New Ad Links U.S. Oil Industry's Anti-Biofuel Campaign to Saudi Arabia

In high-stakes battle over renewable fuels, pro-biofuels camp takes a page out of the playbook used by the oil industry repeatedly—and successfully.

Controversial ad alleges that Saudia Arabia is helping to bankroll an anti-biofuels campaign by the American Petroleum Institute "to keep you addicted to their oil." One pro-biofuels magazine said it "abhors this appeal to the lowest form of xenophobia." Image: screen capture from the ad, which will air Sunday on news shows

The latest skirmish in the political battle over U.S. renewable fuels is playing out in new ad campaigns that begin Sunday with the appearance of one of this country's favorite energy villains: Saudi Arabia.

The Middle Eastern oil powerhouse stars in "The Kingdom," a new television ad warning viewers that the American Petroleum Institute's "smear campaign" against renewable fuels is being waged with the backing of Saudi Arabian oil interests.

"Saudi Arabia ... the kingdom. It's seven thousand miles away ... but they've got some good friends here at home. The American Petroleum Institute. A-P-I," the ad's narrator says. "Together, they're bankrolling these political ads attacking American-made fuels like ethanol...to keep you addicted to their oil.

The new ad, set to appear Sunday in Washington, D.C. during several popular news talk shows, was paid for by the progressive group Americans United for Change and VoteVets.org—two organizations that have produced other ads supporting the use of more renewable fuels. The groups said their new ad is based on the fact that API board members are typically large donors, and that executives from affiliates of Saudi Aramco, Saudi Arabia's state-owned oil company, have served on API's board at least from 2008 through 2012.

It echoes suggestions made in a 2012 article in The Nation that noted the Saudi presence on API's board and API's funding of several groups, including the Coalition for American Jobs and Americans for Prosperity, that ran political attack ads against Democratic candidates. The Saudi board member at the time also was a registered foreign agent for the Saudi government, the story said. "API's Saudi leadership is perhaps one of the most salient examples of how the Supreme Court's Citizens United [campaign spending] decision has opened the door to foreign influence," the story said.

The 2010 Citizens United ruling struck down limitations on corporate or labor union spending to support or denounce individual candidates in elections. While those entities may not contribute to campaigns directly, they may achieve the same ends through contributions to outside groups, such as advocacy or trade groups.

API, the oil industry's powerful lobbying arm, will counter next week with new anti-renewable fuels ads on television, radio and the internet aimed at Congress and federal regulators, according to Bob Greco, who is leading API's effort to halt planned increases in renewable fuel use. 

The dueling advertising barrage is just the latest development in what has been a fierce, years-long battle over the fate of America's ambitious renewable fuels standard (RFS), a policy that mandates that the U.S. fuel supply include increasing amounts of renewable fuel—primarily by adding corn-based ethanol to gasoline, but also through the growing use of biodiesel and advanced biofuels.

MORE: The Oil Industry's Fight to Kill Renewable Fuels—and Why It May Win

Almost from the beginning, the RFS has been both complex and controversial. But it was a series of market miscalculations, combined with a backlash against corn ethanol, that has put the program in jeopardy now. Citing an "inadequate domestic supply of renewable fuels," the Environmental Protection Agency late last year proposed lowering the 2014 volume requirements for renewable fuel and advanced biofuels.

The proposed roll back drew praise from API and oil companies, which made weakening or repealing the RFS a top lobbying priority. Since its introduction in 2005, the RFS has been injecting higher volumes of renewable fuels into U.S. vehicles, steadily eroding the market for traditional gasoline and diesel and cutting into oil company fuel profits.

Backers of the RFS have accused API of waging a "war on corn," and criticized the EPA's proposal, arguing that it would hurt farmers and others in the ethanol industry as well as permanently undermine research and funding for non-corn ethanol and advanced biofuels. The API, fast food companies and some environmental groups have argued that the growing use of corn ethanol could harm small engines, raise food costs and have harmful effects on land use.

Some expect the EPA to issue a final ruling in June.

Page Out of Industry's Playbook

The latest pro-biofuels ad, unveiled on Wednesday, drew a rebuke from Biofuels Digest, a publication that has said it strongly supports the RFS and objects to the API's methods of "waging war" on the policy. In an editorial, it wrote that it "abhors this appeal to the lowest form of xenophobia and, on the whole, racially-based, anti-Muslim, anti-Arabian rhetoric that will accomplish little except bringing on board the wrong kinds of supporters for renewable fuels, for the wrong reasons."

David Dumke, director of the Prince Mohammad Bin Fahd Program for Strategic Research and Studies at the University of Central Florida, called Saudi Arabia "an easy target because you see the kingdom, you see these concepts of the rich oil sheik that go back to the 70s."

Even so, the strategy is a popular one in fights over U.S. energy policy. In fact, the groups behind the new ad are doing little more than taking a page from the playbook used by oil industry backers repeatedly—and successfully—to boost public support for domestic drilling and other policies helpful to U.S. oil companies.

It doesn't seem to matter that oil prices and flows are dictated primarily by world events and supplies; that U.S. oil companies routinely partner with their counterparts in Russia, Saudi Arabia and elsewhere; or that cross ownership is rampant, with state oil companies from Saudi Arabia and Venezuela owning U.S. refineries and Chinese oil companies owning operations in Canada's tar sands. (American biofuel production isn't immune to foreign influence: Spanish solar giant Abengoa owns several ethanol facilities.)

Scare tactics, especially ones that raise the specter of a hostile foreign country wielding influence over our energy destiny, are common. It remains an effective way to inflame American anxieties, whether it's a simmering distrust of Saudi Arabia or China, distaste for the leadership of Venezuela, or dismay over Russia's brazen use of energy supplies as leverage in foreign policy disputes.

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There are several examples of this in the debate over the Keystone XL pipeline, the long-delayed project that would carry Canadian heavy oil from the Alberta tar sands to the U.S. Gulf Coast.

Echoing an argument made by many U.S. lawmakers over the years, a Forbes columnist wrote that the Keystone XL should be approved by the Obama Administration because it would reduce U.S. reliance on certain kinds of foreign oil. "Doesn't it make more sense to import oil from Canada than from repressive, autocratic nations like Venezuela and Saudi Arabia?" the author asked.

In 2011, a Canadian group backing the Keystone XL and promoting oil sands products as "ethical oil," funded print ads that showed an Arab woman about to be stoned. Ethicaloil.org, which has ties to Canadian Prime Minister Stephen Harper, later released a television ad that equated buying Saudi oil to bank-rolling "a state that doesn't allow women to drive and that doesn't allow them to leave their homes or work without their male guardian's permission." The ad shows a woman with tape over her mouth. "Why are we paying their bills and funding their oppression?' the narrator asks. "Today there is a better way. Ethical oil from Canada's oil sands."

Dumke, who spent years working for John Dingell (D-Michigan) when he was chairman of the House Energy and Commerce Committee, said he has watched plenty of debates over energy and Saudi Arabia. So he's not surprised that Saudi Arabia, Venezuela, Russia and others continue to play a role in fights over U.S. energy policy.

"It is what it is," he said. "This is how lobbying is played, regardless of what industry you're coming from."

Jon Soltz, a veteran of the Iraq War and co-founder of VoteVets.org, said the criticism is not a dig at Saudi Arabia, which he noted is a U.S. ally and strategic partner.

"We mean no disrespect," Soltz said in a statement introducing the new ad. "But this is our country, and Americans should be the ones to decide our energy future."

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