Big oil weighs in against coal and nuclear

The American Petroleum Institute, the nation’s biggest and most influential lobbying group for the oil and natural gas industry, is fighting nuclear power subsidies across the U.S., poised to oppose any efforts to expand renewable electricity, and telling the Trump administration that its study on the power grid better not hurt natural gas in an effort to help coal and nuclear energy.

Why it matters: The entry of API into the debate over power generation is a turning point in an industry long dominated by coal and nuclear energy. It’s also a shift at an organization traditionally known for focusing on drilling and the transportation sector. API’s members, including Exxon Mobil Corp., and Royal Dutch Shell, are increasingly producing natural gas, and now the group is fighting to make sure that fuel becomes America’s dominant source of electricity.

A decade ago, coal powered almost 50% of U.S. electricity. By last year, that figure had dropped to 30%, and natural gas has made up most of the difference. Here’s an Axios card deck primer on America’s electricity sources.

Fueled by the oil and natural gas boom over the last decade, API began moving into the electricity business in late 2015, when it acquired another trade group, America’s Natural Gas Alliance, whose sole mission was to pump up demand for natural gas. API’s broader mission has come into clearer focus over the last few months in three ways.

Trump’s grid study

The Energy Department is set to issue as soon as this week a study looking at the electric grid, with a focus on what the government could do to stop coal and nuclear plants from shutting down. Energy Secretary Rick Perry talks a lot about how environmental rules and renewable subsidies are hurting coal and nuclear, but the biggest driver is the bounty of cheap natural gas in stagnant electricity markets. That puts API, a typical ally of the new administration, in an ironic position.

“We certainly want to make sure there isn’t some inadvertent message coming out of this study that maybe we should be worried about having too much natural gas,” said Marty Durbin, executive vice president and chief strategy officer at API.

Starting last year, API began hearing concerns from utility officials and others about fuel diversity. “To us that was a buzzword to say don’t be too dependent upon natural gas,” Durbin said. Which is exactly what the coal industry is doing. “We have not beat up on natural gas I would say, but we certainly have pointed to an over-reliance on the fuel,” said Paul Bailey, president of the American Coalition for Clean Coal Electricity.