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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 →

TransCanada Charitable Fund: Keystone XL South “Good Neighbor” Charm Offensive

1:40 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

No KXL sign in front of cops

TransCanada is trying to bribe its way to success, but is anyone buying?

TransCanada has taken a page out of former U.S. President Franklin Delano Roosevelt’s playbook and deployed a public relations “charm offensive” in Texas, home of the southern leg of its Keystone XL tar sands pipeline now known as the Gulf Coast Pipeline Project.

In the 1930s and 1940s, Roosevelt utilized a “good neighbor policy“ — conceptualized today as “soft power” by U.S. foreign policy practitioners — to curry favor in Latin America and win over its public. Recently, TransCanada announced it would do something similar in Texas with its newly formed TransCanada Charitable Fund.

TransCanada has pledged $125,000 to 18 Texas counties over the next four years, funds it channeled through the East Texas Communities Foundation. In February, the company announced the first non-profit recipients of its initial $50,000 grant cycle.

“The fund is designed to help improve East Texas communities and the lives of their residents through grants to qualifying non-profit organizations in the counties where TransCanada pipeline operations and projects exist,” explained a press release. “All funded projects and programs fall within three charitable categories: community, safety, and the environment.”

TransCanada utilizes the “good neighbor” language in deploying its own public relations pitch.

“At TransCanada, being a good neighbor and contributing to communities is an integral part of our success,” TransCanada’s Corey Goulet said in a press release. “The establishment of the fund is another example of our commitment to long-term community investment and our dedication to the people of East Texas.”

Fund Launched After Safety Issues Revealed

Less than a week after Public Citizen published its November 2013 report addressing safety issues discovered during the construction phase of KeystoneXL’s southern leg, TransCanada announced the launch of its charitable fund.

Public Citizen‘s report, “Construction Problems Raise Questions About the Integrity of the Pipeline,” found 250 miles of the pipelines’ 485-mile route had faulty welding, dents and several parts patched up, among other anomalies.

Julia Trigg Crawford, a Lamar County resident (one of the counties eligible for TransCanada’s grants) best known as the landowner who filed a major eminent domain lawsuit against TransCanada for Keystone XL South, told DeSmogBlog she believes the timing of the fund’s launch is suspect.

“Texans are smart enough to see what’s going on here,” Crawford said.

“Before the heat got turned up with the Public Citizen report, TransCanada’s community involvement consisted of half-page newspaper ads across Northeast Texas saying, ‘We want to be more than just a pipeline company. We want to be a trusted neighbor.’”

Environment and Safety Grants

Despite the concerns about the ecological impacts and safety issues related to Keystone XL’s southern half (or perhaps because of them), environment and safety are two of the categories TransCanada will give grants to out of the fund.

Safety grant “projects will enable emergency personnel to respond quickly and effectively to local needs and focus on emergency preparedness, accident prevention, and education and training,” says TransCanada on its grant application form, while environment grant “programs will conserve important habitat, protect species at risk, and educate individuals about the importance of the environment.”

Non-profits are eligible for grants of up to $5,000.

Not Charming, Rather Offensive

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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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ALEC, CSG, ExxonMobil Fracking Fluid “Disclosure” Model Bill Failing By Design

11:02 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Official portrait of Representative DeGette

Representative Diana DeGette says fracking bills make a mockery of disclosure.

Last year, a hydraulic fracturing (“fracking”) chemical fluid disclosure “model bill” was passed by both the Council of State Governments (CSG) and the American Legislative Exchange Council (ALEC). It proceeded to pass in multiple states across the country soon thereafter, but as Bloomberg recently reported, the bill has been an abject failure with regards to “disclosure.”

That was by design, thanks to the bill’s chief author, ExxonMobil.

Originating as a Texas bill with disclosure standards drawn up under the auspices of the Obama Administration’s Department of Energy Fracking Subcommittee rife with oil and gas industry insiders, the model is now codified as law in Colorado, Pennsylvania, and Illinois.

