Even as Joe Biden and Congressional Democrats have built a commanding lead in the money race ahead of the November election, the nation’s oil and gas industry has continued to direct its formidable financial clout to support President Donald Trump and Republicans.
The spending gap in campaign contributions reflects the starkly different platforms of the two parties on energy and climate change. Biden, the Democratic nominee for president, has promised to spend $2 trillion to pivot the nation’s energy system away from fossil fuels, while Trump has spent the last four years rolling back or eliminating dozens of regulations that aimed to limit fossil fuel emissions and consumption.
Energy and climate change have been overshadowed on the campaign trail by the coronavirus, the economy and other issues. But since the last debate, Trump has seized on Biden’s comment that he would transition away from oil to argue that the Democrat would jeopardize jobs for those who work in the industry. Even in the energy producing swing state of Pennsylvania, however, it’s not clear whether Biden’s positions on climate change and fossil fuels are turning off many undecided voters.
The stakes for the oil industry may be higher in Congress, where Republicans in the Senate have acted as a block on any major climate change legislation since taking control of the upper chamber in 2015.
Election spending across the board has increased by 50 percent since 2016, according to the Center for Responsive Politics. Political contributions from the oil industry, by contrast, are up only slightly as the industry experiences its worst financial crisis in decades. Oil companies have slashed tens of billions of dollars from their budgets and cut more than 100,000 jobs as the fallout from the coronavirus pandemic has sent global oil demand plummeting. Political contributions from coal mining companies, which have faced dire financial conditions for years, have dropped sharply since 2016.
Two players dominate the oil industry’s political giving: the pipeline company Energy Transfer LP and its chief executive Kelcy Warren, and Koch Industries, the privately held conglomerate run by billionaire Charles Koch, who has helped fund a vast conservative political network. Those two companies and their executives account for more than 20 percent of the total $110 million in campaign spending by the oil industry and its employees and executives so far, according to the center.
“Since they contribute so much out of their own pocketbooks they become the top donors and sort of lead what the industry as a whole might favor,” said Sarah Bryner, director of research and strategy at the center.
One of Trump’s first acts as president was to sign an executive order that sought speedy approval of the Dakota Access Pipeline, a project of Energy Transfer’s that had been blocked by the Obama administration. Trump’s first energy secretary, Rick Perry, sat on the company’s board of directors before joining the administration and re-joined the board after stepping down last year.
Warren has emerged as one of Trump’s top supporters. He held a fundraiser for the president at his Texas home in June and has given $10 million to a Super PAC that supports the president’s reelection. Super PACs can accept unlimited amounts of money to support specific candidates, but are not allowed to coordinate with the candidates. All told, Warren, his company and its employees have given more than $14.3 million to candidates and outside groups, with practically all of it going to support Republicans.
Koch Industries, a perennial top donor in conservative politics, has given more than $11.3 million to candidates and outside groups, largely for Congressional races, with 98 percent going to Republicans.
Both Warren and Koch have devoted far more money to so-called outside groups, such as Super PACs, than they have to candidates directly. That matches a larger trend: Outside groups have spent an unprecedented $2 billion this cycle, according to the responsive politics center data. Oil companies are among the top corporate donors to outside groups, with Koch, Chevron, ConocoPhillips, Energy Transfer, Marathon Petroleum and Valero Energy each giving at least $1 million, practically all to conservative groups. Several environmental organizations have also given more than $1 million, all to liberal groups.
Campaign spending—by the oil industry and more broadly—began to soar after the 2010 Supreme Court decision in Citizens United v. Federal Election Commission struck down limits on election-related spending by corporations and other outside groups. The ruling did not end limits on donations directly to candidates.
In those direct donations, there may be a sliver of movement within the oil and gas sector towards supporting more Democrats this election. ExxonMobil’s political action committee, for example, directed 21 percent of its $1 million in contributions to Democrats so far, compared to only 10 percent four years ago. Neither Exxon nor its chief executive, Darren Woods, have donated to Trump’s campaign, however, despite the president’s direct appeal at a recent rally that he could “call the head of Exxon,” to ask for money.
