Gas company sets sights on Washington

Since opening for business in 1993, Chesapeake Energy has grown into a dominant player in the natural gas industry. Now the company is setting its sights on Washington.

In the process, it is making the traditional energy lobby, which tries hard to avoid infighting, nervous that the détente could be over.

Chesapeake’s push comes as Congress weighs global warming legislation, which could rearrange the country’s energy fuel mix.

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The company is a charter member of the American Clean Skies Foundation, which will promote natural gas interests. The formation of a new coalition itself isn’t particularly newsworthy since several already exist. But Chesapeake’s CEO, Aubrey McClendon, who co-founded the company with $50,000, indicated in an interview with The Hill that the foundation would not be afraid to challenge Big Coal, despite that industry’s powerful backers on Capitol Hill.

“We will be an aggressive and forceful advocate of natural gas, and I should add, effective,” McClendon said.

Chesapeake Energy has already roiled Washington’s waters - and received some brush back from coal and its supporters on Capitol Hill.

The company, the third largest independent provider of natural gas in the United Sates, was a sponsor of the “Face It: Coal is Filthy” advertising campaign that drew rebuke this week from Rep. Nick Rahall on the House floor.

Rahall, a West Virginia Democrat, said the ads were paid for by “one segment of the energy industry trying to bamboozle the general public and policymakers.”

Senate Appropriations Committee Chairman Robert Byrd, another West Virginia Democrat, also blasted the campaign.

Coal’s main lobby, the National Mining Association, meanwhile, called the ad campaign a “destructive attempt to further natural gas interests at the expense of coal,” in a letter sent today to Barry Russell, the president of the Independent Petroleum Association of America (IPAA).

The ads were sponsored by a group called the Clean Sky Coalition, which is based in Austin, Texas. The coalition originally ran the ad campaign in protest to TXU Energy’s plan to build 11-coal-fired power plants. 

“In the heart of natural gas country,” McClendon said.

Chesapeake officials insist that it is just one member of several members in the Clean Sky Coalition. Other members are not known.

McClendon said the coalition decided to buy ads in Washington in anticipation of Earth Day. Coal utilities are the largest single source of carbon dioxide from manmade sources. The momentum behind a cap on greenhouse gas emissions makes the industry nervous, even as it has tried hard to market itself as an environmentally friendly industry.

McClendon said while coal has tried to advertise itself as green, “its predominant color is black.”

He said the ad campaign has received positive feedback. Although he acknowledges that not everyone is pleased.

“Coal-state senators and representatives are going to be disappointed, but in my view they are on the wrong side of history,” McClendon said.

But other natural gas companies and trade groups, fearing a backlash in Congress, have tried to distance themselves from Chesapeake’s aggressive position.

“Now is not the time to engage in efforts that criticize one energy source compared to another,” said Mike Linn, IPAA chairman, in a statement.

Chesapeake is a member of IPAA. But Aaron Bernstein, a spokesman for the group, said Chesapeake was, “acting uniformly, without our endorsement or our funding.”

“I don’t know what the message behind this new foundation will be, but trashing the coal industry isn’t going to be a winner for natural gas,” said Martin Edwards, a lobbyist for the Interstate Natural Gas Association of America.

Rick Shelby, a lobbyist at the American Gas Association, said the energy industry has tried hard in recent years to unify though groups like the Alliance for Energy and Economic Growth.

He called the ads “terribly counterproductive to everything we’ve done on this front.”

McClendon said the American Clean Skies Foundation would principally focus on educating members and the public about the environmental benefits of natural gas.

The foundation will be run by Denise Bode, a member of the Oklahoma Corporation Commission with ties to Washington’s oil and gas lobby. Bode was once the president of the IPAA and is a former staffer to ex-Sen. David Boren (D-Okla.).

She changed parties and ran as a Republican for an Oklahoma congressional seat before losing a primary battle to Rep. Mary Fallin, who is now serving. One natural gas lobbyist said Bode has a reputation as a “hard charger.”

Clean air rules passed in the early 1990s were a boon to the natural gas industry. Ninety percent of utilities built subsequently were natural gas fired plants.

But coal retains a big edge overall. More than 50 percent of the electricity comes from coal-powered plants.

McClendon said one of his worries was that coal was threatening to have a revival. More than 150 coal plants have been proposed.

Natural gas emits less carbon dioxide than coal, and therefore could stand to benefit from a carbon cap under consideration in Congress.

“Natural gas should capture the vast majority of the new power plants that are built,” he said.