The Supreme Court rejected a challenge to the Environmental Protect Agency’s air pollution rules this morning.

The case, American Petroleum Institute vs. EPA, saw the oil lobby disputing a rule adopted in 2010 that “set a tighter Clean Air Act standard for short-term spikes in nitrogen dioxide pollution near roads.” This new standard is 100 parts per billion for one hour, compared to the previous annual standard of 53 parts per billion dating back to 1971.

Nitrogen dioxide is a pungent, reddish-brown gas with a strong odor, and is emitted from auto exhaust and fossil fuel power generation. The DC Circuit upheld the rule in July of last year, finding that it addressed a real public health threat. The agency had pointed to scientific data showing the effect of nitrogen dioxide on the public, particularly asthma sufferers.

The Supreme Court’s decision to not hear the case means the DC Circuit’s 2012 decision stands — and its decision was fairly clear:

The unanimous three-judge panel ruled that EPA’s move was not arbitrary and capricious and did not violate the Clean Air Act. On a separate question over EPA’s plan for implementing the standards, the court punted, saying the statement was not final agency action and therefore not subject to review.

On the claim that EPA’s own regulations required it to rely on peer-reviewed studies, Judge Douglas Ginsburg wrote that the challengers were simply incorrect.

“Perhaps the API should have had its brief peer-reviewed,” he quipped.

Nitrogen dioxide in the atmosphere produces ozone when acted on by sunlight. The IPCC considers ozone to be the third most important greenhouse gas behind carbon dioxide and methane. A recent study by NASA’s Jet Propulsion Laboratory found that where nitrogen dioxide is cleaned up is crucial:

“When it comes to reducing ozone levels, emission reductions in one part of the world may drive greenhouse warming more than a similar level of emission reductions elsewhere,” said Kevin Bowman, lead author of the study, published recently in the journal Geophysical Research Letters. “Where you clean up ozone precursor emissions makes a big difference. It’s all about — to use a real estate analogy — location, location, location.”

Courtesy of the Supreme Court, EPA monitoring of nitrogen dioxide in this new standard can only help build that understanding of where greenhouse emissions originate.

So the American Petroleum Institute is out with more ads that feature “person on the street” interviews with ordinary Americans. You know, the kind of folks that go to bed at night worried about those mean people in Washington threatening to take away the billions in tax breaks currently enjoyed by the fossil fuel industry.

Leaving aside the substance — that high gas prices are already enriching oil companies on top of their tax breaks, and the industry has enjoyed hundreds of billions in government support for a very long time — you have to wonder how ads like this get made in the first place. Do those folks really walk around on the street, and a camera pops up in front of them, and they blurt out deep-seated and authentic desires to protect aggrieved mega-corporations?

Greenpeace investigated this in 2011, and got some audio evidence of the direction these “people on the street” receive from the directors.

The people who appear in the ads are assured that : “... all they do is the director feeds them the lines and he talks them through it.” As a result, they end up saying crazy things like “I think taxing the oil and gas industry does nothing but harm the country” on national television.

So keep that in mind when you see the people in these ads: It’s more profiteering through puppeteering than any genuine concern about energy costs.

Despite ranking among the most profitable corporations in the world, Big Oil benefits from $4 billion in annual tax breaks. It fights to maintain them through aggressive political donations, lobbying, and heavy ad spending, but also employs another tactic: Pretending these tax breaks don’t exist.

“The oil and gas industry gets no subsidies, zero, nothing,” API President Jack Gerard said on Tuesday. “We get cost-recovery benefits, much like other industries. You can go down the road of allowing economic activity, generating hundreds of billions to the government, or you can take the alternative route by trying to extract new revenue from industry by increasing their cost to do business.”

Tax deductions are indeed subsidies, as API admitted in a document that labeled “subsidies for alternative fuels” as “preferential tax treatment.” And the oil industry’s $4 billion preferential treatment is written permanently into the tax code. These include:

Percentage depletion allowance: lets companies deduct the costs of an oil or gas well, about 15 percent, from its taxes.

Domestic manufacturing tax deduction: Allows oil companies to collect $1.8 billion each year, even though there are vast differences between oil and traditional U.S. manufacturing. It is a benefit that was never intended for them, according to Sen. Bob Corker, a Tennessee Republican, who said Congress included oil producers “almost inadvertently.”

