Redesign the Paradigm

In the previous blog, A Call For The Transition To Renewable Energy  it was discussed that industrialized nations of the world will soon have to address that a world energy crisis driven by demand from developing countries is looming within the next 25 years. Fossil fuels alone will not be able to meet demand. The easier to extract surface sources are rapidly becoming exhausted requiring more difficult and environmentally damaging drilling and mining procedures that are both more time intensive and expensive. The increased costs of energy and potential shortages can create more geopolitical stresses between countries as they scramble to meet their energy demands. It is beyond time to ramp up existing renewable energy sources (biofuels, solar thermal, photovoltaics, wind, geothermal, tidal, and biomass) to supplement fossil fuels over the next 25 years while actively searching for long term, highly efficient energy systems to transition into beyond 2035.

The liquid fuel transportation sector is dominated by petroleum which is refined into gasoline, diesel, and jet fuel. The transition process in this sector would involve escalating biofuels production in order to supplement future petroleum demand. Cellulosic ethanol can be economically derived from gasification processes and will represent the most cost effective and efficient production means of ethanol production. It also doesn’t compete against food crops, requires much less water, and can be attained from a multitude of carbon based sources including the unusable residue from crops, natural fast growing grasses and plants, disposable wood from logging, and even human waste. Increasing the additive rates of ethanol in gasoline up to E30 (30% ethanol / 70% gasoline) and providing government subsidies for fuel line conversions will contribute significantly to mitigating demand and reduce the chance of rampant  price increases due to regional gas shortages.

Diesel fuel necessary for commercial transportation (large trucks and ships) can also be supplemented by biofuels, in this case utilizing bio-algae, jatropha, and halophytes to create bio-diesel.  Microbial organisms can be used during the processing to increase yield and refinement efficiencies and reduce costs. Diesel blends up to B30 (30% biodiesel / 70% petroldiesel) can be attained without major modification in fuel lines. World governments can then provide similar subsides for fuel line conversions to trucking and shipping fleets. Jet fuel blends can be supplemented with bio-algae; the U.S. military and some commercial airlines have already taken keen interest and developed prototypes for this application.  The goal is to supplement petroleum based diesel and jet fuels with biodiesel which will mitigate demand and reduce the chance of price increases in commercial transportation which adversely affects consumer goods pricing and airline ticket prices.

In addition, supplementing petroleum based fuels should be done in unison with the generation of new hybrid (gasoline/battery) or completely battery based automobiles and light truck production over the next 25 years. Battery technology and high capacitance systems need to be elevated in importance and additional government funding for research and development put in place to provide economically viable batteries and ultra capacitors with greater yields and longer life capabilities. If necessary the patents held by the fossil fuel and aerospace defense industries need to be made available for public use instead of being put on ice as a potential threat of substitution to petroleum, or classified for military uses. Suitable battery technology may very well already exist but the public sector does not have access to it. Utilization of hybrid, battery, or high capacitance system will further reduce future demand for liquid petroleum fuels but will require increased demand in electricity production. Heavy trucks, trains, and ships used for commercial transportation require considerable power to move heavy loads. Battery and high capacitor systems are not currently able to provide adequate power to solely meet commercial transportation needs. They will be more reliant on hybrid systems and will require more energy from the biodiesel / petroldiesel blends than are required for cars and light trucks.

The unspoken and long term strategic goal of many developed countries appears to be to use up the petroleum resources of other countries while saving their own reserves for emergency or to sustain their countries liquid fuel needs decades from now.  This strategy needs to be scrapped and replaced with a new 25 year goal that includes drilling and refining the readily available global petroleum resources in combination with increases in cellulosic ethanol and biodiesel production, government subsidization for replacing fuel lines on existing personal and commercial vehicles,  and creating high efficiency hybrid, battery and high capacitance electric cars and light trucks for personal transportation, and hybrid biodiesel large trucks, trains and boats for commercial uses. Then by 2035, begin the process of transitioning into hydrogen fuel based transportation models for developed countries, while allowing undeveloped countries additional time to become petroleum independent. This means limiting expensive and risky deep water drilling rigs, shale extraction, and production of more oil refineries limited only to petroleum. All government subsidization for the petroleum sector should cease and be transferred to companies generating second (cellulosic ethanol), third (bioalgae), and fourth (high yield genetically modified plants combined with microbial catalysts) generation biofuels, and for the development of biofuel infrastructure. This would include refineries that can be utilized for both petroleum and biofuels.

