This month US Interior Secretary Ryan Zinke announced that President Trump plans to issue an executive order expanding offshore drilling in areas now off limits, including the Atlantic Ocean and parts of the Arctic.
Trump’s order would amend the Obama administration’s five-year drilling plan that excluded lease auctions in those areas through 2022. It would also open the door to reversing President Obama’s decision to permanently withdraw most of the US Arctic and an area of the Atlantic stretching from New England to the Maryland-Virginia border from the federal offshore leasing program — an effort that environmentalists think would be ultimately unsuccessful due to how laws governing offshore drilling are written.
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Although the decision could affect thousands of square miles of ocean waters, the Trump administration’s offshore drilling plans weren’t announced at a press conference or other public setting. Instead, Secretary Zinke, a former Montana congressman who earned low marks for his environmental record during his two-year tenure in the US House, unveiled the proposal at a closed-door meeting of the National Ocean Industries Association (NOIA) in Washington, D.C. His remarks were reported by Bloomberg, who spoke to three attendees on condition of anonymity.
So what is NOIA, and how did it come to have such clout?
Launched by oil giant Exxon in the 1970s, NOIA is a trade association that advocates for the offshore drilling industry. Its 300 member companies include oil and gas “supermajors” like BP, Chevron, Exxon Mobil and Shell, as well as drilling contractors, seismic testing firms and shipbuilders. The group also includes banking and investment firms that serve the industry such as Capital One, Credit Suisse and Wells Fargo Energy Group.
NOIA’s CEO is Randall Luthi, a former Wyoming state lawmaker and aide to Dick Cheney when the former vice president served in Congress. Luthi served in the Department of Interior under Presidents Reagan and George H.W. Bush and as deputy director of the US Fish and Wildlife Service under George W. Bush. According to the most recent publicly available NOIA tax filing, NOIA has an annual budget of over $3 million and pays Luthi over $600,000.
From mid-2007 to late 2009, Luthi served as head of Interior’s Minerals Management Service (MMS), which was reorganized after BP’s 2010 Deepwater Horizon disaster due to conflict-of-interest and oversight issues. During his tenure, the agency was embroiled in an ethics scandal involving allegations of financial self-dealing, accepting gifts from energy companies, cocaine use and sexual misconduct. The wrongdoing reportedly occurred between 2002 and 2006, before Luthi came to the agency, and Luthi has said MMS requested an investigation by the agency’s inspector general after receiving whistle-blower complaints in the spring of 2006.
But Luthi was the central figure in another controversy over the revolving door between MMS and the oil and gas industry, an issue that drew criticism from public interest groups for many years. Just over a year after leaving his post at the regulatory agency, Luthi became president of NOIA and began advocating for the industry’s interests with the agency he used to lead. In 2010 testimony before a US House committee, the watchdog Project on Government Oversight (POGO) called Luthi’s move to NOIA “the most egregious example” of the MMS revolving-door problem.
“When the director of MMS joins a trade association whose explicit mission was to secure a ‘favorable regulatory and economic environment for the companies that develop the nation’s valuable offshore energy resources,’ taxpayers have to question whose interests were actually being served when he was at MMS,” said POGO Executive Director Danielle Brian. “In the case of Mr. Luthi — who joined the trade association approximately 14 months after leaving MMS — it’s unclear whether he was always ideologically opposed to the agency’s mission.”
NOIA’s Strategic Campaign Giving
In 2011, the governors of Southern states launched an initiative to expand offshore drilling in Atlantic waters. The Outer Continental Shelf Governors Coalition, which was led by former North Carolina Gov. Pat McCrory, was administered behind the scenes by a front group for oil and gas industry lobbyists called the Consumer Energy Alliance, of which NOIA is a member.
Since then, NOIA has spent $279,000 lobbying Congress, the Department of the Interior, the Commerce Department and the National Oceanic and Atmospheric Administration, according to the Center for Responsive Politics’ OpenSecrets.org database.
A political action committee tied to NOIA has also spent over $700,000 since 2011 supporting the campaigns of key members of Congress. Among the top beneficiaries of the NOIA PAC were representatives from Southeastern states where the industry is pushing for seismic testing for oil and gas reserves, and eventually offshore drilling:
- In the 2016 election cycle, NOIA’s PAC was a top contributor to lawmakers including Reps. Scott Rigell of Virginia, Richard Hudson and David Rouzer of North Carolina, and Jeff Duncan of South Carolina, according to OpenSecrets.org. Rigell left office in January after deciding not to run for re-election.
- In the 2014 cycle, NOIA’s PAC was a top contributor to Reps. Morgan Griffith of Virginia, Mark Meadows of North Carolina, Mick Mulvaney of South Carolina (now Trump’s budget director), and John Mica and Steve Southerland of Florida. During this election cycle the energy industry PAC was also a top contributor to US Sen. Tim Scott of South Carolina.
- In the 2012 cycle, NOIA’s PAC was a top contributor to Reps. Rob Wittman of Virginia and Florida’s Tom Rooney and Connie Mack, who has since left office to become a lobbyist.
Other members of Congress receiving donations from the NOIA PAC during those election cycles were Reps. Bob Goodlatte of Virginia; Patrick McHenryand Robert Pittenger of North Carolina; Jim Clyburn, Trey Gowdy, Tom Rice, Mark Sanford and Joe Wilson of South Carolina; Sanford Bishop of Georgia; and Carlos Curbelo, Bill Posey and Dennis Ross of Florida. Beneficiaries also included former Reps. Eric Cantor of Virginia, Renee Ellmers of North Carolina and Georgia’s John Barrow, Paul Broun, Phil Gingrey and Tom Price, who’s now Trump’s secretary of Health and Human Services.
On the Senate side, additional recipients of NOIA PAC contributions during the past three key election cycles included Richard Burr and Thom Tillis of North Carolina, Marco Rubio of Florida and David Perdue of Georgia. NOIA also contributed to the unsuccessful 2012 US Senate campaign of George Allen of Virginia and to the campaign of former Sen. Jim DeMint of South Carolina, who resigned in 2013 to serve as president of The Heritage Foundation, a conservative think tank.
All of those lawmakers are Republicans except for Reps. Clyburn of South Carolina and Barrow and Bishop of Georgia. NOIA’s political donations overwhelmingly favor Republicans; in the 2016 election cycle, for example, 95 percent of its contributions went to GOP candidates, according to OpenSecrets.org.
NOIA’s political giving will help position it in what’s sure to be a pitched political battle over any Trump administration efforts to open the Atlantic to drilling. The push to allow oil and gas exploration in the region under the Obama administration sparked an uprising by Atlantic Coast residents and their representatives concerned about the impact on local economies dependent on tourism and fishing, and ultimately led the Obama administration to cancel plans to open the area to drilling.
To date, more than 120 East Coast municipalities, over 1,200 elected officials and an alliance representing over 35,000 businesses and 500,000 fishing families have publicly opposed offshore drilling and/or seismic testing in the Atlantic. They include NOIA political beneficiaries Reps. Sanford of South Carolina and Posey of Florida, showing that getting money from the organization does not necessarily translate into supporting its agenda.