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Canada Teams with Oil Lobby to Fight US Clean Energy Clause

In tandem with Ottawa and Alberta, top oil sands lobbyist Tom Corcoran keeps chipping away at Section 526. Third in a series.

By Geoff Dembicki, 16 Mar 2011, TheTyee.ca

Oil Sands War graphic, Dembicki series

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In Tom Corcoran's world, it's not worth trying to reason with certain opponents. Some warriors are on the right side in Washington's war over the oil sands. Others are irrevocably beyond recruiting.

Democrat congressman and clean energy champion Henry Waxman falls into the latter camp. "I've known him for years. He's a very nice guy but wrong on this issue," Corcoran tells me. "It would be a waste of time to talk him."

Composed and contained, Corcoran delivers his crisp assessment of his opponent without veering from his gentlemanly drawl.

The issue Corcoran mentions is a clean energy provision adopted in late 2007. It's called Section 526, and it's a major battleground in Washington's war over the oil sands. Rather than attempt to convince its author, Congressman Waxman, that the law would restrict imports from Alberta's oil sands, hurting U.S. energy security, Corcoran decided to fight him head on.

After all, he tells me, committed greenhouse gas reducers such as Waxman "are not going to change their opinion."

Attack on Section 526 

When my account left off in yesterday's Tyee article, I was drinking coffee with oil sands top lobbyist Tom Corcoran at the Capitol Hill Club, a members-only Republican social hub in Washington, DC.

Corcoran had just finished explaining how he helped form a group called the Center for North American Energy Security in the summer of 2008. The group, whose purpose is to maximize the amount of unconventional fuels powering the United States, includes the American Petroleum Institute, ExxonMobil and other oil industry majors as members.

Since its inception, the center has lobbied against any U.S. clean energy laws which could limit the growth of Alberta's oil sands.

Corcoran sees Canada as a major source of secure oil for fossil-fuel-dependent America -- and one where his allies have tens of billions of dollars invested.

Two of those allies, the American Petroleum Institute and the Canadian government, argue the industry's environmental footprint is shrinking yearly. Yet the industry still emits much more greenhouse gases overall than traditional operations in places like Texas or Saudi Arabia.

With limited time left to take meaningful action on global warming, green groups argue the United States should not be growing reliant on some of the planet's most carbon-intensive oil.

Corcoran's group entered this debate in 2008 with a strategic lobbying campaign designed to repeal Section 526, a clean energy provision adopted the year before.

The reason that Section 526 became a key battleground in Washington's war over the oil sands is that it forbids U.S. government agencies from purchasing "alternative" fuels with high carbon footprints.

One of its original authors, Congressmen Waxman, stated that the law should apply to fuels produced from Alberta's oil sands.

Canadian and Alberta government officials, fearing a precedent for wider bans, began fighting against that interpretation almost immediately. "We hope that we can find a solution to ensure that the oil keeps a-flowing," reads an internal email written by the Canadian embassy's Jason Tolland in early 2008.

Enlisting allies in the US military

Corcoran and his oil industry allies, meanwhile, determined early on that the U.S. military stood to be hit hardest by Section 526. The Department of Defense is by far the American government's biggest purchaser of fossil fuels.

Putting down his coffee at the Capitol Hill Club, Corcoran describes for me a hypothetical exchange in war-torn Afghanistan.

Imagine some observer arrives there and starts pestering a military official about the fuel he's using while trying to whip the Taliban. "'What's your carbon footprint?'"

Suddenly Corcoran's low-key drawl explodes into laughter. "It would make no sense!"

Presumably, the Department of Defense envisioned a similar scenario. Corcoran's group apparently had no problem making alliances with sympathetic officials.

The next step was to provide the Department of Defense with the Center for North American Energy Security's own legal opinion on Section 526. Essentially, Corcoran's associates felt the law's wording was too ambiguous for a blanket ban on purchases of oil-sands fuel. Even with clearer language, they argued, it'd be difficult to track Albertan fuel through the maze of pipelines and refineries supplying U.S. markets.

The Department of Defense eventually issued its own review of Section 526, coming to similar conclusions.

Lobbying by Canadian and Albertan governments

But Corcoran and his associates weren't the only ones cultivating influence within the U.S. military. Canadian and Alberta government representatives had also been convening with high-ranking army officials, according to internal embassy emails.

