BP Oil Spill Keeps Fueling Business on K Street

Posted July 13, 2010 at 5:04pm

The Montana Refining Co. is more than 2,000 miles from the exploded BP well in the Gulf of Mexico and refines oil from Canada. Nevertheless, officials at the Great Falls, Mont., operation, which employs 100 people, fear legislative blowback from the spill.

Congressional efforts to quadruple an oil tax to pay for the cleanup prompted Dexter Busby, the company’s director of government affairs, to travel last month to the nation’s capital. On the Hill, he expressed qualms about the levy to home-state Sen. Jon Tester (D) and to the staff of Sen. Max Baucus (D-Mont.), chairman of the Finance Committee who helped craft the bill that included the oil tax hike.

“They are going to do some knee-jerk-reaction legislation that is going to cost companies like us inordinate amounts,” Busby said.

That worry, fueled by bills now moving through Congressional committees to address the environmental effects of the spill and shortcomings in federal offshore drilling oversight, has spurred a lobbying frenzy in Washington, D.C.

The activity is coming not only from the big oil companies and their trade associations but from smaller businesses such as the Montana Refining Co., as well as groups and municipalities worried about the plunge in Gulf Coast tourism and companies involved in the extensive cleanup.

Lobbying records filed with Congress show a number of companies and entities have either hired lobbyists for the first time to deal with the spill or are directing firms they have used in the past to focus on spill-related legislation.

Take the town of Dauphin Island, Ala. For years, it has retained Monterey Consulting Associates to handle its issues in Washington. But in recent weeks, the tourist town of 1,300 full-time residents has directed its lobbyists to help it obtain funding from BP and the federal government for damage caused by the Deepwater Horizon spill.

Dauphin Mayor Jeff Collier said his town is expected to suffer a precipitous decline in tax revenue because as many as 90 percent of its tourists have canceled reservations for vacation rentals. Some of the oil has washed ashore on the barrier island three miles south of the mouth of Mobile Bay, prompting a recent visit by President Barack Obama, who spoke with Collier.

The mayor said that while the compensation fund set up by BP addresses individuals and companies affected by the spill, it does not accept claims from municipalities such as the island.

Collier, who works full time as a golf professional, said he has been too busy dealing with the spill to travel to Washington, D.C., increasing the importance of having a lobbyist on Capitol Hill.

“They keep us in the loop,” he said. “It is nice to have that extra set of eyes and ears on that end.” The town paid Monterey $30,000 to lobby in the second quarter of this year, according to its disclosure report.

Other companies that have in the past steered clear of Washington have decided they need a presence here with all the spill-related legislation and regulatory activity.

Six companies involved in shallow-water oil and gas drilling hired a team of lobbying firms in the aftermath of the April 20 spill because they wanted to spell out differences for lawmakers between their models and that of the deep-water drilling done by BP.

“We knew there was a distinction that had to be made,” said Jim Noe, senior vice president and general counsel of Hercules Offshore in Houston, one of the companies that formed the Shallow Water Energy Security Coalition.

Noe said that when executives first met to discuss strategy in the aftermath of the spill, a number of those in the room had never been to Washington.

But he said the group was nervous about the “level of emotionality and hostility” being directed at all offshore drilling operations.

“We wanted to make sure our voice is heard,” he said. To that end, the coalition has hired Bracewell & Giuliani, which specializes in energy regulation and legislation; the Livingston Group, founded by former Rep. Robert Livingston (R-La.); and Jones, Walker Waechter, Poitevent, Carrere & Denegre, a law firm that is affiliated with the Livingston Group.

Scott Segal, a top energy lobbyist with Bracewell & Giuliani, said that much of the lobbying going on related to the spill “is not opportunistic, it is sort of defensive.”

“If you don’t want inadequate public policy to result from” the spill, Segal said, “you would be well-advised to engage in Washington.”

Bracewell & Giuliani has also recently signed up to lobby for two other companies involved in the Gulf efforts: the Taiwan-based TMT Offshore Group, which owns the world’s largest skimming vessel, and Houston-based Helix Energy Solutions, which owns three vessels now helping with the oil containment.

For some groups with broader agendas, such as the National Tour Association, addressing the effects of the oil spill on travel along the Gulf Coast is now a top priority.

The association is lobbying for the Travel Regional Investment Partnership Act, which would provide federal grants to promote domestic travel.

Stephen Richer, a consultant to the association, said the measure could provide as much as $10 million to help Gulf tourist businesses advertise that they are still open. Richer said the “story is not getting out” that much of the Gulf Coast is still an attractive tourist destination.

“You are not going to be up to your knees in oil,” he said.