The Climate Lobby from Soup to Nuts

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"The Climate Lobby from Soup to Nuts"

An Array of New Interests Joins Washington’s Climate Change Debate

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The next round of the battle over climate change policy on Capitol Hill will involve more than the usual suspects. Way more. Watch soup makers face off against steel companies. Witness the folks who pump gas from the ground fight back against those who dig up rock. And watch the venture capitalists who have money riding on new technology try to gain advantage in a game that so far has been deftly controlled by the old machine.

The Center for Public Integrity has the most comprehensive analysis of the lobby to influence both domestic and global climate action.  They’ve just published their latest analysis of the U.S. climate lobby, by Marianne Lavelle and M.B. Pell, which I excerpt below:

An analysis of the latest federal records by The Center for Public Integrity shows that the overall number of businesses and groups lobbying on climate legislation has essentially held steady at about 1,160, thanks in part to a variety of interests that have left the fray. But a close look at the 140 or so interests that jumped into the debate for the first time in the third quarter shows a marked trend: Companies and organizations which feel they’ve been overlooked are fighting for a place at the table.

In other words, as the action moved to the Senate in recent months, still more sectors of the economy waded into the battle….  Although amounts spent on lobbying by issue are not disclosed, if the groups involved spent just 10 percent of their lobbying budgets on climate, they shelled out $30.5 million in the third quarter “” up nearly 13 percent over the previous quarter.

Of course, the framework for climate change legislation developed by a trio of Senators “” Massachusetts Democrat John Kerry, South Carolina Republican Lindsey Graham, and Connecticut Independent Joe Lieberman “” already makes clear that the climate debate will expand into new realms. Incentives for nuclear power construction and more offshore oil and gas production are key proposals they’ve floated for gaining Republican and moderate Democratic votes for a climate change package. But beyond what are sure to be high-profile battles over those issues, the lobbying records also reveal that a host of smaller battles are brewing “” sure to greatly complicate the challenge of writing a successful bill. It’s one of the reasons that “” despite the pledge by President Obama and other world leaders of “strong political will” on climate “” it likely will be months before the Senate finalizes a measure to curb fossil fuel emissions.

Campbell Soup and Kellogg

imageCampbell Soup Co. registered to lobby on the issue of climate change for the first time in the 3rd Quarter.  [Credit: Photo of Andy Warhol's "Campbells Soup Cans" used under Creative Commons from freshwater2006.] Take the concerns raised by the world’s largest maker of soup, Camden, N.J.-based Campbell Soup Company, one of a slew of grocery producers (including Kellogg Company, Del Monte Foods, and the Alliance of Food Associations) registered to lobby on climate change for the first time in the July-September quarter. “It wasn’t until we analyzed what was going on in the House that we thought, ‘Oh, gosh, we are being affected by this,’” said Kelly Johnston, Campbell Soup’s vice president for public affairs, in an interview. At issue are the free “allowances,” or carbon dioxide pollution permits that the House-passed climate bill would give to manufacturers that use a lot of energy to produce internationally traded products, like steel and aluminum. Those energy-intensive industries fighting international competitors successfully lobbied for protection from loss of jobs to China and other cheap-energy countries if the United States unilaterally enacted a carbon reduction program that would make coal-burning more expensive here. But the House bill’s approach means manufacturers that don’t use as much energy “” like Campbell “” would have to bid at auction for carbon emissions allowances from the federal government. Johnston argues that Campbell should either be exempt from that process or provided some freebies, too. “I think it’s clear from our view that we’re not being treated as fairly as carbon-intensive industries,” Johnston said. “There needs to be some recognition of the role the food industry plays in our economy.”

The Natural Gas Lobby

Also sure to shake up the climate debate are companies that produce or sell natural gas “” the fuel that produces that blue flame on the stovetop, heats half the homes in America, and can generate electricity with 40 percent less carbon emissions than coal. “The gas companies really missed out on influencing [the House bill],” says lobbyist C. Kyle Simpson, who was an Energy Department official in the Clinton administration. Among his 14 climate change clients is the Gas Technology Institute, a research organization, and several natural gas-related firms that have recently begun to weigh in more heavily on climate change legislation, like DCP Midstream of Denver and Denbury Resources of Plano, Texas.

