USA: Big Oil, Gas Funding Ads for Bush's Energy Policy

WASHINGTON -- The big oil and gas companies that spent nearly $2 million to help elect President Bush last year are pouring millions more into an advertising campaign this summer to help sell his energy policy in Congress.

"Remember the energy crisis from the 70s?" reminds one television ad,
paid for by the Alliance for Energy and Economic Growth. "Since then,
Americas energy use has grown twice as fast as production. No wonder were
having problems. To protect our quality of life tomorrow, we need more
energy today."

The stakes of the energy policy are enormous for Bush and the
industries that stand to gain from his plan to boost production. The price
of campaign contributions and ads would easily be eclipsed by the billions
of dollars in industry tax breaks contained in the Bush-inspired energy
bill approved by the House of Representatives just after midnight Aug. 2.

Bush and Vice President Dick Cheney, two former Texas oilmen with a wealth
of connections to the fossil-fuels industry, rode into office on a rising
tide of fuel prices while warning of an energy crisis. Though gasoline
prices have since dropped and brownouts have receded, energy legislation
shaped by the presidents proposals is churning toward a confrontation in
the Senate when Congress reconvenes next month.

For his allies in industry, enactment of Bushs energy policy would mean
more land and offshore oil and gas production, new refineries, 293,000
miles of pipeline, looser government regulation, greater access to public
lands and, if the House bill prevails, more than $20 billion in tax breaks
during 10 years.

Companies would be allowed to begin exploratory drilling about 100 miles
off the Florida shoreline under an administration plan to lease 1.47
million acres in the eastern Gulf of Mexico. When Congress balked at the
prospect of leasing a larger tract that would have brought drilling closer
to the state, the administration worked out a compromise to keep oil rigs
far enough from shore to satisfy Floridas political leaders.

Bushs backers say the House bill balances domestic production with
conservation measures, including incentives for developing renewable power
sources such as water, sun and wind. They acknowledge, however, that
stepped-up production is the prevailing theme -- and that inevitably means
big business for industries long aligned with Bush, Cheney and other key
members of their administration.

"It may well be true that companies have found it in their interest to
make more money than less. Thats what businesses do. And its true that
industry people are active in the administration, with Vice President
Cheney being one," said Luke Popovich, spokesman for the Alliance for
Energy and Economic Growth, a coalition of business interests. "All that
doesnt address the fundamental problem: If we want to have economic growth
in the future, we cant conserve our way to get there. It wont happen."

But critics say the pending legislation amounts to a brazen display of
special-interest politics, creating environmental hazards primarily to
reward friends of Bush and Cheney.

"They need more, they want more, they want it all!" Rep. Peter DeFazio,
D-Ore., shouted on the House floor before final passage of the energy bill.
"And the Republican Party and the president want to deliver, because they
helped them get elected."

Big stakes

Bush was at a shaky point in his election campaign late last summer --
trying to fend off resurgent Democrat Al Gore -- when rising fuel prices
became a major national issue. Suddenly, the economic bliss of recent years
was shaken by the specter of gasoline at $2 a gallon and the prospect of a
long winter of costly heating bills.

Bush seized upon an appearance in Saginaw, Mich., to proclaim energy
policy a major campaign theme. The former oilman from West Texas called for
a comprehensive national energy policy in a speech to sympathetic
machine-shop workers whose jobs depend on a thriving auto industry and
cheap gas to keep it humming.

"In the future, no administration should be caught napping when our
supplies are low," Bush told them.

The Bush team, both during the campaign and today, is stocked with
executives who hail from the energy and automotive industries.

Bush plucked Cheney, a former congressman and defense secretary, from the
Dallas-based Halliburton Co., the worlds leading oil-services company,
where he served as chief executive officer.

Commerce Secretary Don Evans, who will soon announce the administrations
decision on whether to allow Chevron Corp. to begin offshore production
near the Florida Panhandle, was an old drinking buddy of Bushs back in
Texas who once ran the Tom Brown Inc. production company.

Andrew Card, White House chief of staff, once served as CEO of the
American Automobile Manufacturers Association, where he lobbied against
stricter fuel-emission standards.

Energy Secretary Spencer Abraham, a former senator from Michigan who lost
his bid for re-election last year, is a long-time ally of the automotive
industry who once promoted legislation to dissolve the department he now
leads.

When Cheney headed up the administrations energy task force last winter,
his meetings took place behind closed doors. The contents and the
participants remain largely a secret. Luminaries of the oil industry turned
up to lend their advice. Environmentalists presented their views to the
task force staff.

But Cheney has fended off attempts by the General Accounting Office and
environmental critics to find out exactly who took part in forming the
presidents energy policy, saying he wants to protect the privacy of his
day-to-day doings as a matter of principle.

Big contributors

Long before Cheneys task force went to work, energy and automotive
interests rallied around Bush and other Republican candidates, knowing that
energy policy would be a major issue this year.