The foreign tax credit: Oil companies overwhelmingly fall into the category of companies that can claim credits for payments to foreign governments.

Expensing intangible drilling costs: For over a century, oil companies have written off wages, fuel, repairs, and hauling costs.

ExxonMobil, Chevron, and ConocoPhillips have paid federal tax rates well below the 35 percent top corporate rate, a far cry from paying “more than our fair share”. ExxonMobil, for instance, paid a 13 percent tax rate in 2011, after drilling deductions and benefits, and 14 percent on average between 2008 and 2010.

The record-high gas prices of 2012 reinforce the decades of data showing domestic drilling has very little impact on gas prices. At the same time, the Big Five companies are on track to collect more than $100 billion profit this year.

When Big Oil’s lobby, the American Petroleum Institute, ramped up its election-year spending, API President Jack Gerard said “This is not about political party.”

But in addition to its misleading multi-million dollar public campaign, API also funneled at least half a million dollars through groups that ran attack ads against Democratic candidates.

That’s according to disclosures reported by Lee Fang at The Nation, which show that API used membership dues to finance several dark money groups:

• $50,000 to Americans for Prosperity’s 501(c)(4) group, which ran ads against President Obama and congressional Democrats.
• $412,969 to Coalition for American Jobs’ 501(c)(6) group, a front set up by API lobbyists to air ads for industry-friendly politicians, including former Sen. Scott Brown (R-MA).
• $25,000 to the Sixty Plus Association’s 501(c)(4), which ran ads against congressional Democrats.

Public relations were also a priority for the lobby in 2011. Fang notes that API spent over $68 million for a public relations firm’s services, $5.4 million at a “coalition building” firm, and $4 million at an advocacy firm connected to the Bush White House that “works with corporations to help them communicate with workers on how to vote.”

The oil industry has long-held ties to Republicans. Gerard, personally connected to Mitt Romney, was a rumored favorite for a cabinet appointment. The industry donates to Republican candidates 90 percent of the time. The Supreme Court Citizens United decision opened up another avenue for API to fund political advocacy, now allowing the trade association to quietly fund political ads.

After the election, spending on API-branded ads has only picked up pace. It has already spent $3 million on ads since November 6, including $600,000 in 2014 battlegrounds that aim to protect billions of dollars in oil tax breaks.

On election night, polluter-backed candidates lost in some of the most expensive races targeted by polluters, despite outside ad spending that tallied to $270 million.

The American Petroleum Institute already has 2014 in its sights, and it is spending aggressively to protect the oil industry’s multi-billion-dollar tax breaks. Three weeks since election day, API has spent $3 million on TV ads, according to a ThinkProgress analysis of Kantar Media’s CMAG data. That is already $1 million more than what API spent in the final two months of the election, as part of its “I’m an Energy Voter” campaign.

A bulk of the spending, $600,000, targets specific senators over Big Oil’s $4 billion annual tax breaks, all of whom are up for reelection in 2014. All but two voted in March to end oil subsidies, a vote blocked by 47 senators who have taken more than $23.5 million from the oil and gas industry.

Here is an example of one ad directed at Sen. Mark Warner (D-VA):

NARRATOR: America spoke loudly. Clearly, we want a commonsense plan to help people succeed. Senator Mark Warner can make energy a big part of improving our economy. He can choose economic growth and American jobs, not slow them with job-killing energy taxes. Let’s take advantage of America’s energy resources to power growth. American energy – not higher taxes on energy – will create jobs. Let’s get to work.

Ending the industry’s tax breaks would not affect Americans’ gas prices, or kill jobs. Factcheck.org writes that “nonpartisan congressional analysts and industry experts say higher taxes would have little or no effect on gasoline prices.” And at the same time oil enjoyed low tax rates and earned high profits, Exxon, Shell, and BP still shed 17,500 jobs.

ExxonMobil, Chevron, and ConocoPhillips have paid federal tax rates well below the 35 percent top corporate rate. ExxonMobil, for instance, paid a 13 percent tax rate in 2011, after drilling deductions and benefits, and 14 percent on average between 2008 and 2010.
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by Lee Fang, via the Republic Report

When oil companies need help in Washington, they call Jack Gerard. But in January of next year, assuming he wins the presidency, Mitt Romney may be dialing Gerard for political support. According to media reports in his native Idaho, Gerard is on the shortlist to become Romney’s White House chief of staff.

