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Not Just the Atlantic: Obama Leasing Millions of Gulf Acres for Offshore Drilling

9:39 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

Deepwater Horizon

Deploying the age-old “Friday news dump,” President Barack Obama’s Interior Department gave the green light on Friday, July 18 to companies to deploy seismic air guns to examine the scope of Atlantic Coast offshore oil-and-gas reserves.

It is the first time in over 30 years that the oil and gas industry is permitted to do geophysical data collection along the Atlantic coast. Though decried by environmentalists, another offshore oil and gas announcement made the same week has flown under the radar: over 21 million acres of Gulf of Mexico offshore oil and gas reserves will be up for lease on August 20 in New Orleans, Louisiana at the [Mercedes-Benz] Superdome.

On July 17, the U.S. Department of Interior’s Bureau of Ocean Energy Management (BOEM)  announced the lease in the name of President Obama’s “all of the above” energy policy.

“As part of President Obama’s all-of-the-above energy strategy to continue to expand safe and responsible domestic energy production, BOEM…today announced that the bureau will offer more than 21 million acres offshore Texas for oil and gas exploration and development in a lease sale that will include all available unleased areas in the Western Gulf of Mexico Planning Area,” proclaimed a July 17 BOEM press release.

The release says this equates to upwards of 116-200 million barrels of oil and 538-938 billion cubic feet of natural gas and falls under the banner of the U.S.-Mexico Transboundary Hydrocarbon Agreement.

That Agreement was signed into law on December 26, 2013. It served as a precursor to the recently-passed Mexican oil and gas industry privatization reforms, which have opened the floodgates to international oil and gas companies to come into Mexico for onshore and offshore oil and gas exploration and production.

Tourist Hot Spots Port Isabel, South Padre Island for Sale

According to BOEM’s Proposed Notice of Sale Package, dozens of blocks sitting in close proximity to both Port Isabel and South Padre Island will be auctioned off during the August 20 lease. Both Port Isabel and South Padre Island are vacation and tourist hot spots, which were visited during a recent vacation by this writer.

(click to embiggen)

In total, an enormous 4,057 blocks of Gulf of Mexico oil and gas reserves are up for lease on August 20 in the Superdome.

Climate Action Plan?

The Obama Administration will auction off the thousands of blocks of Gulf of Mexico oil and gas leases in the midst of rolling out its Climate Action Plan, best known to some simply as the U.S. Environmental Protection Agency’s carbon rule for coal-fired power plants.

Ruled out of Obama’s Climate Action Plan, however, is any second-guessing of his “all of the above” energy policy.

While critics of the climate plan have noted the carbon rule is a full-fledged embrace of hydraulic fracturing (“fracking”) for onshore oil and gas, another undeniable truism has arisen: it’s also a full-fledged embrace of offshore drilling for oil and gas both in the Gulf — and perhaps soon in the Atlantic. Read the rest of this entry →

Dairyland to Petrostate: Wisconsin Oil-By-Rail Routes Published for First Time

1:51 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

A BNSF train engine heading north

BNSF and other rail companies are carrying dangerous oil tankers through Wisconsin.

DeSmogBlog is publishing the first documents ever obtained from the Wisconsin government revealing routes for oil-by-rail trains in the state carrying oil obtained via hydraulic fracturing (“fracking”) in the Bakken Shale basin.

The information was initially submitted to the U.S. Department of Transportation (DOT) under the auspices of a May 7 Emergency Order, which both the federal government and the rail industry initially argued should only be released to those with a “need to know” and not the public at-large.

The Wisconsin documents show the three companies that send Bakken crude trains through the state — Burlington Northern Santa Fe (BNSF), Union Pacific and Canadian Pacific — all initially argued routes are “sensitive security information” only to be seen by those with a “need to know.”

As covered in a previous DeSmogBlog article revealing the routes of oil trains traveling through North Dakota for the first time, the rail industry used this same line of legal argument there and beyond.

Wisconsin Emergency Management did not buy the argument, though, and released the documents to DeSmogBlog through the state’s Public Records Act.

BNSF Hugs the Mississippi

As with North Dakota, BNSF is the chief mover of oil-by-rail in Wisconsin.

BNSF is owned by Warren Buffett, one of the richest men on the planet and a major campaign contributor to President Barack Obama and expected major donor for Hillary Clinton’s 2016 presidential bid.

According to the records it submitted to Wisconsin Emergency Management, BNSF moves the majority of its crude-by-rail trains along the state’s western corridor, which hugs the Mississippi River.

For the week of June 5 through June 11, records show BNSF sent 39 oil-by-rail trains through Buffalo County, La Crosse County, Pepin County, Pierce County and Trempealeau County. All of these counties border the Mississippi.

