Rick Perry’s Dirty Industry Donors and What They Could Mean for the Department of Energy

Former Gov. Rick Perry hugs an unidentified man  at Trump Tower in New York on December 12, 2016.

Former Texas Gov. Rick Perry (R), President-elect Trump’s nominee for secretary of energy, has spent his career courting dirty industry donors and taking actions that benefit them. If confirmed, Perry could transform the U.S. Department of Energy, or DOE, into a billion-dollar pass-through benefitting his donors with taxpayer dollars while fouling up the air and water and defunding vital clean energy research and development. His close ties to dirty industry donors could hamper his ability to advance the department’s mission to “ensure America’s security and prosperity by addressing its energy, environmental and nuclear challenges through transformative science and technology solutions.”

Friendly with fossil fuels

Gov. Perry has cultivated close relationships with fossil fuel industries. Given the DOE’s role in liquefied natural gas, or LNG, exports, its influence over oil supplies and security, and the technical and policy advice it provides other federal decision-makers, Perry could tip the scales in favor of his fossil fuel friends.

Who has Perry’s ear?

Gov. Perry recently stepped down from the boards of Energy Transfer Partners and Sunoco Logistics Partners, oil and gas pipeline companies owned by billionaire donor Kelcy Warren. Since 2015, Perry has earned at least $365,000 from the positions, and Warren has donated more than $6 million to Perry’s political ambitions. These companies are building the Dakota Access Pipeline, which sparked the Standing Rock Sioux Tribe’s recent protest, and a LNG export facility in Louisiana that received the DOE’s authorization in July 2016. Perry also drew his 2011 energy plan from American Petroleum Institute, the oil and gas industry trade association, ideas; received more than $11.6 million from the oil and gas industry between 1998 and 2016; and has continued to deny climate change and undermine clean air and water protections.

What does this mean for the Department of Energy?

Perry’s close ties with oil and gas companies raise concern about his potential influence over LNG export authorizations, fuel reserve contracts, and technical analysis at the Department of Energy. The DOE’s LNG export authorizations allow companies to sell natural gas to other countries, often with the potential for sizeable profits given higher prices abroad. If confirmed, Perry could hasten LNG authorization reviews. As a result, communities affected by the LNG terminals could be shut out of the process, and increased exports could increase domestic prices, enlarging industry profits and raising prices for American consumers.

The DOE operates the Strategic Petroleum Reserve, or SPR, and other reserves that store fuels, such as crude oil or home heating oil, for use in emergencies. In 2015, Congress enabled the DOE to sell up to $2 billion worth of crude oil to invest in SPR facilities. If confirmed, Perry would oversee these sales and related multimillion-dollar contracts for the SPR and other fuel reserves. He would also oversee the use of the SPR in any energy disruption affecting national security or global oil markets, such as the 2011 sale due to supply disruptions in Libya. Dirty fuel funders of Perry’s political career include current and past SPR contract and repurchase awardees, and the department will announce a new set of sale contract recipients for up to 8 million barrels of SPR oil in January 2017.

The DOE’s technical experts—engineers and scientists—work with other federal agencies to aid their decision-making processes, including infrastructure permitting, to better understand how infrastructure changes affect the energy system, communities, markets, the environment, and national security. This analysis relies on scientific integrity and inclusive public consultation so that decision-makers can weigh risks and benefits appropriately. If confirmed, Perry could influence any reconsideration of the Obama administration’s decision to require more robust analysis of the Dakota Access Pipeline—potentially handing a significant win to his donors. His fossil fuel ties undermine the integrity of the DOE’s permitting, contracting, and advisory duties.

Too much haste with nuclear waste

The Manhattan Project and its legacy form the DOE’s roots. In response, several DOE offices coordinate efforts to clean up related sites; reduce risks to workers, nearby communities, and the environment; and manage the long-term remediation and storage of radioactive or toxic materials, including from civilian nuclear power plants. While communities and DOE employees most directly face the gravity of these responsibilities, the next secretary of energy must prioritize this ongoing work as well.

Who has Perry’s ear?

In 2014, then-Gov. Perry made headlines by championing the expansion of a nuclear waste storage facility in Texas. Beforehand, Perry directed the state’s environmental agency to produce a report on its storage options, and he later endorsed “a Texas solution” to the problem. Perry’s bold statements obscure the influence of his political patron, Harold Simmons, a hazardous waste industry billionaire who donated approximately $3 million to Perry’s political ambitions and the Republican Governors Association, which Perry chaired, between 2001 and 2011.