Resistance from the very profitable petroleum sector will be considerable and OPEC nations will put up a strong fight even going so far as to temporarily drop oil prices in order to draw attention away from the need to transition to renewables and to save the petroleum industry’s future profitability. Excuses for why renewables are a panacea will flourish and will need to be set aside. Our next generation of automobiles may not run as fast, or have the same mileage capability, but they will be clean and reduce our reliance on a polluting fuel source that has created enough geo-political instabilities and wars already. This 100 year old technology is past its prime and the world is certainly capable of doing better. The reason fossil fuels have been held in place this long as our dominate source of energy is because of the massive profitability and wealth generation it provides for a small percentage of the world’s population and not for its current benefit to humanity.

The other half of the fossil fuel equation is electricity production which is provided by coal and natural gas. Electricity production actually requires more fossil fuels than the transportation sector and demand is projected to outpace petroleum and will be further increased by the need for hybrids, electric, and high capacitance vehicles all of which will draw additional power from the grid. The transition of this sector, over the next 25 years, should be a move towards the existing renewable energy sources of solar thermal, photovoltaic, wind, tidal, geothermal, and biomass facilities. Biomass which uses carbon based refuse (forestry, crop, animal, and industrial) and wastes (sewage and municipal solid) will be the only source that requires commodity based replenishment that could be subject to price fluctuations, but this resource will be derived from throw away material.  The transition process itself can begin with the removal of coal and natural gas subsidies and strict limitations on future coal or natural gas power plant production. One such limitation could require no more coal fired plants built without adjacent bio-algae photo bioreactors for algae based biodiesel production and CO2 sequestration. Instead, funds could be allocated to infrastructure development of large solar thermal, geothermal, tidal and wind generation systems. Subsidies should also be provided to business and homeowners to put photovoltaic arrays on their premises.  If regional electricity service providers heavily vested in coal and natural gas production want to continue as public electricity providers they will need to be required to build an increasing number of energy facilities that are completely renewable in nature. Some renewable energy plants are more expensive to construct than traditional coal and natural gas facilities, certainly the case for large solar thermal operations. However, over the 25 year life span of the facility the infrastructure costs become offset within a few years since there are no ongoing requirements for expensive and environmentally damaging drilling, mining, refining, and distribution expenses associated with acquiring oil, coal, and natural gas.  Renewable energy power plants will be cheaper for developed and developing countries in the long run, providing clean energy, and not require purchasing or extracting fossil fuel commodities from potential hostile countries.

Synergies exist between complimentary renewable energy sources and with existing fossil fuel sources. Large megawatt solar thermal facilities can be designed to provide power for cities, or smaller solar thermal power plants can be utilized for neighborhood or suburb electricity generation.  Residential and commercial photovoltaic arrays with government subsidies to assist business and resident affordability can be utilized in conjunction with solar thermal (or other renewable energy sources) to help reduce the regions demand. Solar thermal, geothermal, and wind farms can share space with bio-algae photo bioreactors (PBR’s) to reduce land costs and reduce space requirements.  Biofuels can be generated from sewage, waste material, food crop residue, and wood residues creating fuel sources from material that would otherwise be burned or sent to landfills. Fast growing and drought resistant plants requiring little irrigation can be grown and harvested on lands unsuitable for crops and utilize husks, stovers, and other discardable material from traditional crop harvesting.  All existing coal fire and natural gas plants could have bio-algae PBR’s in place to absorb the CO2 that would otherwise be released into the atmosphere. In developed countries all new power plants should be renewable where possible and only natural gas if not. Coal plants should only be considered for poorer developing countries with large coal reserves.  

