Oil and gas lobbying retrenches amid slump
With fewer members, trade groups’ voices lose some of their volume
Tumbling crude and natural gas prices have weakened the energy industry’s influence in Washington as cutbacks in the oil patch have spread to the nation’s capital.
Casualties include the army of lobbyists battling new regulations and the rosters of trade groups trying to elect friendly candidates in November.
The Independent Petroleum Association of America, a trade group in Washington, has shed about 100 members in the past year, as low prices force oil and gas companies to merge, declare bankruptcy and scrutinize every transaction, including as much as $60,000 they send the trade group in annual dues. At the National Stripper Well Association, another trade group, officials started a monthly payment plan to keep some members on their rolls. But they’ve still lost about 10 percent of their lineup.
Even the biggest industry group—the American Petroleum Institute—waived dues briefly last year.
The fight is on
“When everybody starts looking at their bottom line, trade association dues can be the first to go,” said Tim Charters, vice president of governmental and regulatory affairs at the stripper well group, which represents the producers, owners and operators of marginal, low-producing wells. “At the same time, this is when you need D.C. representation because the fight is on. With everything that’s rolling out of this administration and the presidential election on the line, we need to be right here in the middle of the fight.”
The industry already feels battered by a two-year slump in prices. More than 140 North American oil and gas producers and service companies have filed for bankruptcy since the beginning of 2015, according to Haynes & Boone, a law firm that tracks the industry. Those that survived did so by cutting costs, including laying off 350,000 workers globally.
Now, those cash-strapped oil and gas companies have less room in their budget for advocacy in Washington.
Exploration and production companies spent just $6.2 million on lobbying during the first quarter of 2016 — 17.5 percent less than they did in the same period two years ago, according to public disclosure data analyzed by Bloomberg Government.
The sector is relying on a smaller army of lobbyists to deliver its message to lawmakers — 608 this year, versus 812 at the beginning of the price slide in 2014, according to the nonprofit Center for Responsive Politics.
Oil companies haven’t closed outposts in Washington, but they haven’t rushed to fill lobbyist openings, either. Consider Chevron Corp., which reported activity by 13 internal lobbyists at the beginning of this year, down from 15 two years ago. Houston company Co noco Phillips reported lobbying by four employees earlier this year, compared with five in the first quarter of 2014.
Outside consultants
Oil and gas companies also have canceled contracts with outside consultants and lobbyists hired to bring special expertise and personal connections to a single issue. Four lobbying firms reported doing work for Halliburton Co., the oil field services company, compared with six in the first quarter of 2014.
Still, cutbacks in Washington haven’t matched the carnage in oil fields. Lobbying experts say there’s a good reason for that: The industry knows it’s in the middle of an epic battle for survival as climate change concerns drive a wave of new regulations.
“We need to be right here in the middle of the fight.” Tim Charters, National Stripper Well Association