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Oil industry’s lobby working overtime

Oil industry’s lobby working overtime

May 11, 2008

WASHINGTON — Faced with a national outcry over the high price of gasoline and soaring profits for energy companies, the oil and gas industry is waging an unusually pricey campaign to burnish its image.

The American Petroleum Institute, the industry’s main lobby, has embarked on a multiyear, multimedia, multimillion-dollar campaign, which includes advertising in the nation’s largest newspapers, news conferences in many state capitals and trips for bloggers out to drilling platforms at sea.

The intended audience is elected officials and the public, with an emphasis on the latter. The industry is trying to convince voters — who, in turn, will make the case to their members of Congress — that rising energy prices are not the producers’ fault and that government efforts to punish the industry, especially with higher taxes, would only make pricing problems worse.

“We decided that if we didn’t do something to help people understand the basics of our industry, we’d be on the losing end as far as the eye could see,” said Red Cavaney, the institute’s president.

Despite the efforts, Democratic congressional leaders this week again proposed an energy plan that would strip oil companies of billions of dollars of tax breaks and impose a tax on windfall profits. Also, the Democratic presidential candidates routinely pronounce “big oil” as if it were a one-word epithet, said former Oklahoma senator Don Nickles, an energy lobbyist.

Still, the oil lobby thinks it has made significant progress with consumers and will make even more as it continues to spend heavily on public relations.

The campaign has stirred outrage among consumer groups. They complain that the industry is using its outlandish profits to make even more money, and that its advertisements use statistics selectively. “It’s basically deceptive advertising that dulls the natural and proper reaction of the public,” said Mark Cooper, research director of the Consumer Federation of America.

Oil company profits have soared lately, bolstered by record crude oil prices.

This month, Exxon Mobil reported a first-quarter profit of $10.89 billion, up 17 percent from a year ago, which provoked new congressional complaints. Shell and BP also posted sharp quarterly profit increases.

Gasoline prices, meanwhile, have risen to a national record of nearly $3.65 a gallon, and crude oil hit several new peaks last week above $120 a barrel.

Cavaney will not disclose how much his institute is spending on its campaign, except to say that it is less than $100 million a year, which was roughly the size of the “Got Milk?” ad blitz that featured famous people with milk mustaches.

The price tag for issue-oriented campaigns that lobbies routinely sponsor is huge, said Bill Replogle, an advertising executive at Qorvis Communications.

“A typical issues ad-spend in D.C. might be $2 million to $3 million for a significant campaign,” he said. “This dwarfs that.”

http://www.capecodonline.com/apps/pbcs.dll/article?AID=/20080511/BIZ/805110304

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