Rough Road Ahead for US Oil Companies

Energy companies now face a democratically controlled House and perhaps Senate, whose leaders have vowed to take aim at the big oil companies.

"The oil industry should be worried," noted Massie Ritsch, a spokesman for the Washington-based Center for Responsive Politics, a campaign finance watchdog group. "The Democrats have already signaled that they're not going to be nearly as friendly to the industry as the Republicans have been."  And the industry has not laid the political groundwork to handle such a shift. 

Democrats on Capitol Hill have called for the rollback of tax breaks and incentives handed out to the industry that they estimate are worth $33 billion.  As part of that effort, Democrats may take another look at the flawed offshore lease agreements signed with oil and gas producers in 1998 and 1999, noted Rep. John Dingell, D-Mich., who will take over the House Energy and Commerce Committee.  Those agreements omitted price triggers that would have required producers to pay billions more in federal royalties.

Democrats on the Energy and Commerce Committee also want to know more about Vice President Dick Cheney's energy task force.  Throughout the campaign, Democrats have been attacking the oil companies. 

On Tuesday, Democrats were able to take out one of the oil and gas industry's staunchest allies, House Resources Committee Chairman Richard Pombo, R-Calif.  Pombo has pushed for greater access for energy companies to drill offshore. 

His defeat, argued Rodger Schlickeisen, president of the Defenders of Wildlife Action Fund, was "the most significant electoral victory the environmental movement has seen in decades."

Both Rep. Henry Waxman of California, in line to assume the chairmanship of the House Government Reform Committee and Sen. Byron Dorgan, D-N.D., head of the Senate Democratic Policy Committee, have been dogged in their efforts to pry out information about Houston-based military contractor and oil-field-services giant Halliburton. 

Whether they will use the subpoena power at the disposal of the majority to pursue those investigations even more aggressively remained unclear Wednesday.  "Rep. Waxman hasn't set out his agenda yet," said Karen Lightfoot, a spokeswoman for the Democrats on the Government Reform Committee. 

Corporate America has traditionally tried to navigate the choppy waters of Washington politics by contributing to both parties.  Shell Oil Co. President John Hofmeister, for instance, speaking to a Washington luncheon crowd last month, said he ensures his contributions are "fully bipartisan, 50-50." 

Hofmeister gave $1,000 in May to Pombo and then another $1,000 in July to Sen. Hillary Clinton, D-N.Y., Center for Responsive Politics records show.  But Hofmeister is an exception in his industry.  Individuals and political action committees tied to the oil and gas industry funneled 83 percent of their campaign contributions to Republicans in the current election cycle — more than $11.8 million as of Oct. 10, according to the Center for Responsive Politics.  Democrats garnered only 17 percent, or $2.4 million, in energy sector campaign contributions, the center said. 

Dingell has received more than $22,000 in campaign contributions from the oil and gas sector in this campaign cycle, the Center for Responsive Politics reported.  The senior member of the House of Representatives and a one-time chairman of the Energy and Commerce Committee, Dingell hardly sounded like a radical Wednesday. 

Many of the issues he wants to address have also been raised by Republicans.  "I've been writing energy bills for about 40 years," Dingell said. "We have always, where we could, worked with the White House."