As covered here on DeSmogBlog in January, the BNSF-owned Bakken oil train that exploded in Casselton, North Dakota on December 30, 2013 was headed to a Mississippi River terminal in Missouri owned by Marquis Energy.

Canadian Pacific Hugs Lake Michigan

While BNSF dominates Wisconsin’s Mississippi River corridor, Canadian Pacific does the same — albeit to a much lesser extent — along another major body of water: Lake Michigan.

According to the data submitted by the company, Canadian Pacific ships three to five train-loads of Bakken oil per week through Milwaukee County, Racine County and Kenosha County. Canadian Pacific slices through the heart of the state in a west-to-east transit route to reach Milwaukee County.

Milwaukee, Racine and Kenosha all border Lake Michigan. And once it crosses into northeastern Illinois, the rail line sits in close proximity to Lake Michgan, particularly in Waukegan (a train line traversed many times by this writer, a Kenosha native).

Canadian Pacific owns a major rail transload facility — Great Lakes Reloading — located on the southeast side of Chicago. It sits close to both Lake Michigan and the Calumet River.

Great Lakes Reloading serves as a key thoroughfare for many of the company’s freight rail transportation routes, including for crude-by-rail.

Union Pacific: Didn’t Meet Threshold

Industry giant Union Pacific did not meet the oil-by-rail carriage threshold that requires companies to submit routes to State Emergency Response Commissions (SERCs), one of which is Wisconsin Emergency Management.

That threshold, as explained by Union Pacific in its letter to Wisconsin Emergency Management, is one million gallons of Bakken crude per week.

Union Pacific is perhaps best known to many in southeast Wisconsin and northeast Illinois for its Metra public transit line running from Kenosha to Chicago (and vice versa) and from Chicago to many Chicago-area suburbs (and vice versa).

From America’s Dairyland to Petrostate?

Read the rest of this entry →

Industry Data: Oil-By-Rail in North America Moving at Record Levels

2:15 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

A line of oil tanks on a train

A look at oil trains by the numbers.

On July 3, the Association of American Railroads (AAR) released June 2014 data showing oil-by-rail and petroleum products at-large are moving at record levels throughout North America.

The release of the data comes on the heels of the ongoing oil-by-rail nationwide week of action launched by environmental groups.

For the 26th week of 2014 (the half year point) in the U.S., 18.5% more tank cars were on the tracks carrying petroleum and/or petroleum products than last year, a total of 15,894 cars.

Examined on a year-to-date basis, 7.0% more of those same tank cars were on the tracks in the U.S. this year than last, totaling 380,961 cars to date.

Across the border in Canada, the same trend lines exist: for the 26th week of 2014, 6.9% more cars moved petroleum and/or petroleum products by rail than in the 26th week of 2013.

Looked at in terms of year-to-date compared to 2013, that totals a 7.7% increase in tank cars moving the commodity by rail.

Bomb trains,” as some critics call them, move oil obtained from hydraulic fracturing (“fracking”) in North Dakota’s Bakken Shale basin to terminals, holding facilities and markets both in the U.S. and Canada.

Hence the upsurge in unit cars carrying petroleum and/or petroleum products both north and south of the border.

Looked at through the lens of North America, 14.6% more tank cars carried petroleum and/or petroleum products during the 26th week of 2014 compared to the same time in 2013.

And 7.0% more of those tank cars have moved petroleum and/or petroleum products to market so far this year as compared to last year.

AAR: Stats Provider, Lobbying Tour De Force

Beyond crunching numbers and statistics, AAR also is a lobbying tour de force for Big Rail in the same way the American Petroleum Institute (API) is for Big Oil.

With its public relations work overseen and advised by SKDKnickerbocker — co-owned by former Obama White House communications director Anita Dunn — AARhas landed numerous meetings with the White House Office of Information and Regulatory Affairs (OIRA) in the attempt to water down crude-by-rail regulations currently being drafted by the U.S. Department of Transportation (DOT).

As revealed on DeSmogBlog, AAR members gave a presentation to OIRA on June 10 on how companies would be faced with “far reaching economic impacts” if speed limits were imposed on trains carrying oil by rail.

According to a DeSmogBlog review of federal lobbying disclosure documents, AAR has spent roughly $1.82 million on lobbying at the federal level so far in 2014.

Additionally, AAR has doled out over $150,000 in campaign contributions to congressional candidates for the 2014 electoral cycle and is also active at the state level.

Put another way, AAR’s political activism clarifies its hopes to produce more numbers and figures of the sort just unveiled in its most recent report.

