Bloomberg News

Keystone Pipeline Support Enlists Oil Firms to U.S. Jews: Energy

April 29, 2013

Keystone Pipeline Support Enlists Oil Firms to U.S. Jews

Pipeline sits on the ground near a trench during construction of the Gulf Coast Project pipeline, part of the Keystone XL Pipeline Project, near Ada, Oklahoma. Photographer: Daniel Acker/Bloomberg

Almost 50 groups representing everything from oil companies to American Jews have stepped up their Washington spending as the proposed Keystone XL oil pipeline proves to be a bonanza for lobbyists.

The American Petroleum Institute, a Washington-based oil industry trade group, increased its lobbying spending on all issues, including Keystone, to $2.1 million in the first three months of the year from $1.8 million during the same period a year earlier, Senate records show. The American Jewish Committee lobbying costs rose to $40,000 from $30,000.

They are among 48 groups that disclosed in filings last week that they were lobbying on Calgary-based TransCanada Corp. (TRP)’s proposed $5.3 billion pipeline, which would bring oil derived from tar sands in Alberta, Canada, to the U.S. Gulf Coast. Others include construction equipment manufacturers such as Deere & Co. (DE:US), labor unions such as the Laborers International Union of North America, and environmental groups such as the League of Conservation Voters -- and the government of Canada.

“Because it’s such a high-profile issue and it has such symbolism, it’s become a full-employment program for K Street,” said Bill Allison, editorial director at the Sunlight Foundation, a Washington-based watchdog. Many lobbyists have offices on K Street in the District of Columbia.

Oil Companies

All but two of the groups -- the League of Conservation Voters and Greenpeace -- appear to be in support of the pipeline. That includes oil companies such as Exxon Mobil Corp. (XOM:US), Royal Dutch Shell PLC (A:US) and Valero Energy Corp. (VLO:US), which all registered as lobbying on the issue, according to the disclosure reports filed with the U.S. Senate. All own refineries in the Gulf Coast that could benefit from the Keystone oil, according to Oil Change International, a Washington-based advocacy group that opposes the pipeline.

Some of the top lobbying firms in the U.S. are involved. Akin Gump Strauss Hauer & Feld LLP counts Shell among its clients. Podesta Group Inc. lobbies for BP PLC. (BP/) The BGR Group lobbies for Chevron Corp. (CVX:US)

“The vast array of lobbyists engaged on Keystone owes partly to the immense geographic and policy-topic spread of the pipeline,” said Rogan Kersh, a lobbying expert and provost of Wake Forest University in Winston-Salem, North Carolina. “Many interest groups can’t afford to let a major issue like this go by without putting their oar in.”

The pipeline “runs across a large swath of the U.S., and it engages constituents from both private and public-advocacy sectors: engineering, construction, environmental, wildlife, energy, transportation, and many others,” Kersh said.

‘Vast Array’

In addition, the president’s inaugural committee received millions of dollars in contributions from corporations and unions lobbying on Keystone, Federal Election Commission filings show.

Chevron gave $1 million while Exxon Mobil contributed $250,000. Four unions donated a total of $1.1 million: the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry, the International Brotherhood of Teamsters, the International Brotherhood of Electrical Workers and the laborers.

Other advocates that have registered to lobby for the pipeline include the American Jewish Committee, better known for its support of the state of Israel and on behalf of Jews worldwide.

Reduce Dependence

Keystone would help reduce “U.S. dependence on oil from hostile or unstable foreign sources,” said Kenneth Bandler, a spokesman for the New York-based committee. “The Keystone XL pipeline is vital toward strengthening America’s energy security, and also important for our relations with Canada, our dependable, democratic ally and neighbor.”

Obama sided with Nebraska’s Republican governor, David Heineman, and initially rejected the pipeline because its original route took it through the state’s Sand Hills region, a national natural landmark. TransCanada shifted the route and filed a new application for approval, which is under review by the State Department, which is involved because the pipeline crosses an international border. A decision is expected by the end of the year.

Advocates and opponents continue to hire lobbyists, hold rallies and send letters to convince the administration to make a final decision in their favor.

Alberta Lobbying

The Canadian province of Alberta hired two firms in March, Mehlman Vogel Castagnetti Inc. and Rasky Baerlein Strategic Communications Inc., to promote Keystone, according to Justice Department filings. Bruce Mehlman is a veteran of President George W. Bush’s administration; Alex Vogel formerly worked for then-Senate Majority Leader Bill Frist, a Tennessee Republican; and David Castagnetti was the congressional liaison for current Secretary of State John Kerry’s 2004 presidential campaign.

Rasky Baerlein’s chairman is Larry Rasky, who served as a spokesman for Vice President Joe Biden’s two presidential campaigns. An associate vice president, Ron Eckstein, formerly wrote speeches for Nevada Democratic Senator Harry Reid, the current majority leader.

Alberta Premier Alison Redford has made four trips to Washington to lobby on Keystone. Saskatchewan Premier Brad Wall has also visited.

The Canadian government is also lobbying, though its efforts have been hindered by a labor dispute involving its diplomats. They’re not working more than the 7.5 hours required by their contracts nor answering phones after 5 p.m. EDT, according to Tim Edwards, president of the Professional Association of Foreign Service Officers.

Getting ‘Yes’

The president of the petroleum institute, Jack Gerard, told Bloomberg Radio on April 23 that he believed Obama would approve the pipeline this year following a new environmental study.

“We’re working to get the president to ‘yes,’ whatever it takes,” said John Kerekes, midwest regional director for API. “The process will be inside baseball, and inside the administration. It’s a different lobbying approach altogether.”

Unions supporting the project as a way to create jobs were rallying at AFL-CIO headquarters in Washington April 24.

“This is about making sure the president and the State Department evaluate this based on the actual record,” said David Mallino, the laborers’ union legislation director. “The record is clear that this is in the national interest.”

The pipeline project has vaulted to the top of the list of priorities for the union, he said. It could employ “several thousand laborers” through two construction seasons, he said.

20 Jobs

Estimates for construction and manufacturing employment range from 2,500 to 20,000, depending on assumptions of how much of the project’s budget will be spent in the U.S. According to State Department estimates, the number of full-time jobs once the pipeline is built could be as few as 20.

Environmentalists still hope to scuttle the project. They filed more than 1 million critical comments with the U.S. State Department and have run ads opposing the pipeline.

“It’s increasingly clear that this pipeline simply is not in our national interest and we continue to hope the president will reject it,” said Tiernan Sittenfeld, a senior vice president for government affairs at the Washington-based League of Conservation Voters, whose home page prominently features a picture of some of the thousands of anti-pipeline demonstrators marching in Washington in February as it exhorts visitors to “Stop the dangerous Keystone XL tar sands pipeline.”

To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net; Jonathan D. Salant in Washington at jsalant@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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