Smoke and Mirrors: Obama DOE Fracked Gas Export Study Contractor’s Tobacco Industry Roots

4:19 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

At first, it was kept secret for months, cryptically referred to only as an “unidentified third-party contractor.”

Finally, in November 2012, Reuters revealed the name of the corporate consulting firm the U.S. Department of Energy (DOE) hired to produce a study on the prospective economic impacts of liquefied natural gas (LNG) exports.

LNG is the super-chilled final product of gas obtained – predominatly in today’s context – via the controversial hydraulic fracturing (“fracking”) process taking place within shale deposits located throughout the U.S. This “prize” is shipped from the multitude of domestic shale basins in pipelines to various coastal LNG terminals, and then sent on LNG tankers to the global market.

The firm: National Economic Research Associates (NERA) Economic Consulting, has a long history of pushing for deregulation. Its claim to fame: the deregulation “studies” it publishes on behalf of the nuclear, coal, and oil/gas industry – and as it turns out, Big Tobacco, too.

Alfred E. Kahn, the late “Father of Deregulation,” founded NERA in 1961 along with Irwin Stelzer, now a senior fellow and director of the right-wing Hudson Institute’s Center for Economic Policy. 

The NERA/Obama DOE LNG export economic impact study, released in early-December 2012, concluded that exporting the U.S. shale gas bounty is in the best economic interest of the country. 

This conclusion drew metaphorical hisses from many analysts, including prominent shale gas market economist and former Wall Street investor Deborah Rogers, who now maintains the blog Energy Policy Forum. Her critique cut straight to the very foundation of the study itself, stating that “economic model[s] are only as good as their inputs.”

She proceeded to explain,

In fact, it is neither difficult nor unusual for models to be designed to favor one outcome over another. In other words, models can be essentially reverse engineered. This is especially true when the models have been commissioned by industries that stand to gain significantly in monetary terms. Or government agencies which are perhaps pushing a political agenda.

Beyond its history working as a hired gun for the fossil fuel industry, NERA also has deeper historical roots producing “smoke and mirrors” studies on behalf of the tobacco industry. The long view of the firm’s past is something NERA would likely rather see “go up in smoke,” forever buried in the historical annals. But that would be a disservice to U.S. taxpayers since NERA continues to receive government contracts to produce tobacco-era disinformation to this day. 

NERA and the “Tobacco Playbook”

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