But will events like the oil-by-rail week of action block such hopes and dreams?

Read the rest of this entry →

Oil-By-Rail: A Battle Between “Right to Know” & “Need to Know”

11:35 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

BNSF Oil Train preparing to head north.

BNSF claims their oil train routes are secrets protected by law.

Since the first major oil-by-rail explosion occurred on July 6, 2013, in Lac-Mégantic, Quebec, citizens in communities across the U.S. have risen up when they’ve learned their communities are destinations for volatile oil obtained from hydraulic fracturing (“fracking”) in North Dakota’s Bakken Shale basin.

As the old adage goes, ignorance is bliss. It’s also one of the keys to how massive oil-by-rail infrastructure was built in just a few short years — the public simply didn’t know about it.

Often, oil companies are only required to get state-level air quality permits to open a new oil-by-rail facility.

Terry Wechsler, an environmental attorney in Washington, recently explained to Reuters why there was no opposition to the first three oil-by-rail facilities in the area.

“There was no opposition to the other three proposals only because we weren’t aware they were in formal permitting,” he said

The same thing unfolded in Albany, N.Y., where there is an ongoing battle over expansion of the major oil-by-rail facility set to process tar sands crude sent by rail from Alberta. The initial permits for the oil rail transfer facility, which would allow two companies to bring in billions of gallons of oil a year, were approved with no public comment.

Oil and rail companies know well that they can proceed with their planned expansions more easily if communities remain unaware of their plans.

And now that some states — including North Dakota — have defied their efforts to keep the public in the dark about the crude-carrying trains, the public will have a much clearer idea of what’s going on.

A case in point, DeSmogBlog recently revealed crude-by-rail giant Burlington Northern Santa Fe (BNSF) moves up to 45 trains a week in some North Dakota counties and up to three dozen in others.

Big Rail’s Big Bluff

The rail industry has enjoyed a long history of legal protections, allowing it to operate in secrecy with regards to carrying hazardous materials. Indeed, Big Rail pushed hard to fight the release of information to the public on the transportation of Bakken crude oil.

This time around, the rail industry said that information it was compelled to give the federal government on its Bakken oil shipments under the U.S. Department of Transportation’s (DOT) May 7 Emergency Order could not be released to the public under state-level open records laws.

Why? Because it fell under the category of “sensitive security information.”

In boilerplate letters and contract proposals sent to heads of State Emergency Response Commissions — one of which was obtained via Idaho’s Public Records Act by DeSmogBlog — BNSF deployed this argument.

This legal designation means BNSF and other companies could withhold information regarding the movements of Bakken crude from the public — by exempting it from state-level open records laws — and would only have to release it to the emergency response commissions.

“It is important to note that this information is subject to several restrictions on its release and exemptions from both state and federal applicable Freedom of Information laws and should only be provided to persons meeting with the appropriate need-to-knows discussed below,” BNSF wrote in its boilerplate letter.

BNSF considers this information commercial confidential and business confidential information and Security Sensitive Information pursuant to Federal law, and the documents have been marked accordingly.

But despite BNSF’s legal claims, some states have released this information in response to open records requests. And the federal government has also leaned toward advocating for greater transparency.

The U.S. Transportation Security Administration (TSA) confirmed by e-mail to the Sacramento Bee that the administration did not consider this information “security sensitive,” stating, “TSA has not made a finding as to whether or not information concerning the volume of crude oil train traffic or the routes used by these trains is considered security-sensitive information.

The Federal Railroad Administration also concluded information about Bakken crude was not considered sensitive security information.

Community’s Right to Know

The U.S. Environmental Protection Agency’s website contains a section on right to know laws. That section opens by stating, “Every American has the right to know the chemicals to which they may be exposed in their daily living.”

Read the rest of this entry →

Meme with Wings: Are Western Anti-Fracking Activists Funded by Putin’s Russia?

1:08 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Anti-fracking banner on a march: "We Can't Drink Money"

The myth of Russian funding for anti-fracking activists keeps reappearing.

At a June 19 speaking event at London’s Chatham House, North Atlantic Treaty Organization (NATO) secretary-general Anders Fogh Rasmussen claimed the Russian government is covertly working to discredit hydraulic fracturing (“fracking”) in the west from afar.

“I have met allies who can report that Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called non-governmental organisations — environmental organizations working against shale gas — to maintain European dependence on imported Russian gas,” said Rasmussen, the former Prime Minister of Denmark.

Rasmussen’s comments were relayed to the press by someone in attendance who apparently broke the “Chatham House Rule” by telling outsiders about the content of a Chatham House meeting.

But Rasmussen left out some key context from his presentation, which he said “is my interpretation” and did not further elaborate on his “disinformation operations” comments.

