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Green Billionaires Club? David Vitter Owns Stock in Coal Utilities Fighting EPA Carbon Rules

10:26 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

A caricature of the Charles & David Koch as clowns

“The most patriotic Americans in the history of the Earth?”

On July 30, the Republican minority of the U.S. Senate Committee on Environment and Public Works, headed by Sen. David Vitter, released a report titled “The Chain of Environmental Command: How a Club of Billionaires and Their Foundations Control the Environmental Movement and Obama’s EPA.”

Critics of the report say it is propaganda designed to skewer the Obama EPA and environmental philanthropists for “conspiring to help the environment.”

Vitter’s chief source of campaign cash is the oil and gas industry and he recently called the billionaire Koch Brothers “two of the most patriotic Americans in the history of the Earth.”

What the 92-page report leaves out is that Vitter — an esteemed member of the Senate “Millionaires Club” — owns tens of thousands of dollars in stocks of the electric utility Wisconsin Energy Corporation (We Energies), which owns major coal-fired power plants in both Oak Creek, Wisc. and Pleasant Prairie, Wisc.

We Energies says it stands to lose economically if the proposed Obama EPA carbon rules are implemented, citing the potential risks related to legislation and regulation in its most recent U.S. Securities and Exchange Commission (SEC) Form 10-Q.

“Any legislation or regulation that may ultimately be adopted, either at the federal or state level, designed to reduce GHG emissions could have a material adverse impact on our electric generation and natural gas distribution operations,” We Energies stated on the form.

“Such regulation could make some of our electric generating units uneconomic to maintain or operate, and could adversely affect our future results of operations.”

We Energies CEO Gale Klappa also voiced dissatisfaction with the proposed rule during his company’s most recent earnings call, saying the company will submit comment to the EPA as part of the public comment period.

Not Just Wisconsin Energy

Financial disclosure forms for 2013 obtained by DeSmogBlog show that, beyond We Energies, Vitter also owns stock in other companies with “skin in the game” on fossil fuel investments, such as General ElectricNextEra Energy and Emerson Electric.

Like We Energies, NextEra Energy — which owns Florida Light & Power — said greenhouse gas regulations at either the federal or state level could hurt its corporate bottom line in its most recent SEC Form 10-Q.

“[NextEra] business could be negatively affected by federal or state laws or regulations mandating new or additional limits on the production of greenhouse gas emissions,” reads the Form 10-Q.

“Extensive federal regulation of the operations of [the company] exposes [it] to significant and increasing compliance costs and may also expose them to substantial monetary penalties and other sanctions for compliance failures.”

Vitter also owns stock in oil majors ExxonMobil and Chevron.

Vitter owns $250,000-$500,000 in Chevron stock alone, not including ownership in other related holdings, such as the company’s mutual funds. When that is tallied, Vitter owns hundreds of thousands more dollars worth of Chevron holdings.

Spokespeople for U.S. Senate Committee on Environment and Public Works and Sen. Vitter’s office did not respond to a request for comment from DeSmogBlog sent via email.

Transparency is in the Eye of the Beholder

In the opening section of the report, the U.S. Senate Committee on Environment and Public Works wrote that “the Billionaire’s Club is not, and seemingly does not, want to be transparent about the groups they fund and how much they are supporting them.”

Yet the hundreds of thousands of dollars in investments owned by Vitter in companies that stand to lose from the proposed Obama EPA carbon rules go unmentioned anywhere in the report.

Transparency, some would say, is in the eye of the beholder.

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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.

Former Chesapeake Energy CEO Aubrey McClendon Buys Fracking Wells In Ohio’s Utica Shale

9:41 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Former Chesapeake Energy CEO and Founder Aubrey McClendon is back in the hydraulic fracturing (“fracking”) game in Ohio’s Utica Shale in a big way, receiving a permit to frack five wells from the Ohio Department of Natural Resources on November 26.

“The Ohio Department of Natural Resources awarded McClendon’s new company, American Energy Utica LLC, five horizontal well permits Nov. 26 that allows oil and gas exploration on the Jones property in Nottingham Township, Harrison County,” a December 6 article appearing in The Business Journal explained. “In October, American Energy Utica announced it has raised $1.7 billion in capital to secure new leases in the Utica shale play.”

McClendon is the former CEO of fracking giant Chesapeake Energy and now the owner of American Energy Partners, whose office is located less than a mile away from Chesapeake’s corporate headquarters.

The $1.7 billion McClendon has received in capital investments for the purchase of 110,000 acres worth of Utica Shale land came from the Energy & Minerals GroupFirst Reserve CorporationBlackRock Inc. and Magnetar Capital.

McClendon — a central figure in Gregory Zuckerman’s recent book “The Frackers” — is currently under investigation by the U.S. Securities and Exchange Commission. He left Chesapeake in January 2013 following a shareholder revolt over controversial business practices.

In departing, he was given a $35 million severance package, access to the company’s private jets through 2016 and a 2.5% stake in every well Chesapeake fracks through June 2014 as part of the Founder’s Well Participation Program.

Little discussed beyond the business press, McClendon has teamed up with a prominent business partner for his new start-up: former ExxonMobil CEO Lee Raymond.

Power Mapping McClendon’s New Venture

“[Lee] Raymond has emerged as a director alongside Mr. McClendon in American Energy Ohio Holdings LLC… according to [an SEC] regulatory filing,” The Wall Street Journal reported in October.

The former Exxon CEO’s brother son John Raymond is the Managing Partner, Chief Financial Officer, and Chief Executive Officer of Minerals & Energy Group, currently the largest capital investor in McClendon’s start-up venture. He is also a partner McClendon’s new venture. Ryan Turner, Chesapeake’s Stock Plan Manager has also joined the team as a partner.

“Jefferies Group LLC gave financial advice to American Energy” for the deal,according to Bloomberg — and is listed as such on American Energy Ohio Holdings LLC’s SEC Form D.

Ralph Eads III — McClendon’s fraternity brother at Duke University — serves as Global Head of Energy Investment Banking at Jefferies Group, Inc.

“Mr. Eads…is a prince of this world,” the New York Times reported in October 2012. ”His financial innovations helped feed the gas drilling boom, and he has participated in $159 billion worth of oil and gas deals since 2007.”

Eads maintained tight financial ties with McClendon when he was at the helm of Chesapeake Energy.

High Stakes Game

In teaming up with Lee Raymond, the former CEO of ExxonMobil — notorious for its role in funding climate change denial — and his brother John, McClendon has shown he is back in Ohio ready to play ball.

But a recent Environmental Integrity Project report indicates the life-cycle climate change impacts of fracking are more severe than previously thought.

With the U.S. Navy predicting an ice-free Arctic summer by 2016 due to climate change, it’s a ball game with undeniably high stakes.