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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.

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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.

Silent Coup: How Enbridge is Quietly Cloning the Keystone XL Tar Sands Pipeline

10:48 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

A Canadian flag dripping with oil

Despite activist opposition, “pipeline giant Enbridge has quietly cloned its own Keystone XL in the U.S and Canada.”

While the debate over the TransCanada Keystone XL tar sands pipeline has raged on for over half a decade, pipeline giant Enbridge has quietly cloned its own Keystone XL in the U.S and Canada.

It comes in the form of the combination of Enbridge’s Alberta Clipper (Line 67), Flanagan South and Seaway Twin pipelines.

The pipeline system does what Keystone XL and the Keystone Pipeline System at large is designed to do: ship hundreds of thousands of barrels per day of Alberta’s tar sands diluted bitumen (“dilbit”) to both Gulf Coast refineries in Port Arthur, Texas, and the global export market.

Alberta Clipper and Line 67 expansion

Alberta Clipper was approved by President Barack Obama and the U.S. State Department (legally required because it is a border-crossing pipeline like KeystoneXL) in August 2009 during congressional recess. Clipper runs from Alberta to Superior, Wis.

Initially slated to carry 450,000 barrels per day of dilbit to market, Enbridge now seeks an expansion permit from the State Department to carry up to 570,000 barrels per day, with a designed capacity of 800,000 barrels per day. It has dubbed the expansion Line 67.

As reported on previously by DeSmogBlog, Line 67 is the key connecter pipeline to Line 6A, which feeds into the BP Whiting refinery located near Chicago, Ill., in Whiting, Ind. BP Whiting — the largest in-land refinery in the U.S. — was recently retooled to refine larger amounts of tar sands under the Whiting Refinery Modernization Project. 

Line 67 also connects to Line 61 via a fork in the road of sorts in Wisconsin. From there, it heads to Flanagan, Ill., the namesake of the start of Enbridge’s Flanagan South pipeline.

Like Keystone XL, Enbridge’s Line 67 expansion project has faced unexpected delays in its State Department and Obama Administration review process.

Flanagan South also shares a key legal commonality with TransCanada’s Keystone pipeline system.

That is, like Phase II and Phase III of that system — best known to the general public as Keystone XL’s southern leg and to TransCanada as the Gulf Coast Pipeline Project — it was permitted by the U.S. Army Corps of Engineers using the controversial Nationwide Permit 12 (NWP 12) process.

As documented here on DeSmogBlog, the southern leg of Keystone XL and Flanagan South both played a central role in separate but related precedent-setting federal-level court cases.

In reviewing the legality of approval via NWP 12 through the lens of “harms,” the courts ruled in both cases that the harms of losing corporate profits for both Enbridge and TransCanada trump the potential harms of ecological damage the pipelines could cause in the future. Climate change went undiscussed in both rulings.

According to a May 2014 company newsletter, Enbridge is “on schedule to put [Flanagan South] in operation later this year.”

“After eight months of construction, we are now in the home stretch for the nearly 600-mile pipeline project,” touts the newsletter. “At the peak of construction, between October 2013 and January 2014, there were on average 3,650 construction workers over the entire route — about 1,600 of those workers from communities located along the pipeline route.”

Seaway Pipeline

In a June 16 article titled, “Blame Canada,” Reuters pointed to two new “pipes set to hit U.S. Gulf with heavy crude,” which — as it pertains to Canada — is industry vernacular for tar sands.

Flanagan South was one of the pipelines pointed to in the Reuters piece.

The other is Enbridge’s Seaway Twin pipeline, co-owned on a 50/50 joint venture basis with Enterprise Products Partners. Seaway Twin, like Keystone XL’s southern leg, runs from Cushing, Okla., to Port Arthur, Texas.

Enbridge scheduled Line 67 to go on-line in mid-2014 and reach full-capacity by mid-2015.

But, because of backlash against the proposal from environmentalists and citizens who live along the pipeline expansion’s route, the company does not expect to receive a State Department expansion permit until mid-2015.

Flanagan South Pipeline

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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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Joe Biden Turns Fracking Missionary On Ukraine Trip

1:39 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

Caricature of Joe Biden

Joe Biden: Global fracking evangelist.

