what's going to be interesting will be to see which Obama will we have in the second term. Will we have candidate Obama, who thumped his chest as the all-of-the-above president, who was interested in getting America free from foreign oil? Or will he continue to use the regulatory bureaucracy to impose his energy policies on the American people? We're all waiting to see."

This post has been updated to clarify the relationship between Thomas Pyle and the American Energy Alliance. Pyle is the president of the group, but not its founder.

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