In the early 2000s, Simmons began constructing a nuclear waste empire by aggressively lobbying the Texas Legislature for a privatized monopoly for his waste storage company. He later won a license from Perry-appointed commissioners over public complaints and without a public hearing. In 2011, Perry enabled the site to expand its capacity, accept low-level radioactive waste from outside Texas, set its own rates, and reduce its liability—a burden Texas would take on once the operating contract expired.

What does this mean for the Department of Energy?

The DOE operates $6.3 billion in cleanup programs at sites in 11 states, a critical priority for their congressional representatives. Politics has no place in these siting and contract decisions, and here, Gov. Perry falls short. Simmons’ influence sets a concerning precedent for Perry’s future consideration of storage sites and environmental management. The appearance that Perry exerted any political pressure over state agency staff to make recommendations, grant licenses or permits, or otherwise benefit donors conflicts with the DOE’s mission and the long-term interests of the affected communities and the nation.

Playing chicken with renewable fuels

Energy commodities—such as coal, oil, or biofuel sources like corn—compete as sources of fuel or electricity generation, and the demand for their use as fuel affects uses in other industries such as agriculture or chemicals. When politics get involved, as Gov. Perry’s record shows, a bias for one fuel source over another may distort policy decisions.

Who has Perry’s ear?

In a three-month period in 2008, then-Gov. Perry turned a politically convenient corner on ethanol—a leading biofuel and key component of the U.S. Environmental Protection Agency’s, or EPA’s, Renewable Fuel Standard, or RFS, program. Having first supported the EPA’s ethanol mandate in 1993 as agriculture commissioner and Texas ethanol production in 2001 as governor, Perry’s attitude shifted after a March 2008 meeting with Lonnie “Bo” Pilgrim, a chicken company executive and flagrant lobbyist.* In agricultural commodity markets, the use of corn for ethanol production rose in the mid-2000s, and corn prices also rose, affecting the costs of animal feed for livestock producers, including Pilgrim.

Pilgrim then donated $100,000 to the Republican Governors Association,* and in April 2008, Perry requested that the EPA waive Texas’ ethanol production requirements. Between 2001 and 2011, Pilgrim donated more than $631,000 to Perry’s political ambitions, including a private jet flight to Washington, D.C., to advocate for the waiver. Ultimately, the EPA denied Perry’s waiver request for lack of evidence of economic harm to Texas.

What does this mean for the Department of Energy?

Although Perry’s continuing support for ethanol mandate waivers reflects some opposition to renewable fuels, the coincidence of Pilgrim’s donations and Perry’s waiver request raises more questions regarding whether industry might influence his decision-making. Currently, the DOE’s bioenergy research and development program invests $225 million in technologies that hold promise for rural and farming areas with biofuel resources. Additionally, the DOE worked with the U.S. Department of Agriculture and the U.S. Navy to develop biofuels that substitute fossil-based jet fuel to create new markets for farmers and reduce U.S. dependence on foreign oil.

The success of the nascent biofuels market requires continued support from DOE for research and development and the demand stimulated by the RFS program. Perry’s record on ethanol shows his willingness to stand up for donors and oppose clean energy programs, even those with bipartisan support and the potential for new jobs in rural areas.

Conclusion

Across a range of energy technologies and issues, Gov. Perry’s record illustrates that his political donors—including representatives of the fossil fuel, nuclear waste, and agriculture industries—have influenced his policy decisions, and they stand to benefit if he becomes energy secretary. Perry’s proximity to industry donors raises many questions about the bias he would bring to the energy department’s research and development, environmental cleanup, and technical and policy analysis responsibilities.

Luke H. Bassett is the Associate Director of Domestic Energy Policy at the Center for American Progress.

* Source: R.G. Ratcliffe, “For Perry, farm aid may grow into campaign issue,” Austin American-Statesman, August 8, 2011, p. A01; R.G. Ratcliffe, “$100,000 gift led the attack on ethanol; Poultry titan gave Perry group funds, then work for waiver began, records show,” Houston Chronicle, July 2, 2008, p. A1.