A new paradigm for worldwide renewable energy production can be implemented where profitability expectations are removed from future State owned and privately held renewable energy companies.  In countries with a private sector, existing renewable energy companies could be incentivized by their governments to switch to a strictly non-profit model. Another option is the creation of new private non-profit renewable energy companies with infrastructure development and scaling subsidies provided by their governments that would allow them to provide energy at lower costs to consumers and compete directly against for-profit renewable energy (and fossil fuel).  If full government subsidization is not possible then 0% infrastructure and scaling loans could be made available with repayment plans established that assure competitive energy pricing remains available to the public.  State owned energy companies with little incentive to eliminate their profit structure will still be able to provide energy indigenously and to the developing nations but in time will be hard press to remain competitive outside their own borders.

The goal of the non-profit renewable energy provider is to be able to produce and distribute electricity in the most efficient and low cost manner possible and to pass those savings onto their customers. It is also to provide energy sector jobs to replace those jobs lost from the fossil fuel industries.  Favorable government legislation and subsidization for private sector non-profits will be essential to ensure political barriers to entry are removed and to meet infrastructure costs and to develop economies of scale.  Subsidization can come from removing subsidies provided to very profitable oil, coal and natural gas companies and from tax revenues associated with providing clean energy. A non-profit model focused on efficiency and removing unnecessary expenses associated with pay for performance executive compensations, investor ROI expectations, profits for mining and drilling operations, costs related to exporting of fossil fuels, and short sighted profit maximizing decision making will be removed from the future energy equation.  I am not advocating government takeover of the western energy industry, but the establishment of true non-profit private companies in the free market economies. For already established state owned companies heavily vested in fossil fuels my hope is they will eventually operate under the same non-profit guidelines as they to transition towards renewable.  This should also decrease geo-political instability in certain regions of the world that use energy profits to sponsor terrorism or as funds to support military buildup and wars.

It is time for world governments especially those in developed countries with free market to start acting responsibly and considering its citizens. Energy is a basic requirement for all societies and the world has been limited to technology and policies that are outdated and no longer in its best interests. The question of how to pay for the transition to renewable energy is legitimate. Whether governments should increase taxes or use existing tax dollars to subsidize renewable energy infrastructure and provide assistance for companies to scale up production will be debate and heavily resisted from many channels. Interestingly enough, funding didn’t appear to difficult to acquire when it was necessary for bailing out irresponsible financial companies or providing massive subsidies to the ridiculously profitable fossil fuel industry. Fossil fuel based companies know they will eventually have to venture into the renewable market as oil, coal, and natural gas become to scarce or expensive. Why should the world wait until governments are near financial collapse due to high energy costs affecting nearly every sector of their economies, or countries are on the brink of war due to scarcity and conflicts over meeting demand?

Prior to 2035, world governments, academia, and even private sector labs should have been be utilized to search out the most promising energy sources with the greatest efficiencies that will meet the world’s long term energy needs. The push should be to develop free or extremely low cost energy systems such as fusion or kinetic systems for electricity production, and a hydrogen based fuel source for vehicles. We must begin this researching process and planning for this process now.

http://www.eia.doe.gov/oiaf/ieo/highlights.html

How is it that our scientists and technologies have created exponential growth in computing, super colliders, nano-technology, particle weaponry, world-wide satellite coverage, etc. and yet for energy production we are limiting ourselves to a polluting, 100+ year old technology that creates geo-political instability around the world and has most recently become subject to the whims of commodities traders?

Industrialized nations of the world will soon have to address that a world energy crisis driven by demand from developing countries is looming within the next 25 years. The bulk of the energy industry’s production motives which are dominated by fossil fuels and its obsession with profitability are not going to provide the solution for our upcoming energy problems. World energy producers have become very efficient at extracting, processing, refining, and distributing petroleum for transportation liquid fuels, and coal / natural gas for electricity production. However, production will not be able to keep pace with the growing world wide demand expected to rise almost 50% by 2035, much of that coming from the developing countries of China, India and in Southeast Asia. This is not a matter of peak oil or how much fossil fuel remains in the ground, but an issue of simple supply versus demand.