During his two-day visit this week to Kiev, Ukraine, Vice President Joe Biden unfurled President Barack Obama’s “U.S.Crisis Support Package for Ukraine.”

A key part of the package involves promoting the deployment of hydraulic fracturing (“fracking”) in Ukraine. Dean Neu, professor of accounting at York University in Toronto, describes this phenomenon in his book “Doing Missionary Work.” And in this case, it involves the U.S. acting as a modern-day missionary to spread the gospel of fracking to further its own interests.

With the ongoing Russian occupation of Crimea serving as the backdrop for the trip, Biden made Vladimir Putin’s Russia and its dominance of the global gas market one of the centerpieces of a key speech he gave while in Kiev.

“And as you attempt to pursue energy security, there’s no reason why you cannot be energy secure. I mean there isn’t. It will take time. It takes some difficult decisions, but it’s collectively within your power and the power of Europe and the United States,” Biden said.

“And we stand ready to assist you in reaching that. Imagine where you’d be today if you were able to tell Russia: Keep your gas. It would be a very different world you’d be facing today.”

The U.S. oil and gas industry has long lobbied to “weaponize” its fracking prowess to fend off Russian global gas market dominance. It’s done so primarily in two ways.

One way: by transforming the U.S. State Department into a global promoter of fracking via its Unconventional Gas Technical Engagement Program (formerly theGlobal Shale Gas Initiative), which is a key, albeit less talked about, part of President Obama’s “Climate Action Plan.”

The other way: by exporting U.S. fracked gas to the global market, namely EUcountries currently heavily dependent on Russia’s gas spigot.

In this sense, the crisis in Ukraine — as Naomi Klein pointed out in a recent article — has merely served as a “shock doctrine” excuse to push through plans that were already long in the making. In other words, it’s “old wine in a new bottle.”

Gas “Support Package” Details

Within the energy security section of the aid package, the White House promises in “the coming weeks, expert teams from several U.S. government agencies will travel to the region to help Ukraine meet immediate and longer term energy needs.”

That section contains three main things the U.S. will do to ensure U.S. oil and gas companies continue to profit during this geopolitical stand-off.

1) Help with pipelines and securing access to gas at the midstream level of production.

“Today, a U.S. interagency expert team arrived in Kyiv to help Ukraine secure reverse flows of natural gas from its European neighbors,” the White House fact sheet explains. “Reverse flows of natural gas will provide Ukraine with additional immediate sources of energy.”

2) Technical assistance to help boost conventional gas production in Ukraine. That is, gas obtained not from fracking and horizontal drilling, but via traditional vertical drilling.

As the White House explains, “U.S. technical experts will join with the European Bank for Reconstruction and Development and others in May to help Ukraine develop a public-private investment initiative to increase conventional gas production from existing fields to boost domestic energy supply.”

3) Shale gas missionary work.

“A technical team will also engage the government on measures that will help the Ukrainian government ensure swift and environmentally sustainable implementation of contracts signed in 2013 for shale gas development,” says the White House.

ExxonMobil Teaching Russia Fracking

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BP’s Lake Michigan Spill: Did Tar Sands Spill into the Great Lake?

11:16 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

Is it conventional crude or tar sands? That is the question. And it’s one with high stakes, to boot.

The BP Whiting refinery in Indiana spilled between 470 and 1228 gallons of oil (or is it tar sands?) into Lake Michigan on March 24 and four days later no one really knows for sure what type of crude it was. Most signs, however, point to tar sands.

The low-hanging fruit: the refinery was recently retooled as part of its “modernization project,” which will “provide Whiting with the capability of processing up to about 85% heavy crude, versus about 20% today.”

As Natural Resources Defense Council (NRDC) Midwest Program Director Henry Henderson explained in a 2010 article, “heavy crude [is] code for tar sands.”

Albeit, “heavy crude” is produced in places other than Alberta’s tar sands, with Venezuela serving as the world’s other tar sands-producing epicenter. So, in theory, if it’s heavy crude that spilled into Lake Michigan, it could be from Venezuela.