Bloomberg reported that the public is being kept “clueless” as to what chemicals are injected into the ground during the fracking process by the oil and gas industry.

“Truck-Sized” Loopholes: Fracking Chemical Fluid Non-Disclosure by Design

“Drilling companies in Texas, the biggest oil-and-natural gas producing state, claimed similar exemptions about 19,000 times this year through August,” explained Bloomberg. “Trade-secret exemptions block information on more than five ingredients for every well in Texas, undermining the statute’s purpose of informing people about chemicals that are hauled through their communities and injected thousands of feet beneath their homes and farms.”

For close observers of this issue, it’s no surprise that the model bills contain “truck-sized” loopholes.

“A close reading of the bill…reveals loopholes that would allow energy companies to withhold the names of certain fluid contents, for reasons including that they have been deemed trade secrets,” The New York Times explained back in April.

Disclosure Goes Through FracFocus, PR Front For Oil and Gas Industry

The model bill that’s passed in four states so far mandates that fracking chemical fluid disclosure be conducted by FracFocus, which recently celebrated its one-year anniversary, claiming it has produced chemical data on over 15,000 fracked wells in a promotional video.

The reality is far more messy, as reported in an August investigation by Bloomberg.

“Energy companies failed to list more than two out of every five fracked wells in eight U.S. states from April 11, 2011, when FracFocus began operating, through the end of last year,” wrote Bloomberg. “The gaps reveal shortcomings in the voluntary approach to transparency on the site, which has received funding from oil and gas trade groups and $1.5 million from the U.S. Department of Energy.”

This moved U.S. Representative Diana DeGette (D-CO) to say that FracFocus and the model bills it would soon be a part of make a mockery of the term “disclosure.”

“FracFocus is just a fig leaf for the industry to be able to say they’re doing something in terms of disclosure,” she said.

“Fig leaf” is one way of putting it.

Another way of putting it is “public relations ploy.” As Dory Hippauf of ShaleShock Media recently revealed in an article titled “FracUNfocusED,” FracFocus is actually a PR front for the oil and gas industry.

Hippauf revealed that FracFocus‘ domain is registered by Brothers & Company, a public relations firm whose clients include America’s Natural Gas Alliance, Chesapeake Energy, and American Clean Skies Foundation – a front group for Chesapeake Energy.

Given the situation, it’s not surprising then that “companies claimed trade secrets or otherwise failed to identify the chemicals they used about 22 percent of the time,” according to Bloomberg‘s analysis of FracFocus data for 18 states.

Put another way, the ExxonMobil’s bill has done exactly what it set out to do: business as usual for the oil and gas industry. Read the rest of this entry →

Breaking: SUNY Buffalo Shuts “Frackademia” Center, Shale Resources and Society Institute

7:40 pm in Uncategorized by Steve Horn

SUNY Buffalo

Today, SUNY Buffalo closed the doors of its Shale Resources and Society Institute (SRSI), what we at DeSmog have described as an epicenter for “frackademia” and a public relations front for the oil and gas industry to promote hydraulic fracturing (“fracking“) under the guise of scientific legitimacy that a university offers.

A letter from SUNY Buffalo President Satish K. Tripathi said that the nail in the coffin for SRSI was what we coined its “shill gas study,” the first paper published by SRSI. All of the co-authors of this paper had direct ties to the oil and gas industry, as did four out of five of its peer reviewers.

Tripathi explained his rationale behind slamming the door shut on SRSI, writing,

The university upholds academic freedom as a core principle of our institutional mission. With that being said, academic freedom carries with it inherent responsibilities…The May 15, 2012 report…led to allegations questioning whether historical financial interests influenced the authors’ conclusions. The fundamental source of controversy revolves around clarity and substantiation of conclusions. Every faculty member has a responsibility to ensure that conclusions in technical reports or papers are unambiguous and supported by the presented data. It is imperative that our faculty members adhere to rigorous standards of academic integrity, intellectual honesty, transparency, and the highest ethical conduct in their work.