Because natural gas is the least carbon-intensive fossil fuel that can be burned to produce electricity, companies that produce it stand to gain significant share in the power generation business if Congress passes legislation that makes coal “” its competitor “” more expensive. In theory, climate legislation would do that, but lawmakers have been lobbied by the coal industry to endorse a ramp-up of the program slow enough to discourage such fuel switching.

imageLobbyist C. Kyle Simpson says natural gas companies are vying to influence the Senate climate bill after missing out on the House version.

The natural gas industry is diverse, so it had trouble organizing as a politically cohesive force to urge a quicker transition from coal power to protect the climate. Many natural gas players are first and foremost oil companies that produced natural gas “conventionally” as a by-product of oil “” a sector that hasn’t been at the forefront of calling for greenhouse gas regulation. But recent technological advances have allowed companies to produce huge amounts of natural gas all by itself, “unconventionally,” by breaking up underground shale formations with horizontal drilling and high-pressure water fracturing. Just days before the House voted on the climate bill last June, a widely watched industry group announced a 35 percent increase in U.S. gas reserves “” the largest jump in its 44-year history of supply tracking. Abundance and relatively low prices already have some electric power producers switching from coal to natural gas. In one of the largest such moves, Raleigh, N.C.’s Progress Energy this month announced it would shut down 11 aging coal plants and replace them with natural gas generation.

That trend surely would continue under the climate change bill passed in the House, says Simpson, but natural gas companies might win an even larger share of the U.S. electricity market with an all-out push in the Senate. “If they would say there should be a price on carbon, the fundamental change could be extraordinary,” Simpson says. He could see, for example, a scenario in which utilities were given a kind of “cash for coal clunkers” credit in the carbon market for making the switch to natural gas.

For more on gas, see Game Changer, Part 1:  There appears to be a lot more natural gas than previously thought and Part 2: Unconventional gas makes the 2020 Waxman-Markey target so damn easy and cheap to meet?

Venture Capitalists and Clean Tech

… “We’d like to see a price on carbon that escalates at a reasonable rate in the early years, not just the later years,” says Will Coleman , a partner with Mohr Davidow Ventures of Menlo Park, Calif. A venture capital firm with $2 billion under management that invests in early-stage business development, the company registered to lobby on climate change for the first time in the third quarter, joining about a dozen investment and private equity firms weighing in on the issue on Capitol Hill. Investors want to see returns in five-to-10-year cycles, says Coleman. Therefore, clean tech investors “” much like the natural gas industry “” would like to see a climate bill that makes coal more expensive in a shorter time frame. That would allow alternatives like solar energy “” currently expensive, but perhaps cheaper in the future if mass produced “” to be more competitive earlier, and to deliver returns sooner to investors. But the House bill, for example, would have the effect of keeping the pollution-price added to coal relatively low for 15 years, because it would not begin phasing out many of the free carbon allowances that the government distributes until 2026.

Mohr Davidow is already investing in new technologies to reduce carbon emissions “” like solar that uses a thinner, and therefore cheaper, layer of photovoltaic material, biomass fuel, and new ways to extract the lithium needed for advanced batteries. But Coleman says that there would be a much wider range of venture opportunities if investors were surer that companies could gain an early competitive foothold against coal. “My biggest concern is that if we are less aggressive in carbon targets and carbon pricing, we may incur more costs in the future, because we’ll drive less investment into the space,” Coleman says.

But he admits that it’s been a rather subtle argument for Washington policymakers more accustomed to lobbyists for businesses who want clearer, nearer-term issues addressed. “They sort of say, ‘What do you want?’” Coleman says. What the venture capitalists want isn’t a hand-out or carve-out, as traditionally seen on Capitol Hill, but a regulatory environment that creates a more favorable playing field for new tech investments. “Our effort was to talk to as many people on the Hill and in [the Department of Energy] and White House as we could about the way the innovation economy could work,” he says.