But in practice, the facts on the ground tell a different story. As a January 2014 article in Bloomberg outlined, the combination of the U.S. hydraulic fracturing (“fracking”) boom and the Canadian tar sands boom has brought U.S. imports of Venezuelan oil to 28-year lows.

Which brings us to the next question: how does the Canadian “heavy crude” get to BP’s Whiting refinery to begin with? Enter: Enbridge’s Line 6A pipeline.

Alberta Clipper/Line 6A

Dan Goldblatt, a spokesman for the Indiana Department of Environmental Management, told DeSmogBlog he wasn’t sure what type of oil was spilled into Lake Michigan from the BP Whiting refinery  — which goes back to why it’s just being referred to as “oil” at this point by officials.

Goldblatt said the U.S. Environmental Protection Agency (EPA) will be looking into it as part of its investigation.

“Right now they’re more focused on recovery than on what type of oil it is,” Goldblatt said. “That’s a little further down the line.”

When asked about which pipeline feeds the BP Whiting refinery beast, Goldblatt told DeSmogBlog it’s Enbridge’s Line 6A pipeline.

Part of Enbridge’s “Lakehead System,” Line 6A stretches from Superior, Wis., to Enbridge’s Griffith/Hartsdale holding terminal in northwest Indiana.

“Lakehead System serves all the major refining centers in the Great Lakes … through its connection with the affiliated Canadian pipeline,” explains Enbridge’s Lakehead System website. “Total deliveries on the Lakehead System averaged 1.65 million [barrels per day] in 2009, meeting approximately … 70 percent of the refinery capacity in the greater Chicago area.”

Enbridge’s Line 67 (AKA Alberta Clipper) pipeline serves as the corridor between Alberta’s tar sands and Line 6A. Alberta Clipper currently awaits a capacity expansion permit from the U.S. State Department, which it applied for in November 2012 and needs because it’s a U.S.-Canada border-crossing line.

It was originally approved by President Barack Obama’s State Department in August 2009.

If approved, Line 67′s expansion would morph it from a 450,000 barrels per day pipeline to a 570,000 barrels per day pipeline. Its “full design capacity is 880,000 [barrels per day] of heavy crude oil,” (emphasis mine) according to theexpansion application it submitted to the State Department.

Hydrocarbon Technologies, which offers “market insight tools covering all segments of the global hydrocarbons market,” also points to the ties that bind Alberta’s tar sands, Enbridge’s Line 6A and the BP Whiting refinery.

“Once the modernisation project is complete, BP aims to increase the use of Canadian crude from oil sands via the Enbridge [Line 6A] pipeline, which runs from Alberta to Illinois,” explains Hydrocarbon Technologies.

In 2010, Line 6A spilled in a major way in Romeoville, Ill., with 6,050 barrels of oil escaping. An account in oil and gas industry trade publication PennEnergy explains the pipeline was carrying “heavy crude oil.”

“When the leak occurred, the Line 6A was transporting approximately 459,000 barrels per day of heavy crude oil,” the reporter detailed.

The “Dilbit Disaster” Connection

Line 6A is connected to the 2010 spill of over 843,000 gallons of tar sands into the Kalamazoo River, a Lake Michigan tributary. Literally.

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Follow the Money: Three Energy Export Congressional Hearings, Climate Undiscussed

9:33 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

A joint meeting of the US Congress

Congress keeps talking, but not about climate change.

In light of ongoing geopolitical tensions in Russia, Ukraine and hotly contested Crimea, three (yes, three!) U.S.Congressional Committees held hearings this week on the U.S. using its newfangled oil and gas bounty as a blunt tool to fend off Russian dominance of the global gas market.

Though 14 combined witnesses testified in front of the U.S. Senate Committee on Energy and Natural Resources, the U.S. House Energy and Commerce Committee’s Subcommittee on Energy and Power and U.S. Senate Committee on Foreign Relations, not a single environmental voice received an invitation. Climate change and environmental concerns were only voiced by two witnesses.

Using the ongoing regional tumult as a rationale to discuss exports of U.S. oil and gas obtained mainly via hydraulic fracturing (“fracking”), the lack of discussion on climate change doesn’t mean the issue isn’t important to national security types.