Because of these collective concerns, I have decided to close the Shale Resources and Society Institute.

Tripathi’s announcement comes on the heels of the upcoming SUNY Board of Trustees meeting set to take place in Albany, NY on Dec. 3-4.

New Yorkers Against Fracking proclaimed the announcement a “victory for real science over junk science peddled by the gas industry.”

Cross-Posted from DeSmogBlog

Chesapeake Energy Tied to Mansfield, OH Bill of Rights Astroturf Attack

1:10 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

The oil and gas industry is waging an 11th hour astroturf campaign in Mansfield, OH in an attempt to defeat the “Community Bill of Rights“ referendum.

A “yes” vote would, in effect, prohibit hydraulic fracturing (“fracking”) injection wells in Mansfield, a city of 48,000 located in the heart of the Utica Shale basin between Cleveland and Columbus.

In March 2012, the Ohio Department of Natural Resources (ODNR) conducted a study linking the 12 earthquakes that have occurred in Youngstown, OH to injection wells located in the city. Further, recent investigative reports by ProPublica show that these new dumping grounds – with a staggering 150,000 injection wells in 33 states and 10 trillion gallons of toxic fluid underground - are a public health hazard in the making.

And yet, for the most part, hardly anyone is talking about it.

Preferred Fluids Management LLC is the upstart business that received two well injection permits from the ODNR in the spring of 2011 that motivated the “Bill of Rights” initiative. Industry front groups ranging from Energy in Depth (EID), Energy CitizensOhio Energy Resource Alliance and “Mansfielders for Jobs” are leading the charge in the astroturf campaign to defeat it.

Why, though, has the fracking industry put so much time and effort into the placement of a measly two injection wells in Mansfield for this relatively unheard of LLC? Michael Chadsey of EID Ohio explained the importance of the waste dumping grounds at a forum on Jan. 30, 2012, stating,

If for some reason they just said, you know, we’re going to stop this process, eventually the tanks that are on-site are going to get filled up. And then all the drilling pads are going to have to shut down and all of the truck drivers will have to stop.

So…this is the part of the process that is the end part of the process. When you shut down the end, you can’t even start or continue because you have to have all the pieces of the puzzle to make this thing move. Everything is interconnected.

There’s that and then there’s the fact that Preferred Fluids Management LLC isn’t merely a “new kid on the block.” Owned and founded by Steven Mobley, the business has a story of its own worthy of sharing, as it’s closely connected to gas industry powerhouse, Chesapeake Energy.

Preferred Fluids Management LLC: A Quick Primer

According to documents on the Ohio Secretary of State’s Division of Corporations website, Preferred Fluids Management was originally incorporated in February 2010. Since then, fracking waste injection wells have been in the eye of the backlash storm from grassroots activists, environmental NGOs, lawyers, and both federal- and state-level regulators nationwide.

In Ohio, this ongoing backlash motivated Preferred Fluids to withdraw its Mansfield well permits on June 26, 2012.

“While this withdrawal appears to be a city victory over a company that sought to injection toxic poison into our soil, the city must remain vigilant against other companies,” Mansfield Mayor Tim Theaker and Law Director John Spon declared.

Roughly three weeks later, Preferred Fluids responded by filing a federal lawsuit in the Northern District Court of Ohio, stating that Mansfield “has no right under Ohio law to regulate the injection wells,” according to the Cleveland Plain Dealer. In response to the lawsuit, on Sept. 9 the Mansfield City Council voted to put the “Community Bill of Rights” referendum on the ballot for the Nov. 6 election.

The crazy set of twists and turns continued, when on Oct. 19, perhaps seeing that it’d been one-upped by the citizens of Mansfield, Preferred Fluids decided to drop its federal lawsuit.

“The need to adopt the charter amendment is even greater because it’s very possible that this industry is just regrouping to commence another assault,” Mansfield Law Director John Spon told the Mansfield News Journal, foreshadowing the astroturf battle citizens and grassroots activists are facing in Mansfield.

