Oil Industry Backs Protests of Emissions Bill

Published on
by
The New York Times

Oil Industry Backs Protests of Emissions Bill

by
Clifford Krauss & Jad Mouawad

A rally against legislation to set a limit on greenhouse gas emissions in Houston on Tuesday. Oil companies bused in their employees. (Karen Warren/Houston Chronicle, via Associated Press)

HOUSTON — Hard on the heels of the health care protests, another
citizen movement seems to have sprung up, this one to oppose
Washington’s attempts to tackle climate change. But behind the scenes, an industry with much at stake — Big Oil — is pulling the strings.

Hundreds of people packed a downtown theater here on Tuesday for a
lunchtime rally that was as much a celebration of oil’s traditional
role in the Texas way of life as it was a political protest against
Washington’s energy policies, which many here fear will raise energy
prices.

“Something we hold dear is in danger, and that’s our future,” said
Bill Bailey, a rodeo announcer and local celebrity, who was the master
of ceremonies at the hourlong rally.

The event on Tuesday was organized by a group called Energy Citizens, which is backed by the American Petroleum Institute,
the oil industry’s main trade group. Many of the people attending the
demonstration were employees of oil companies who work in Houston and
were bused from their workplaces.

This was the first of a series of about 20 rallies planned for
Southern and oil-producing states to organize resistance to proposed
legislation that would set a limit on emissions of heat-trapping gases,
requiring many companies to buy emission permits. Participants
described the system as an energy tax that would undermine the economy
of Houston, the nation’s energy capital.

Mentions of the legislation, which narrowly passed the House
in June, drew boos, but most of the rally was festive. A high school
marching band played, hot dogs and hamburgers were served, a video
featuring the country star Trace Adkins was shown, and hundreds of
people wore yellow T-shirts with slogans like “Create American Jobs
Don’t Export Them” and “I’ll Pass on $4 Gas.”

The buoyant atmosphere belied the billions of dollars at stake for
the petroleum industry. Since the House passed the bill, oil executives
have repeatedly complained that their industry would incur sharply
higher costs, while federal subsidies would flow to coal-fired utilities and renewable energy programs.

“It’s just a sense of outrage and disappointment with the bill passed by the House,” said James T. Hackett, chief executive of Anadarko Petroleum,
who attended the rally. He defended, as an environmental measure, the
use of buses financed by oil companies and Energy Citizens to carry
employees to the rally. “If we all drove in cars, it wouldn’t look
good,” he said.

While polls show that a majority of Americans support efforts to
tackle climate change, opposition to the climate bill from
energy-intensive industries has become more vigorous in recent weeks.
The Senate is expected to consider its own version of the bill at the
end of September.

A public relations company hired by a pro-coal industry group, the
American Coalition for Clean Coal Electricity, recently sent at least
58 fake letters opposing new climate laws to members of Congress. The
letters, forged by the public relations company Bonner &
Associates, purported to be from groups like the National Association for the Advancement of Colored People and Hispanic organizations.

Bonner & Associates has acknowledged the forgeries, blaming them
on a temporary employee who was subsequently fired. The coal coalition
has apologized for the fake letters and said it was cooperating with an
investigation of the matter by a Congressional committee.

For its part, the oil industry plans to raise the pressure in coming
weeks through its public rallies so that it can negotiate more
favorable terms in the Senate than it got in the House. The strategy
was outlined by the American Petroleum Institute in a memorandum sent
to its members, which include Exxon Mobil, Chevron and ConocoPhillips. The memorandum, not meant for the public, was obtained by the environmental group Greenpeace last week.

“It’s a clear political hit campaign,” said Kert Davies, the research director at Greenpeace.

In the memorandum, the president and chief executive of the American
Petroleum Institute, Jack N. Gerard, said that the aim of the rallies
was to send a “loud message” to the Senate. He said the rallies should
focus on higher energy costs and jobs. “It’s important that our views
be heard,” Mr. Gerard wrote.

Cathy Landry, a spokeswoman for the American Petroleum Institute,
confirmed the contents of the memorandum, but said that the rally was
not strictly an institute event and that Energy Citizens included other
organizations representing farm and other business interests.

The House bill seeks to reduce greenhouse gases in the United States by 83 percent by 2050 through a mechanism known as cap and trade, which would create carbon permits that could be bought and sold. President Obama
initially wanted these permits to be entirely auctioned off, so that
all industries would be on the same footing, but the sponsors of the
bill agreed to hand out 85 percent of the permits free to ensure
passage of the legislation.

The power sector, which accounts for about a third of the nation’s
emissions, got 35.5 percent of the free allowances. Petroleum refiners,
meanwhile, got 2.25 percent of these allowances, although the
transportation sector accounts for about 40 percent of emissions. That
means oil companies would have to buy many of their permits on the open
market, and they contend that they would have to raise gasoline prices
to do so.

But Daniel J. Weiss, a senior fellow at the Center for American
Progress, a research and advocacy organization, said that refiners
would be allowed to keep the value of the free allowances they
received, while public utilities would be required to return the value
of their permits to customers.

“There is a myth out there that this is a giveaway to utilities,”
Mr. Weiss said. “It’s not true. The oil industry’s goal is to block or
weaken efforts to tackle global warming.”

The rallies have opened a rift within the industry. Royal Dutch Shell,
an initial supporter of climate legislation, said that it had told the
institute that it would not participate in the rallies, although its
employees would be free to attend if they wanted to. ConocoPhillips,
meanwhile, has opposed the bill since its passage and, in a note on its Web site, encouraged employees to attend the rallies.

Since Mr. Obama’s election, the oil industry has lost some clout in
Washington. The rally on Tuesday gave voice to the feeling among
employees of oil companies that their industry was being battered.

“I experienced Carter’s war against the industry, and I’m tired of
being pushed around,” said David H. Leland, a geological map maker for
NFR Energy. “We provide a product for a reasonable price, and we’re
going to be punished for doing a damn good job.”

Clifford Krauss reported from Houston, and Jad Mouawad from New York.

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