Interest Groups: Alternative Energy

Posted: April 26, 2014 in Energy

So how does the power of alternative energy compare to that of the oil and gas industry that we looked at last week? Intuition would probably hold a couple of things: 1) the ability to have impact (give $) is significantly less than the oil and gas and 2) that democrats receive more of the money than do the republicans. In general these things do hold true, but are not completely accurate. 

In the past 20 or so years, the alternative energy industry has given 4.6 million dollars to candidates or parties, which was drastically less than that of the oil and gas industry. Important to specify, there is a difference between just donating money to a candidate or a party and lobbying for production or services, as I do not think I made that clear in my last post. Alternative energy has increased significantly the amount of money spent on lobbying in the past several years, and the strong focus on lobbying for government policy is a significant portion of that. By the way, yes this is the post that was interrupted by my Heavyweights connection. 

The total amount of lobbying spending for this industry has amounted to just under 22 million dollars, with 139 clients and 334 lobbyists withing this industry. Again, this pales in comparison to the oil and gas industry, but is what we expected to see. What I find most interesting about this is how the composition of donations has shifted politically. As mentioned earlier, one intuition would be that democrats would get a significantly greater amount of the money due to the wider support they give to alternative energy in DC. While it has been the case that typically they receive a majority of the funding, it does not always hold true and even when it does there is not a drastic domination in most cases. In fact, there are been periods when republicans received the majority of the money. Now I am not exactly sure the reason, but I am going to say that I think the bio-fuels play a large part. Republicans often have support of farming and look to tend to middle america’s farmers and subsidies for bio-fuels and ethanol would certainly be something to benefit some of those folks. This seems to be supported by the fact that Poet LLC is the largest contributor of this funding, and they focus on bio-fuels and about 61% of their funding goes to republicans.

There has been some flip-flopping from election to election in which party gets the majority of the money, and I think that would tend to be due, at least in part, to the current situation in policy. Sometimes we see republicans take initiative on alternative energy subsidies, and other times it is democrats. This industry is smart enough to understand that they do not need to focus on only one party, and that continuous “help” from government is needed to assure adequate development of the market. Again, it is similar to the boys at fat camp that are looking for any avenue to get that dance. Follow me on Twitter @devinxcombs and stay tuned for further posts.


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