The energy sector contributed $64.9 million to federal candidates and
political parties during the 1999-2000 election cycle, about 75 percent of
it to Republicans, according to The Center for Responsive Politics. The oil
and gas industry contributed $33.3 million of that total, 78 percent of it
to Republicans.

Bush by far topped the list of candidates who received money from oil and
gas companies, collecting $1.88 million. Second on the list was Abraham,
whose Senate campaign received $255,771.

Car makers contributed $2.2 million to parties or campaigns during the
election cycle. Abraham was the biggest beneficiary, with $185,200,
followed by Bush, with $126,350.

Defensive about their ties to industry, administration figures say their
only motive is to provide a balanced energy plan that prevents wild price
fluctuations and ensures adequate supplies to promote economic growth.
Dependence on foreign oil keeps rising, they point out, while demand
inevitably keeps growing.

"Our plan confronts our increasing dependency on foreign sources of energy
by calling for -- yes, its true, I admit it -- increased domestic
production of energy that relies on new technologies that can dramatically
reduce the impact on the environment," Abraham said in a speech last month.

The same business interests that helped bankroll the Bush campaign are now
promoting this message in hopes of rousing public support and influencing
Congress.

The ad blitz

While the Alliance for Energy and Economic Growth spent more than $1
million for ads in Washington, D.C., a new group called Citizens for Real
Energy Solutions has launched a multimillion-dollar ad campaign -- the
group wont say exactly how much -- featuring television spots in 10
states, including Florida.

One ad depicts a burst of can-do Americana -- from spaceflights to fields
of windmills -- while conveying the message: "What makes America
extraordinary? Possibilities. We make miracles happen, then make them
commonplace. Our next great challenge: conserving and producing cleaner
energy using new digital-age technologies to power the future, while still
protecting the Earth. Urge Congress to vote for President Bushs national
energy policy."

In contrast, the Natural Resources Defense Council, an environmental
advocate, is planning $160,000 worth of radio and print ads to chide House
members who voted against higher fuel-mileage standards and to open the
Arctic National Wildlife Refuge for drilling.

The industrys lobbying effort appeared to pay off this month when the
House passed an energy bill that would provide a host of tax breaks and
only modest increases in fuel standards.

Tax breaks

The bill would bestow $33.5 billion of tax breaks during 10 years, the
bulk of it to encourage production of new energy supplies. They include:

• $13.3 billion for oil and gas companies.
  
• $3.3 billion to encourage development of clean coal.
  
• $1.9 billion for the nuclear-power industry.
  
• $992 million of relief on excise taxes for railroad diesel fuel.
  
• $502 million of business credits to reduce the alternative minimum tax.

The bill also would provide more than $5 billion worth of various
electricity-related tax breaks, including relief for public power
facilities and cooperatives.

Tax credits worth about $5.8 billion are designed to encourage
conservation or energy efficiency, including breaks for those who buy
electric or gas-electric hybrid cars, efficient appliances and homes. About
$2.4 billion would be devoted to extending credits for renewable energy
sources.

The bill also calls for improved gas-mileage standards for minivans and
sport-utility vehicles that would save 5 billion gallons for model years
2004 to 2010.

Critics charged that this provision would improve efficiency by less than
1 mpg.

"This bill that emerged from the House is more generous to the fossil-fuel
industry than the original Bush energy plan. Conservation is nothing more
than a fig leaf," said Daniel Lashof, senior scientist at the Natural
Resources Defense Council. "If you look at the bill overall, it channels
billions of dollars of subsidies into oil, coal and automotive industries
that have put millions of dollars into congressional campaign coffers."

Economic boost

More neutral observers say the heap of campaign contributions and
big-bucks lobbying have reinforced long-held beliefs by Bush, Cheney and
many members of Congress that domestic production is essential while
conservation is a prudent but marginal sideshow.

"The experience of administration people is on the supply side. They have
more experience with oil production than with building windmills," said
David Victor, an energy expert at the Council on Foreign Relations. "Whats
critically important is that they are going to have to put together a
package that gives something to Democrats, now that Democrats control the
Senate. Democrats will see that a compromise is reached that creates a
balanced policy with significant investment in energy efficiency."

Now that the "crisis" has abated, energy policy has turned into more of a
remedy for a weak economy, starting with boosting key industries long
familiar to the Bush administration, other observers said.

"This is more than a simple political payoff," said George Gonzalez, a
political scientist and expert on environmental issues at the University of
Miami. " I really feel that the one impetus pushing this legislation is the
desire to keep these economic sectors viable as much as possible.

"They are taking a real gamble with the environment. But looking at the
political coalition that underlies the Bush administration, this is the
logical stimulus package."

William E. Gibson can be reached at wgibson@sun-sentinel.com or
202-824-8256.

• 106 Money & Politics
• 107 Energy