Fossil fuels have served our world’s growing energy needs extremely well, despite the fact that oil and coal use has been around since the turn of the 20^th century, but we are fast approaching the limits in improvements that can be expected from production capabilities. In addition, the easier to extract surface fossil fuel sources are rapidly becoming exhausted requiring more difficult and environmentally damaging drilling and mining procedures that are both more time intensive and expensive. The increased costs will be passed on to end users and when combined with potential shortages will create stresses between countries scrambling to meet their own energy demands,  this may even include going to war to guarantee energy  stability. This scenario can be further complicated by fossil fuel commodities traders who take advantage of regional problems to run up prices. This is an excellent formula for State owned or privately held oil companies interested in ensuring ongoing profits for decades, but not for the rest of the world.

There is also the matter that the regions containing fossil fuels are not only proving to be environmentally difficult to work in but geo-politically hostile as well. Many countries rich in fossil fuels (ie. Middle East and African countries) also divert funds to groups and organizations that sponsor regional unrest and acts of terrorism or can use earnings to build up military capacity and develop weapons of mass destruction.

We are fast running out of time to seriously implement existing renewable energy sources (biofuels, solar thermal, photovoltaics, wind, geothermal, tidal, and biomass) as a supplement to fossil fuels over the next 25 years while actively searching for long term, highly efficient energy systems to transition into beyond 2035. The industrialized countries of the world and their private or state owned energy companies are going to have to set aside their fossil fuel based profitability expectations for energy production and begin thinking in terms of transitioning. This will not be done willingly, these companies and their holdings represent significant infrastructure investments and they are cash cows, in many cases representing the only significant source of income for the region. In countries with capitalism based economies the lobbying stranglehold the fossil fuel industry holds over energy legislation will need to be removed, and campaign contributions that help elect sympathetic representatives curtailed if there is to be any significant infrastructure support from those governments.

This process will have to be driven from the free market economies since State owned companies with large oil reserves will have little incentive to transition on their own since they can meet their domestic demand, and fossil fuels represents a substantial income source for the country and they will profit off of the projected 84% expected increase in demand from developing countries over the next 25 years. This sharp increase in demand will be buffered by developing countries themselves as S. America, China and India are currently taking their own measures to implement renewable energy sources realizing their own vulnerabilities. Even if these developing countries begin the transition process to renewable energy sources, State owned companies will be needed to fill the remaining projected demand. Privately held companies in the U.S., Canada and Europe can then be utilized to meet remaining 16% growth expectation from the developed countries with fossil fuels and renewables.

Existing renewable energy processes need to become more efficient and costs brought down through economies of scale. The purpose for expansion of these renewable sources is to increasingly supplement fossil fuels over the next 25 years.  This must become mandated. In addition, new technologies and system improvements investigated and existing patents that have been shelved to protect fossil fuels from competition should be re-evaluated. Their feasibility and economic viability analyzed, and those with satisfactory efficiencies implemented. World governments cannot immediately dump existing fossil fuel systems since renewable capacity falls far short of meeting demand. In addition, current levels of debt among industrialized countries are already to burdensome due to the irresponsible behaviors of governments and their financial leaders to sufficiently generate new infrastructure in a timely enough manner. We can however begin to aggressively supplement fossil fuels consumption with renewable energy sources in the industrialized worlds. This will allow the poorer developing countries to continue to use predominately fossil fuel sources while they implement renewable energy infrastructure themselves. This may require years of transitioning so it must begin now.

World energy demand can become as significant an issue as the 2008 world wide collapse of the financial markets and generate long term recessions. I would like to emphasize this point once again; regardless of how world fossil fuel producers try to ramp up production they cannot meet global demand. For the transition period over the next 25 years we must utilize all sources of energy and start the process of relinquishing the political stranglehold that the fossil fuel industry holds in the political arenas.

By 2035 renewable energy sources should play significant role supplementing fossil fuels and contributing towards global demand. During this transition period research and development initiatives from world government’s, academia’s, and even government funded and private sector laboratories’ should be utilized to search for new energy sources and refine existing systems for still greater efficiencies. Possibilities for new energy systems include hydrogen, advance fuel cells, new battery or high efficiency capacitors for transportation requirements, and fusion reactors and kinetic energy systems combined with advancements in solar, geothermal, wind and tidal power for electricity generation. 

