Big Oil’s trade group allies outspent clean energy groups by a whopping 27x, with billions in ads and lobbying to keep fossil fuels flowing
Environment + Energy – The Conversation Read More
You’ve probably seen ads promoting gas and oil companies as the solutions to climate change. They’re meant to be inspiring and hopeful, with scenes of a green, clean future.
But shiny ads are not all these companies do to protect their commercial interests in the face of a rapidly heating world. Most also provide financial support to industry groups that are spending hundreds of millions of dollars on political activities, often to thwart polices designed to slow climate change.
For example, The New York Times recently reported on the Propane Education and Research Council’s attempts to derail efforts to electrify homes and buildings in New York, in part by committing nearly US$900,000 to the New York Propane Gas Association, which flooded social media with misleading information about energy-efficient heat pumps.
The American Fuel and Petrochemical Manufacturers, which represents oil refiners and petrochemical firms, has spent millions on public relations campaigns, such as promoting a rollback of federal fuel efficiency standards.
These practices have been going on for decades, and evidence shows that industry groups have played key roles in blocking state and federal climate policies. This matters not just because of the enormous sums the groups are spending, but also because they often act as a command center for political campaigns to kill pro-climate policies.
We study the political activities of industry groups. In a recent research paper, we dug through U.S. tax filings to follow the money trail of trade associations engaged on climate change issues and track the billions they have spent to shape federal policy.
What we found
After NASA scientist James Hansen sounded the alarm on climate change in 1988, three trade associations – the National Association of Manufacturers, the Edison Electric Institute and the American Petroleum Institute – banded together with a couple of electrical utilities to form the Global Climate Coalition, or GCC.
The GCC systematically opposed any international regulation of climate-warming emissions, and successfully prevented the U.S. from ratifying the Kyoto Protocol, a 1997 international agreement to reduce greenhouse gas emissions.
This was the first example of trade associations working together to stall government action on climate change. Similar efforts continue today.
So, how much do trade associations spend on political activities, such as public relations? As not-for-profit organizations under the Internal Revenue Code, trade associations have to report their revenue and spending.
We found that trade associations historically opposed to climate policies spent $2 billion in the decade from 2008 to 2018 on political activities, such as advertising, lobbying and political contributions. Together, they outspent climate-supporting industry groups 27 to 1.
The oil and gas sector was the largest, spending $1.3 billion. Across the 89 trade associations we examined in nine different sectors of the U.S. economy between 2008 and 2018, no other group of trade associations came close.
No. 1 expense: Advertising and promotion
What came as more of a surprise as we were tallying up the data was how much trade associations are spending on advertising and promotion. This can include everything from mainstream media ads promoting the industry to hiring public relations firms to target particular issues before Congress.
For example, until they parted ways last year, Edelman, the world’s largest public relations firm, received close to $30 million from American Fuel and Petrochemical Manufacturers to promote fossil fuels, reporters at the online news site Heated found.
Our study found that trade associations engaged on climate change issues spent a total of $2.2 billion on advertising and promotion between 2008 and 2018, compared with $729 million on lobbying. As 2022 lobbying data shows, their spending continues. While not all of this spending is directly targeting climate policy, climate change is one of the top political issues for many industries in the energy sector.
Media buys are expensive, but these numbers also reflect the specific role trade associations play in protecting the reputation of the firms they represent.
Trade groups run promotional ads for their industries, as well as negative ads.
One reason that groups like the American Petroleum Institute have historically taken the lead running negative public relations campaigns is so that their members, such as BP and Shell, are not tarred with the same brush, as our interviews with industry insiders confirmed.
However, many firms are now coming under pressure to leave trade associations that oppose climate policies. In one example, the oil giant Total quit API in 2021, citing disagreements over climate positions.
Spending on social media in the weeks ahead of the U.S. midterm elections and during the U.N. Climate Conference in November 2022 offers another window into these groups’ operations.
A review by the advocacy group Climate Action Against Disinformation found that 87 fossil-fuel-linked groups spent roughly $3 million to $4 million on more than 3,700 ads through Facebook’s parent company alone in the 12 weeks before and during the conference.
Facebook received millions of dollars to run ads promoting natural gas.
The largest share came from a public relations group representing the American Petroleum Institute and focused heavily on advocating for natural gas and oil and discussing energy security. America’s Plastic Makers spent about $1.1 million on climate-related advertising during the two weeks of the U.N. conference.
Funneling money to think tanks and local groups
Trade associations also spent $394 million on grants to other organizations during the decade we reviewed. For example, they gave money to think tanks, universities, charitable foundations and political organizations like associations of mayors and governors.
While some of these grants may be philanthropic in nature, among the trade associations we spoke to, most have a political purpose in mind. Grants channeled to local community groups, as one example, can help boost an industry’s reputation among key constituent groups, and as a result their social license to operate.
What this means for climate policy
Fossil fuel companies, which reported record profits in 2022, still spend more on political activities than their trade associations do.
But industry groups historically opposed to climate policies are also big spenders, as our research shows. They outspent those that support actions to slow climate change, such as the solar and wind industries, by a whopping $2 billion to $74.5 million over the 10 years we reviewed.
This likely helps to explain why it took Congress almost 35 years after Hansen first warned representatives about the dangers of climate change to pass a major climate bill, the 2022 Inflation Reduction Act.