That is, while powerful actors have claimed on multiple occasions that western-based anti-fracking activists are funded by the Kremlin, no one has ever documented such a relationship in the form of a money paper trail.

Meme with Wings

Rasmussen’s allegation that western “fracktivists” are or might be funded by the Kremlin is a meme with wings.

In a June 2010 email revealed by Wikileaks, private intelligence firm Stratfor (shorthand for Strategic Forecasting, Inc.) speculated that Josh Fox, director of Gasland and Gasland: Part II, might be funded by the Russian government or the coal industry. According to a January 2010 email, Stratfor’s “biggest client” is the American Petroleum Institute.

Stratfor published a white paper titled “Shale Gas Activism,” an analysis of anti-fracking opposition groups and leaders, in December 2009.

Emails show Stratfor sent the white paper to Stanley Sokul, then-ExxonMobil corporate issues senior advisor and now XTO Energy’s manager of public and government affairs. Sokul formerly served as chief of staff and general counsel for the White House Office of Science and Technology Policy under President George W. Bush.

Further, in the industry-funded documentary film FrackNation, climate change denier James Delingpole also stated that anti-fracking activists are likely funded by the Kremlin.

Most recently, climate change skeptic Bjorn Lomborg — whose Copenhagen Consensus Center was recently exposed by DeSmogBlog’s Graham Readfearn — also recently wrote that he concurred with his fellow Dane Rasmussen’s assessment.

“The accusations do not seem too far-fetched. Russia is very keen on dissuading Europe from exploiting its shale reserves,” Lomborg wrote in Forbes. “Moscow’s goal clearly is to keep the EU dependent on Russia.”

Memes Work

While in reality, U.S. oil and gas companies maintain close ties with Russia — including in the fracking sphere — the meme brought to the forefront again by Rasmussen is the one that has caught much more fire.

Originally conceptualized in scholar Richard Dawkins‘ 1976 book The Selfish Gene, one conclusion reigns supreme: memes work and can have a major impact.

For example, Occupy Wall Street’s “We are the 99-percent” is a meme. So too is “Global warming is a hoax.”

“In my opinion, the problem is not with the meme concept itself, but with some of the ways in which it has been used, and especially those that undermine the role of agency in [deploying memes],” Limor Shifman — senior lectureer at the Department of Communication and Journalism at the Hebrew University of Jerusalem and author of the book, Memes In Digital Culture — said in a recent interview on her book.

With loud megaphones and ongoing geopolitical tensions between the U.S. and Russia with no end in sight, one can rest assured Rasmussen will not be the last one to repeat this meme, just as he was not the first.

DeSmogBlog First to Publish North Dakota Oil-By-Rail Routes

9:40 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

A BNSF train engine heading north

Warren Buffett’s BNSF is a leader in moving fracked oil from North Dakota’s Bakken fields.

For the first time, DeSmogBlog has published dozens of documents obtained from the North Dakota government revealing routes and chemical composition data for oil-by-rail trains in the state carrying oil obtained via hydraulic fracturing (“fracking”) in the Bakken Shale.

The information was initially submitted to the U.S. Department of Transportation (DOT) under the legal dictates of a May 7 Emergency Order, which both the federal government and the rail industry initially argued should only be released to those with a “need-to-know” and not the public at-large.

North Dakota’s Department of Emergency Services, working in consultation with the North Dakota Office of the Attorney General, made the documents public a couple weeks after DeSmogBlog filed a June 13 North Dakota Public Records Statute request.

“There is no legal basis to protect what they have provided us at this point,” North Dakota assistant attorney general Mary Kae Kelsch said during the June 25 Department of Emergency Service’s quarterly meeting, which DeSmogBlog attended via phone. “It doesn’t meet any criteria for our state law to protect this.”

Initially, oil-by-rail giant Burlington Northern Santa Fe (BNSF) and other rail companies sent boilerplate letters — one copy of which has been obtained by DeSmogBlog from the Idaho Bureau of Homeland Security through the state’s Public Records Act — to several State Emergency Response Commissions (SERCs), arguing train routes should be kept confidential.

BNSF also sent several SERCs a boilerplate contract proposal, requesting that they exempt the information rail companies were compelled to submit to the SERCs under the DOT Emergency Order from release under Freedom of Information Act. A snippet of the proposed contract can be seen below:

Dan Wilz, homeland security division director and state security advisor of the Department of Emergency Services, said the claims did not hold legal water.

“Joe can stand on a street corner and figure that out within a week’s period,” Wilz said at the quarterly meeting. “They watch the trains go through their community each and every day.”