“How are you doing? How’s energy coming? When are you doing the exploration? Oh, you need a couple of permits?” Trump said, acting out an imaginary conversation with Woods, presumably, in an attempt to show that he could raise as much money as Biden if he wanted to. “‘You know, I’d love (for you) to send me $25 million for the campaign.’ ‘Absolutely sir.’”
Exxon responded with a tweet about the hypothetical phone call, saying “just so we’re all clear, it never happened.”
Casey Norton, an Exxon spokesman, said about the company’s campaign contributions that “We support sound climate policies that promote global participation, let market prices drive the selection of solutions, ensure a uniform and predictable cost of greenhouse gas emissions across the economy, minimize complexity and administrative costs, maximize transparency and provide flexibility to react to developments in technology, climate science and policy.”
Chevron’s PAC has given 16 percent of its more than $900,000 in total contributions to Democrats this cycle, compared to 8 percent in 2016. But in Chevron’s case, any slight shift towards Democratic candidates is dwarfed by the $5.4 million it has given over the past two years to groups supporting Republican candidates in the Senate and House.
Sean Comey, a spokesman for Chevron, said the company does not contribute to presidential candidates, but “We do make political contributions to support the election of other candidates who believe, like we do, in the value of responsible energy development and organizations and measures that are aligned with our business interests.”
Such partisan division hews closely to a trend that began more than two decades ago. In the early- and mid-1990s, Democratic candidates received about a third of the oil industry’s campaign contributions. But the money then shifted toward Republicans, who in nearly every election over the last 20 years have received about 80 percent or more of the industry’s largess.
That shift may have made it easier for more Democrats to make a pledge that is gaining increasing support within the party: refusing to accept campaign contributions from fossil fuel companies or their executives or lobbyists.
“Fossil fuel money has become a no-go for the Democrats, and that’s increasingly becoming the standard for the Democratic Party,” said Collin Rees, a senior campaigner at Oil Change International who helped write the pledge.
Biden is among those who have made the pledge, which Rees said is beginning to drive a wedge between moderates and the left-wing of the Democratic Party. He said oil companies have continued to contribute to moderate Democrats who may be more friendly to the industry.
“In some sense it’s sorting out who their allies are,” he said.
Rees said that advocates intentionally limited the scope of the pledge to allow contributions from lower level employees who he noted might be supporters of action on climate change and who are not driving the policies or lobbying practices of their companies. Biden has received at least $1.3 million from people working in the oil and gas industry, compared to $2.6 million for Trump.
In October, the American Petroleum Institute launched a series of advertisements in battleground states that did not mention either candidate, but warned about the impact of a federal ban on oil and gas leasing, which Biden has proposed. The League of Conservation Voters Victory Fund has its own ad, backed by $2 million in spending and running online and on national cable channels, that depicts fictional oil executives in plush homes, bragging about their financial fortunes. “We need a president that will make Big Oil pay,” the ad says, urging voters to support Biden.
But some analysts have said that a Biden administration could actually bring good news for oil companies, at least in the short term, if more aggressive efforts to limit the spread of the coronavirus can help the economy recover more quickly and lift demand for oil and gas. And the steps that Biden can take on energy and climate change on his own, including a halt to new oil and gas activity on federal lands, may have only a limited impact on the industry’s fortunes. Biden’s more far-reaching proposals would require congressional action.
While the oil and gas industry is still a formidable force in campaign finance, donations from the moribund coal sector, which Trump has championed, have dropped sharply. Coal mining companies and their executives have contributed only about $7.3 million this election cycle, down from nearly $14 million in 2016. Almost all that money has gone to support Republicans. Nearly 40 percent of this year’s total is from Joe Craft, who runs the coal producer Alliance Resource Partners and has given more than $2 million to outside groups supporting Republicans in Congress and Trump, and hundreds of thousands more to Republican committees and candidates.
The dip in spending reflects the industry’s broader decline. Coal companies have undergone waves of bankruptcies. The fuel now provides less electricity than it did in the late 1970s, and its use fell 30 percent in the first half of 2020.
And for the first time, contributions from the clean energy sector, including wind and solar developers, eclipsed those of coal, with about $11 million flowing into campaigns and outside groups, according to the responsive politics center, more than double the total from 2016. Like its fossil fuel competitors, the renewable energy industry has given more to candidates who have supported the industry, with more than three-quarters of the total direct contributions going to Democrats.