Of course, put the 60 or so venture and investment firm lobbyists together with the 170 alternative energy lobbyists and 160 environmental lobbyists, and they are still outnumbered 5-to-1 by the approximately 2,000 representatives of major sectors that are looking for a slow-down or hand-out “” traditional manufacturers, power companies, oil and gas, transportation, and agriculture. And it likely will be weeks after the Copenhagen conference until climate legislation that begins to weigh all these interests takes shape in the Senate. Kerry said he expects movement on the bill in the late spring, after the Senate has dealt with two other massive undertakings “” health care and financial regulatory reform. The total number of climate lobbyists working for all those interest groups, new and old, stands at about 2,780 “” five for every member of Congress. That’s 400 percent more than when lawmakers first considered a nationwide greenhouse gas emissions reduction program six years ago. If they all want a place at the Senate’s table, there had better be plenty of chairs.

Kudos to CPI for their work tracking the energy and climate lobbyists.

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11 Responses to The Climate Lobby from Soup to Nuts

  1. John McCormick says:

    Watch the paint dry. It will condition you to the Senate’s consideration and passage of climate change legislation in the Second Session of this Congress.

    Senators (D&R) are pushing back while the climate time bomb is ticking.

    John McCormick

  2. Hal says:

    Will the Senate Dems actually pass something with House Dems who are fearing big losses next November due to Obama progressive ambitions/gains pressing to step back on global warming legislation?

  3. Chris Dudley says:

    It should be remembered that natural gas has already got some lobbying help from some environmental groups where it has been considered a transition fuel. One thing that should happen now that the industry is taking a few baby steps away from the oil industry is that it should be making a play for all of the carbon capture and sequestration (CCS) funding that oil and coal have been supporting. It is much much easier for natural gas power plants to capture carbon dioxide than for coal plants because ash won’t contaminate the flue gas. Further, a much smaller fraction of the released energy from gas burning needs to be devoted to sequestering the carbon dioxide owing to the larger hydrogen fraction and the better efficiency in gas generation vrs. coal generation. This makes CCS less of an energy dog. Further, a pipeline right-of-way leads to each gas power plant so that returning the waste gas to where the fuel gas came from is easily arranged. One might even run the (high pressure) return pipe down the center of the supply pipe. The industry should also emphasizing that gas infrastructure built today can be used with biomass gasification tomorrow while large coal facilities have a very difficult time getting biomass delivered and so are not very convertible.

    A direction for lobbying that has not been pushed enough yet is attempting to target solar and wind manufacturing jobs to coal mining regions. There is a strong urban jobs lobby that Van Jones has helped to shape, but an effort to split coal mining unions from coal mining companies should be a priority.

  4. Anna Haynes says:

    > “The Center for Public Integrity has the most comprehensive analysis of the lobby to influence both domestic and global climate action.”

    I looked on their Global Climate Change Lobby site and couldn’t find the bottom-line comparison of lobbying dollars spent for vs. against climate action – which I know I read about in the last couple months.

    Perhaps it’s staring me in the face; can anyone else see it?

    (maybe it’s under “Key Facts”, which, alas, provides a seemingly promising, linky submenu, that disappears when I move the mouse onto it… Grrr.)

  5. Turboblocke says:

    AH: I think those key facts are just information, not links.

  6. Anna Haynes says:

    re my above Q, on where to find bottom-line comparison of lobbying dollars spent for vs. against climate action -

    Here are links to lobbying info (thx to the provider!)
    ======

    2008 lobbying:
    http://wonkroom.thinkprogress.org/2009/02/25/pollution-climate-lobbyists
    (“Pollution Industry Dominates Climate Change Lobbying”)
    ““more than 770 companies and interest groups hired an estimated 2,340 lobbyists to influence federal policy on climate change in the past year,”… ~$90 million. … nearly 2,000 of the lobbyists represent corporate interests.”)

    1st quarter 2009 lobbying:
    http://www.eenews.net/public/Greenwire/2009/06/26/4
    “CLIMATE: Lobbying cash paved Waxman-Markey’s road to House floor ”
    “Despite oil and gas companies spending nearly 10 times what environmental groups spent,…”
    $111 million against (from established interests), vs. $11.9 million for.