Indeed, the Pentagon’s recently published Quadrennial Defense Review coins climate change a “threat force multiplier” that could lead to resource scarcity and resource wars. Though directly related to rampant resource extraction and global oil and gas marketing, with fracking’s accompanying climate change and ecological impacts, “threat force multiplication” impacts of climate change went undiscussed.

With another LNG (liquefied natural gas) export terminal approved by the U.S.Department of Energy (DOE) in Coos Bay, Ore., to non-Free Trade Agreement countries on March 24 (the seventh so far, with two dozen still pending), the heat is on to export U.S. fracked oil and gas to the global market.

So, why wasn’t the LNG climate trump card discussed in a loud and clear way? Well, just consider the source: ten of the witnesses had ties in one way or another to the oil and gas industry.

Senate Committee on Energy and Natural Resources

Headed by recently named chair U.S. Sen. Mary Landrieu (D-LA), the March 25 U.S. Senate Energy and Natural Resources Committee hearing featured four of five witnesses with industry ties, all of which went undisclosed. It was titled, “Importing Energy, Exporting Jobs. Can it be Reversed?”

“The last thing Putin and his cronies wants (sic) is competition from the United States of America in the energy race,” Landrieu declared in her opening statement. “Tyrants and dictators throughout history have had many reasons to fear revolutions, and this U.S. energy revolution is one they should all keep their eyes on!” More on that later.

Given the enthusiasim conveyed in her statement, perhaps it’s unsurprising Landrieu — whose state of Louisiana is an oil and gas industry hub like few others — also has close industry ties.

Up for re-election in 2014, Landrieu has already taken close to half a million dollars from the industry to the chagrin of environmentalistsCommittee Ranking Member Lisa Murkowski (R-AK) has taken $40,600 during this campaign cycle, as well, even though she isn’t up for re-election until 2016.

Daniel Adamson, senior counsel for the committee, worked as a lobbyist fornatural gas utility company Avista Corporation from 2004-2010.

And now for the witnesses:

Adam Sieminski: Before taking the seat as head of the U.S. Energy Information Administration (EIA) in 2012, Sieminski worked in the fossil fuel finance sector.

“From 2005 until March 2012, he was the chief energy economist for Deutsche Bank, working with the bank’s global research and trading units,” explains his EIAbiography. “From 1998 to 2005, he served as the director and energy strategist for Deutsche Bank’s global oil and gas equity team.”

- W. David Montgomery: Testifying at both this committee hearing and the U.S.House Energy and Commerce Committee’s Subcommittee on Energy and Power hearing, Montgomery is the senior vice president of NERA (National Economic Research Associates) Economic Consulting.

NERA penned a study on behalf of the DOE published in December 2012concluding LNG exports will be economically beneficial to the U.S. It recently published an updated follow-up study funded by Cheniere — the first company to receive a permit to export fracked U.S. gas in Sabine Pass, La., in 2012 — concluding “unlimited LNG exports benefit U.S.

Author of a 2009 paper titled, “Organized Hypocrisy as a Tool of Climate Diplomacy,” commissioned by the fossil fuel funded American Enterprise Institute, Montgomery is not a climate change denier. He just doesn’t think anything should be done to tackle climate change.

“Trying to bribe or coerce unwilling countries into curtailing their GHG emissions threatens to cause more harm than good,” he wrote in the American Enterprise Institute paper.

Montgomery sang a similar tune during a March 2011 U.S. House Committee on Science, Space and Technology hearing:

Read the rest of this entry →

Keystone XL’s Northern Leg: A Fracked Oil Pipeline Along With Tar Sands

3:45 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Bakken Flaring Gas at Night

On January 31, President Barack Obama’s U.S. State Department released its Final Environmental Impact Statement (FEIS) for the northern leg of TransCanada‘s proposed Keystone XL tar sands pipeline.

The State Department’s FEIS argues that the northern half of Keystone XL, if built, “remains unlikely to significantly impact the rate of extraction in the oil sands, or the continued demand for heavy crude oil at refineries in the United States.”

