As lobbying on climate and energy surged last year, the wind industry pushed hard into a field of competitors, nearly tripling its spending on influence efforts from a year earlier.
The American Wind Energy Association paid $5 million for lobbying in 2009, compared with $1.7 million the previous year, the highest amount ever for the association and a sixth of the $30.1 million spent by all renewable companies combined. It came in the same year that the wind industry saw its prospects lifted by legislation.
The increase in lobbying by wind was the largest for any individual company or group in the 10 energy sectors analyzed by the nonpartisan Center for Responsive Politics for E&E.
Spending by all renewable energy interests, meanwhile, surged 35.8 percent to hit the $30.1 million mark.
Industries intensified lobbying as Congress debated climate legislation. As well, analysts said, companies wanted to influence the $787 billion stimulus bill that passed in February. Lobbying continued throughout the year as federal agencies doled out about $300 billion of that stimulus juggernaut in tax breaks and other spending.
"There was a lot of money potentially being sloshed around in that bill," Adele Morris, policy director for climate and energy economics at the Brookings Institution, said of the stimulus. "Everybody wanted a piece of that pie."
As President Obama had signaled that he wanted to promote wind and other green energy, Morris said, "they probably thought that the returns for that lobbying could be pretty high."
E&E examined wind and alternative-energy sector spending, along with nine other industries that lobbied on climate and energy legislation: oil and gas, electric utilities, chemical and related manufacturing, agricultural services and products, mining, coal mining, environmental groups, forestry and forest products, and natural gas transmission and distribution. Industry data were compiled by the Center for Responsive Politics, which uses reports filed with the House and determines industry categories and which businesses and groups fit in which sectors. Altogether, those energy interests spent $512.8 million on lobbying last year, up 4 percent from a year earlier.
Lobbying spending for renewables remains small beside traditional energy sources. Oil and gas companies paid $168.4 million for lobbying last year and electric utilities spent $144.4 million. But percentage-wise, spending grew the most sharply in the renewable sector, followed by environmental groups, which combined allocated $22.5 million for lobbying, 30 percent more than in 2008.
Many companies lobbied on a number of issues other than climate and energy. Alternative-power companies, however, said they focused primarily on energy policies and the economic stimulus legislation.
All energy interests had a reason to lobby on the House and Senate climate bills, Morris said. Both bills sought to create a program to cap carbon emissions and let businesses buy and sell pollutions permits and proposed giving away a large portion of those permits to industry.
U.S. EPA in a June 2009 analysis put the value of all permits at more than $60 billion a year starting in 2015 and growing to almost $100 billion annually in 2040.
"If you're looking at a policy that's going to slice off chunks of that year after year, boy oh boy, you're going to have lobbyists in action," Morris said.
Wind installations grow, climate bill stalls
Lobbying investments by wind appear to have helped the industry, both analysts and AWEA officials said.
The wind industry saw a 39 percent increase in wind installations last year, growth that accelerated after passage of the stimulus bill. That legislation included both a three-year extension of a 2.1-cent tax credit for every kilowatt-hour of green power produced and language allowing a federal grant in lieu of the value of that tax credit. Before the stimulus bill, forecasts had projected a 50 percent downturn in wind projects because of the recession, said AWEA spokeswoman Christine Real de Azua.
"That made a big difference in the momentum over the course of the year," Real de Azua said.
The wind industry needs federal subsidies to survive, said Kenneth Green, resident scholar at American Enterprise Institute, who added that "the best use of their money is to keep priming the federal pump." Green favors a free-market approach.
But AWEA President Denise Bode has argued that traditional energy sources and nuclear power have had decades of tax help and other policies that helped them flourish and that wind and other renewable energy companies need similar help now to expand.
"Each industry has been given long-term assurance by the government," Bode said recently.
Wind and other renewables also would have been bolstered by the climate legislation that passed the House and emerged from the Senate Environment and Public Works Committee, because both contained a cap on carbon emissions. That was widely expected to power investments in the green energy sector.
Oil and gas companies assailed the House bill and major aspects of the Senate counterpart from Sens. John Kerry (D-Mass.) and Barbara Boxer (D-Calif.). Some utilities voiced concerns about House and Senate climate bills, although other power companies supported the measures.
"There are much better-funded industries out there who are opposing the things we want," said Rob Gramlich, AWEA's senior vice president for public policy.
Morris and others, however, said that climate legislation likely did not move forward for a number of reasons.
"Lobbying might have had something to do with it," Morris said. "But the real impediment to climate legislation is 10 percent unemployment. It makes it incredibly hard to have a conversation about restricting the economy in any way."
With many now skeptical that Congress will pass a climate bill in 2010, those who want policies capping carbon emissions said they plan to push forward with arguments that clean energy policies will drive job creation. The oil and gas industry, meanwhile, wants help for natural gas as a means of limiting climate change. Coal interests will continue to push for research and development of carbon capture and sequestration technology.
Wind group's priorities
The wind group's board of directors decided to ramp up spending because Congress was poised to act on energy policy, Gramlich said, adding that "our board decided that we had a message to convey in Washington."
The lobbying increase came as AWEA saw major growth in its membership and accompanying revenues. AWEA's currently has 2,600 members, up from 400 members in 2005 and 200 members in 2000, Real de Azua said.