BNSF, Canadian Pacific Railway (CP Rail) and Northern Plains Railroad all submitted information to the Department of Emergency Services.

CP Rail: 7 Trains/Week, “Highly Flammable”

In its submission to the North Dakota Department of Emergency Services, CP Rail revealed it sent seven oil-by-rail trains through 13 counties in North Dakota the week of June 9-15. CP Rail also estimated it generally sends 2-5 trains through those same counties during an average week.

Some oil-by-rail trains, dubbed “bomb trains” by some due to their propensity to explode, carry over 2,677,500 gallons of fracked oil. The trains are often over a mile in length and contain over 100 cars.

The company also released information on the chemical composition of the Bakken oil it sends on its rail cars, conceding that Bakken oil is “highly flammable” and “easily ignited by heat, sparks or flames.”

Further, CP Rail admitted that Bakken oil has “a very low flash point” and that “water spray when fighting [its] fire may be inefficient.”

BNSF: Bakken Oil-By-Rail King

BNSF, owned by Warren Buffett — a major campaign contributor to President Barack Obama both in 2008 and 2012 and one of the richest men on the planet — is widely considered the king of oil-by-rail in the U.S. The documents BNSF released to the Department of Emergency Services back up the notion.

One document shows BNSF sent 31 oil-by-rail trains through Cass County, North Dakota during the week of May 29 – June 4, also saying it sends between 30-45 trains per week on average through the County. That same week, 30 BNSF trains zoomed through Barnes County, North Dakota.

A document filed the next week, covering June 5 – June 11, shows 45 trains passed through Cass County that week. Another 37 passed through Ward County, North Dakota and another 33 through McHenryPierce and Mountrail counties.

Northern Plains: Chemical Composition Revealed

In its DOT submission, Northern Plains included an expansive Bakken crude oil sample chemical composition test submitted by Musket Corporation, which has a terminal and transload site in North Dakota.

Read the rest of this entry →

Revealed: Heather Zichal Met with Cheniere Executives as Obama Energy Aide Before Board Nomination

9:14 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

 

Portrait of Heather Zichal

Zichal through the revolving door?

Heather Zichal, former deputy assistant for energy and climate change to President Barack Obama and nominee to sit on the board of directors of LNG export company Cheniere Energy Inc., held two meetings with Cheniere executives while working for the White House.

White House meeting logs show Zichal attended the meetings with three executives from Cheniere, owner of the Sabine Pass LNG (liquefied natural gas) export facility, the first terminal to receive a final approval from the U.S. Federal Energy Regulatory Commission (FERC) during the hydraulic fracturing (“fracking”) boom.

The meetings appear to have taken place just over two weeks apart from one another, according to the meeting logs. The first meeting was on January 14, 2013, and the second on January 29, 2013. Just over eight months later, Zichal resigned from her White House job, with Reuters citing “plans to move to a non-government job.”

Cheniere CEO Charif Souki — who is facing a major ongoing class-action lawsuit— sat in on both of those meetings. He was joined by Cheniere executives Patricia Outtrim, vice president of governmental and regulatory affairs, and Ankit Desai, vice president of government relations.

Desai, a Cheniere lobbyist, formerly worked with Zichal on U.S. Secretary of State John Kerry’s 2004 presidential campaign, serving as his budget director. Desai also formerly served as political director for then-U.S. Senator and now Vice President Joe Biden.

Zichal served as Kerry’s energy and environment policy adviser for the 2004 campaign and in 2006, became his legislative director, a job she held until becoming policy director for energy, environment and agriculture for President Barack Obama’s 2008 presidential campaign.

“Ms. Zichal served as the top energy advisor to the President of the United States at a time when Cheniere was beginning construction on [Sabine Pass LNG],” Katie Pipkin, Cheniere’s senior vice president of business development and communications told DeSmogBlog. “The meeting was simply to inform and update the administration on that project.”

Pipkin also denied that two separate meetings took place in January 2013 between Cheniere and Zichal, telling DeSmogBlog, “Our records indicate only one meeting with Zichal on the 29th.” She did not respond to repeated requests for clarification on that claim.

While at the White House, Zichal earned a salary of $140,000 per year. If elected to the Cheniere board, she will make $180,000 per year, plus own 6,000 shares of Cheniere stock.

White House Open Door for Cheniere

According to a DeSmogBlog review of White House meeting logs, between 2009 and 2013, the Obama White House held 32 meetings with Cheniere board members and lobbyists, including the two attended by Souki, Desai and Outtrim.

Together, Souki and Outtrim attended four other meetings with White House officials and eight more each, either on their own or as part of other meeting blocs.

