The Climate Lobby from Soup to Nuts

Published on
by
Center for Public Integrity

The Climate Lobby from Soup to Nuts

by
Marianne Lavelle and M.B. Pell

Campbell Soup Co. registered to lobby on the issue of climate change for the first time in the 3rd Quarter. (Credit: Photo of Andy Warhol’s “Campbells Soup Cans” used under Creative Commons from freshwater2006.)

WASHINGTON - The
next round of the battle over climate change policy on Capitol Hill
will involve more than the usual suspects. Way more. Watch soup makers
face off against steel companies. Witness the folks who pump gas from
the ground fight back against those who dig up rock. And watch the
venture capitalists who have money riding on new technology try to gain
advantage in a game that so far has been deftly controlled by the old
machine.

In short, even though President Obama pledged to the
world at Copenhagen that the United States is committed to action on
global warming, the domestic politics are only growing "curiouser and
curiouser," as Alice might say from Wonderland. An analysis of the
latest federal records by The Center for Public Integrity shows that
the overall number of businesses and groups lobbying on climate
legislation has essentially held steady at about 1,160, thanks in part
to a variety of interests that have left the fray. But a close look at
the 140 or so interests that jumped into the debate for the first time
in the third quarter shows a marked trend: Companies and organizations
which feel they've been overlooked are fighting for a place at the
table.

In other words, as the action moved to the Senate in
recent months, still more sectors of the economy waded into the battle.
This occurred even though the issue and interests are already so
complex that Congress failed to pass legislation this year as hoped,
and even though the House more than doubled its draft bill to 1,428
pages to address an array of industry concerns and gain passage back in
June. The amount of money involved likely rose as well. Although
amounts spent on lobbying by issue are not disclosed, if the groups
involved spent just 10 percent of their lobbying budgets on climate,
they shelled out $30.5 million in the third quarter - up nearly 13
percent over the previous quarter.

Of course, the framework
for climate change legislation developed by a trio of Senators -
Massachusetts Democrat John Kerry, South Carolina Republican Lindsey
Graham, and Connecticut Independent Joe Lieberman - already makes clear
that the climate debate will expand into new realms. Incentives for
nuclear power construction and more offshore oil and gas production are
key proposals they've floated for gaining Republican and moderate
Democratic votes for a climate change package. But beyond what are sure
to be high-profile battles over those issues, the lobbying records also
reveal that a host of smaller battles are brewing - sure to greatly
complicate the challenge of writing a successful bill. It's one of the
reasons that - despite the pledge by President Obama and other world
leaders of "strong political will" on climate - it likely will be
months before the Senate finalizes a measure to curb fossil fuel
emissions.

Campbell Soup and Kellogg

Take
the concerns raised by the world's largest maker of soup, Camden,
N.J.-based Campbell Soup Company, one of a slew of grocery producers
(including Kellogg Company, Del Monte Foods, and the Alliance of Food
Associations) registered to lobby on climate change for the first time
in the July-September quarter. "It wasn't until we analyzed what was
going on in the House that we thought, ‘Oh, gosh, we are being affected
by this,'" said Kelly Johnston, Campbell Soup's vice president for
public affairs, in an interview. At issue are the free "allowances," or
carbon dioxide
pollution permits that the House-passed climate bill would give to
manufacturers that use a lot of energy to produce internationally
traded products, like steel and aluminum. Those energy-intensive
industries fighting international competitors successfully lobbied for
protection from loss of jobs to China and other cheap-energy countries
if the United States unilaterally enacted a carbon reduction program
that would make coal-burning more expensive here. But the House bill's
approach means manufacturers that don't use as much energy - like
Campbell - would have to bid at auction for carbon emissions allowances
from the federal government. Johnston argues that Campbell should
either be exempt from that process or provided some freebies, too. "I
think it's clear from our view that we're not being treated as fairly
as carbon-intensive industries," Johnston said. "There needs to be some
recognition of the role the food industry plays in our economy."

The Natural Gas Lobby

Also sure to shake up the climate
debate are companies that produce or sell natural gas - the fuel that
produces that blue flame on the stovetop, heats half the homes in
America, and can generate electricity with 40 percent less carbon
emissions than coal. "The gas companies really missed out on
influencing [the House bill]," says lobbyist C. Kyle Simpson, who was
an Energy Department official in the Clinton administration. Among his
14 climate change clients is the Gas Technology Institute, a research
organization, and several natural gas-related firms that have recently
begun to weigh in more heavily on climate change legislation, like DCP
Midstream of Denver and Denbury Resources of Plano, Texas.

Because
natural gas is the least carbon-intensive fossil fuel that can be
burned to produce electricity, companies that produce it stand to gain
significant share in the power generation business if Congress passes
legislation that makes coal - its competitor - more expensive. In
theory, climate legislation would do that, but lawmakers have been
lobbied by the coal industry to endorse a ramp-up of the program slow
enough to discourage such fuel switching.

