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Why the White House Loves Natural Gas Why the White House Loves Natural Gas

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ENERGY

Why the White House Loves Natural Gas

While environmentalists oppose the Keystone Pipeline, the Obama Administration sees an opportunity to cut dependence on dirty coal and generate new jobs.

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Piper: Obama could green-light Keystone. (PRNewsFoto/Oil and Natural Gas Industry Labor-Management Committee)

Outside the White House on a frigid Sunday last month, thousands of environmentalists rallied to protest construction of the Keystone XL oil pipeline, chanting, waving banners, and handcuffing themselves to a metal fence until police arrested them.

President Obama wasn’t around to witness the spectacle. He was golfing in Florida that weekend with Milton Carroll and Jim Crane, two leading figures in the Texas oil and gas industry. Both are partners in Western Gas Holdings, which invests heavily in natural-gas drilling.

 

A few weeks later, the Keystone protesters, who were led by the environmental advocacy group 350.org, were dealt a blow when the State Department released a draft impact study of the pipeline, which would bring carbon-heavy tar-sands oil from Canada to the U.S. The study appeared to pave the way toward the project’s eventual approval.

“It was incredibly disappointing,” said Daniel Kessler, a spokesman for 350.org. But the group hasn’t surrendered; it signed up more than 50,000 people to perform acts of civil disobedience to protest the pipeline. “The sharpest tool in our belt is going to be people getting arrested,” Kessler said.

Just how sharp that tool is remains debatable. Obama began his second term with two speeches forcefully declaring his intent to take on climate change—but offering few details on how he planned to do it. Now, all those with a stake in climate policy, from environmental activists to the oil, gas, and coal lobbies, are rushing to get their views in the president’s ear.

 

Anyone with an Internet connection can hear what the 350.org protesters, who yelled themselves hoarse that day, had to say to the president. What matters more is whom Obama is meeting with out of view. It isn’t 350.org, which hasn’t had any White House meetings this year. Last week, however, the president met with a group of 14 energy-industry leaders, including the CEOs of nine energy companies.

There’s a reason the protesters aren’t in the room. Many Obama administration staffers privately dismiss the Keystone rallies as a sideshow over an issue that’s more symbolic than substantial. Rather than focus on the pipeline, the White House is moving forward on Environmental Protection Agency regulations to slash carbon emissions from coal-fired power plants. What that move lacks in symbolism it could make up for in effectiveness, doing substantially more to lower greenhouse-gas emissions in the long run.

But the regs could also impose large costs on the coal industry, so the president’s advisers are working to create an effective climate plan that won’t kneecap the fragile economy. The strategy involves embracing a transition from coal as the nation’s chief source of electricity to natural gas, which produces half the carbon pollution. Despite its lower-carbon profile, many environmentalists remain deeply uncomfortable with natural gas, particularly the controversial and high-impact drilling process known “fracking.” But the White House has paid close attention to economic studies concluding that new U.S. natural-gas production could generate 650,000 jobs while lowering manufacturing costs.

That’s where natural-gas and the electric-utility industries, which were heavily represented among the CEOs Obama met with last week, come in. Among the group were the heads of the oil and gas company Anadarko; the Edison Electric Institute, which lobbies for power companies; FedEx, which is pushing a shift to natural-gas vehicles; Southwest Gas; and former Colorado Gov. Bill Ritter, who advocates an energy economy that combines renewables and natural gas.

 

The group was asked not to disclose the details of their conversations, but in a note to reporters the White House did say that “the important role of natural gas in our domestic policy portfolio” was key.

Also in the meeting was Susan Tierney, who was an assistant Energy secretary in the Clinton administration. She came away believing that Obama wants to take climate action—but in a politically careful way. “I have every impression that the president understands that these important policy issues are complicated,” she said. “He understands the suite of policy issues that affect states, communities, and the industry.”

White House officials this year have already huddled with lobbyists from ExxonMobil, the nation’s leading natural-gas producer; the American Petroleum Institute, which lobbies for oil and gas companies; the natural-gas company Chesapeake Energy; Exterran, which produces natural-gas equipment; and the Interstate Natural Gas Association of America.

To be sure, green groups do get in the door. White House aides have also met with the League of Conservation Voters, the Natural Resources Defense Council, the Environmental Defense Fund and the Sierra Club, as well as green-minded think tanks. And even the environmental demonstrators outside have some influence on the policy formed within. When they raise awareness of an issue, they also raise money—and fortunately for them, there’s a new avenue for influence.

Obama’s former campaign machine has been transformed into a lobbying group called Organizing for Action. The group held private meetings in Washington this week for high-dollar donors, who were given time with the president on Wednesday. Some of those donors, particularly those from the West Coast, have pushed Obama to act more forcefully on environmental issues, spurred by the protests outside the White House. “We might not get a meeting with the president. But our protests can make an impact with OFA donors,” Kessler said. In other words, if they can raise enough money, the groups on the outside may still be able to get in.

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