The goal after 2035 is not to supplement fossil fuels but replace them. The motivation to look for energy systems that provide ongoing streams of company profits and investor return will have to be put aside and a new generation of non-profit energy providers created. Profit maximization will then be replaced with production efficiency and providing free or extremely low cost energy to end users. Research for these next generations of renewable energy systems must begin now with long term plans designed for the transition.

My next blog will discuss procedures necessary to implement the transition process to renewable energy sources in both the transportation and electricity production sectors.

http://www.eia.doe.gov/oiaf/ieo/highlights.html

Is lobbying a beneficial component of government decision making, or an avenue for corporations and special interest groups to guarantee that legislation will favor their goals, often at the expense of the public at large?

The purpose of lobbying is to influence legislators and government officials who are responsible for regulation on behalf of a special interest group. Lobbying is protected by the right to petition found in the first amendment of the constitution. The right to petition guarantees citizens the right to request or appeal to our government for or against policies that will affect them or they may have strong opinions or beliefs about. It also guarantees that these actions will be free from punishment or reprisal. But what percentage of actual lobbying goes towards defending a citizen or a groups right to petition versus influencing legislators in order to acquire government contracts, remove regulation, lower corporate taxes, limit competition, etc. in order to create an environment conducive to greater profits?

A lobbyist is defined as anyone who “directly or indirectly, solicits, collects, or receives money or any other thing of value to be used principally . . . to influence, directly or indirectly, the passage or defeat of any legislation by the Congress of the United States”. The intended rationale of lobbyists today involves not simply influencing legislators but explaining the goals of the special interest and assisting to overcome potential obstacles legislators may face meeting those goals. Lobbying occurs at the city, state and federal level.

Organized lobbying in the U.S. is almost as old as the country is. William Hull in 1792 represented Virginia veterans in attempts to acquire additional compensation for their services in the War of Independence. Early lobbying practices were free from any form of regulation and utilized far less legitimate techniques than found today. Early lobbyists quickly attained a reputation by both press and public as disreputable, corrupt and a subversive influence on democracy. All attempts to regulate lobbying over the past 200 years have been met with only limited success. Obviously, lobbyists lobby best on their own behalf.

The total number of registered lobbyists at the federal level for 2009 was 13,700 and at the state and local levels 38,800 representing some 53,400 clients. There are of course more lobbyists who have chosen not to register or have deregistered over the past few years but are still engaged in lobbying activities. This is easily done by adopting a title other than lobbyist such as senior advisor then claiming that no more than 20 percent of a persons time is spent lobbying, this is relatively simple since federal laws do not require that lobbyists document the activities they claim they are doing. Actual numbers of fulltime lobbyists are probably closer to 70,000 and this doesn’t include large public relations and marketing firms engaged in numerous activities that clearly fall under the definition of lobbying.

Lobbyists and their clients spent more than $3.47 billion last year up from $2.85 billion in 2007 attempting to influence legislators. How much of that amount went solely towards lobbying dedicated to increasing corporate profits? The numbers break down for the three major sectors and sub sectors as follows:

Miscellaneous Business Sector

Total Miscellaneous Business expenditures from 1998 to 2010 was $4,050,396,479

Miscellaneous business expenditures increased $145,000,000 or 35 percent from 2007 to 2009

Sub Sectors

• Business Associations sector – Massive 173% increase in lobbying from the Chamber of Commerce which claims to represent approximately 3 million businesses and organizations but has been criticized for being primarily a republican lobbying machine focused on removing climate change legislation and healthcare reform and disproportionately lobbying for oil companies, pharmaceutical giants, and automakers.
• Manufacturing & Distributing sector – 25% increase in the past three years as fortune 500 companies ramped up lobbying. The top spenders in 2009 were:
  • GE increased expenditures to almost $24 million for a variety of lobbying to get government contracts and subsidies one of the largest was for wind turbines and clean coal research.
  • Honeywell spent $7 million more for aero space defense contracts, aircraft safety & technologies, and energy conservation / biofuels).
  • Procter & Gamble paid $4.5 million to lobby for positive tax and foreign trade legislation in addition to having input on food and drug safety for its products.
  • Food & Beverage sector was led by the American Beverage Assn who is the major lobbying representative for the beverage industry ($18,850,000) and companies like Coca-Cola Co. ($9,390,000) and PepsiCo Inc. ($9,159,500), all totaled spent more than $40,000,000, a 400% growth over prior year, to successfully defeat the National Soda Tax of 1 penny per ounce designed to pay for obesity related health care costs.

