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Big money worked hard last year, but climate activists are working harder

In This Week in Climate, we look how fossil fuel money in the IRA is igniting climate activists.
Julian Moore
Jan 29, 2023 9 min read
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The Inflation Reduction Act ushered in a new era of climate politics, and this week we got a better picture of how the sausage was made with the help of chemical and fossil fuel interests.

Washington’s K Street lobbying firms spent unprecedented sums to influence the direction of the IRA. The American Chemical Council (ACC) shelled out $19.8 million in lobbying efforts in 2022, nearly 20% more than the previous year. Meanwhile a triumvirate of American oil interests, Occidental Petroleum Corp., ConocoPhillips and Exxon Mobil, together spent $27.2 million primarily on shaping the law.

The chemical industry’s interest were two-fold: curbing regulations on emissions and pollution, and including funds for carbon capture and infrastructure weatherization.

The lobbying dollars paid off with the inclusion of carbon capture funding in the IRA, despite several studies showing the dubious impact of CCS on reducing emissions when paired with fossil fuels.

Chemical and oil lobbyists didn’t get everything they wanted, however. In 2021, the ACC pushed hard against reinstating the Hazardous Substance Superfund. The Superfund was an expired 1980 tax on industries that use “taxable chemicals” to pay for the hazardous waste sites they produce. It came back in the 2021 Infrastructure bill, and in the 2022 IRA it was extended to include a tax on petroleum products.

Perhaps it’s unsurprising to see oil and chemical companies shell out to influence climate laws, but public utilities were not far behind. The Edison Electric Institute, which represents public utilities in all 50 states, spent $10.5 million on lobbying in 2022.

Utilities and energy companies are often lumped together, but there’s an important distinction to be drawn between the two sectors that makes lobbying by utilities particularly egregious.

Oil and gas companies are private entities that customers can choose between when buying gasoline or other petroleum products. Of course, one could dispute that characterization when you take into account the $20 billion in public subsidies oil companies received in the U.S. in 2022.

But power utilities are usually monopolies owned in whole or in part by public agencies.

In other words, consumers might have a choice between where to buy gas for their cars, or to not to buy it at all by taking public transportation, where available. But everyone has to pay their power bill, and in all but the 15 American states that have consumer choice, they do not get to choose which utility they buy it from.

The result is that ratepayers often are forced to pay utilities which in turn use some of that money to lobby Congress against climate action and lower power rates.

A study published this week offered a solution to this problem: ban ratepayer-funded lobbying completely.

Using ratepayer money for lobbying is technically illegal already under several state and federal regulations. But you will be shocked to learn that these rules are “riddled with loopholes,” as the report’s author David Pomerantz put it.

The biggest loophole is to funnel money through “trade associations”, like the Edison Electric Institute, to choose one example. The Edison Institute has successfully lobbied to block measures to promote rooftop solar and electrify buildings as recently as last year.

The good news is that obstruction at the highest levels of government is spurring action at the lowest levels. Climate activists are increasingly adapting their tactics to hold their local regulators accountable to decarbonization goals.

A story this week highlighted how climate activists from No Coal No Gas elected six members to the ISO-New England power utility’s governing committee last November. Utilities across the country have obscure committees that offer input for how to proceed with the technicalities of energy use and appropriation.

The ISO-New England committee seats don’t have any direct power in making policy, and the New England climate advocates readily admit that the move was a symbolic victory. The final rulemaking happens behind closed doors that committee members are not invited to.

But they emphasize that they are taking the power that they can, and even if utilities are going to act against the interests of ratepayers, they certainly won’t do so in the dark.


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The Author

Julian Moore