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Jack Gerard, the force majeure behind Big Oil

By Steven Mufson,April 06, 2012

(Page 4 of 4)

White House records from early 2009 through Aug. 31, 2011, show that Gerard visited twice, on Dec. 13, 2010, to see Kristin J. Sheehy, special assistant to the deputy chief of staff, and on Aug. 16, 2011, to see Cass Sunstein, head of the office of information and regulatory affairs at the Office of Management and Budget.

Oil company executives typically visit more often and see more senior officials. Exxon Mobil chief Rex W. Tillerson, for instance, has met with Obama, former Council of Economic Advisers head Austan Goolsbee, former OMB director Peter Orszag, economic coordinator Lawrence H. Summers and former energy and climate czar Carol Browner.

It’s not always clear whether Gerard is promoting API or himself. In January, he delivered his second “State of American Energy” speech at the Newseum, inviting notable guests; the news release promoted it as a “major address.”

But some lobbyists say Gerard is doing exactly what Big Oil expects of him, taking flak on controversial issues while corporate executives end up looking reasonable and moderate by comparison.

Gerard says “our views are a reflection of our member companies. . . . You don’t survive very long if you’re inconsistent with what members think.”

It’s possible that Gerard’s hard-nosed tactics are working. Obama has spent much of the past month defending his policies. The EPA has done little to regulate hydraulic fracturing, the Interior Department has approved Shell’s drilling plans in the Arctic and Obama has moved up plans for preliminary exploratory work off the Atlantic coast.

Indeed, many oil executives are frustrated with the administration. “This is a very different direction for the API than when I was on the executive committee,” said John Hofmeister, former president of Shell Oil. “In my opinion, it has been invited by the administration’s deliberate and explicit hostility to the hydrocarbon industry and in particular to oil and gas.”

Hofmeister, one of the industry’s few registered Democrats, said he was “blown off” by Obama during the 2008 campaign. His message was that cultivating biofuels wouldn’t be enough to alter the price of gasoline and that Obama should also support domestic drilling. After the election, he said, he tried again in vain.

“In a sense, the administration has invited hostility,” Hofmeister said.

‘Not on the same page’

Now Obama is trying to find middle ground. He’s for fracking — with regulations to ensure it’s done safely. He’s for offshore drilling — if it also is done properly. He rejected the Keystone XL proposal, but says he’s open to a revised one and has embraced the construction of its more urgently needed southern half. The White House said it believes its “goals . . . are largely shared with API.”

The Obama administration has found that it can be lonely in the middle of American politics. Oil companies say he hasn’t done enough to promote drilling on federal lands; unhappy environmentalists believe he has approved too much drilling in ecologically sensitive areas.

But it’s still trying to find the right spot. White House senior adviser Valerie Jarrett attended a recent meeting of oil executives on the API board, Gerard said. “We’re trying to at least establish some common understanding so we’re not talking past each other,” Durbin said. “They want to initiate a dialogue.” He said the meeting was “very cordial” but he added “we’re not on the same page” and “we didn’t come to any agreements other than to continue the dialogue.”

Two weeks later, Obama and API were at loggerheads again over taxes.

How this will play out in this election year is unclear. API is trying to give Big Oil a makeover. A mid-February Washington Post and Pew Research Center poll suggests it is making headway. Only 14 percent of those surveyed blamed oil giants for high gasoline prices, less than half the level in a 2006 poll; more people, 18 percent, blamed Obama. For his part, Obama has cast the industry as “raking in record profits — profits that go up every time folks pull up into a gas station.”

Frank Maisano, an energy media specialist at Bracewell & Giuliani, says API’s aggressive positions could allow Obama to chart a course between industry and environmentalists. “The president is triangulating between enviros and industry,” he said. “And he comes out looking like he’s in the middle, which is where he wants to be in an election year.”

Post researcher Lucy Shackelford contributed to this report.

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