The Obama White House door has remained open to Outtrim even though she donated $10,000 to Republicans running in the the 2014 mid-term elections, according to OpenSecrets.org. Outtrim has also co-hosted a fundraiser for U.S.Sen. John Cornyn (R-TX).

Just 10 days after Cheniere landed its final approval from FERC to export LNG from Sabine Pass on April 16, 2012, the White House hosted a meeting with Outtrim and fellow board member R. (Robert) Keith Teague.

Majida Mourad, vice president of government relations for Cheniere, also met five times with the White House.

Two of those meetings were held directly with President Barack Obama himself, one on December 4, 2011, and another on January 18, 2013. First Lady Michelle Obama also attended the second meeting.

Prior to becoming a lobbyist for Cheniere, Mourad served as a senior aide for Spencer Abraham, former secretary of energy during the first term of the Bush Administration.

“Not Uncommon”

Some wonder whether Zichal will provide Cheniere even further top-level access to the Obama Administration if elected to the company’s board.

“Heather Zichal taking a position on Cheniere’s board of directors would be another example of the revolving door between those who set energy policies and the corporations that reap financial benefits from those policies,” Emily Wurth, water program director at Food & Water Watch, told DeSmogBlog.

Read the rest of this entry →

Former Obama Energy Aide Named to Board of Fracked Gas Exports Giant Cheniere

11:14 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

 

Face photo of Heather Zichal

Revolving door: An Obama energy aide may join a fracking giant.

Heather Zichal, former Obama White House Deputy Assistant to the President for Energy and Climate Change, may soon walk out of the government-industry revolving door to become a member of the board of directors for fracked gas exports giant Cheniere, who nominated her to serve on the board.

The announcement, made through Cheniere’s U.S. Securities and Exchange Commission Form 8-K and its Schedule 14A, comes just as a major class-action lawsuit was filed against the board of the company by stockholders.

In reaction to the lawsuit, Cheniere has delayed its annual meeting. At that meeting, the company’s stockholders will vote on the Zichal nomination.

The class-action lawsuit was filed by plaintiff and stockholder James B. Jones, who alleges the board gave stock awards to CEO Charif Souki in defiance of both a stockholders’ vote and the company’s by-laws.

Souki — a central character in Gregory Zuckerman‘s book The Frackers — became the highest paid CEO in the U.S. as a result of the maneuver, raking in $142 million in 2013, $133 million of which came from stock awards.

Zichal was nominated to join Cheniere’s audit committee of the board, and will be paid $180,000 per year for the gig if elected.

Among the audit dommittee duties: “Prepare and review the audit committee report for inclusion in the proxy statement for the company’s annual meeting of stockholders,” which is now set for September 11 after the push-back following the filing of the stockholder class-action lawsuit.

“The audit committee’s responsibility is oversight, and it recognizes that the company’s management is responsible for preparing the company’s financial statements and complying with applicable laws and regulations,” Cheniere’s audit committee charter further explains.

Cheniere (stock symbol LNG, shorthand for “liquefied natural gas”) is currently awaiting a final decision on Corpus Christi LNG, its proposed LNG exports facility. That terminal would send gas obtained predominantly via hydraulic fracturing (“fracking”) to the global market.

The company already received the first ever final approval to export fracked gas from the U.S. Federal Energy Regulatory Commission (FERC) in April 2012 for itsSabine Pass LNG export terminal, which is scheduled to be operational by late-2015.

The nature of what role Zichal will play on the board and audit committee of the first company to make a major bet on LNG exports remains unclear. But one thing remains clear: she joins a politically well-connected cadre of Cheniere board members.

Other prominent Cheniere board members include John Deutch, former head of the U.S. Central Intelligence Agency (CIA) and Vicky Bailey, a FERC commissioner, both of whom worked for the Clinton administration.

And given Zichal’s former role as liaison between the oil and gas industry at the White House and her track record serving in that role, it raises the question: was she working for the industry all along?

Zichal Oil and Gas Services

Zichal was best known to many as the main mediator between the oil and gas industry and the White House during her time working for the Obama administration. In fact, Cheniere cites that experience as the rationale for nominating her to serve on the board.

“Zichal has extensive knowledge of the domestic and global energy markets as well as the U.S. regulatory environment,” reads the “skills and qualifications” portion of her nomination announcement on Cheniere’s Schedule 14A. “She brings a diversified perspective about the energy industry to our board having served in significant government positions during her career.” 

As Obama’s “climate czar,” Zichal headed up the effort — mandated via an April 13, 2012 Obama Executive Order — to streamline regulatory oversight of the gas industry in the U.S.

