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Energy and climate change lobbying is generating some heat on K Street. The House and Senate have passed energy bills that have to be reconciled. A climate change bill is in the offing. And lobbyists, drawn to the light, are beefing up their practice groups and going after companies with an interest in both issues. That, of course, includes almost everyone. Food industry groups are worried about ethanol subsidies. Everyone is looking at clean coal technology. Auto companies are interested in fuel economy standards. And the list of industries that could be affected by new regulations is long. Energy companies have long been big players on K Street. They’ve been the fifth-biggest spender (behind communications and electronics and ahead of transportation), spending more than $114 million during the first half of the year, according to a list of sectors published by the Center for Responsive Politics for the past decade. But the scope and sweep of energy regulation and the spotlight on climate change issues encompass far more companies than they once did, which means different kinds of businesses are turning to K Street. Earlier this year, major companies such as General Electric and Alcoa joined with advocacy groups such as the National Wildlife Federation to create the U.S. Climate Action Partnership, a coalition calling for a nationwide limit on carbon dioxide emissions. The Carbon Capture and Storage Association is one of the newest trade associations in Washington. And firms say they see energy and environmental lobbying as a growing part of their business — clear signs that it’s reaching mainstream critical mass. “I would say the opportunity for growth here is relatively significant, because I think these are issues that are going to be facing the lobbying community and the country long-term,” says Rich Gold, head of the public policy group at Holland & Knight. Dennis Fitzgibbons, chief of staff for the House Energy and Commerce Committee, says the issue is the subject of reinvigorated scrutiny. There have been 16 hearings on climate change in the first half of this year, Fitzgibbons says, compared with two over the previous six years. The committee is in the early stages of developing a climate change bill, and interest is high: Fitzgibbons says staffers are meeting with a “full spectrum” of environmental and advocacy organizations, think tanks, labor unions, industry groups, and lobbyists. There is “recognition that any climate legislation is going to affect the entirety of the economy,” he says. FUELING GROWTH In 2005, the Republican-controlled Congress passed a hotly contested energy bill widely viewed as the most comprehensive energy legislation in a decade. The law was adopted after years of discussion and negotiations. But just two years later, the issue is back on the front burner, and the new Democratic majority is reformulating the legislative approach to emphasize alternative fuels and conservation. Both the House and Senate have passed bills, and no one thinks they will be easy to reconcile. For example, the Senate bill contains fuel economy standards that aren’t in the House bill. But whether Congress is debating oil and gas or wind power and biodiesel, it’s all fuel for K Street. Henry Terhune, a partner at Akin Gump Strauss Hauer & Feld, says the firm’s clients are “continuing to have to be engaged in the new Congress.” The firm’s roster of clients includes Eastman Chemical Co., Florida Power & Light Co., and General Electric. But other types of companies that didn’t traditionally worry about energy legislation, such as Akin Gump client Archer Daniels Midland, are paying attention now that the proposals are centering on alternative fuels produced from agricultural products. Climate change legislation, of course, has the potential to affect anyone and everyone. “We’re seeing sort of steady business in this area,” Terhune says, adding that companies want resolution on any climate change rules so they know what to expect.
The Politics of Power: Getting Plugged In
Think the electric company is the only one paying attention to energy legislation? Think nature-loving nonprofits are the only ones lobbying on climate change? Think again. The picture of energy lobbying has changed. Here are less traditional groups that are paying attention. THE FOOD INDUSTRY: The energy legislation is almost as important to this industry as the farm bill, because ethanol subsidies could send the price of corn soaring. Food giants such as Archer Daniels Midland have been lobbying on the energy legislation. So have powerful trade associations representing farmers, who rely on corn for feed, and other parts of the food industry, such as the American Meat Institute. LABOR: Proposed fuel efficiency standards could affect automotive jobs, among others, and labor groups such as the AFL-CIO are keeping a close eye on them. AUTOMOBILE MANUFACTURERS: They stand to be the most affected by proposed fuel efficiency standards and have been lobbying heavily on the issue. It remains to be seen whether the mileage increases in the Senate bill will make it into the final version. LOCAL GOVERNMENTS: States, cities, and towns around the country are lobbying for block grants and funding for municipal alternative energy projects. RETAILERS: Americans are interested in sustainable development and green practices. Retailers such as Wal-Mart are also paying close attention to energy and climate change legislation because it could affect the wholesale prices of goods. UNIVERSITIES, RESEARCHERS, AND COMPANIES THAT SPECIALIZE IN GREEN PRODUCTS: Might new energy and climate change legislation create a need for new research or greener products? Some researchers and companies believe it will, and they want to make sure they monitor the process and push for their products, whether that involves better dry-cleaning solvents or electric cars. BIG BUSINESS: Manufacturers and businesses in general are focusing on proposed new regulations and weighing in on whether those regulations will increase the costs of doing business — and consumer prices. That means heavyweight trade associations such as the U.S. Chamber of Commerce and the National Association of Manufacturers are at full attention. THE USUAL SUSPECTS: Oil companies, utilities, nuclear plants, nonprofits dedicated to the environment, and even some wealthy individuals (yes, Julian Robertson, we’re talking about you) are still lobbying on climate change and energy, despite the growing field of newcomers.

