Big Oil Quiet on ANWR

Posted March 14, 2003 at 6:03pm

Beginning this week, scores of environmentalists will descend on Capitol Hill to warn Members of Congress that allowing oil drilling in Alaska’s Arctic National Wildlife Refuge would destroy 1.5 million acres of pristine wilderness.

But they won’t be going up against the adversaries that most observers of the debate over ANWR had expected to play a prominent role in the debate.

The U.S. oil industry, in an effort to conserve political capital, has quietly decided to sit out the battle over the Arctic refuge.

Instead, ExxonMobil, ChevronTexaco, BP Amoco, Shell Oil, Conoco Phillips and Anadarko Petroleum have decided to focus on other priorities in Washington.

“They have faded away on this issue,” said Roger Herrera, a lobbyist for Arctic Power, a group funded by the state of Alaska to promote the ANWR legislation. “I don’t speak with them very often anymore.”

After more than a decade of costly and unproductive drives to expand exploration in the oil-rich region, oil companies are shutting down their ANWR lobbying efforts even as President Bush and key Members of Congress push to approve more drilling this year.

The shift, which has taken place over several years, adds a counterintuitive element to the upcoming Congressional debate: While a string of Democratic presidential candidates have blasted the legislation as a giveaway to Big Oil, it is the state of Alaska, its residents and Democratic-leaning labor unions that will lead the push to expand oil and gas drilling in the state.

To be sure, the oil industry’s trade group, the American Petroleum Institute, is urging Congress to approve ANWR legislation — but only as part of a comprehensive energy package. “API supports the notion that this area ought to be explored,” said Mike Shanahan, a spokesman for the trade group. “It’s a part of the larger puzzle.”

The oil giants also are major financial contributors to the Alliance for Energy and Economic Growth, a group of businesses pressing for a comprehensive energy policy bill that would include ANWR drilling. Red Caveney, the president of the American Petroleum Institute, sits on the group’s board.

But the oil companies themselves have scheduled few meetings with lawmakers to discuss ANWR while pumping a tiny fraction of the $24 million spent on lobbying last year toward the effort.

“We’re not lobbying ANWR,” said Lee Warren, a spokesman for Anadarko Petroleum.

An Anadarko spokeswoman did tell Roll Call that the company strongly supports opening ANWR to oil and gas exploration. “Industry can develop these resources without harming the environment as Anadarko and our partners have demonstrated in other parts of Alaska, and we urge policy makers to make these critical resources available for exploration,” she said.

Adding a spokesman for BP Amoco: “We are concentrating more on adding more production from existing acreage, rather than looking for new acreage. We already have major production up there.”

“If asked our opinion, then we would provide it,” added Ian Stewart of BP Amoco, summarizing the company’s lobbying effort.

The domestic oil and gas industry had lobbied Congress and the White House for years to open up ANWR. But after a string of defeats in the 1990s, the companies have shifted their resources to more promising efforts, from prodding the federal government to build a billion-dollar gas pipeline in Alaska to securing permission to drill in less-controversial areas.

In the last session of Congress, the industry even rebuffed a request from Alaska Republican Sens. Ted Stevens and Frank Murkowski — the champions of the effort — to bankroll a $15 million advertising campaign to build support for the legislation.

That’s not to say that the oil companies oppose ANWR drilling. They simply have decided to focus their energy on more profitable areas.

Conoco Phillips, for example, has concentrated on getting Congress to sign off on an Alaska natural gas pipeline to deliver gas to the lower 48 states.

[IMGCAP(1)] “We just had to chose between two priorities — and for us it’s a gas pipeline,” said Don Duncan of Conoco Phillips. Duncan said that Conoco re-injects 8.5 billion cubic feet of natural gas back into the Earth each day because a sufficient pipeline does not exist. “We find it hard to believe that you are going to get ANWR open and a pipeline built,” he said.

With the oil industry on the sidelines, the strongest campaign on behalf of the ANWR legislation comes from Arctic Power, a group that does not make political donations and is currently in debt.

Herrera, Arctic’s sole lobbyist in the three-person Washington office, said he has not received a paycheck in nine months.

Herrera said that the entire oil industry provides less than 1 percent of Arctic Power’s annual budget.

“Some of the companies didn’t give a penny,” Herrera said.

Instead, Arctic gets most of its funding from the state of Alaska, which last week approved $1.1 million for this year’s lobbying effort. Another million or so comes from businesses and residents in Alaska.

The group spends about a half-million dollars each year to lobby Congress and employs a team of outside firms.

On Arctic’s payroll are Bartley O’Hara, a Democrat with close ties to the labor community, and Jack Ferguson, who lobbies on most Alaska issues.

When Democrats took control of the Senate in 2001, Arctic signed up Patton Boggs and senior lobbyist Tommy Boggs. But with Republicans back in the Senate majority, Arctic last month dumped the Democratic-leaning firm. “In the period after the election, their skills became less valuable,” Herrera said.

The Anchorage-based nonprofit is led by a 50-person board of directors and three politically active co-chairmen, including a former chairman of the Alaska state Senate’s Finance Committee and a onetime mayor of Kodiak.

On Capitol Hill, Arctic formed an odd political partnership with the International Brotherhood of Teamsters when the union realized that ANWR drilling could generate hundreds of thousands of jobs for union workers by boosting demand for new pipelines, tankers and drilling equipment. By teaming up with a major labor union, Arctic Power gave Congressional Republicans an opportunity to make inroads in the traditionally Democratic turf of union workers.

“It was the one example that I can think of where we suited up in the same locker room,” said Lee Johnson, a former Senate Republican leadership aide who organized the pro-ANWR coalition last year.

Still, the alliance has consistently fallen just a few votes short of the needed 60 votes in the Senate to overcome a threatened filibuster from Democratic presidential candidates John Kerry (Mass.) and Joe Lieberman (Conn.).

But the work of the Teamsters and the union’s top lobbyist, Jerry Hood, did not go unnoticed.

When Murkowski was elected governor in November, he considered tapping Hood, a Democrat, to serve the remaining two years in his Senate term.

Hood also sits on Arctic’s board of directors and serves as one of the group’s three Capitol Hill chairmen.

This year, Arctic Power and the Teamsters hope to add language to the budget reconciliation package in the House and Senate that would open up ANWR.

The procedural move, expected to play out in the next few weeks, would sidestep the threatened filibuster — requiring the pro-ANWR forces to rally a mere 50 votes to approve the legislation.

Democrats decried the move. “The president asked the Republican Budget Committee to drill in the pristine Arctic refuge and tonight the committee has said: ‘Let the drilling begin,’” complained Rep. Ed Markey (D-Mass.) when Republicans began moving the legislation.

Nevertheless, the pro-exploration movement believes it is closer than ever to that goal thanks to Arctic, the Teamsters and a few lucky breaks in November.

In Missouri, Sen. Jean Carnahan (D) lost narrowly to ANWR supporter and now-Sen. Jim Talent (R), while then-Rep. John Sununu swiped New Hampshire’s Republican Senate seat from Bob Smith, one of the handful of Republicans who opposed ANWR last year.

In another good omen for ANWR backers, two wavering Senators — Republican Norm Coleman (Minn.) and Democrat Mark Pryor (Ark.) — indicated last week that they may support adding ANWR to the budget package.

Herrera said he was pleased that the election had increased the chances for ANWR this year. As for the oil companies, “it used to be frustrating,” he said, “but I’ve gotten used to it.”