The trade group takes in two-thirds of its revenue from its annual conference, Gramlich said, and that also has expanded. Last year, 23,000 people attended the event, compared with 13,000 in 2008.
Many of the new members are companies in the supply chain for wind projects, Gramlich said, including gear, bolt and bearing manufacturers, tower manufacturers and drivetrain makers.
"It shows a lot of interest in the growth of the market," Gramlich said. As it has lobbied Congress, he said, one of the messages the industry has pushed is that the supply chain creates jobs in states even where wind is not strong and frequent enough for wind energy farms.
Solar's trade group also saw growth last year and also increased lobbying. Its spending on influence efforts grew 14 percent, to $1.6 million.
Membership in the Solar Energy Industries Association grew to 1,000 from 700, spokeswoman Monique Hanis said. The group added three assistant positions to bring its government affairs staff to eight people and now is seeking four more people as it expands beyond lobbying Congress to also target federal agencies, Hanis said.
"We definitely have seen tremendous growth in the membership," Hanis said "We've been able to support the priorities by increasing lobbying staff."
Wind, solar and other renewable interests are pushing for a federal mandate that utilities generate a portion of their power from renewable sources, called a renewable electricity standard. AWEA wants a 25 percent RES, and that was a top priority in lobbying efforts last year.
The climate bill, H.R. 2454, that passed the House and then stalled in the Senate included an RES requirement of 20 percent in 2021. There are other bills that also contain the national mandate, including a Senate Energy and Natural Resources Committee bill, which has an RES that peaks at 15 percent in 2021.
"RES has been a key component of every [energy] package that's been discussed," Gramlich said. By that standard, he said, lobbying on that priority has been successful.
An RES is equivalent to a subsidy because it directs resources to certain industries, said Green with AEI. Utilities have argued that a national mandate will raise power prices for customers in areas that lack significant wind, solar or geothermal resources.
American Electric Power Co. Inc., a utility that uses coal for about 66 percent of its generation, argues for an RES "that could recognize regional differences," said Pat Hemlepp, AEP's director of corporate media relations. AEP and others also want federal help for upgrades to the power transmission system so that utilities in places with less renewable resources can move green-generated power more easily.
The wind industry sees an RES with "aggressive, binding near- and long-term targets" as a priority because the industry says it will create the market certainty needed to drive private investment dollars to wind, Real de Azua said.
Wind and solar also lobbied on the Department of Energy's loan guarantee program and saw success on that front. A $535 million guarantee went to Solyndra Inc. for construction of a solar photovoltaic manufacturing plant. Nordic Windpower received a $16 million guarantee to scale up an assembly plant.
Oil and gas industry tops others
Lobbying by oil and gas set a new high for that industry. Influence expenses by oil and gas companies grew 26.2 percent in 2009 to reach $168.4 million.
"Energy was a big priority for this administration and this Congress," said Karen Matusic, spokeswoman for industry trade group American Petroleum Institute. "Our spending really reflects the activities of the policymakers."
American Petroleum Institute spent $7.3 million lobbying last year, up 50.1 percent from the previous year. API's lobbyists focused on the climate bill's proposed cap-and-trade program, issues of access to drilling and President Obama proposals to eliminate some of the oil and gas industry's tax benefits, Matusic said.
As it lobbied last year, the oil and gas industry objected to the allocation of allowances in the House and Senate climate bills. In the House bill, oil refiners received 2 percent of the emissions credits for two years. In both chambers, the legislation gave a large portion of allowances to coal-fired utilities. Oil interests pushed back hard against that and other provisions, saying that they would kill jobs and raise energy prices.
Matusic rejected that oil and gas was competing against other industries, including electric utilities, for specific policy provisions in climate legislation. Instead, she said, oil and gas was arguing, "Don't penalize one sector of the economy."
But some oil and gas companies and utilities behind the scenes were working in opposition to each other, with oil and gas interests arguing that climate legislation failed to create incentives for increased use of natural gas and overly penalized the transportation sector. Natural gas has about half the carbon emissions of coal.
That tension surfaced last week when ConocoPhillips, Caterpillar Inc. and BP America announced that they had left the U.S. Climate Action Partnership, a coalition of more than two dozen companies and environmental groups lobbying Congress to pass cap-and-trade legislation. The split came over the natural gas issue and other parts of the climate bill that the oil companies said disadvantaged them compared with coal (see related story).
"The lowest-cost option for decreasing emissions in the power sector is to increase the use of natural gas," BP spokesman Ronnie Chappell said.
BP ranked fourth in the sector for spending on lobbying last year, with $16 million in expenses. That amount is a 53 percent increase from 2008.
BP lobbyists have been talking about the natural gas issue with lawmakers, and "we'll continue to talk about it," Chappell said, as well as about the issue of allowance distribution.
AEP, in contrast, supported climate legislation that passed the House. That company spent $7.3 million on lobbying last year, the third-highest amount in the electric utility sector. The spending was a 35 percent decrease from 2008, which Chappell said was due to a one-time expense in 2008 as part of the T. Boone Pickens effort on energy.
"AEP could have taken a coal-or-nothing approach on this. We didn't," Hemlepp said. If legislative action is going to be taken, Hemlepp said, it needs to keep compliance costs as low as possible for the most affected industries.