Meet the Obscure Group Influencing Trump’s Energy Policy

Source: By Jennifer A Dlouhy, Bloomberg • Posted: Friday, January 6, 2017

An obscure Washington policy group that opposes almost any government aid for renewable energy has emerged as an influential force in shaping Donald Trump’s plans to dismantle Obama administration climate initiatives.

The tiny Institute for Energy Research and its advocacy arm, the American Energy Alliance, work from an office decorated with an oversized photo of an oil derrick in a nondescript building in downtown Washington. Their names aren’t even on display in the unmanned lobby nine floors below.

But the modest trappings and small, 14-member staff belies their impact.

“There’s not a material energy or environmental policy on which they are not involved — and most of them, they own,” said Michael McKenna, a lobbyist who advises the alliance

The head of the institute, Thomas Pyle, is leading the president-elect’s transition team for energy. Two other staff members are advising Trump, and another recently joined the office of House Speaker Paul Ryan.

And the group’s views permeated a controversial questionnaire sent to the Energy Department last month seeking names of employees involved in work on climate change.

AEA and IER bill themselves as free-market groups, fighting regulations they see distorting the energy market and restricting the use of coal, oil and natural gas in favor of lower-emission wind and solar power. They have derided electric car pioneer and newly minted Trump adviser Elon Musk as taking advantage of government support to build his business and complained when President Barack Obama announced plans to install solar panels on the White House.

Funding Database

Founded by a former Enron Corp. executive, the institute has drawn financial support from the fossil-fuel industry. It maintains a database tracking U.S. funding of private energy ventures, circulates a survey on voter opposition to carbon taxes and scrutinizes the cost of wind and solar power. The group has become a go-to source for congressional Republicans looking for data to support legislation and speeches on climate change and environmental regulation.

Its growing prominence and the fact that Pyle is a former lobbyist for Koch Industries, a nemesis of environmentalists, has them worried.

“You have a president-elect who pledged to clean up the swamp, and now you have people being tapped for the most important positions who have been instrumental in advancing corporate interests over the interests of ordinary Americans,” said Lisa Graves, executive director of the left-leaning Center for Media and Democracy.

‘Industry Wish List’

After Pyle sent donors an e-mail outlining “what to expect from the Trump administration,” the center published the document, warning that it “amounts to a fossil fuel industry wish list.”

Some of that plays out in the AEA’s daily newsletter “In The Pipeline,” often in sarcastic criticism of Obama, electric vehicles, and Tesla Motors Inc. Chairman Musk. Recent headlines: “Elon Musk: messiah or charlatan? I think you know how we’re voting;” “January 20th can’t come soon enough;” “Big Wind runs into big problems in Vermont” and “The environmental left: Where everything’s made up and the facts don’t matter.”

The alliance already has recommendations for how Trump can expand drilling and make good on his campaign promise to rescind “job-killing” regulations by targeting fuel economy standards and Obama’s Clean Power Plan to slash power-plant emissions.

Trump transition officials did not respond to e-mails seeking comment about the institute.

Bigger Groups

To win Trump’s ear, the alliance and research institute beat out larger funded and staffed groups, such as the American Petroleum Institute, which has 21 times the alliance’s 14-member staff and 45 times its $4.8 million budget. IER leveraged its reputation in conservative circles as a reliable source of economic reports and wonky regulatory studies buttressing calls for more fossil fuel development and fewer renewable power subsidies.

An alliance spokesman did not respond to a request for comment on whether its staff had authored the controversial questionnaire that was sent to the Energy Department last month, although Pyle leads the team that sent it. A Trump transition official said the questionnaire hadn’t been authorized.

Even before the election, the groups’ reports were cited in Trump’s campaign speeches and policy papers, though the president-elect mangled IER’s name when he highlighted one of its studies during a Sept. 15 speech to the New York Economic Club.

Exxon, Koch

The alliance does not discuss its donors, other than acknowledging supporters include energy companies with fossil fuel interests as well as foundations that care about free markets. Exxon Mobil Corp. said it funded the Institute for Energy Research in 2006 and 2007, though it subsequently stopped providing financial support to the group. Exxon has joined some other oil companies in advocating a revenue-neutral carbon tax — a non-starter with the alliance. The Claude R. Lambe Foundation, which was created by billionaire Charles Koch, also steered money to the institute before it folded in 2013. Bankruptcy filings indicate coal producer Peabody Energy Corp. also funded the alliance.

To be sure, some environmental groups dwarf AEA in size and resources. The Natural Resources Defense Council has more than 500 employees and an annual budget of more than $150 million, 32 times that of AEA. The Oakland, California-based Sierra Club pulled in about 23 times AEA’s revenue in 2015.

“We are definitely the underdog in terms of money — not in terms of reach and influence with the new administration,” said Dan Simmons, vice president of policy for the institute. “If we could have the type of influence that NRDC had, for example, with the Obama administration, then we’ve done our job.”

‘Sowers of Doubt’

Critics say AEA’s relatively low revenue numbers belie its role as a highly focused group in a bigger network of conservative organizations, including the Heritage Foundation and the Competitive Enterprise Institute. Graves calls IER and AEA “professional sowers of doubt” on climate change.

Greenpeace spokesman Travis Nichols says the alliance is “an astroturf group of extremist climate deniers and regulatory obstructionists” that could have a “disastrous influence on energy policy.”

Simmons has a starkly different view, casting the alliance as “advocating for working Americans” so they can make their own choices about the energy they consume, the cars they drive and the appliances they use.

The Institute for Energy Research was founded to be a clearinghouse for energy information in 1989 in Houston by Robert L. Bradley Jr., a speechwriter for Enron chief executive Kenneth Lay, who was later convicted of securities fraud. A predecessor group, the Institute for Humane Studies of Texas, listed Charles Koch as a member of its board of directors when it incorporated in 1984.

Green Jobs

IER won attention in Washington for studies disputing Obama’s promises that investment in clean, low-emission energy sources would create a wave of new “green jobs.” One of those reports concluded that 2.2 jobs were lost in Spain for every one created as a result of government wind energy subsidies — drawing a rebuke from the U.S. National Renewable Energy Laboratory.

The institute moved its headquarters to Washington, D.C. in 2007 in a bid to play a bigger role guiding U.S. energy policy. A year later, the institute spun off the American Energy Alliance under section 501c(4) of the tax code, freeing it to aggressively lobby policy makers and promote political candidates.

Although the American Energy Alliance didn’t pay for any political ads in 2016, it endorsed Trump, months after publicizing questionnaires providing an early look at his policy views and those of Republican challenger Ted Cruz. The document also served to lock both in as opponents of a carbon tax.

AEA’s victories include advising states to “just say no” to complying with the Clean Power Plan while the measure was challenged in court. That strategy was validated when the Supreme Court issued a stay blocking enforcement of the rule last February.

After years as one of Obama’s antagonists, the alliance is poised to play a different role advising congressional Republicans and a receptive administration on the most legally bulletproof ways to dismantle environmental regulations.

“We have to be constructively thinking, because we know our friends in the environmental community are already working very aggressively to push back on pretty much everything we want to do,” Simmons said. “They are very good — they are great activists, they are very good litigators — so everything the Trump administration does on their issues has to be very well thought out.”