On Oct 5, 2011 Preferred Fluids Management owner Steven Mobley also incorporated a new company, Buckeye Brine LLC, according to the Ohio Department of State’s Division of Corporations. “It seeks to be a positive force in the communities in which it operates, buying and hiring locally whenever possible, with a strong commitment to local community causes,” according to Buckeye Brine’s website.

The Coshocton Tribune explained that, like Mobley’s Preferred Fluids Management proposal in Mansfield, the plan is to place two injection wells in Coshocton, a city of just over 11,000 southeast of Mansfield.

Buckeye Brine says it will only bring five jobs to Coshocton and has the capacity to process 4,000 to 5,000 barrels of waste fluids a day, according to the Tribune.

Mobley Family Connection to Chesapeake, Injection Wells, Earthquakes

The unanswered question remains on the table: who is Steven Mobley?

Steven Mobley’s brother is David Mobley, who currently serve as Chief Adminstrative Officer and formerly served as Land Manager of Chesapeake Operating Inc., a subsidiary of Chesapeake Energy.

Steven and David were both formerly partial co-owners of their family business, Mobley Environmental Services, according to Securities and Exchange Commission (SEC) forms. Businessweek‘s profile for Mobley Environmental Services reads,

In May 1997, Mobley Environmental Services, Inc. sold its only operating division, waste management services, to United States Filter Corporation…It also provided oilfield services, including transporting, marketing, storing, and disposing of various liquid materials used or produced as waste throughout the lifecycle of oil and gas wells.

In 1999, Vivendi Environnement aquired United States Filter Corporation for $6.2 billion. Vivendi Environnement is now known as Veolia Environnement and remains in the oil and gas industry wastewater treatment sector. Facing hard financial times in 2004, Veolia sold US Filter for $1 billion to the German corporation, Siemens, which is also in the oil and gas industry wastewater treatment business.

The frightening and growing nexus between the water privatization industry, the shale gas industry, and the wastewater treatment industry has been pointed out in reports authored by both the Colorado Independent and Food and Water Watch.

Like Mobley Environmental Services and its predecessors – and like Preferred Fluids Management and Buckeye Brine – Chesapeake Operating is also in the fracking wastewater injection business, notorious for its activity in Arkansas.

Paralleling Ohio, Arkansas, home of the Fayetteville Shale basin, has seen over 1,200 waste injection well-related earthquakes, leading the Arkansas Oil and Gas Commission to place a ban on injection wells in July 2011 in the area where the earthquakes were most prevalent, though there are still wells in other areas across the state. A February 2011 magnitude 4.7 earthquake near Greenbrier, “was the most powerful to hit the state in 35 years,” according to the Associated Press.

AP further explained that Chesapeake Energy was one of the main well injection operating culprits:

The two injection wells are used to dispose of wastewater from natural-gas production. One is owned by Chesapeake Energy, and the other by Clarita Operating. They agreed March 4 to temporarily cease injection operations at the request of the Arkansas Oil and Gas Commission.

The barrage of earthquakes served as a motivation for an ongoing class action lawsuit filed by Emerson Poynter LLP in May 2011 at the federal-level Faulkner County Circuit Court in Conway, AR against Chesapeake Operating, as well as BHP Billiton, Petroleum Americas Inc., and Clarita Operating LLC.

In a press release, Emerson Poynter explained it is suing for “millions of dollars in damages for property damage, loss of fair market value in real estate, emotional distress, and damages related to the purchase of earthquake insurance.”

Since the closure of the two injection wells, the number of earthquakes occuring in the area has fallen dramatically, according to the Arkansas Geological Survey.

Chesapeake is closely tethered to or is a member of all of the front groups waging the gas industry’s astroturf campaign in Mansfield, except for the shadowy “Mansfielders for Jobs,” including Energy in DepthAmerican Petroleum Institute, the Buckeye Energy Forum (API front group), and the Ohio Energy Resource Alliance (OERA).

