Powerful Republican lobbying group comes to Vancouver to strategize with oil industry

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Jenny Uechi

At a meeting last week of the Canadian Oil and Gas Export Summit in Vancouver, the U.S. Chamber of Commerce sent a representative to huddle with industry. Here’s a look at how the Republican Party is extending its influence into Canada.

The U.S. Chamber of Commerce, a powerful Republican lobbying group, was in Vancouver last week at the Canadian Oil and Gas Export Summit. Their appearance comes amidst the Harper government’s attacks on environmental charities in Canada, accusing them of influence from foreign billionaire “radicals” from the US.

Christopher Guith, vice president of policy for the U.S. Chamber of Commerce’s Institute for 21st Century Energy, addressed the small group of oil industry representatives at the oil and gas summit at the Four Seasons Hotel in downtown Vancouver.

Matt Koch, vice president for Oil Sands and Arctic Issues, was originally slated to speak at the event. Koch, who worked in the George W. Bush administration and at the American Petroleum Institute, had to cancel on short notice.

The U.S. Chamber of Commerce, described by The Economist as “the most muscular business lobby group in Washington”, is one of the largest Republican lobbying groups. Conservative commentator Glenn Beck recently held a telethon on its behalf, touting the Chamber as his ideological ally. Through its state chapter, the U.S. Chamber of Commerce recently poured $4.7 million into Wisconsin to support Republican governor Scott Walker, who recently emerged victorious from his recall race.

Also present was EPRINC president Lucian Pugliaresi, a former energy lobbyist whose company, LPI Consulting, was registered as a foreign agent due to consulting work the firm has done for countries such as Saudi Arabia and Venezuela.

A “paradigm shift” for more oil supply, not less

Tall, blond and well-spoken, Guith told participants in the gleaming beige and gold conference room on the hotel’s second floor that the world was going to need more oil in the future, not less.

“We’re in the middle of an absolute paradigm shift. Conventional wisdom is on its head right now and very few people understand this, least of all in Washington, D.C.,” Guith said, echoing the views of various Republican lobbying groups.

In Guith’s view, a few points are critical for anyone in the oil and gas industry to understand in-depth:

According to a report from the Energy Information Administration (EIA) – said by many speakers at the summit to be “too conservative” with its estimates – global energy demand will rise 53 per cent between 2008 and 2035. Guith said 90 per cent of that demand will come from develping nations, including places where millions are currently without household electricity.

Renewable energy will not fill the gap, he said, as it needs heavy government subsidies to survive. Even though wind installations in the U.S. are up 31 per cent in 2011, Guith said that the federal wind tax credit is set to expire on December 31, and claimed this meant an uncertain future for the industry.

Given the slumping economy and rising oil prices, Guith said, U.S. public opinion is shifting more and more in favour of offshore drilling and oil exploration.

Source: EIA.gov

In his view, North America is uniquely positioned to make substantial profits through offshore drilling and oil exploration. His line of thought: as developing countries rapidly industrialize, so does their demand for energy. Enter Canada, with its political stability and rich oil and gas resources.

Powerful Republican lobbying group comes to Vancouver to strategize with oil industry

At a meeting last week of the Canadian Oil and Gas Export Summit in Vancouver, the U.S. Chamber of Commerce sent a representative to huddle with industry. Here’s a look at how the Republican Party is extending its influence into Canada.

This is the first of a special three-part series on what was said and heard at the Summit.

He pointed to a screen showing a statement of “profound disappointment” from Prime Minister Stephen Harper after the U.S. rejection of the controversial Keystone XL pipeline.

“We Yanks have a reputation for being a little brash,” he said, “but at least you know where we stand. You have these statements, which I understand are pretty big statements coming out of Ottawa – but from an American policy standpoint, it’s like…’profound disappointment’?

“Is that the best the Prime Minister can do? He must not be very upset. If it was the other way around you would have people talking about invading Canada..I say this only to make a point that it is difficult when our friends to the north don’t necessarily play as directly as we do.”

Renewable energy – not an option?

What importance will renewable energy have in supplying the global demand for energy? Not much, according to Guith. He insisted that renewable energy such as wind and solar won’t become mainstream for several reasons: for one, renewable energy is not competitive with oil in his view.

“Renewables are tied directly to federal subsidies – it’s not competitive,” he argued. “Wind is closer than other forms of renewable energy, but no one expects to see offshore investment happen. The margin is too far out for any sort of investment.”

Secondly, he said, even renewable energy projects tend to be stalled due to the BANANA syndrome (described as “NIMBY on steroids”, meaning “Build Absolutely Nothing Anywhere Near Anyone.”)

As an example, he brought up the Massachusetts Cape Wind project, a federally approved offshore wind farm which which was first proposed in 2001 and remains in “regulatory purgatory”, according to Guith, due to heavy opposition from environmental groups.

Lastly, he noted that public attitudes oil development are rapidly changing to become more accepting of oil – despite widespread warnings of climate change and the environmental damage caused by carbon emissions.

Gas prices, he said, have been rapidly rising in the past few years: Drawing on last year’s research from the Oil Price Information Service, he said that American households have been steadily spending more of their income on gas. The figure, he said, rose from $173.80 in 2009 to $281. 06 in 2010, hitting $368.09 in 2011.

According to a Pew Research poll, support for offshore drilling is at a historic high – now at 65 per cent, compared to 44 per cent in June 2010. Attitudes toward oil are changing, he suggested, to be more favorable. Guith expressed his exasperation at “ugly” U.S. regulations that put around 86 per cent of U.S. offshore reserves off limits and expressed hope that his institute could convince the public and government to allow more oil drilling and exploration.

The U.S. presidential election and Keystone XL

Guith repeatedly mentioned the rejection of the controversial Keystone XL pipeline by President Obama, which took many in the oil industry by surprise.

As Guith saw it, the major political problem with the Keystone XL pipeline was public ignorance of the project and its potential benefits for the country.

Referring to another Pew Reserach Centre poll, he said that of 63 per cent of Americans surveyed had heard about the Keystone XL pipeline. Of that group, two thirds approved. However, 28 per cent of people did not even know what the project was about. It’s hard to make the average person care about the pipeline, he said, but it is possible to change this by educating people about its benefits for them. The benefits, he said, would be increased income and a higher standard of living.

Asked about the possibility of the Keystone XL pipeline being approved in the future, both Pugliaresi and Guith said they were uncertain.

“You would have to be a moron not to approve [the Keystone XL pipeline] …It’s from Canada, they have carbon tax, universal health care…who would say no to this project?” Pugliaresi asked, shaking his head with bewilderment.

“We were all wrong on that,” Guith agreed. “The group 350.org – Bill McKibben’s organization – I have to give them credit. They were the ones who spent an entire month last year protesting at the White House, and turned it into a cause célèbre in the environment community.”

Both said it was still possible to see the Keystone XL pipeline approved after the November election, but the outcome is uncertain. No one seemed to know which way Obama would swing on the Keystone project if he was re-elected. One thing both seemed certain about was that the Canadian government would be on board.

Neither could say for sure if all Canadians would be on board.

This article is part of a series. For more from the Canada Oil and Gas Export Summit, see “Pushing through Enbridge pipeline without First Nations consent?” and “BC Premier Christy Clark not working hard enough for LNG, energy expert says”.