It’s hard to imagine two people less alike than Harold Hamm and Heather Zichal, the top energy advisers to the presidential candidates.
Hamm, energy czar for Mitt Romney, is a billionaire oil man who rose to success with only a high school diploma. Raised as a sharecropper’s son, he is now the 35th richest person in America.
Heather Zichal, President Barack Obama’s deputy assistant for energy and climate change, is the daughter of a medical doctor. She was an intern for the Sierra Club while at Rutgers University. After graduating, she soared up Washington’s policy ranks to a top White House position in little over a decade.
Who exactly are Hamm and Zichal? What influence do they wield? And what do energy and environmental insiders think about them?
Testifying before Congress on energy independence in September, Hamm said, “Good things flow from American oil and natural gas.” And they certainly have for Hamm, age 66, who is founder, chairman and CEO of Continental Resources, an Oklahoma City independent oil and natural production company that has put Hamm on Forbes’ listof wealthiest Americans and on Time Magazine’s list of the most influential.
He appeared before Congress as none of these things though, not even Romney’s advisor, he said, “but as an American patriot,” a common theme for Hamm. His company’s corporate tagline is ‘American oil champion,’ and he describes today’s thriving domestic oil market as the “American energy renaissance.”
Hamm’s praise for all things American is not surprising given that his story is the iconic American dream. He was the youngest child of 13 who grew up in poverty in Lexington, Oklahoma and entered the oil industry pumping gas and cleaning tanks. He started his own oilfield service company in 1966 when he borrowed money to buy a bob tail tank truck. The next year he formed Continental Resources, today a company with a $37 billion annual payroll and the largest leasehold in the oil-rich Bakken formation of North Dakota and Montana.
“I don’t know how to describe his innate business sense. He doesn’t have any formal education in terms of business practices or business philosophy,” said Michael “Mickey” Thompson, executive director of the Domestic Energy Producers Alliance (DEPA), an organization that Thompson co-founded with Hamm.
How does Hamm influence Romney? Thompson says he sees Hamm when Romney talks about giving states more say in environmental regulation. Romney wants the states to take over control of energy development on federal lands.
Cutting back on federal environmental regulation is a big theme in Hamm’s world at DEPA, where he serves as chairman.
“We are not radical about it. We are not trying to overthrow the government. We are not even in the Tea Party,” Thompson said. “We understand the essential role the federal government plays in many aspects of our society and lives. But environmental regulation, by in large, is just not one of them.”
Pragmatist not politician
One issue Romney and Hamm did not always see eye to eye on – but now do – is TransCanada’s controversial XL Pipeline Project. Romney supports the 1,179-mile pipeline from Alberta to the Texas Gulf Coast. But Hamm initially lobbied to stop it, not for environmental reasons, but because he saw the line as a threat to domestic oil and his own business. In fact, TransCanada’s project was Hamm’s impetus for forming DEPA.
“Interesting, I know, in hindsight that our little organization was created in opposition to the Keystone XL Pipeline,” Thompson said.
DEPA and Hamm’s position on the pipeline changed when TransCanada acquiesced on some key issues, among them acceptance of US oil on the pipeline. “TransCanada figured out they needed some friends,” Thompson said.
Thompson, whose known Hamm for more than two decades, emphasized that Hamm’s position on the pipeline was never political. “It was born out of the necessity of trying to survive and get the best price we can for our product down here in our part of the country.”
Indeed, Hamm is more pragmatist than politician, his colleagues say. For example, he switched his party registration to Democrat in the early 2000s when he felt Oklahoma Republicans were siding with those in the natural gas pipeline and crude oil marketing industry over the independent producers. He later switched back to Republican, but Thompson says not to make too much of the shift. Little difference exists between the two parties in Oklahoma. “It is very conservative state,” Thompson said.
Massachusetts Another World
Hamm is very different from the energy advisor Romney chose while Governor of Massachusetts. Then Romney made headlines by selecting Doug Foy, one of New England’s most prominent environmentalists. Indeed, Foy seems to be a closer ideologically to Zichal, Obama’s advisor, than to Hamm.
A Princeton University and Harvard Law School graduate, Foy for 25 years ran the Conservation Law Foundation, an influential New England environmental organization. Romney tapped Foy to not only oversee energy but also transportation, housing and environment, making the environmentalist arguably one of the most powerful players in the Romney administration.
This reflected a very different energy agenda promoted by Romney as Governor versus Romney as presidential contender. Today, Romney focuses on production of oil, gas and coal. But then his talk was of the business benefits of energy efficiency and renewable energy. In 2004, he released Massachusetts’ first climate action plan, a document that called for renewable energy mandates, energy efficiency standards and state participation in the Regional Greenhouse Gas Initiative (RGGI), the US’ first carbon dioxide cap and trade program. Romney later reversed his stand on RGGI, although the state joined under the next Governor, Democrat Deval Patrick.
Romney’s seeming reversal on RGGI led Melinda Pierce, lead lobbyist for the Sierra Club, to call him a “born again climate denier.” She sees Hamm’s influence looming large over the Republican presidential candidate, and describes him as “the American oil champion who literally wrote Romney’s energy plan.”
“He is one of the most wealthy men on the planet who is clearly on record as pro drilling, as itching to open up large swaths of American public lands, clearly anti-regulatory,” she said.
For those in the domestic oil industry, though, Hamm’s influence at the top level is not a bad thing, nor surprising.
“Harold doesn’t tip toe into anything. He splashes in with both feet. That would be how I would characterize his involvement with the Romney campaign. He is just a very focused, very serious guy. When he believes in a person or a cause, he’s usually all in,” Thompson said.
Hamm as Prognosticator
This kind of commitment is one reason Hamm is so successful, say his friends and colleagues. Another is his sense of market timing. “He has a unique ability to see things forward,” said Mike McDonald, co -owner of Triad Energy, a small independent oil and gas producer in Oklahoma. “I’m thinking next month, he’s thinking two or three months down the road.”
Jim Cramer, CNBC’s Mad Money show host also has hailed Hamm’s foresight, particularly when it comes to his call on the vast Bakken find. Hamm is a “real oil man making real money with an unbelievable find in the Bakken. No one believed it except for him,” Cramer said on his show.
Is Hamm likely to play a role in Romney’s administration, should the Republican win the White House? Thompson can’t see his friend working in policy.
“My personal opinion is that he would be very frustrated in a federal bureaucracy, even in a cabinet level position,” Thompson said. “Harold Hamm is not a political animal.”
This marks a major difference between Hamm and Zichal. She has worked in federal policy most of her adult life.
Read about Zichal in Part II of “Who Obama and Romney listen to on energy.”