Patton Boggs’ Amy Koch, chairwoman of the energy and natural resources practice group, says that while the firm has many areas of growth, “I think energy is a strong growing area.” It’s hard to say how many new companies have begun hiring lobbyists on energy and climate change issues, but lobbyists agree that the pool has widened to include companies that cater to Americans concerned about going “green,” electronics companies, food companies, and others. Lou Hayden of the American Petroleum Institute, the heavy-hitting trade association that represents the oil and natural gas industry, calls companies with a new interest in such issues “emerging clients” for lobbyists. “I think there’s a brand-new client base,” he says. “We’ve kind of always been there. .�.�. There’s a whole new world of �Let’s go meet with cattlemen. They’re probably concerned about prices for their feed.’” Peter Robertson, a former deputy administrator of the Environmental Protection Agency during the Clinton administration who is now a partner at Pillsbury Winthrop Shaw Pittman, specializes in lobbying on environmental issues and says, “The pond in which you can go fishing is larger than it was before.” That means more lobbyists are vying for the business, too, Robertson acknowledges. “I’ve certainly found it a challenge as we look to attract business in the global climate change area,” he says. THE FRONT BURNER One firm that’s been working to boost its roster of clients on energy, environmental, and climate change issues is the Podesta Group. Founding partner Tony Podesta says there is “a bipartisan consensus that something needs to be done about climate change. .�.�. This is going to be one of the front-burner issues for Washington as far as one can reasonably look forward.” Podesta says the firm has “aggressively pursued” energy and climate change business over the past couple of years because “we saw it as an opportunity.” In the past year, the Podesta Group has registered to represent not only oil companies Sunoco and BP America on energy issues but also retail giant Wal-Mart, which is concerned about how the bill will affect costs. A spokeswoman for the Podesta Group says revenue tied to clients on climate change issues was roughly 4 percent of the firm’s revenue in 2006 (less than $500,000) but is projected to soar to 11 or 12 percent (roughly $1.4 million) this year. The firm also has a partnership with the Livingston Group known as the PLM Group. The Livingston Group declined to comment for this story, but Jim Pruitt, the firm’s chief operating officer, told Legal Times last month that the firm wants to attract new clients for its energy practice. The PLM Group currently represents Miles Automotive Group, a California-based electric car developer. LOBBYING: A RENEWABLE RESOURCE Right now, everyone in town is still lobbying on this year’s energy legislation, as The House and Senate still need to reconcile their versions sometime this fall. One of the biggest fights is expected to be over corporate average fuel economy, or CAFE, standards. The Senate bill would increase standards to 35 miles per gallon on average by 2020. The House bill doesn’t include increases to fuel economy standards, chiefly because they were opposed by Michigan Democrat John Dingell, the formidable chairman of the House Energy and Commerce Committee. The House bill is stronger in other areas, though. For example, it requires utilities to generate 15 percent of their electricity from renewable sources such as wind and solar power by 2020, a provision that didn’t make the Senate version. The substantial differences between the bills raises the obvious question of whether they can be successfully reconciled, especially with the White House expressing major reservations about provisions in the bills, such as their effect on offshore drilling. A spokesman for Senate Majority Leader Harry Reid (D-Nev.) says Senate Democrats are committed to energy legislation and want it to move forward this fall. The president has harshly criticized the House version of the bill, especially its potential impact on domestic oil and gas production, and the administration has threatened to veto the energy legislation once it lands on his desk. But whatever happens with this round of legislation, Congress has clearly signaled that its interest in energy and climate change isn’t going away. Accordingly, lobbying firms are positioning themselves to work on these issues for the foreseeable future. Holland & Knight’s Gold says his firm is doing more work for current clients, and attracting new ones on issues such as clean coal and energy efficiency. The firm recently hired former Rep. Jim Davis (D-Fla.), a veteran of the Energy and Commerce Committee, as a partner. (Davis is still in a waiting period that prevents him from lobbying, but Gold says he’s still able to meet with clients and offer his advice.) Holland & Knight’s lobbying revenue for the first half of 2007 was up roughly $1 million over the same period last year, a big chunk of which, Gold says, is due to energy and climate change work. In other words, when it comes to energy and climate change, the train has left the station. And for lobbyists, at least, it’s running on alternative fuel.

Carrie Levine can be contacted at [email protected].

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