Obama, who in the 2008 campaign said “we must end the age of oil,” has drawn his own stark line. On March 29, with Congress set to vote on industry tax breaks, he said: “Today, members of Congress have a simple choice to make: They can stand with big oil companies, or they can stand with the American people.” The vote failed in the Senate.
For a brief moment in March 2010, it looked as though Obama’s effort to find a middle ground on energy policy might succeed. He unveiled a five-year lease plan that included expanded offshore drilling. Gerard called it a “positive development.” Three weeks later, when a BP exploration well exploded, killing 11 workers and uncorking a massive oil spill in the Gulf of Mexico, the administration backed away and declared a six-month drilling moratorium. Gerard went back on the offensive.
Interior Secretary Ken Salazar has been a special target because he oversees leases and drilling on federal lands, both onshore in the Rocky Mountain states and offshore on the Outer Continental Shelf. After the oil spill, Salazar angered oil execs by saying he wanted to “keep our boot on their neck” until BP cleaned up.
Gerard lambasted the drilling slowdown as the administration struggled to address the environmental disaster and overhaul of the discredited regulatory agency before ramping up drilling again. The Interior Department fired back: “API’s Gerard Makes Inaccurate Statements on Federal Oil and Gas Development,” it said in a “reality check” noting high levels of drilling and production on federal lands. Even after deep-water drilling returned to pre-spill levels, Gerard kept hammering Obama on the issue.
Is confrontation the best strategy? Not every trade association thinks so.
“Our association tries to avoid combat and hope the logic of our positions prevail,” said Thomas F. Farrell, chief of Dominion Power and chairman of the utility industry’s Edison Electric Institute.
A former API board member said “for my taste the whole organization is far too aggressive.”
“A trade organization should not adopt party loyalty,” said Fadel Gheit, an oil analyst with Oppenheimer & Co. “It should be much more constructive instead of just blaming the president.” According to Open Secrets, 70 percent of campaign contributions from API’s political action committee (started by Gerard and funded by employees) go to Republicans. Roughly 90 percent of oil company PAC contributions go to Republicans.