    July-Sept 2009:
    http://www.nytimes.com/gwire/2009/10/30/30greenwire-enviro-group-spending-soars-in-senate-climate-13238.html
    (“Enviro Group Spending Soars in Senate Climate Push “)
    Green-group *lobbying* expenditures for July through September ballooned 33 percent to $6.1 million … The oil and gas industry in the third quarter …[spent] $38.4 million

    …10 industries spent a total of $124.2 million on lobbying in July, August and September ($6 mill from enviros, $6.6 mill from
    alternative energy (Wind, solar, biofuel and other green energy companies and trade groups) (vs $7.2 mil from Exxon-Mobil alone))

    (the 10, I think: green groups, oil and gas, alternative energy, natural gas, electric utilities, chemical and related manufacturing, agricultural services and products, mining, coal mining, and forestry and forest products.)
    So, $111 million against (from established interests), vs. $12.7 million for.

    http://www.publicintegrity.org/investigations/global_climate_change_lobby/articles/entry/1884
    (“The Climate Lobby from Soup to Nuts”)
    “Of course, put the 60 or so venture and investment firm lobbyists together with the 170 alternative energy lobbyists and 160 environmental lobbyists, and they are still outnumbered 5-to-1 by the approximately 2,000 representatives of major sectors that are looking for a slow-down or hand-out — traditional manufacturers, power companies, oil and gas, transportation, and agriculture. ”

    ======

  7. Anna Haynes says:

    p.s. To Turboblocke#5 (“those key facts are just information, not links”) – the CPI’s “Key Facts” submenus had ~4 links (to info pages, I assume), that – because the submenu would disappear if you moused toward them – were unclickable.

    (and still are)

  8. Anna Haynes says:

    Joe, can you look for a comment from me that went AWOL on this post please? I think it’s #comment-244020 and this would be its permalink.

    And could you add a reminder, in red and directly above the “Submit comment” button, suggesting we copy-paste our comment into a safe place before submitting?

  9. Hello Anna, and all,

    You have hit on one of the biggest problems in trying to track lobbying. Although the U.S. system is the most transparent in the world (my colleague M.B. Pell discusses the shortfalls in other countries’ disclosure laws here: http://www.publicintegrity.org/investigations/global_climate_change_lobby/databases/) it is still impossible to say how much any particular company or interest group is spending on any particular issue, like climate change. To take just one example of a diverse company–General Electric–you can search our database http://www.publicintegrity.org/investigations/climate_change/ & see it spent $6.9 million lobbying in the third quarter. But in addition to climate, that included GE lobbying on the omnibus federal spending bill, FAA reauthorization, water infrastructure, the stimulus, telecom policy, patent reform–to name just a few of the issues in a 34-page disclosure. Now in contrast, for some other companies, particularly those in the energy sector, nearly 100 percent of their lobbying was on climate and related energy policy. So the best that we can do is come up with a very conservative estimate, and that is, for the third quarter, it looks like if all of the companies and interest groups involved spent 10 percent of their time on climate, they would have spent about $30.5 million on lobbying from July through September.
    Remember also that lobbying groups do not, for the most part, have to disclose the money they spent on many other things they do to influence legislation–advertising, grassroots or ‘astroturf’ lobbying or lobbying state legislatures. We’d welcome any thoughts or ideas on how best to get a grasp on what is actually being spent to influence climate policy!

    Marianne Lavelle
    staff writer
    The Center for Public Integrity

  10. Anna Haynes says:

    Thank you Marianne! that’s valuable information.

    p.s. Your CPI climate lobby investigation website is still broken, the “Key Facts” submenus’ items aren’t clickable. (using Firefox & XP)

  11. todd says:

    Great post, I agree with your insight on climate change and impacts on recent legislation to reduce greenhouse gases. I also believe, that lack of competition among Electric Companies in Connecticut and other states have greatly inflated rates to unreasonable levels. My client, Low Cost Power, strives to stimulate competition and lower rates on the consumer end.