Gerard is the president of the American Petroleum Institute, the largest oil lobbying associations in the country. Using a budget that is rumored to be in the hundreds of millions (funded by all of the major oil companies, including Chevron, ExxonMobil, etc.), Gerard finances pro-oil propaganda on network television, academic studies to promote his policy positions, front groups to hold rallies in pivotal swing states, and of course a large teams of lobbyists from D.C. to over a dozen state capitals across the country. For his work, he’s one of the highest paid lobbyists in the Beltway, making $6.4 million in 2010 alone.

Rumors are again circulating that Gerard, a prominent Mormon and close ally to the Romney campaign, may be selected to take the top slot in a Romney administration. And there’s other evidence that Gerard has already ingratiated himself with the Romney campaign:

– Senator Jim Risch (R-ID) told the Idaho Statesman that he thinks Gerard may be selected as Romney’s chief of staff. “Gerard is a heckuva player in Washington, D.C.,” Risch told the newspaper. “He’s well thought of, well connected, has incredible street cred. He’s certainly got the qualifications to do any of that.”

– Former Senator Jim McClure (R-ID), Gerard’s former boss when he worked on Capitol Hill, predicted that Gerard would be Romney’s chief of staff had he won in 2008.

– Breaking a tradition of trade association nonpartisanship, Gerard endorsed Romney during the Republican primaries this year, and indicated the he is close to the Romney family.

– Jack Gerard’s son, who shares the same name, is now a spokesman for the Romney campaign.

The Romney campaign, like most political campaigns, has remained largely silent about its future staffing plans.

Lee Fang is a reporter with the Republic Report. This piece was originally published at the Republic Report and was reprinted with permission.

by Daniel J. Weiss

The Department of Interior released an updated analysis of fossil fuel leases today, finding that more than two thirds of offshore leases and half of onshore leases are sitting idle — “neither producing nor under active exploration.”

The report, “Oil and Gas Lease Utilization, Onshore and Offshore Updated Report to the President,” explained that oil and gas companies hold thousands of undeveloped leases. Despite holding these inactive leases, the oil industry continues to demand the opening of new, previously protected federal lands and waters areas to drilling.

The report found that:

More than 70 percent of the tens of millions of offshore acres currently under lease are inactive, neither producing nor currently subject to approved or pending exploration or development plans. Out of nearly 36 million acres leased offshore, only about 10 million acres are active – leaving nearly 72 percent of the offshore leased area idle.

In the lower 48 states, an additional 20.8 million acres, or 56 percent of onshore leased acres, remain idle. Furthermore, there are approximately 7,000 approved permits for drilling on federal and Indian lands that have not yet been drilled by companies.

According to the Energy Information Administration, total federal oil production (offshore and onshore) has increased by 13 percent during the first three years of the Obama administration combined, compared with the last three years of the previous administration. According to independent analysis, the total number of active rigs operating on the U.S. outer continental shelf was higher in January 2012 than any time since May 2010.

The American Petroleum Institute – Big Oil’s lobbying arm — claims that the Department of Interior ignores exploratory work on leases; however, that is clearly included in DOI’s assessment above.

API recently demanded that the Obama Administration open up the North Atlantic to “seismic exploration” for oil. This is an area that supports vital American fisheries.

In addition to holding thousands of undeveloped leases while lobbying to drill in the Arctic National Wildlife Refuge, off the New England Coast, and in the Eastern Gulf of Mexico, the big five oil companies produced 12 percent less oil in 2011 than in 2006 — all while making record profits.

Daniel J. Weiss is Director of Climate Strategy at the Center for American Progress Action Fund.

by Kiley Kroh and Michael Conathan

Yesterday, former members of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling released a report card evaluating the progress made by the federal government, Congress, and industry toward implementing the critical reforms recommended by the Commission in their 2011 report.

None of them make the honor roll. While the harshest rebukes were aimed at Congress, the report card finds that overall, “in every category, much more needs to be done.”

Big Oil, on the other hand, touted the reforms made by the oil and gas industry. Oil & Gas Journal reported “the industry has always demonstrated a strong commitment to operate safely and responsibly offshore, and has deepened that [sic] the commitment in the nearly 2 years since the Macondo well accident.”

Erik Milito, API’s upstream and industry operations group director, said “the bar continues to rise, the commitment is stronger, and the mechanisms are in place to support the strongest safety standards possible.”

