The Voice of Big Oil on Capitol Hill

Posted October 15, 2008 at 3:27pm

For years, the American Petroleum Institute has been the 800-pound gorilla of the oil and gas industry. As the industry’s most prominent voice in Washington, the association has single-handedly been in charge of staving off inopportune legislation and burdensome tax hikes.

The industry, which employs about 2 million people, has in large part been successful in Washington and on Wall Street. This year alone, oil and gas companies have had record profits yet remained unscathed by Congress — despite high gasoline prices and calls by Democrats for a windfall profits tax.

However, with both presidential candidates criticizing the high price of crude oil and a likely more-Democratic- leaning Congress coming into power, API’s job will only be tougher next year.

It will also have a new public face; longtime head Byron “Red” Cavaney is being replaced by American Chemistry Council President Jack Gerard in November.

“Energy has been front and center for quite some time now,” said Jim Ford, the API’s head of government relations. “The oil and natural gas industry is such a major source of energy for the U.S., we’re embroiled in discussions at the national and state level constantly.”

Even substantial victories, like last month’s lifting of the offshore drilling moratorium, may be short-lived — the environmental lobby and Democrats have pledged to reinstate it by next Congress.

Offshore drilling could be the API’s first test next Congress on whether Republicans and Oil Patch Democrats continue to back the oil and gas industry.

Ford says he sees the moratorium as a good first step toward increasing domestic production.

“It means that we’ll potentially be able to access what are considered extremely significant supplies of oil and natural gas,” Ford said.

Ford will be on Capitol Hill lobbying to make sure lawmakers understand that they should now turn their attention to implementing the lifting of the ban so that drilling can begin on schedule.

The industry is also likely to face a potential tax hike, as Congress looks for revenue raisers in a dire economic environment.

Ford says he doesn’t see the industry on the defensive.

“Just look at how public opinion is registering such strong support for expanding domestic production,” Ford said. “What it basically shows is our fact-based message on a balanced energy policy is ringing true with the public and policymakers.”

Former Louisiana Democratic Sen. Bennett Johnston agrees.

“We’re kind of the truth squad,” Johnston said. “We try to bring out the actual facts and figures about oil and gas.”

Cavaney, who will be moving to head ConocoPhillips Co.’s Washington office, is a former White House aide in the Nixon, Ford and Reagan administrations. He headed the American Forest and Paper Association and the American Plastics Council before jumping to API in 1997. Since then, he has largely been the industry’s public face.

The announcement of the leadership shakeup occurred earlier this summer. The change comes after API member companies voiced frustration over the organization’s slow response to the changing political climate, according to several outside lobbyists for the industry.

With Cavaney’s contract nearly up, the API wanted to bring in someone known for assessing operations within a trade association to try to make the group more nimble in the coming years as it continues to fight off legislative and public relations attacks.

Widely known throughout the association community as a fixer, Gerard brought with him sweeping changes at the Chemistry Council, downsizing the group and putting it on a sounder economic footing.

When the announcement was made this summer of Gerard’s move to the API, he told Roll Call he didn’t expect to enact as many large-scale moves as he did at the Chemistry Council. (The API declined to make Gerard or Cavaney available for this article.)

While it is unknown what changes Gerard will enact, Ford is likely one person he will rely on heavily.

Ford has been the group’s main voice on Capitol Hill for the past eight years. He heads a team of 35 professionals focused on Capitol Hill, state relations, the administration and tax issues. The association has eight in-house federal lobbyists.

Prior to working for the API, Ford was a lobbyist at oil company Atlantic Richfield Co.

Ford also oversees petroleum councils in 21 states and is active in 11 others. The association also has a retinue of outside lobbyists, including Ogilvy Government Relations, Timmons and Co. Inc. and Olsson Frank Weeda Terman Bode Matz.

API spent $2.29 million on lobbying during the first half of this year, according to Senate disclosure reports.

In the face of tough political rhetoric, Ford is sticking to his call for a comprehensive energy plan that includes alternative energy.

“Our message to policymakers has been about the role oil and natural gas will play and the need for a balanced energy policy,” Ford said.

While the current political rhetoric on Capitol Hill targets the oil industry, even those on the opposite side of the energy debate, like Tyson Slocum of Public Citizen, say one has to respect the industry’s success.

“There is no question that they are a huge force in D.C. and they have done a very good job from the industry’s standpoint of fending off a lot of attacks,” Slocum said. “It’s an industry that, even though it’s been vilified by some Members of Congress and by the public, continues to have a lot of success lobbying.”