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Lobbying Increases with Oil Prices

Industry spent nearly 62 percent more between 2004 and 2007

THE OIL LOBBY
Expenditures for federal lobbying by the oil and gas industry:

• 2004: $51.8 million

• 2005: $66.3 million

• 2006: $75.2 million

• 2007: $83.9 million

• 2008 (first quarter): $26.5 million

Source: Center for Responsive Politics

WASHINGTON — Amid a national backdrop of steadily rising gasoline prices, oil and natural gas interests have pumped up their spending on lobbying while working aggressively to thwart Democratic initiatives in Congress.

The lobbying tab for the industry jumped by nearly 62 percent between 2004 and 2007 — from $51.1 million to $83.9 million — according to disclosure reports analyzed by the Center for Responsive Politics, a nonpartisan research group that tracks money in politics.

Overall lobbying increased by about 30 percent during the same period, according to the center's Web site, OpenSecrets.org.

The stepped-up oil and gas lobbying comes as the industry has been challenging a number of congressional initiatives, including efforts to repeal old tax breaks, impose new taxes and curb speculation in the energy futures market.

"There is a lot of education we need to do on Capitol Hill and with the general public," said Karen Matusic, a spokeswoman for the American Petroleum Institute, the industry trade group.

The success of industry lobbyists in fending off proposals that would have levied $18 billion in new taxes on Big Oil over the next decade amounts to a return on investment of 21,454 percent — almost 215 times the industry's outlay.

Leading the corporate lobbying list was Exxon Mobil Corp., according to the Center for Responsive Politics.

Exxon Mobil shelled out $16.9 million in 2007, a 57 percent increase over its 2004 spending.

In the first quarter of this year, the Irving-based oil giant spent $3 million for in-house staff and 11 outside firms.

Exxon Mobil's lobbying disclosure forms list a variety of legislation of interest to the company, including measures to curb climate change, the proposed Colombia free trade agreement and a House resolution affirming global leadership to fight HIV/AIDS, malaria and tuberculosis.

Because of the size and the number of high-profile issues the company is addressing and monitoring, "our lobbying efforts have necessarily increased at both federal and state levels," said Tony Cudmore, a spokesman for the company.

Independent exploration and production companies also have joined the trend, including the Houston-based Apache Corp.

For the past three years, Apache did not report any lobbying expenditures because it did not meet minimum reporting requirements of $10,000 per reporting period, company spokesman Bill Mintz said.

But in the first three months of this year, Apache reported spending $110,000, some of it going to industry associations and the rest for two government-affairs employees who spent a portion of their time on federal lobbying.

"We're spending a lot of time on tax policy," Mintz said. "We're concerned that they understand the impact of changes in the tax code and how it would affect investment in developing oil and gas resources."

So far, even the industry's most vocal critics agree the high-priced lobbying is paying off, because many of the Democratic measures have failed.

Most have been blocked in the Senate, where Democrats and Republicans each have 49 votes, with two independents.

"The petroleum industry is extremely smart," said Tyson Slocum, the director of the energy program at Public Citizen, a consumer advocacy organization.

"They will invest money where they can maximize return. And lobbying and influencing government is no exception. This is seen as a key part of doing business."

Energy-related bills

Oil industry officials say that it is no surprise they are more active on Capitol Hill, where hardly a week goes by when lawmakers are not debating energy-related bills.

Before the recess for the Fourth of July holiday, the House approved a proposal that would raise taxes on oil companies and hedge fund managers to offset the $61 billion cost of reducing the alternative minimum tax on the middle class.

But President Bush has threatened to veto the measure if it reaches his desk.

Although oil industry lobbyists have waged relatively successful defensive battles, they still face uphill fights to persuade Congress to pass the initiatives they favor.

One such proposal would lift a federal ban on offshore drilling, as GOP presidential candidate John McCain recently has advocated.

But McCain joins a majority of Democrats in opposing a proposal long championed by the industry to allow drilling in the Arctic National Wildlife Refuge.

Much of the industry's lobbying is aimed at Republicans in the Senate, where it only takes 40 of 100 votes to block a bill.

That has led to some grumbling among House members sympathetic to oil interests that they are ignored by the industry, said Rep. Gene Green, D-Houston, whose district includes refineries.

"I continually get complaints from Democratic members that they never hear from anybody in the energy industry," Green said.

Profits vs. prices

Public interest groups charge that the lobbying efforts have a detrimental impact on consumers and the economy by helping keep oil company profits high as gasoline prices skyrocket.

"They are intent on preserving what they have," said Judy Dugan, a research director of Consumer Watchdog in Santa Monica, Calif.

While the oil companies historically have focused their lobbying on Republicans, a number have acknowledged the change in power on Capitol Hill by hiring Democratic lobbyists.

The American Petroleum Institute, for instance, has contracted with a lobbying firm that includes a former staffer to Houston Democrat Green as well as an ex-aide to former House Majority leader Tom DeLay, R-Sugar Land.

In the first quarter of this year, Houston-based Shell Oil Co. paid $70,000 to Elmendorf Strategies, headed by Steven Elmendorf, who was chief of staff to former House Democratic leader Richard Gephardt of Missouri.

The firm lobbied on global warming and renewable energy issues for Shell, according to lobbying disclosure forms.

Shell also paid $50,000 to the Breaux Lott Leadership Group, whose principals are former Democratic Sen. John Breaux of Louisiana and former Senate Majority Leader Trent Lott, a Republican from Mississippi.

Between 2004 and 2007, Shell tripled its overall federal lobbying expenditures to $3 million.

Environmental lobbying up

At the same time, environmental groups also have stepped up their lobbying, spending $13 million in 2007, a 44 percent increase since 2004.

"We have more of our staff focused on legislative issues, " said Melinda Pierce, a lobbyist for the Sierra Club.

Despite this increased activity, Dugan, at Consumer Watchdog, said the environmentalists remain vastly outmanned by the oil lobbyists.

"It is an army," Dugan said, "against a regiment."

Contact the author at: bennett.roth@chron.com