Editorial: Oil, politics, and money

July 23, 2001
With a political frenzy under way in Congress over energy, US oil and gas companies should stay alert to developments in the uneasy stalemate over reform of campaign finance.

With a political frenzy under way in Congress over energy, US oil and gas companies should stay alert to developments in the uneasy stalemate over reform of campaign finance.

The debate over energy has not attained towering heights of sophistication. An issue that should be addressed strategically has instead disintegrated into polarized superficialities-development vs. environment, conventional vs. renewable fuels, production vs. conservation. The disconnected tidbits make life easy for headline writers and political deal-makers but sever energy's essential moorings to broader national interests. The process will yield not a strategy but an incomplete hash of compromises, split differences, and mistakes needing correction when no election looms.

Common denominator

A weak analytical link surviving this torture is money. Anxiety over campaign finance has turned election money into the common denominator of political discourse. On questions of national importance, the merit of argument yields to the money trail.

Destructive cynicism thus has displaced healthy skepticism, especially where energy is concerned. Yet it grows naturally from the campaign finance issue, which stalled this month on a procedural maneuver in the House of Representatives.

Whatever the outcome of that impasse, the effort to reform campaign finance throws useful light on political giving by the energy industry. According to the Center for Responsive Politics (CRP), a nonpartisan group that disseminates data from the Federal Election Commission, the energy and natural re- source industries during the 2000 election cycle made political contributions totaling $65 million. The figure covers funds from political action committees, donors of so-called soft money (which doesn't go directly to candidates), and individuals giving $200 or more. The category includes oil and gas companies, electric utilities, and mining companies.

The 2000 election drew unusually heavy giving from energy donors, probably because much of the industry saw the Democratic candidate, former Vice-Pres. Al Gore, as an extremist threat. The total compares with $44 million in the 1996 election cycle and $33 million in the 1992 campaign. Of the 2000 total, 72% went to Republican candidates, 27% to Democrats.

Enron Corp. was the largest single source of political contributions in the energy and natural re- sources group during the last election cycle. Groups and individuals affiliated with it gave $2.4 million. In diminishing order, other companies credited with at least $1 million in political giving-all less than $1.5 million-are Southern Co., Exxon-Mobil Corp., BP Amoco Corp., Dominion Resources Inc., El Paso Corp., Chevron Corp., Koch Industries Inc., and National Rural Electric Cooperative Association. Energy companies oriented more to electricity than to oil and gas dominated the rest of the top 20 list published by CRP.

Energy wasn't the biggest contributing sector among CRP categories in the 2000 election. Finance, insurance, and real estate received that distinction with $133 million. A sector labeled "lawyers and lobbyists" contributed $76 million to political campaigns. Other sectors and their contributions include health $54 million, construction $33 million, agribusiness $31 million, and transportation $29 million.

Like counterparts in other industries, most energy companies see political contributions as essential. The outlays secure access to elected officials. They ensure that company positions on important issues receive attention. And they sustain functions that have entrenched themselves in the energy industry and most others. Those functions naturally incline toward favor of the existing campaign-finance system. At the very least, the industry's political apparatus would likely regard questions about political giving, and a system that makes it necessary, as naïve.

Economic scrutiny

Yet political spending deserves economic scrutiny no less rigorous than that given any other outlay of funds. Is there an economic return warranting all this expenditure on political campaigns? And if the answer is no, might a change in campaign finance be good for the industry?

That Gore dwells somewhere other than the White House does not adequately respond to the question about value returned on a $65 million political investment. Access purchased at such great cost should improve, over time, the political climate in which the US handles questions about energy. Mangling of energy issues by a divided Congress this year demonstrates little progress toward this hope. The oil and gas industry should stay receptive to suggestions for a new system of campaign finance. The current system too frequently betrays its benefactors.