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Oil Executives Lobbied on Drilling
Two Went to Cheney Task Force to Push for Gulf of Mexico Sale

WINNIE HU . NY Times . 27 february 2002

Shortly after Vice President Cheney launched a task force on energy policy last year, he met with two top executives from the oil and gas industry. The men from Shell Oil Co. and Anadarko Petroleum Corp. pressed the new administration to stick to a long-standing plan to open a huge tract in the eastern Gulf of Mexico to oil and gas exploration.

The executives' hour-long meeting with Cheney on Feb. 8, 2001, offers a rare glimpse into a process that has become draped in questions and controversy. The General Accounting Office, Congress's investigative arm, has sued Cheney to obtain details of his task force's meetings, hoping to learn more about efforts by energy executives and others to shape White House policy.

Relatively few details are known about those meetings because the White House is fighting the GAO's effort to have their contents revealed. But the February meeting shows how at least two politically connected energy executives tried to use Cheney and behind-closed-doors access to his task force to steer policy the way it would best serve their interests.

The two men had reason to be concerned that theirs was an uphill fight. The president's brother -- Florida Gov. Jeb Bush (R) -- had recently written a letter urging that the plan be scrapped, arguing it would threaten his state's coastline and tourism.

As it turned out, the executives found a receptive audience in Cheney. Like them, the new president and vice president were oilmen. Cheney recently had stepped down as chairman of Halliburton Co., a Dallas-based oil services company with extensive operations in the Gulf. Halliburton had done business with Anadarko since 1959. Cheney's wife, Lynne, had been a director and significant stockholder of an energy company that had merged with Anadarko.

Moreover, the two White House visitors -- Anadarko Chairman Robert J. Allison Jr. and Shell Chairman Steven L. Miller -- had generously backed George W. Bush's presidential campaign. Allison gave $150,000 to the Republican Party; Miller gave $10,500 to the party and $1,000 to Bush's presidential campaign.

The two ultimately got much -- though not all -- of what they wanted. In July, the administration said it would allow drilling in a 1.5 million-acre sector of the Gulf's outer continental shelf, rich in natural gas and oil. The area, though one-fourth the size approved by the Clinton administration, still contained nearly half the available resources, Interior Department officials said.

In a December auction, Anadarko and Shell won the right to develop several prime sites.

The Anadarko-Shell episode suggests that Cheney's energy task force -- whose work resulted in the national energy policy released in May -- was subject to complex and competing forces. The sharp scaling back of the gulf drilling area, for example, represented a compromise between the wishes of Jeb Bush and his allies and those of Anadarko, Shell and others pushing greater oil and gas exploration.

When the July compromise was reached, Jeb Bush hailed it as reflecting "significant progress in Florida's fight to protect our coastline."

Anadarko spokeswoman Teresa Wong said, "We applauded them for going forward with the [reduced] size, but we were disappointed it was cut back."

Precisely how such compromises were reached is unclear. The White House says disclosing the task force's actions would inhibit its ability to solicit confidential advice and conduct internal deliberations.

"There were all manner of people and groups that came in and were briefed and shared their suggestions," Cheney aide Mary Matalin said. "But the deliberative process and decision-making process took place among the Cabinet-level group and only that group and their staffs."

But even some GOP lobbyists say they are baffled by the administration's stance. "It may be a fine intellectual argument, but it's not a good road for Republicans to go down right now, what with the Enron thing," a former GOP House aide said.

Aides to Cheney have said he met with only a few of the interest groups seeking input. In addition to Allison and Miller, the list includes then-Enron Corp. Chairman Kenneth L. Lay; Haley Barbour, a utilities industry lobbyist and former chairman of the Republican National Committee; and officials of the Edison Electric Institute, a utilities trade association.

Andrew Lundquist, the task force's executive director, and Cheney deputy Karen Knudsen met with half of the 400 or so groups that requested access. Aides cited meetings with 118 energy industry or corporate groups, 40 renewable-energy providers, 22 unions, 13 environmental groups, five academics, 63 governmental groups, six energy efficiency proponents and a consumer group.

Tom Kuhn, president of the Edison Electric Institute, has said that a meeting between Cheney and his board focused on the need for more coal, gas, nuclear and hydroelectric generation. Energy Secretary Spencer Abraham attended several task force meetings, including one with Teamsters President James Hoffa and one in California with Gov. Gray Davis (D).

Complicating any assessment of the meetings' influence is the fact that many industry priorities coincided with the views of the market-oriented Bush administration.

The controversy over drilling in the Gulf of Mexico was rooted in a Clinton-era plan to auction off rights to a 5.9 million-acre section of the outer continental shelf south of Alabama known as Lease Sale Area 181. Under a moratorium established by President George H.W. Bush and extended by President Bill Clinton in 1998, new drilling in the gulf is largely restricted until 2012, except for Lease Sale Area 181 and another section off Florida called the Destin Dome.

But three days after President Bush's Jan. 20, 2001, inauguration, Jeb Bush wrote the Interior Department urging cancellation of Lease Sale 181 "to protect sensitive natural resources" and tourism along Florida's west coast.

Houston-based Anadarko had merged in 2000 with Union Pacific Resources. Lynne Cheney was a Union Pacific director until the merger. From the merger, she received Anadarko stock worth $250,000 to $500,000, which she sold before her husband took office.

The merger gave Anadarko access to gas and oil fields on more than 7 million acres of land in Utah, Colorado and Wyoming. Allison urged the administration to open still more government property to exploration. He also called on it to stick with the plans for Lease Sale 181 in December.

Anadarko's Wong said last week that there was nothing new in Allison's message, as he had long advocated expanding mineral exploration on government land. "We didn't go marching up there just to talk about 181," Wong said.

Anadarko, she noted, had already spent more than a year studying the area and had invested $34 million in acquiring seismic data. Vice President Cheney expressed concern but said the Interior Department must settle the matter.

The energy task force's final report did not directly address the Gulf drilling controversy, but it did call for Interior to approve offshore oil and gas leases "on predictable schedules." Cheney made clear at a May meeting with members of Florida's congressional delegation that the administration would not agree to a ban on new offshore drilling in the Gulf.

Sen. Bill Nelson (D-Fla.) said Cheney "spoke as if he knew this issue backwards and forwards" and sounded out the lawmakers on possible compromises, including a reconfiguration of the drilling area that would keep it at least 100 miles from Florida shores.

Nelson and some environmental groups saw the eventual compromise as a cave-in to industry interests. Nelson called it "the proverbial camel's nose under the tent."

© 2002 The Washington Post Company