The
natural gas industry is diverse, so it had trouble organizing as a
politically cohesive force to urge a quicker transition from coal power
to protect the climate. Many natural gas players are first and foremost
oil companies that produced natural gas "conventionally" as a
by-product of oil - a sector that hasn't been at the forefront of
calling for greenhouse gas regulation. But recent technological
advances have allowed companies to produce huge amounts of natural gas
all by itself, "unconventionally," by breaking up underground shale
formations with horizontal drilling and high-pressure water fracturing.
Just days before the House voted on the climate bill last June, a
widely watched industry group announced a 35 percent increase in U.S.
gas reserves - the largest jump in its 44-year history of supply
tracking. Abundance and relatively low prices already have some
electric power producers switching from coal to natural gas. In one of
the largest such moves, Raleigh, N.C.'s Progress Energy this month
announced it would shut down 11 aging coal plants and replace them with
natural gas generation.

That trend surely would continue
under the climate change bill passed in the House, says Simpson, but
natural gas companies might win an even larger share of the U.S.
electricity market with an all-out push in the Senate. "If they would
say there should be a price on carbon, the fundamental change could be
extraordinary," Simpson says. He could see, for example, a scenario in
which utilities were given a kind of "cash for coal clunkers" credit in
the carbon market for making the switch to natural gas.

Venture Capitalists and Clean Tech

Up to now, the push
for a slower phase-in and more modest carbon emissions reduction has
been apparent in the Senate machinations on the bill. The original
legislation authored by Kerry and California Democrat Barbara Boxer,
and passed last month by the Environment and Public Works Committee she
chairs, would have called for a 20 percent reduction in carbon
emissions by 2020, but that bill failed to garner a single Republican
vote on the panel.

The Kerry-Graham-Lieberman framework
ratchets the goal back down to a 17 percent cut - the House bill's
target - as "reasonable and achievable" - and it is also the figure
that Obama touted at Copenhagen. But the latest figures from the U.S.
Energy Information Administration show that the nation already has made
significant progress toward that benchmark thanks to the economic
slowdown and the switching from coal to natural gas. Energy-related
carbon emissions, which account for the bulk of greenhouse gases
by far, are expected to fall six percent this year after a nearly three
percent drop in 2008. So among those who will be pushing the Senate to
reach for more ambitious goals earlier: would-be investors in clean
energy solutions, who have been waiting for a signal that there will be
a market for new technologies.

"We'd like to see a price on
carbon that escalates at a reasonable rate in the early years, not just
the later years," says Will Coleman , a partner with Mohr Davidow
Ventures of Menlo Park, Calif. A venture capital firm with $2 billion
under management that invests in early-stage business development, the
company registered to lobby on climate change for the first time in the
third quarter, joining about a dozen investment and private equity
firms weighing in on the issue on Capitol Hill. Investors want to see
returns in five-to-10-year cycles, says Coleman. Therefore, clean tech
investors - much like the natural gas industry - would like to see a
climate bill that makes coal more expensive in a shorter time frame.
That would allow alternatives like solar energy - currently expensive,
but perhaps cheaper in the future if mass produced - to be more
competitive earlier, and to deliver returns sooner to investors. But
the House bill, for example, would have the effect of keeping the
pollution-price added to coal relatively low for 15 years, because it
would not begin phasing out many of the free carbon allowances that the
government distributes until 2026.

Mohr Davidow is already
investing in new technologies to reduce carbon emissions - like solar
that uses a thinner, and therefore cheaper, layer of photovoltaic
material, biomass fuel, and new ways to extract the lithium needed for
advanced batteries. But Coleman says that there would be a much wider
range of venture opportunities if investors were surer that companies
could gain an early competitive foothold against coal. "My biggest
concern is that if we are less aggressive in carbon targets and carbon
pricing, we may incur more costs in the future, because we'll drive
less investment into the space," Coleman says.

But he admits
that it's been a rather subtle argument for Washington policymakers
more accustomed to lobbyists for businesses who want clearer,
nearer-term issues addressed. "They sort of say, ‘What do you want?'"
Coleman says. What the venture capitalists want isn't a hand-out or
carve-out, as traditionally seen on Capitol Hill, but a regulatory
environment that creates a more favorable playing field for new tech
investments. "Our effort was to talk to as many people on the Hill and
in [the Department of Energy] and White House as we could about the way
the innovation economy could work," he says.

Of course, put
the 60 or so venture and investment firm lobbyists together with the
170 alternative energy lobbyists and 160 environmental lobbyists, and
they are still outnumbered 5-to-1 by the approximately 2,000
representatives of major sectors that are looking for a slow-down or
hand-out - traditional manufacturers, power companies, oil and gas,
transportation, and agriculture. And it likely will be weeks after the
Copenhagen conference until climate legislation that begins to weigh
all these interests takes shape in the Senate. Kerry said he expects
movement on the bill in the late spring, after the Senate has dealt
with two other massive undertakings - health care and financial
regulatory reform. The total number of climate lobbyists working for
all those interest groups, new and old, stands at about 2,780 - five
for every member of Congress. That's 400 percent more than when
lawmakers first considered a nationwide greenhouse gas emissions
reduction program six years ago. If they all want a place at the
Senate's table, there had better be plenty of chairs.

Share This Article

More in: