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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 →

Revealed: Emails Show ND Ethics Law Potentially Broken on Petraeus Fracking Trip

9:18 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

A digital envelope

Emails obtained through a standard Open Records Statute request in North Dakota show Petraeus’ fracking field trip’s ethical & legal issues.

DeSmogBlog has obtained emails via North Dakota’s Open Records Statute revealing facts that could be interpreted as indicating that North Dakota Treasurer Kelly Schmidt broke State Investment Board ethics laws.

The potential legal breach occurred during a late-April fracking field trip made to the state by former CIA Director Gen. David Petraeus.

In a radio interview responding to DeSmogBlog’s original investigation about the trip, Schmidt said rolling out the red carpet for Petraeus — who now works at Manhattan-based private equity giant Kohlberg Kravis Roberts (KKR), which holds over $1 billion in oil and gas industry assets and calls itself a “mini oil and gas company“ — was “not unusual.”

KKR initially told DeSmogBlog it followed all state and federal laws during the Petraeus visit.

But new emails obtained by DeSmogBlog from both the North Dakota State Investment Board and the Office of the North Dakota State Treasurer call that and much more into question.

Rewinding back to where it all began, for the final stops of the two-day Petraeus visit to North Dakota, he and his KKR colleagues Ari Barkan and Vance Serchuk met with representatives from the North State Investment Board and the North Dakota Department of Land Trusts.

Banal convenings at face-value, what preceded and followed the meetings tells a bigger story: first a crucial plane flight and then a follow-up invitation to come to New York City to talk business.

Looked at on the whole, the plane flight and what came after it raises fundamental legal and ethical questions about the burgeoning — and much-touted in some circles — North Dakota oil and gas Legacy Fund.

Fly Like an Eagle

On day one of the Petraeus visit, Schmidt flew on a private plane chartered byKKR from the Bakken Shale oil fracking fields in Watford, North Dakota out to Bismarck, North Dakota.

In introducing Petraeus in Bismarck for a speaking engagement with the North Dakota National Guard, Schmidt thanked the troops for fighting in oil wars, as seen in a video obtained by DeSmogBlog from a Freedom of Information Act request. It was skewered in a recent episode of comedian Lee Camp‘s show, “Redacted Tonight.”

“David and I have been out in the western portion of North Dakota where we have shared with him the challenges we’ve been facing to help make our nation and our world an energy independent country so that you and your fellow officers and enlisted folks never have to go over there again in order to fight for the oil we all need,” said Schmidt.

KKR — as we discovered in an earlier Open Records Statute request — required Schmidt to get legal clearance to fly on the private plane. Schmidt got the clearance within a couple of hours from Assistant Attorney General Janilyn Murtha.

Murtha gave Schmidt the legal clearance because — although Schmidt sits on the Board of the State Investment Board by legal mandate — “KKR does not have any current or pending business relationship with the [State Investment Board],”Murtha wrote.

Therefore, Murtha continued, “the conflict of interest provisions of the aforementioned code of conduct and associated fiduciary responsibilities are not implicated by the benefit described herein.”

Most important is what Murtha wrote next.

“If in the future the [State Investment Board] considers entering into a business relationship with KKR, and Treasurer Schmidt is then an acting board member, she may bring the prior contact with KKR to the attention of both the board and legal counsel and determine at that time if a conflict exists.”

New emails obtained by DeSmogBlog demonstrate Schmidt knew KKR had an April 30 breakfast with the State Investment Board to talk business. In fact, the new emails reveal Schmidt helped set the meeting up.

Further, other emails show Murtha forwarded the legal clearance she wrote for Schmidt off to David Hunter and Darren Schulz, Chief Investment Officer (CIO) and Deputy CIO for the State Investment Board, respectively.

In other words, all parties involved were “in the know.”

The new documents also portray that, in the trip’s aftermath, KKR and the State Investment Board have kept in touch and scheduled a mid-July meeting to discuss ”entering into a business relationship” with one another.

New York, New York

A few days after the April 30 breakfast meeting held between the KKR team and both Hunter and Schulz, Hunter sent a thank you email to KKR’s Ari Barkan. Barkan serves as Director for KKR’s Client and Partner Group.

“I just wanted to drop you a note to let you know I truly enjoyed our meeting last week and found our conversation with David, Vance, Darren and yourself to be truly compelling,” Hunter wrote to Barkan. “As your schedule permits over the next few weeks, let’s attempt to set up a meeting in New York during the first two weeks of July or August.”

After kicking back-and-forth a few emails, Barkan told Hunter a mid-July business meeting date would work best for a meeting at KKR’s New York City office.

“Please also keep in mind that, at the moment, I am envisioning two separate topics of discussions – one connected to private markets and one to credit – so really we are talking about 1.5 hours for each one,” Barkan wrote in an email.

Emails show Hunter invited Schmidt to the mid-July gathering, though she had to decline the invitation due to other commitments.

Breaking the Law?

So, did Schmidt engage in breaking the law?

Read the rest of this entry →

Lee Camp Features Gen. Petraeus Oil Wars Video on “Redacted Tonight”

5:20 pm in Uncategorized by Steve Horn

Comedian Lee Camp premiered a never-before-televised video of former CIA Director General David Petraeus  — who now serves as Chairman of the Kohlberg Kravis Roberts (KKR)’s Global Institute  —  introduced in front of the North Dakota National Guard by Treasurer Kelly Schmidt at an April 29 event in Bismarck, North Dakota.

In the original video I initially obtained via Freedom of Information Act and published on YouTube, Schmidt thanked the troops at the National Guard event for fighting wars for oil “over there” so that we can all have a dependent flow of oil over here. The back-drop of Petraeus being in town was a field trip to the Bakken Shale oil fracking fields, which according to Schmidt’s short introduction, has helped make oil wars less necessary.

Televised on the second episode of his new show, “ Redacted Tonight,” Camp introduced the video, showed a small portion of it (the whole thing is close to an hour and 14 minutes) and produced a four and a half minute segment, which packs a punch, provides some good laughs and covers a lot of ground.

The oil wars video was obtained and published in part two of an ongoing investigative series published on DeSmogBlog.com about the Petraeus fracking field trip. Part three is currently being worked on and will be published soon.

For now, sit back, watch the video and stay tuned for part three of the series on DeSmogBlog.com. And if you like the video or any of the articles, please share them with your friends, family and colleagues!

ND Treasurer: Red Carpet Rollout for Gen. Petraeus Fracking Field Trip “Not Unusual”

3:19 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Petreaus drinking coffee

Petraeus’ pro-fracking mission received a hero’s welcome in North Dakota.

North Dakota Treasurer Kelly Schmidt has responded to DeSmogBlog’s investigation of the Bakken Shale basin fracking field trip her office facilitated for former CIA Director Gen. David Petraeus, who now works at the Manhattan-based private equity firm Kohlberg Kravis Roberts (KKR).

Schmidt expanded on the initial comments she provided to DeSmogBlog in response to our findings obtained via North Dakota Open Records Statute. Among other things, she described the blurred lines existing between the North Dakota government, the oil industry and private equity firms like KKR as “not unusual.”

Schmidt’s comments came on May 23 on WDAY’s Jay Thomas Show, guest hosted that day by Rob Port, just over three weeks after her office hosted Petraeus.

DeSmogBlog’s May 22 investigative piece revealed that KKR — which has ties to North Dakota’s hydraulic fracturing (“fracking”) boom via Samson Resources and The Ridge housing complex and considers itself a “mini oil and gas company” — wrote the press release for the Office of North Dakota State Treasurer announcing Petraeus’ visit, closely counseled Schmidt’s office on media strategy and hosted Schmidt on a company chartered private jet. 

Radio host Port was the “winner of the Americans For Prosperity Award for Online Excellence” according to his biography on his Say Anything blog, and is also a policy fellow for the North Dakota Policy Council, a wing of the State Policy Network “stink tanks.”

Prior to interviewing Schmidt, Port had previously written an article on the same day the DeSmogBlog piece was published in response to it, exonerating Schmidt for what unfolded during the trip. His interview with Schmidt on the Jay Thomas Show did much the same.

KKR Press Release Writing “Not Unusual”

After explaining how she initially met Petraeus — who on top of his role at the KKR Global Institute, also works as an adjunct professor teaching KKR’s curriculum at CUNY Honors College, USC and Harvard University — Schmidt responded to a question by Port, saying it was “not something unusual” for KKRto draft the press release now published on the treasurer’s office website.

“We worked collaboratively with KKR to set things up. When you’re working with someone who has the caliber and in some cases security issues that I may not be aware of nor my staff, we always work together with staff of someone who’s coming to visit or someone of his caliber,” she said. “So to have them create a press release was not something unusual.”

Schmidt also cited another tie Petraeus has to North Dakota, which served as a major impetus for KKR and the treasurer’s office to co-manage the media scrupulously: Paula Broadwell.

Schmidt Thanks ND National Guard for Oil War

Petraeus resigned from the CIA in November 2012 after it got out that he had an extramarital affair with his biographer, Paula Broadwell.

Broadwell — author of the book, All In: The Education of General David Petraeus — is a native of Bismarck, ND, the final destination of Petraeus’ late-April trip to the state.

Bismarck, in turn, was a key part of the trip. While there, Petraeus gave a lecture on leadership to the North Dakota National Guard.

In introducing Petraeus at the National Guard event, Schmidt thanked the troops in attendance for fighting in a war “over there for the oil we all need.”

“David and I have been out in the western portion of North Dakota where we have shared with him the challenges we’ve been facing to help make our nation and our world an energy independent country so that you and your fellow officers and enlisted folks never have to go over there again in order to fight for the oil we all need,” said Schmidt in a video obtained via Freedom of Information request by DeSmogBlog from the North Dakota National Guard.

Schmidt also told Port the North Dakota treasurer’s office was happy to do the media bidding of both Petraeus and KKR to ensure the National Guard speaking event went smoothly.

“Most people are familiar with the indiscretion that [Petraeus] had and its relationship to North Dakota,” she told Port. “And I was concerned this would take on legs and have a life of its own and that was something none of us wanted to see happen…I did not want this to become something it was never intended to be.”

“Smell Test”

Port also said on the show that DeSmogBlog’s alleged claim that “[Petraeus] was kept from the media doesn’t pass the smell test.”

Read the rest of this entry →

Revealed: Former Energy in Depth Spokesman John Krohn Now at EIA Promoting Fracking

9:11 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

For those familiar with U.S. Energy Information Administration’s (EIA) work, objectivity and commitment to fact based on statistics come to mind. Yet as Mark Twain once put it, “There are three kinds of lies: lies, damned lies, and statistics.”
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That’s where John Krohn comes into play. A former spokesman for the gas industry front group Energy in Depth (EID), Krohn now works on the Core Team for EIA’s “Today in Energy!

Krohn has been at EIA since at least January 2014, when his name first appeared on the EIA website. On his Twitter account, he describes himself as an EIA communications manager.

As DeSmog revealed in February 2011, Energy In Depth was launched with a heavy injection of funding from oil and gas industry goliaths such as BP, Halliburton, Chevron, Shell and XTO Energy (now owned by ExxonMobil).

With its public relations efforts conducted by FTI Consulting, EID now serves as a key pro-industry front group promoting unfettered hydraulic fracturing (“fracking”) to the U.S. public.

Krohn follows in the footsteps through the government-industry revolving door of the man President Barack Obama named to head the U.S. Department of Energy (DOE) for his second term, former Massachusetts Institute of Technology “frackademic,” Ernest Moniz. DOE is the parent agency for EIA.

Further, EIA Administrator Adam Sieminski, another second-term appointee of President Obama, also passed through the same revolving door as Krohn and Moniz in his pathway to heading EIA. He formerly worked in the world of oil and gas finance. 

“From 1998 to 2005, he served as the director and energy strategist for Deutsche Bank’s global oil and gas equity team,” his EIA biography explains. “Prior to that, from 1988 to 1997, Mr. Sieminski was the senior energy analyst for NatWest Securities in the United States, covering the major U.S. international integrated oil companies.”

The revolving door, though, is as American as apple pie. What makes the Krohn appointment more alarming to some observers is what this means in the context of the potential looming shale gas and oil bubble.

This revelation comes after EIA downgraded its Monterey Shale oil reserves estimate from 13.7 billion barrels to 600 million barrels, a 96-percent decrease

EIA: “Seriously Exaggerating Shale Gas Production”

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Documents: Petraeus Fracking Field Trip Reveals ND Government, Oil, Private Equity Nexus

3:22 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

A large part of Petraeus’ visit centered around a tour of the state’s Bakken Shale basin.

DeSmogBlog has obtained hundreds of documents portraying the blurred lines between North Dakota’s government, the oil and gas industry and the private equity world. They also offer one of the first looks inside the professional life of former CIA Director Gen. David Petraeus after he resigned from the agency in 2012.

The documents reveal Kohlberg Kravis Roberts (KKR) — a private equity firm where Petraeus now works at the KKR Global Institute — wrote a press release for North Dakota’s State Treasurer announcing the Petraeus visit, meticulously counseled the state treasurer’s office on media strategy and hosted the state treasurer on its company plane.

A large part of Petraeus’ visit centered around a tour of the state’s Bakken Shale basin, where upwards of 1 million barrels of oil are extracted each day via hydraulic fracturing (“fracking”). The Bakken pumped out its billionth barrel of oil during his stay.

KKR, with $87 billion in assets, owns two major Bakken entities: The Ridge in Williston, ND, and Samson Resources.

The Ridge is a KKR-owned housing complex for Bakken oil and gas workers, while Samson Resources is a major company fracking for oil and gas throughout theU.S., including in the Bakken.

With over $4 billion sitting in an energy investment fund as of June 2012, KKR also owns over $950 million in oil and gas industry assets. Marc Lipschultz, head of energy and infrastructure for KKR, called the firm a “mini oil and gas company“ in an April 2013 interview with Privcap.

“We have our own technical abilities attached to the firm we have our own back office [and] we can manage the daily flows of oil and gas in drilling wells and managing our own hedges,” said Lipschultz. 

KKR’s Stage-Managing

At face value, the Petraeus visit seemed rather banal, garnering no national press attention and little local media coverage.

Amy Dalrymple, a reporter for the Oil Patch Dispatch, was the only one to cover it. Her short piece devoted but a single paragraph to Petraeus’ KKR connection.

“Petraeus has a tie to the Bakken through private equity firm Kohlberg Kravis Roberts…which is partnering with other investors on a 164-acre housing development in Williston,” Dalrymple wrote. “Petraeus works for KKR as chairman of the KKR Global Institute.”

But e-mails reveal KKR stage-managed the entire event from start to finish, doing so quietly and behind the scenes.

According to the emails, planning began on March 18, when Ari Barkan, director of KKR’s client and partner group, reached out to treasurer Kelly Schmidt to share a draft agenda for the forthcoming Petraeus visit. In a March 24 email, Barkan explained to Schmidt the rationale behind Petraeus’ visit.

“Gen. Petraeus would ideally like to learn as much as possible about realities on the ground connected with development of our shale gas/oil resources, including a sense of the challenges that operators, local/state governments, business leaders, and other community leaders are experiencing,” Barkan wrote.

“The development of these resources is one of the key underpinning (sic) of the nation’s renaissance, in his view, and he would be delighted to gain additional insights into what the benefits (sic) as well as the issues people are faced with.”

The draft and final agenda included a tour of a Bakken Shale oil field and a meeting with North Dakota community leaders at KKR’s The Ridge, as well as aPetraeus speaking event hosted by the North Dakota National Guard and other meetings.

KKR facilitated how these events would unfold, breaking down the Petraeus visit minute-by-minute. And North Dakota’s government was pleased to facilitate KKR’s plans. Read the rest of this entry →