OERA is an API front group led by the former head of the Koch-funded Americans for Prosperity Ohio, Rebecca Heimlich, who now also serves as Campaign Manager for API Ohio. OERA’s members include EID Ohio, API, the Ohio Oil & Gas Association (OOGA), and America’s Natural Gas Alliance, among others. Chesapeake is also a member of OOGA and ANGA.

Big Picture: Chesapeake’s Big Plans in the Utica Shale

Cheseapeake, a company currently in deep financial straits, sees the Utica Shale basin as a potential saving grace, with Forbes saying that the Utica is “crucial for Cheseapeake’s future” in a July article.

In a recent call with investors, controversial CEO Aubrey McClendon said he’s “thrilled” with its potential. He also said that Chesapeake is particularly focused on production in Columbiana, Carroll and Harrison counties.

These counties are all within 50-100 miles of Richland and Coshocton counties, the two counties where Preferred Fluid Management LLC’s and Buckeye Brine LLC’s operations are both set to be located, respectively. That makes Richland and Coshocton easily accessible dumping grounds for Chesapeake’s toxic waste.

The fracking waste injection business is a burgeoning and lucrative one, but with it comes huge costs that go above and beyond earthquakes alone.

“In 10 to 100 years we are going to find out that most of our groundwater is polluted,” Mario Salazar, an engineer who worked for 25 years at the EPA’s underground injection program told ProPublica. “A lot of people are going to get sick, and a lot of people may die.”

Grassroots activists have pledged to fight this one tooth and nail as the high stakes battle goes down to the wire.

“The battle lines are being drawn between the greed of the oil and gas industry and the rights of individuals at the local level, Bill Baker, an organizer for Frack Free Ohio told DeSmogBlog in an interview. ”Powerful organizations with no vested interest in the Mansfield community, other than to turn it into a toxic waste dump, are spending millions in advertising to convince citizens to vote ‘no’ on the Bill of Rights.”

New Gas Industry Astroturf: Landowner Advocates of NY Buses Activists to Albany Pro-Fracking Rally

6:54 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

A pro-fracking rally held on Oct. 15 in Albany, NY was described by about a dozen local media outlets as a gathering of roughly 1,000 grassroots activists from all walks of life.

All came out to add their voice to the conversation regarding the extraction of unconventional gas from the Marcellus Shale basin in New York state. But the marchers weren’t concerned landowners worried about losing their water supplies or property values. Their demand: to lift the current moratorium on fracking, which was prolonged by Democratic Gov. Andrew Cuomo on Sept. 30.

One rally attendee, Doug Lee, described the ongoing fracking moratorium as a “communist act” to the Albany Times-Union. Another described anti-fracking activists as “well-funded and organized activists masquerading as environmentalists, who often do not need to make a living in our communities.” Republican Sen. Tom Libous, observed that Hollywood stars Mark Ruffalo and Debra Winger weren’t on the scene, telling them to ”Stay in Hollywood. We don’t want you here.”

Unmentioned by any of the news outlets that covered the event was a crucial fact: these weren’t actual “grassroots” activists, but rather astroturf out-of-towners bused in from counties all across the state. Their journey was paid for by the legitimately “well-funded” oil and gas industry, which raked in profits of $1 trillion in the past decade.

According to the Associated Press, the pro-fracking rally and march were organized by a brand new front group called the Landowner Advocates of New York formed in the immediate aftermath of the recent Cuomo decision to stall on opening the fracking floodgates.

The well-known industry front group, Energy in Depth (EID), announced the launch of the Landowner Advocates of New York in an Oct. 3 blog post, mere days after the Cuomo announcement. Lee (the same man who accused Cuomo of partaking in a “communist act” by extending the fracking moratorium) wrote about the rationale behind the group’s genesis – which he is the head of and which he registered the website for – in the EID post announcing the Landowner Advocates’ launch:

Read the rest of this entry →