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Drilling for Influence: API Unshaken by 2012 Elections

With its neoclassical marble columns and massive, gold-trimmed wooden doors, the Andrew W. Mellon Auditorium was an apt setting for American Petroleum Institute President and CEO Jack Gerard’s annual State of American Energy speech.

“U.S. oil and natural gas companies are providing more than jobs and more than economic growth,” Gerard declared at the event last month, his usually quiet voice booming through the high-ceilinged banquet room of the government-owned auditorium that connects the two wings of the Environmental Protection Agency headquarters. “The success of this industry means enhancing our energy security, our economic security and our national security.”

Gerard’s grand pronouncements contrasted with what must have been a considerable letdown for him and his trade group following the 2012 elections. Gerard had been one of GOP presidential nominee Mitt Romney’s biggest boosters inside the Beltway and had been mentioned as a possible White House or Cabinet appointee.

But Gerard now casts the election as a clear win for his industry, and the API has responded with characteristic bravado. Within two weeks of Election Day, API had launched a multistate TV ad campaign targeting some half-dozen Senate Democrats, all up for re-election in 2014, with ads urging them to steer clear of “job-killing energy taxes.”

Gerard’s speech kicked off yet another campaign that combines print and broadcast ads, grass-roots organizing and social media to cast big petroleum as a boon to the nation’s economy and national security — providing, the argument goes, that the industry isn’t burdened with new taxes and regulations, and gets full access to leases and drilling sites.

The Investing in America’s Future campaign harkens to the multimillion-dollar Vote4- Energy API campaign that employed a similar strategy during the 2012 elections. The idea is to build public support from the ground up, said Gerard, a tactic he cottoned to after talking to some of President Barack Obama’s organizers following the 2008 election.

With a $185 million budget in 2010, according to tax records (Gerard’s share of that was $2.2 million), the trade group can well afford national broadcast and cable ads such as its latest “What Does it Take to Make America Run?” spot, in which a polished female narrator sings the petroleum industry’s praises. The group spent $7.3 million on lobbying last year, according to the Center for Responsive Politics. And the titans of the 500-member API, from Exxon Mobil Corp. to Shell Oil Co., are riding a natural gas and hydraulic fracturing boom.

“Too many people try to force understanding and messaging without understanding that you need to go to where the people are,” Gerard said in an interview at the API’s Washington headquarters, where a spacious foyer is decorated with supersized oil tanker models and wall panels of faux layered rock evoking Pennsylvania shale. “[One] of the things we’ve changed about the way we do our work at API is, we’re going to the people. The Congress is a lagging indicator. The Congress responds to the voters.”

API has 700,000 “energy citizens” in its database of supporters and some 500 backers ready to attend events and town hall meetings in each congressional district, the trade group’s organizers say. API staged 38 Vote4Energy events in 19 states last year. Not surprisingly, its Vote4Energy ads tended to run in battleground states.

Environmental activists scoff at the notion that API has genuine grass-roots support, and Greenpeace USA spoofed the Vote4Energy campaign in its own satirical video. Four years ago, Greenpeace made much of a leaked memo in which Gerard called on API member executives to help the trade group “put a human face” on its Energy Citizen campaign.

“They would love to have popular support, but in truth nobody likes oil companies — except for maybe the people who work for them and their families,” Greenpeace Research Director Kert Davies said.

But that’s a pretty big number, API officials like to point out. The industry fueled 9.2 million jobs and pumped $545 billion into the American economy in 2011, a new glossy API booklet boasts. And even Davies acknowledged that, politically, the oil and gas industry is well-positioned.

“I would argue that, by and large, to my consternation, the oil industry is doing pretty well right now,” he said.

To be sure, Obama pledged to “respond to the threat of climate change” in his inaugural address, increasing pressure on the administration to reject the long-contested Keystone XL oil pipeline. Approval of the pipeline, which would run from Canada to Texas, is a leading API priority. Devastating droughts and storms, particularly Superstorm Sandy, have also stirred climate concerns on Capitol Hill.

Proposals to end what Democrats call industry “tax breaks” — a term the API rejects in favor of “preferential tax treatment” — have a way of creeping into budget negotiations. The group is engaged in an ongoing regulatory and legal fight with the EPA over the agency’s biofuels standards. The API has also taken steps to respond to a growing campus-based movement of students asking university endowments to divest from fossil fuel companies.

But Gerard asserts buoyantly that “energy won the election.” The proof? Obama’s “all of the above” energy strategy is a tacit endorsement of oil and gas. Environmentalists cast Obama’s energy talking points in the same light.

“Even though they lost the election, they won in the rhetorical space, because they had the president saying their words on the campaign trail,” Davies said, referring to the API. “And now they’re going to hold him to those words.”

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