Health Sector

Total Health sector expenditures from 1998 to 2010 was $3,980,184,031

Health expenditures increased $97,579,000 or 22% from 2007 to 2009

Sub Sectors

• Pharmaceuticals/Health Production sector – 18% increase since 2007 as the determined pharmaceutical and health services industry increased lobbying to fight against the democrat lead health care bill. The big spenders in 2009 were:
  • Pharmaceutical Research & Mfrs of America (PhRMA), is an exceptionally powerful and influential lobbying organization that represents 48 of the largest pharmaceutical companies. In 2009 alone it spent $26 million defending pharmaceutical intellectual property rights, fighting against price controls, creating favorable regulation, and a broad attack against healthcare reform. PhRMA also uses numerous other organizations to advocate on its behalf.
  • Pharmaceutical / Health Product companies – Lobbying amongst all pharmaceutical companies was concentrated on overturning healthcare reform. Other lobbying interests included those lobbied for by PhRMA as well as specific industry related tax breaks. Largest individual lobbying expenditures included:
    • C Pfizer Inc spent $24,619,268 in 2009 as compared to $12,180,000 in 2008
    • Amgen Inc $12,440,000 in 2009 as compared to $10,800,000 in 2008
    • Eli Lilly  $11,215,000 spent less than 2008 amount of $12,485,000
    • The next 10 largest pharmaceutical companies all spent between $5,000,000 and $9,000,000.
  • Health Services/HMOs sector – increased spending almost $23,000,000 a 45% increase over 2008. This sector represents large health care insurance companies like United Health Group ($4,770,000), Blue Cross / Blue Shield ($4,700,000), and Humana ($3,180,000). It also represents companies that provide health care related services such as DaVita Inc. ($2,870,000) and Medco Health Solutions ($3,977,000). This sectors principle lobbying interests involved defeating healthcare reform and ensuring Medicare and Medicaid payments / overpayments continue unimpeded.

Finance, Insurance, and Real Estate Sector

Total Finance, Insurance, & Real Estate expenditures from 1998 to 2010 was $4,050,396,479

Finance, Insurance expenditures increased $45,639,000 or 18% from 2007 to 2009

Sub Sectors

• Insurance sector – 18% increase since 2007. The principle increase in the insurance industry was from healthcare related insurance companies or healthcare divisions within insurance companies to once again overturn the new health care bill. The big spenders in 2009 were:
  • Blue Cross/Blue Shield spent $14,805,439 in 2009, as compared to $11,770,165 in 2008 and included measures to use the issue of state’s rights to render the proposed health care reform and its regulation of insurance unconstitutional
  • America’s Health Insurance Plans spent $8,850,000 in 2009, as compared to $7,540,000 in 2008 and included efforts to create the Campaign for an American Solution. This was an attempt to generate grassroots support for a suitable healthcare reform based on existing practices that would incorporate coverage, quality, affordability, choice, and core portability.
  • American Council of Life Insurers (ACLI) spent $7,530,583 in 2009, up from $6,375,032 in 2008 representing 300 insurance companies which accounts for over 90% of all U.S. life insurance companies focusing on privacy regulations, tax issues, and pension reform.
  • The next 10 largest insurance companies all spent between $4,000,000 and $7,000,000 and included life insurance, automobile insurers, and health insurance companies. Many insurance companies lobbied for legislative support to enforce and expand the Financial Services Act of 1999 which enables insurance companies to provide financial services.
  • Finance / Visa Credit Companies increased spending 26% since 2007. This sector represents large credit companies like Visa Inc ($6,010,000), American Express ($3,260,000), MasterCard Inc ($3,100,000) all of which spent heavy on legislation to curtail credit card restrictions, overdraft fees, consumer financial protection, and data security issues. It also represents companies like Sallie Mae (SLM)( $480,000) who increased lobbying drastically to fight against legislation designed to cut SLM and other private lenders out of student loan programs, and GMAC LLC ($5,320,000)  which lobbied for new consumer protections, assistance for struggling mortgage holders, foreclosure prevention, and against proposed regulation on the derivatives markets.