During one meeting in early February 2008, embassy representatives presented a laundry list of Section 526 concerns to Paul Bollinger, then in charge of interpreting the provision. President George W. Bush had already publicly lauded Alberta's vast fossil-fuel reserves, the Canadians argued. "Therefore," they added, "for the U.S. government to decline to purchase oil sands would send a contradictory signal."

Like Corcoran's center, Canadian representatives wanted a narrow interpretation of Section 526's language, a reading that wouldn't affect the oil-sands industry. Ideally though, the provision would be scrapped entirely. "An executive order or a repeal through Congressional action may be necessary," reads an embassy email from February 2008. "Post and the [Alberta] office will continue to make interventions with the Administration and Congress."

Corcoran's center and his oil company allies waged a similar campaign. The lobbying process, in his words, was actually quite simple. First his coalition figured out which policymakers, committees and congressional staffers might be unsympathetic to Section 526. "Then we talked to those people to a) alert them it exists; b) explain why it was a mistake; c) try to get support to repeal it," Corcoran tells me. "That was the process we embarked on in 2008."

Possibly as a result of such battle strategies -- aligned with those of the Canadian government -- the first attempts to overturn Section 526 began appearing that spring.

Waves of assaults

Two Republican congressmen from Texas proposed a repeal of Section 526 in March. Then identical legislation was introduced by an Oklahoma senator the next month. In May, the house passed a Defense Bill amendment limiting the provision's scope, but the changes were never signed into law. Two more unsuccessful attempts to repeal Section 526 were introduced in January 2009.

By March that same year, it appears the Alberta government still felt cautious enough about the provision to include it in its battle plans. One of the contractual duties for a high-powered lobbyist hired by the province reads as follows: "Provide advice for dealing with initiatives that could affect our interests (e.g. the next Section 526)."

A recent attempt to repeal Section 526 can perhaps be credited to Alberta Premier Ed Stelmach. The premier visited Washington early last May, meeting with senators, staffers and top-ranked energy official David Goldwyn.

Among those appointments was a conversation with Republican Senator Lindsey Graham (who next month would completely drop his support for the comprehensive climate legislation he'd helped author). During the visit, Stelmach urged Graham to come visit Alberta's oil sands.

The same day, Stelmach found time to speak at an oil-sands-themed forum hosted by Corcoran's group, the Center for North American Energy Security.

That forum, which was also attended by the Consumer Energy Alliance, a fossil fuel advocacy group similar to Corcoran's, was held at the Canadian embassy.

Here the premier delivered the keynote address to oil-sands allies and others, stating that "it's easy to see how limits on energy are really limits on growth."

Four months later, Senator Lindsey Graham and two other Republican senators flew to Fort McMurray, the heart of Canada's oil-sands boom. They were given a tour of several oil-sands operations by the premier himself, but didn't meet with any environmental or First Nations groups.

"Dirty oil and dangerous oil comes from rogue regimes in the Mideast," Graham told CBC news afterwards. "The oil coming from Alberta in my view is not only acceptably clean, it is safe."

'What is the right timing?'

Back in Washington, Graham helped introduce the Oil Energy Security Act of 2010, a piece of legislation proposing to abolish Section 526.

That attempt died along with the last congress in December's midterm elections. But Corcoran says it won't be the last shot at repeal, not yet. "The question is, 'What is the right legislative vehicle?'" he tells me. "'What is the right timing?'"

Congressman Waxman, needless to say, remains firmly committed to seeing Section 526 survive. As he said in a letter to President Obama, "The problem is that oil can be extracted from the tar sands only by using three times the energy required to produce a barrel of conventional oil." Which means that shifting to oil-sands crude would boost greenhouse gas emissions by over a third, Waxman wrote.

Given what Tom Corcoran is paid to accomplish, it would indeed be "a waste of time" for him to try and win over Waxman. But the top oil-sands' salesman's other conversations clearly are paying off.

Earlier this month, a little more than a week after my chat with Corcoran, in fact, Republican congressman Kevin Nunes proposed a repeal of Section 526 in his wide-ranging Energy Roadmap for America. The bill so far has 56 co-sponsors and is winning praise from conservative activist groups.

Tomorrow: How Corcoran's group got another key clean energy law blocked and deleted with the support of the Canadian government.  [Tyee]

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