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K Street Files: Hill Reaction to Spill Puts Jobs in Jeopardy, Oil Lobby Says

Big Oil, which has been on the defensive since the Gulf of Mexico spill, has decided that public anxiety is its best weapon. To fend off Members’ interest in tightening oversight of the industry, the oil lobby is playing on worries about the nation’s shaky job market.

In a conference call with reporters Tuesday, Jack Gerard, president of the American Petroleum Institute, said Capitol Hill proposals such as lifting liability caps would put more people in the unemployment line.

Gerard cited an API analysis that concluded curbs on deep-water drilling could result in the loss of 93,000 oil and gas industry jobs and an additional 82,000 jobs in related industries each year through 2035. He also said that while tax increases included in the legislation might not have a major effect on the price at the pump, it would have “significant impact” on jobs and economic development.

Gerard added that lawmakers were getting ahead of themselves by proposing tougher standards for blowout preventers before there has been a final analysis about what might have failed with the piece of machinery on the Deepwater Horizon rig that exploded and led to the BP spill.

He likened such legislating to “going into surgery without a complete diagnosis.” And Gerard accused lawmakers of tacking extraneous items on to oil spill legislation, such as provisions regarding royalty payments from wells leased in the late 1990s.

Gerard appeared more amenable to a few changes being proposed such as the reorganization of the former Minerals Management Service. API, which represents BP and other companies involved in the Gulf of Mexico disaster, has ramped up its lobbying recently in response to the spill, spending almost double on lobbying in the second quarter of this year compared with the first quarter.

Environmental groups, too, have increased their presence on Capitol Hill hoping that the catastrophe leads to significant regulatory reforms like those after the 1989 Exxon Valdez spill off the coast of Alaska and the 1969 spill off the coast of Santa Barbara, Calif.

On Tuesday, Clean Energy Works, a coalition of more than 80 advocacy groups, staged a “Carnivoil” rally on Capitol Hill aimed at BP and the company’s handling of the Gulf spill.

Adam Kolton, director of Congressional and federal affairs for the National Wildlife Federation, which is part of the Clean Energy Works coalition , said the issue wasn’t about jobs in general but “lobbying jobs in Washington.”

He said it would be outrageous for Congress to “listen to the people who are responsible for the policies that led to the BP spill.”

$1.8B for the Influence Game

It’s been a boom year so far for select K Street sectors.

Lobbyists involved in energy and natural resources, finance and insurance and those who represent federal employee unions have seen an uptick in business this year since the last six months of 2009, according to reports with Congress.

On the other hand, lobbying budgets for health care, retail operations and real estate interests dropped during the same period compared with the last half of 2009.

Overall, companies, trade associations, labor unions and other registered lobbying entities shelled out about $1.8 billion on lobbying in the first half of this year, according to the latest lobbying reports, which were due last week.

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