Energy and Natuaral Resources Sector

Total Energy & Natural Resources expenditures from 1998 to 2010 was $2,902,630,507

Energy & Natural Resources expenditures increased $156,606,000 or 50% from 2007 to 2009

Sub Sectors

• Oil & Gas sector – The unprecedented 100%increase since 2007 in lobbying from the major oil & gas companies was due to the growing impression that fossil fuel dominance may be beginning its decline. Lobbying from all companies concentrated on battling the proposed cap and trade policy, debunking climate change, ensuring that the oil & gas industries remain influential over energy policies,  maintaining decades-old tax incentives and subsidies, and in successfully convincing the Obama administration to grant access to offshore and domestic drilling.
  • Exxon Mobil – Spent $27,430,000 which was down from 2008’s $29,000,000 but a substantial increase over $16,940,000 in 2007. Exxon Mobil also funded climate change denial groups to promote their climate views via publications and Web sites which were not reviewed or verified by the scientific community. In addition, strongly lobbied for free market advocacy.
  • Chevron Corp – Spent $20,815,000 up from $12,844,000 in 2008.  Chevron devoted extra attention shaping an effective U.S. energy policy representing oil industry interests. It also lobbied hard to establish political barriers to renewable energy companies and clean energy.
  • ConocoPhillips – Spent $18,069,858 up from $8,459,053 in 2008. Lobbying also focused on the federal government where ConocoPhillips was seeking additional time to pay for millions of dollars worth of fines for pollution related cleanup expenses associated with its refineries and favorable legislation for Alaskan oil drilling.
  • BP – Spent $15,990,000 up from $10,450,000 in 2008. BP has lobbied successfully over the past few years to win insider access and many believe has received lenient treatment on a number of violations. It also spent heavily to rebrand its image more towards an overall energy company embracing clean energy in addition to fossil fuels.
  • The remaining top ten companies spent between $12,000,000 and $2,000,000 and included Koch Industries ($12,300,000) which operates oil gathering systems and pipelines and American Petroleum Institute (API) ($7,320,000) which is the industries main trade association representing over 400 companies.
  • Electrical Utilities sector – 28% increase in expenditures over the past three years. This sector consists of the largest utilities companies across The U.S. such as Southern Co ($13,450,000),  American Electric Power ($7,297,245), and  IPG&E Corp ($6,280,000). All of the power utility companies lobbied to influence congress on new climate change legislation before and after it passed in the house. The new federal energy bill would require a reduction of greenhouse gas emissions, mainly carbon dioxide, that has been credited with climate change, this is significant since up to 80% of portfolio’s are concentrated in fossil fuels. Edison Electric Institute (EEI) ($10,500,000), the countries largest electric power company association led lobbying opposition against one of the new federal energy bill provision’s that would require utility companies to produce at least 15% of electricity from renewable sources.

Summing up these findings and looking at each of the top four sectors it becomes apparent that the vast amount of lobbying dollars spent is to improve the bottom line of a lot of corporations. The issue at heart is not that they are simply trying to influence favorable legislation from the U.S. government it is that the corporations then end up controlling a disproportionate amount of the federal budget, which ultimately means our U.S. taxpayer dollars.  There seems to be an unspoken calculation that if a certain amount is invested on lobbying and campaign contributions by corporations it can be expected they will receive both favorable legislation and a certain amount of money allocated through the federal budget (through government contracts, subsidies, tax breaks, etc). This just further exaggerates the imbalance of favorable legislation and access to federal dollars between those with millions of dollars available for lobbying and those who cannot afford it. As a taxpayer I am concerned how this benefits the US and the long term interests of its citizens.

Analysis of the each sector further demonstrates how  lobbying  favors well funded special interests. The Chamber of Commerce is the largest lobbying spender. It is supposed to represent businesses of all types and sizes. In reality, the vast majority of lobbying expenditures were focused on protecting fossil fuel and pharmaceutical interests and bailing out the automotive industry. Small and medium size companies the backbone of U.S. job growth were disproportionately represented. It could be argued saving the automobile industry would save jobs but lobbying for the fossil fuel and pharmaceutical industries was designed to protect profits.