Titled, “Supporting Safe and Responsible Development of Unconventional Domestic Natural Gas Resources,” the Executive Order signed in the form of a “Friday news dump” created “a high-level, interagency working group that will facilitate…domestic natural gas development” overseen by Zichal.

Obama signed the Executive Order after meeting with Jack Gerard, head of the American Petroleum Institute (API), and other industry leaders. According to EnergyWire, API requested the creation of that working group.

“We have called on the White House to rein in these uncoordinated activities to avoid unnecessary and overlapping federal regulatory efforts and are pleased to see forward progress,” Gerard told the Associated Press in response to a question about the order.

A month later on May 15, Zichal spoke to API about her efforts and those of the Obama administration on fracking.

“It’s hard to overstate how natural gas — and our ability to access more of it than ever — has become a game-changer and that’s why it’s been a fixture of the President’s ‘All of the Above’ energy strategy,” she told API.

Just think about it: a few years ago, the conventional wisdom was that the United States would need to build more terminals to import natural gas overseas. And today, America is the world’s leading producer of natural gas and we’re actually exploring opportunities for exports.

As a May 2012 Bloomberg article explained, among Zichal’s tasks was wooing API head Jack Gerard, which she appears to have succeeded at.

Similar to the interagency working group created by the April 13, 2012, Executive Order, Zichal also oversaw the Bakken Federal Executives Group, which was created through the signing of Executive Order 13604 on March 22, 2012. That order was part of the same package that called for expedited building of the southern leg of the Keystone XL tar sands pipeline.

Executive Order 13604 created an interagency steering committee with a goal “to significantly reduce the aggregate time required to make federal permitting and review decisions on infrastructure projects while improving outcomes for communities and the environment.”

Zichal was also instrumental in legalizing the American Legislative Exchange Council‘s (ALEC) approach for fracking chemical fluid disclosure on U.S. public lands, overseen by the U.S. Department of Interior’s Bureau of Land Management.

“Zichal met more than 20 times in 2012 with industry groups and company executives lobbying on the proposed rule,” reported EnergyWire. “Among them were the American Petroleum Institute (API) and the Independent Petroleum Association of America (IPAA), along with BP America Inc., Devon Energy Corp. and Exxon Mobil Corp.”

Beyond overseeing streamlined permitting for fracking sites on both public and private lands, Zichal also oversaw the White House file for the Pavillion, Wyo., fracking groundwater contamination study.

Conducted by the U.S. Environmental Protection Agency (EPA), many believe the White House — counseled by Zichal — made a political calculus to cancel the ongoing investigation, the first of three major major studies on the subject shutdown by the EPA.

“Deeply Embedded”

The Zichal nomination is taking place alongside the deployment of the Obama Administration regulating coal-fired power plants through the U.S. Environmental Protection Agency. The rule is a de facto endorsement of fracking and gas-fired power plants as part of the “all of the above” energy policy.

As the Zichal case makes clear with regards to climate change-causing fracked gas, LNG exports flow through the revolving door in Washington, DC, and beyond.

“The fact that one of Obama’s top climate advisors is now helping expand fossil fuel use raises questions about how deeply embedded oil and gas industry interests are in the administration,” Jesse Coleman, a researcher for Greenpeace USA told DeSmogBlog.

White House Meeting Logs: Big Rail Lobbying Against “Bomb Train” Regulations It Publicly Touts

10:21 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

The rail industry offers up claims about how much it cares about safety when speaking to the public. But behind closed doors, the public relations pitch goes by the wayside in favor of hard-nosed lobbying muscle to avoid accountability.

The Obama White House Office of Information and Regulatory Affairs (OIRA) has held the majority of its meetings on the proposed federal oil-by-rail safety regulations with oil and gas industry lobbyists and representatives.

But OIRA meeting logs reviewed by DeSmogBlog reveal that on June 10, theAmerican Association of Railroads (AAR) and many of its dues-paying members also had a chance to convene with OIRA.

Big Rail has talked a big game to the public about its desire for increased safety measures for its trains carrying oil obtained via hydraulic fracturing (“fracking”) in the Bakken Shale. What happens behind closed doors, the meeting logs show, tells another story.

At the June 12-13 Railway Age Oil-by-Rail Conference, just two days after rail industry representatives met with OIRA, American Association of Railroads President Edward Hamberg, former assistant secretary for governmental affairs at the U.S. Department of Transportation (DOT), made the case for safety.

“Railroads believe that federal tank car standards should be raised to ensure crude oil and other flammable liquids are moving in the safest car possible based on the product they are moving,” said Hamberg.

“The industry also wants the existing crude oil fleet upgraded through retrofits or older cars to be phased out as quickly as possible.”