Such assurances from API are dubious at best, considering the Commission’s 2011 report found a direct causal relationship between API’s role as the industry’s principal lobbyist and public policy advocate and “compromised” safety standards that were a direct contributor to the BP disaster:

API’s proffered safety and technical standards were a major casualty of this conflicted role … Because the Interior Department has in turn relied on API in developing its own regulatory safety standards, API’s shortfalls have undermined the entire federal regulatory system.

John Watson, CEO of oil giant Chevron, told USA Today that he’s confident production can occur safely, saying, “we’ve learned from the Macondo incident and others and have steadily improved our practices as an industry. We’re in a much better position as an industry today than we were a few years ago.”

That’s a questionable self-evaluation from a company recently slapped with an $11 billion lawsuit and criminal charges for a November 2011 spill off the coast Brazil and responsible for setting the ocean ablaze with a natural gas fire in Nigeria this year that burned for 46 days and took the lives of two workers.

While both the federal government and industry have taken steps to improve the serious shortfalls in safety and oversight that led to the Deepwater Horizon disaster, a great deal remains to be done – especially as the industry looks to move into frontier areas like the Arctic that are fraught with uncertainty and risk.

The Commission gave the administration an overall grade of B, industry a C+ and Congress a D. (The ocean conservation group Oceana released a similar report card yesterday comprised of nothing but D’s and F’s.)

Let’s take a look at the commission’s findings.

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Mitt Romney has adopted a Big Oil platform for the elections, appointing oil shale billionaire Harold Hamm as an energy adviser and fully embracing the House Republican budget, which preserves tax loopholes for the industry.

Illustrating the candidate’s ties to the oil industry further, Big Oil’s chief spokesman, API President Jack Gerard, has long backed Mitt Romney. Gerard and his family have donated $7,440 to the Romney campaign, and the campaign in turn has publicly thanked Gerard:

On Super Tuesday, Ann Romney publicly thanked him for helping her husband in his bid for the presidency. According to the Center for Responsive Politics’ OpenSecrets Web site, Gerard has given $2,470 to Romney and his family members have given $4,970 for the 2012 campaign. He has raised much more by hosting fundraisers, including one at the District Chop House in 2010. He was a supporter of Romney in 2008, too, and some former API employees think he hopes to land a job in a Romney administration.

“Romney has a business background that would be helpful to get us back on track,” Gerard says. “They’ve asked us to support them, and we have. They’re good people.” He and his wife “believe the president’s approach to date is not consistent with what the people need or the country needs for sound energy policy.”

The candidate has pulled some serious support from the oil and gas industry, taking more than $750,000 from oil and gas and another $1 million for the pro-Romney Super PAC Restore Our Future.

API promised to play a heavy hand this election cycle and has dropped $4.3 million in the last three months alone. API launched ads a few weeks ago to protect the industry’s tax breaks, even as Big Oil is making record profits off of higher gas prices. Like his favored candidate, Gerard is one of America’s 1 percent, receiving one of the largest salaries of any trade group executive at over $6.4 million.

Chevron contributed $500,000 to the U.S. Chamber of Commerce, and the American Petroleum Institute gave $25,500 to the Koch brothers’ Americans for Prosperity, both of which ran vicious right-wing attack ads in the 2010 midterm elections:

The American Petroleum Institute, which advocates for the oil and gas industry, gave $25,500 to Americans for Prosperity, IRS disclosures show. Americans for Prosperity, based in Arlington, Virginia, spent more than $1.2 million in 2010 to help elect Republicans to Congress, according to FEC records.

The petroleum institute also gave $25,000 to the Alexandria, Virginia-based 60 Plus Association, which favors privatizing Social Security and spent more than $7 million in 2010 in support of Republicans, IRS and FEC records show.

Of course, Republicans picked up seats in both the House and Senate in 2010, when spending from these groups favored Republicans 10-to-1.

Groups like Chevron have seen billions in returns for their 2010 contributions. Chevron’s profits jumped 23.3 percent since 2010, and the company earned $3 million every hour last year. However, the company only paid an effective 19 percent income tax in 2011. Exxon, the most profitable oil company, paid a lowly 13 percent.

In 2012, undisclosed donations will play an even larger role, since interest group spending is up 1600 percent from the 2008 cycle.