WASHINGTON – The Keystone XL pipeline may be stalled, but it’s pumping a steady flow of cash into Washington — where inertia is a multibillion-dollar industry.
The pipeline debate has become a money-making machine for lobbyists, advertisers, NGOs and political fundraisers in the U.S. capital, where tens of millions of dollars are being spent on the issue.
The spending deluge will continue indefinitely, thanks to the two latest non-developments: the Obama administration has delayed a decision on the pipeline, and a congressional effort to speed up the process appears to have collapsed this week.
The Washington insider news outlet, Politico, described the ongoing phenomenon Thursday under the headline, “Keystone Inc.” One activist likened it to an arms race, calling the standoff between the pro- and anti-pipeline sides the most expensive environmental battle he’d ever seen.
Lobbying is conducted a little differently south of the border, one Alberta diplomat pointed out.
“There’s no question that the way Washington operates is that there’s a lot of expertise on how policy is built, and how points are made and how communication can be successful,” said David Manning, the province’s representative in Washington.
“There’s probably a much larger industry in the U.S. than in Canada, and certainly much more aggressive in Washington, than anything Canadians are familiar with.”
The paper trail tells part of the story.
From a labyrinthine disclosure system, some figures emerge to paint a financial portrait of how the issue is being slugged out on various fronts — lobbying, advertising, political donations and grassroots activism.
—Lobbying: It’s a $6.7-billion industry in Washington, according to an analysis by the pro-transparency group the Sunlight Foundation. There are more than 12,000 registered lobbyists in D.C., although analysts say the actual number is exponentially higher.
TransCanada Corp. has had 10 lobbyists registered at the House of Representatives since 2009 and says it has disclosed $3.79 million in total U.S. federal lobbying since then. The company says it hardly did much lobbying before Keystone.
It’s unclear just how many groups have lobbied on Keystone. But the American Petroleum Institute, a major pipeline supporter, reported $2.6 million for all its lobbying expenses in the last quarter of 2013 — with a team of just over a dozen lobbyists working the Houses of Congress and federal agencies.
On the other side, the Environmental Defense Action Fund has reported $300,000 in lobbying expenses for all its various causes this year — one of which is Keystone. The League of Conservation Voters has reported spending $45,000 on its different lobbying activities.
—Political donations: About $6.3 billion was spent on the 2012 election’s presidential and congressional races, according to an analysis by Open Secrets. By way of comparison, in Canada, the four parties in Parliament registered having spent about 135 times less in the 2011 federal election. That $46 million figure, reported by Elections Canada, doesn’t include issue-based ads by outside groups.
Open Secrets calculates that the oil-and-gas industry made $73.4 million in donations during the 2012 U.S. election cycle, with 90 per cent of it going to Republicans.
Anti-Keystone billionaire Tom Steyer promises to fight back by spending up to $100 million on the 2014 congressional races, essentially to help Democrats. The former hedge-fund manager says he’ll spend $50 million of his own money and will seek to raise matching funds from other donors.
—Advertising: Several Washington subway stations are blanketed with pro-Keystone XL ads, paid for by the government of Canada. Ottawa budgeted $16.5 million for advertising in 2013-14 to highlight what it calls responsible resource development.
There are parallel ad campaigns by the industry and its opponents. A Steyer-funded group paid for one ad that aired during President Barack Obama’s state of the Union address, telling viewers the pipeline was a “sucker’s deal” for America.
—NGOs: The oil industry and a pipeline-workers union have created pro-KXL groups, like Nebraskans for Jobs and Energy Independence. Another group, Oil Sands Fact Check, had a spokesman at a recent Washington protest to rebut points raised by anti-pipeline demonstrators.
One of the green groups behind that protest was 350.org. The organization was built in part through multimillion-dollar donations from the Rockefeller Brothers Fund’s Sustainable Development program.
Paralysis is a leading industry in Washington, said Mark Leibovich, the author of “This Town: Two Parties and a Funeral — Plus, Plenty of Valet Parking! — in America’s Gilded Capital.”
“If an immigration bill passed tomorrow, that’s going to be tens of millions of dollars in lobbying fees and consulting fees and cable shouting matches that aren’t going to be realized,” Leibovich said in an interview with the online magazine Salon.
“And I think one of the messages in the book is that the dysfunction that we see is very, very good for business here. This town functions and thrives, not only on disagreement, but on gridlock, and on combat and not on working problems out, but on fighting battles. If you can keep the battles going for a long time, you’re going to keep a lot of people in business.”
For Keystone, the financial floodgates opened when comprehensive climate-change legislation stalled in Congress a few years ago.
The pipeline became a proxy for the entire battle, frustrating even some environmentalists who fretted that attention was being diverted from far bigger issues like cap-and-trade or coal-plant regulations.
“The environmental community was in need of a focus — it was in need of an opportunity, and they were very unfortunate. It’s just an unfortunate coincidence that Keystone was there for them,” Manning said.
“Any time you have an emotionally charged debate it can become a fundraising tool.”