Yet despite public declarations along these lines, proactive safety measures were off the table for all four of Big Rail’s presentations to OIRA.

Though private discussions, the documents made public from the meeting show one consistent message from the rail industry: safety costs big bucks. And these are bucks industry is going to fight against having to spend.

Massive War Room

Those present at the June 10 OIRA meeting included representatives from AAR, the American Short Line & Regional Railroad Association, Union PacificBurlington Northern Santa Fe (BNSF), CSX CorporationNorfolk Southern and the DOT.

Akin to the gargantuan war room in the film “Dr. Strangelove,” 26 people took part in the session.

Invitees included Meredith Kelsch, senior attorney for DOT; Orest Dachniwsky, associate general counsel for BNSF; Robert Schmidt, senior manager of operations and casualty analysis for Union Pacific; and Richard Theroux, who has worked at the Office of Management and Budget — parent of OIRA — for nearly three decades.

“19th Century Technology”

The heading on the first slide of CSX’s presentation for OIRA stated, “ECP brakes are expensive and do not offer material safety advantages.”

ECP is industry shorthand for Electronically Controlled Pneumatic brakes, currently considered the best available brakes in the business.

At a National Transportation Safety Board (NTSB) hearing in April, Richard Connor, safety specialist for DOT’s Federal Railroad Administration (FRA), gave a presentation comparing the conventional air brake system used on most freight trains to the ECP brakes passed over by CSX.

“I’m not sure with the audience if you all understand how the current air brake systems on our freight trains out there operate today, but it’s basically 19th century technology,” said Connor.

Connor also described the performance of the brakes in an emergency situation as “painfully slow” in comparing ECP’s response time to that of the conventional braking system.

“One of the biggest advantages of ECP is that signal to apply your brakes…is going at the speed of light…it’s a much quicker signal,” he said.

Connor also discussed how ECP would “offer material safety advantages” over current technology in an oil train accident, even if expensive.

“For the purpose of why we would want ECP on, say, a unit train like these oil trains, [it’s] to reduce the impact of a derailment or reduce the damages caused by a derailment of these types of trains,” explained Connor.

“[The purpose] is you get a much quicker application, you reduce that kinetic energy involved with that train.”

Speed-Racing

BNSF serves as the Queen Bee in the oil-by-rail world.

Read the rest of this entry →

Meeting Logs: Obama Quietly Coddling Big Oil on “Bomb Trains” Regulations

8:53 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

The exploding CSX Corporation oil-by-rail train in Lynchburg, Virginia owned by Plains All American was on its way to the Yorktown facility. Yorktown has been marked a potential export terminal if the ban on exporting U.S. oil is lifted.

When Richard Revesz, Dean Emeritus of New York University Law School, introduced Howard Shelanski at his only public appearance so far during his tenure as Administrator of the White House Office of Information and Regulatory Affairs (OIRA), Revesz described Shelanski as, “from our perspective, close to the most important official in the federal government.”

OIRA has recently reared its head in a big way because it is currently reviewing the newly-proposed oil-by-rail safety regulations rolled out by the Department of Transportation (DOT) and Pipeline and Hazardous Materials Safety Administration (PHMSA).

During his presentation at NYU, Shelanski spoke at length about how OIRA must use “cost-benefit analysis” with regards to regulations, stating, “Cost-benefit analysis is an essential tool for regulatory policy.”

But during his confirmation hearings, Shelanski made sure to state his position on how cost-benefit analysis should be used in practice. Shelanski let corporate interests know he was well aware of their position on the cost of regulations and what they stood to lose from stringent regulations.

“Regulatory objectives should be achieved at no higher cost than is absolutely necessary,” Shelanski said at the hearing.

With the “cost-benefit analysis” regarding environmental and safety issues for oil-by-rail in OIRA’s hands, it appears both the oil and rail industries will have their voices heard loudly and clearly by the White House.

A DeSmogBlog review of OIRA meeting logs confirms that in recent weeks, OIRAhas held at least ten meetings with officials from both industries on oil-by-rail regulations. On the flip side, it held no meetings with public interest groups.

“Cost-Benefit”: A Brief History

OIRA was created in 1980 by President Ronald Reagan with the goal of getting rid of “intrusive” regulations.

“By instructing agencies to clear drafts of regulations through OIRA, Presidents have made the agency…a virtual choke point for federal regulation,” explains theCenter for Progressive Reform, a think-tank critical of OIRA and its cost-benefit analysis.

Cost-benefit analysis was put on the map by Harvard Law School professor Cass Sunstein, “regulatory czar” and head of OIRA for President Barack Obama before Shelanski. Read the rest of this entry →