Jan. 24 (Bloomberg) — Exxon Mobil Corp. and Dow Chemical
Co., big-dollar lobbying allies on many issues in Washington,
are on opposite sides of a high-stakes fight over how much of
rising U.S. natural gas supplies should be sold overseas.
Exxon, the largest producer of natural gas in the nation,
says exports will create jobs, encourage more production, and
lower the trade deficit. Dow, the largest U.S. chemical maker by
revenue, uses gas and its byproducts and leads a coalition that
wants to keep prices low by limiting the amount that leaves the
country.
The two are among the most active corporations in lobbying
Washington, spending a combined $23 million in 2012, according
to public records. They are more often allies than enemies. Both
supported a bill to improve trade relations with Russia last
year, for example. Now they’re sniping at one another through
competing trade organizations and blog postings on the gas
issue.
“It means a lot of wealth for them, so they are going to
spend a lot of money on an issue that’s fairly narrow in the
minds of most Americans,” said James Thurber, director of the
Center for Congressional & Presidential Studies at American
University in Washington.
“The fight shows that while ‘‘big business’’ tends to get
lumped as a single entity in the public’s mind, in truth
‘‘powerful companies fight each other all the time,’’ Thurber
said in a phone interview.
Shared Memberships
The companies both belong to the U.S. Chamber of Commerce,
the American Chemistry Council, and until recently, the National
Association of Manufacturers — three of the largest business
groups in Washington.
Dow quit the manufacturing group last week over its support
for natural gas exports.
The issue is shaping up to be one of the most contentious
energy policy debates of this Congress, with Ron Wyden, the new
chairman of the Senate Energy and Natural Resources Committee,
vowing to examine whether significant natural gas exports risk
higher energy costs for U.S. consumers.
The debate is likely to be repeated as hydraulic fracturing
increases domestic oil and natural gas production, reversing the
U.S.’s reliance on foreign sources of energy, Paul Bledsoe, a
Washington-based energy consultant, said in an interview.
Now the question is what the nation should do with its
bounty of natural gas, coal and oil.
Energy Challenges
‘‘This is going to keep happening,’’ Bledsoe, who advised
President Bill Clinton on energy issues, said. Energy
development ‘‘raises new challenges along with new opportunities
of an oil- and gas-rich U.S. As public policy, even as a
philosophy, we haven’t come to grips with it.’’
In business, Dow, based in Midland, Michigan, considers the
Irving, Texas-based Exxon to be a ‘‘valued supplier,’’ company
spokeswoman Nancy Lamb said.
Dow backs restrictions on natural gas exports even as it
supports free trade because energy is ‘‘foundational to the
nation’s economy, in a way that other products are not,’’ Lamb
said in an e-mail.
Ken Cohen, Exxon’s vice president of public and government
affairs, called the position America’s Energy Advantage, the
coalition Dow leads, ‘‘opportunistic” and “protectionist.”
“More trade means more supply – and with it, more jobs and
economic expansion,” Cohen wrote on Exxon’s blog.
Other Combatants
Other big companies have been drawn into the fight besides
Dow and Exxon. The Energy Department is reviewing 16
applications to build export terminals to ship supplies to
countries that don’t have free trade agreements with the U.S., a
group that includes Japan.
Eastman Chemical Co. and Huntsman Corp., both chemical
companies, and the aluminum maker Alcoa Inc. and steel
manufacturer Nucor Corp. all belong to America’s Energy
Advantage.
The group is a “small gaggle of companies” that wanted to
“limit the ability of other companies to export their
products,” Exxon’s Cohen wrote in a Jan. 17 blog posting.
Dow and Exxon are preparing to submit comments by today’s
deadline about a study the Energy Department released in
December that found exports of gas would benefit the U.S.
economy.
The department has said it will use the report as it
decides whether to approve the export terminals.
Lobbying Reports
Exxon and Dow are likely to continue to play leading roles
because of how much each spends on lobbying each year. Exxon
spent just under $13 million last year, according to public
records filed with the Senate. That makes it among the biggest
advocacy spenders in Washington, according to the Washington-
based Center for Responsive Politics, which tracks lobbying and
campaign spending.
Dow spent more than $10.5 million to lobby last year,
according to public records. Chief Executive Officer Andrew Liveris discussed natural gas exports with Wyden during a
December dinner at Bistro Cacao in Washington, according to
Wyden spokesman Keith Chu.
In Wyden, Dow may have a sympathetic ear. The Oregon
Democrat said he was “deeply concerned” about the process the
Energy Department would follow to weigh the export applications
in a Jan. 10 letter to Secretary Steven Chu.
The analysis may have underplayed the domestic demand for
the fuel, Wyden said.
Trade Groups
Keith Chu, the committee’s spokesman, said Wyden also has
met with Thomas Farrell, chief executive officer of Dominion
Resources Inc., which has applied to build a natural gas export
terminal, and with Jack Gerard, CEO of the American Petroleum
Institute, which represents Exxon and other oil and gas
companies.
Besides Congress and the Energy Department, the companies
are battling for support from large trade associations to which
they belong.
The American Chemistry Council retracted a week-old
statement endorsing exports after Dow publicly complained.
“The statement accurately reflects executive committee
policy dating to February 2012,” Scott Openshaw, a spokesman
for the American Chemistry Council, said in an e-mailed
statement. “However, the issue and its implications for some of
our members have evolved. We therefore plan to further discuss
this issue to assure all members’ views are fully represented
and the implications understood.”
Dow’s Lamb and Openshaw both declined further comment on
that matter.
Dow left the National Association of Manufacturers after
that group endorsed exports.
“Earlier this week, with no discussion or notification,
NAM adopted a new position on this issue which places the
interest of oil and gas producers above the interests of its
manufacturer members,” Dow said in a statement. “For these
reasons, Dow has chosen to withdraw from membership.”
Bledsoe, the energy consultant, said Dow has to show that
limiting exports will create more jobs than unfettered overseas
sales to win the debate.
To contact the reporter on this story:
Jim Snyder in Washington at
jsnyder24@bloomberg.net
To contact the editor responsible for this story:
Jon Morgan at
jmorgan97@bloomberg.net