The manufacturing sector concentrated on lobbying for tax breaks and subsidies and to acquire government contracts whether they were the best candidate or not. In some cases they lobbied to create contracts that may or may not be needed or directly benefitting the taxpayers.

In the health sector, large pharmaceutical interests revolve solely around defeating health care reform and limiting any price control measures that may be implemented. While this may benefit corporate profitability but we are the only country that pays the high prices for pharmaceutical drugs. All the while the taxpayer will be paying more money into Medicare and Medicaid to help pay for the high costs of health care and pharmaceutical drugs. Health service companies and HMOs successfully lobbied to defeat health care reform in order to protect their profits from government sponsored health care insurance or a non-profit healthcare system similar to countries in Europe.

The financial sector lobbied to limit regulation on lucrative financial arrangements and financialization. This is certainly not beneficial to taxpayers since it led to the financial collapse in early 2008. However, tens of millions of dollars has successfully stalled any significant regulation against financial instruments. The insurance companies may very well be an example of not meeting the before mentioned unspoken calculation, they did not spend or influence to the same levels as the pharmaceutical companies did and while they were able to defeat the government sponsored health care insurance system, they were not successful in completely defeating the pre-existing condition exemptions.

Finally, in the energy sector, the oil and gas companies lobbied strongly to discredit climate change, defeat cap and trade and reduce proposed climate change regulation. The fossil fuel industries were protected from legislation that was designed to limit pollutants and CO2 emissions while removing the requirement that 15% of energy use had to come from renewable sources. This has resulted in an energy policy still overwhelmingly influenced by the fossil fuels industries at a time when we need to be weaning the country off of oil and gas and into renewable energy sources.

Almost all of the top 15 sectors (see data below) with the exception of labor, ideological, civil service, non-profits, and education (the bulk of this subsector isn’t for education but for subsidies for universities) were lobbying to create an environment conducive to increase profitability and could be argued that the overwhelming amount of dollars spent supports profitability while not contributing much towards the well being of the country.

While lobbying is in compliance with the right for citizens and special interests to redress government legislation it is being exploited by corporations and those with enough financial backing.  Lobbying as it has evolved unequally provides favorable legislation and other perks at the expense of the citizens/taxpayers as a whole.  In addition, it is ensuring profitability in sectors that cause environmental damage, resulted in unnecessary and over spending, and even financial collapse of the country. This is the time that government spending and perks need to be reigned in to help rebalance the federal and state budgets. Tax dollars need to be allocated towards systems that actually benefit the public good and the long term viability for our country.

The problem that lobbying demonstrates is not that companies are not only lobbying to ensure their profits, they are lobbying to ensure profits in arenas that are hurting the US citizens and taxpayers. Lobbying for practices within industries that cause environmental problems, collapse of our country, lock us into long term fossil fuel use as opposed to clean energy, and intend to maintain the same type of healthcare system that will soon price itself out of the range of affordability are not in the best interests of humanity.

Other items of interest:

Over the last 10 years, 198 members of congress or 43 percent of legislators have left public office to become registered lobbyists. Similar percentages are applicable at the state level, fewer at local levels.

Lobbying fees have risen from $10,000 to $15,000 a month a decade ago to $20,000 to $25,000 a month or more now.  Republican lobbyist firms can charge even more.

Lobbying activity has increased despite the economic downturn demonstrating that lobbying is truly recession proof.

http://www.lobbyists.info/

http://www.washingtonpost.com/wp-dyn/content/article/2005/06/21/AR2005062101632.html

http://www.followthemoney.org/database/graphs/lobbyistlink/lobbymap.phtml?p=1&y=2009&l=1

http://www.opensecrets.org/news/2010/02/federal-lobbying-soars-in-2009.html

http://www.wilsoncenter.org/index.cfm?event_id=4244&fuseaction=events.event_summary

http://www.sourcewatch.org/index.php?title=Southern_Company