business

Fracking Advocates Urged to Win Ugly by Discrediting Foes

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As he took the floor at the tony Broadmoor resort in Colorado Springs, the veteran Washington public relations guru had an uncompromising message for oil and gas drillers facing an anti-fracking backlash.

“You can either win ugly or lose pretty. You figure out where you want to be,” Rick Berman told the Western Energy Alliance, according to a recording. “Hardball is something that I’m a big fan of, applied appropriately.”

Berman has gained prominence, including a “60 Minutes” profile, for playing hardball with animal activists, labor unions and even Mothers Against Drunk Driving. In Colorado, he was offering to take on environmentalists pushing restrictions on hydraulic fracturing, or fracking.

The fight over fracking in the state has been viewed as a bellwether for similar debates brewing from New York to Sacramento. Energy companies are lobbying against a slew of regulations, including ones setting safety rules for fracking on public lands and another capping carbon emissions from power plants.

That partly explains why energy and resources companies, including Koch Industries Inc., Exxon Mobil Corp. and Murray Energy Corp. are spending lavishly on political campaigns this year. The Center for Responsive Politics data shows the industry will contribute an amount second only to its record $143 million leading up to the 2012 election. So far they have given $95.5 million to candidates and political committees.

‘Dream World’

Industry supporters say they have no choice. They face a well-funded environmental campaign from groups such as the Sierra Club that threaten to endanger the boom in production and domestic manufacturing that followed the shale revolution.

“There is an anti-fossil fuel movement, and a very well-funded lobbying campaign is behind it,” said Michael Krancer, Pennsylvania’s former top natural-gas regulator and an energy attorney at Blank Rome LLP in Philadelphia. “These are people who want to live in a dream world.”

At the June session in Colorado with executives from Halliburton Co., Exxon and Devon Energy Corp., Berman offered companies a way to anonymously target their environmental foes - - at a cost of as much as $3 million. The recording, provided to Bloomberg by an environmental advocate who got it from an attendee, shows an unvarnished look at what Berman promises companies in pitching for their business.

He said his campaign would follow the playbook from his earlier efforts: attacks on the hypocrisy of adversaries, an undercurrent of absurdist humor and the promise of anonymity for the companies behind it. The recording makes it clear that Berman is pitching for their business, and says some companies have already funded the campaign with “six-figure” payments.

Anadarko, Noble

“Think of it as endless war,” he said.

Berman and Tim Wigley, president of the Western Energy Alliance, a Denver-based trade group, didn’t return telephone messages asking about his pitch. Sarah Longwell, a spokeswoman for Berman & Co., said Berman declined to comment.

“We are not confident in the objectivity of your reporting,” Longwell told a reporter. “If you have the recording, then you can use that.”

Anadarko Petroleum Corp. and Noble Energy Inc., two of the largest producers in the state, each had executives at the meeting, but their spokespeople said they didn’t bankroll Berman’s advertising campaign. They have formed a separate educational campaign aimed at explaining fracking, in which water, sand and chemicals are shot underground to free oil and gas from rock formations.

Halliburton, the world’s biggest provider of fracking services, also had an executive at the meeting, according to an attendance list obtained by Bloomberg. Emily Mir, a company spokeswoman, said it hasn’t funded the Berman campaign either.

‘Fear and Anger’

For the Colorado part, Berman said it would cost $2 million to $3 million to run the kind of public relations campaign necessary to defeat proposed anti-fracking referendums, which have since been delayed. That money would be spent in addition to the “positive campaign” companies were running, he said.

“Fear and anger have to be part of this campaign,” Berman told them. “You have to get people fearful about what is on the table, and you have to get people angry that they are being misled.”

Tapping those emotions requires a dose of humor, he said.

He played an advertisement that showed one activist blaming fracking for his overeating and another for the fact that his sock-puppet, Mr. Snuggles, was ignoring him. The ad was posted online and ran on television a few weeks later, according to a Denver Post article.

Getting Message

“We like to use humor because humor doesn’t offend people and at the same time they get the message,” Berman said, according to the tape of the June meeting.

Jack Hubbard, a Berman & Co. vice president, told the audience that the work in Colorado flowed out of a national campaign that had begun some months earlier. That was after some companies provided funding to start “Big Green Radicals,” which goes after environmental groups such as the Sierra Club and the Natural Resources Defense Council.

Hubbard declined to comment for this story.

Berman’s opposition researchers, who Hubbard called the best in the nation, dug into the finances of board members of those groups and issued ads, both online and on billboards, mocking them.

One billboard in Pennsylvania showed a picture of actor Robert Redford, who’s on the board of the Natural Resources Defense Council, and stated: “Demands green living. Flies on a private jet.”

Another shows anti-fracking activist Yoko Ono: “Would you take energy advice from the woman who broke up the Beatles?”

Attacking Messenger

Environmental groups said they were initially worried about the attacks, but found they didn’t gain much traction with the public or press.

“This really is an effort to go after the messenger,” Josh Mogerman, an NRDC spokesman, said. “I don’t think these campaigns have gotten a lot of attention.”

As he has in previous drives against raising the minimum wage or tightening rules to curb drunk driving, Berman said he would run the campaign for fracking through nonprofit entities. Because U.S. law allows nonprofits to keep the source of their funding secret, it’s not clear which companies or individuals are funding these various campaigns.

“What people always want to do is they want to know who funds me so they can attack the funder,” Berman told the Western Energy Alliance, when asked by an audience member which companies were backing him. “We run all of this stuff through nonprofit organizations that are insulated from having to disclose donors.”

‘Dr. Evil’

Taking on unpopular causes -- such as objecting to new restrictions on drinking or food portions -- earned him the moniker “Dr. Evil,” which CBS’s “60 Minutes” program used to describe him in a 2007 broadcast.

In his presentation, Berman said that attacking the messenger is something he learned from the unions and animal rights groups he has tangled with for two decades.

“I studied what the other side did to be successful, and translated it to what business can do,” he said.

One of Berman’s campaigns was focused against then-New York Mayor Michael Bloomberg’s effort to ban the sale of soft drinks larger than 16 ounces. The mayor, whom Berman’s groups portrayed as a female nanny in a full-page New York Times advertisement, is the founder and majority owner of Bloomberg LP, the parent of Bloomberg News.

In the end, New York state courts tossed out the proposed soda-size limit.

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