But flying under the media’s radar so far, the State Department review also highlights the prospect that Keystone XL will not only carry tar sands, but also be tapped to carry up to 100,000 barrels per day of oil extracted via hydraulic fracturing (“fracking”) from North Dakota’s Bakken Shale basin.

“[Keystone XL] would have the capacity to deliver up to 830,000 bpd, of which 730,000 bpd of capacity has been set aside for [tar sands] and the remaining 100,000 bpd of capacity set aside for [Bakken] crude oil,” the report details.

[TransCanada] has represented that it has firm commitments to transport approximately 555,000 bpd of [tar sands], as well as 65,000 bpd of crude oil from the Bakken.

A smaller proposed project owned by TransCanada called the Bakken MarketLink pipeline and incorporated as Keystone Marketlink LLC in February 2011, would ship the fracked oil to Keystone XL’s northern leg as an “on ramp.”

“This project would include a 5-mile pipeline, pumps, meters, and storage tanks to supply Bakken crude oil to the proposed pipeline,” explains the FEIS.

For Bakken Fracked Oil, ‘No’ on KXL Means Rail

Many doubt that rail could ever replace pipeline as a viable marketing mechanism for Alberta’s tar sands. But few could argue the fact that rail reigns supreme for bringing Bakken fracked oil to market.

“Last November, rail shipped 71 percent — nearly 800,000 barrels of oil a day — of the Bakken’s oil, much of it on lines across Minnesota and Wisconsin, while pipelines shipped just 22 percent, according to estimates from the North Dakota Pipeline Authority,” explains the Duluth News Tribune.

The State Department FEIS suggests that if Keystone XL were never completed, the oil industry will instead ship the Bakken crude via rail. Both Union Pacific and Burlington Northern Santa Fe (BNSF) are mentioned by name as the potential corporate beneficiaries.

“One new rail loading terminal would be needed in Epping [in ND] to ship Bakken crude oil,” reads the FEIS. “Sufficient off-loading rail facilities currently exist or are proposed in the Gulf Coast area such that no new terminals would need to be built under this scenario.”

On December 30, 2013, a BNSF freight rail train carrying Bakken fracked oil exploded in Casselton, NDspilling over 400,000 gallons of oil. In July 2013, 47 people were killed in Lac-Mégantic, Quebec by another “bomb train” carrying Bakken crude.

Officially classified as more volatile and explosive than conventional oil by the U.S. government and some state governments, some activists have labeled freight trains carrying Bakken oil “Bomb Trains.” There were more gallons of oil spilled via rail cars carrying crude in 2013 than in the previous four decades combined.

Protests Occur in Over 200 Cities

In response to the release of the FEIS, Credo Mobile, Rainforest Action Network, Sierra Club, 350.org, The Other 98%, Center for Biological Diversity, Oil Change International, Friends of the Earth and other groups mobilized on Monday. 280 vigils took place across the country on February 3, kicking off the 30-day public comment period on the FEIS and 90-day period allotted for a response to the FEIS by the U.S. Environmental Protection Agency and the U.S. Department of Interior.

“This issue has already brought more Americans into the streets than any environmental issue in decades, and now finally we’re at the point of decision,” Bill McKibben, founder of 350.org, said at the New York City rally.

“It’s out of the hands of the bought-off bureaucrats who’ve been delaying it in the State Department for years and doing the bidding of the fossil fuel industry. Now we’re going to find out whether John Kerry and Barack Obama are similarly captives of the oil industry or whether they’re willing to really stand up when it counts for the commitments they’ve made about climate change.”

In setting up the protests, many may have thought they were protesting tar sands extraction and marketing in exclusivity.

Yet, when push comes to shove, the fight against Keystone XL’s northern leg is actually a fight against both tar sands extraction and fracking — and of course, runaway climate change. Read the rest of this entry →

State Dept’s Keystone XL Contractor, ERM Group, Also OK’d Controversial Pebble Mine in Alaska

2:22 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

ERM has always been able to turn a blind eye to serious environmental impacts.

DeSmogBlog investigation has revealed Environmental Resources Management Inc. (ERM Group) — the contractor performing the U.S. State Department’s environmental review for the northern half of TransCanada’s Keystone XL tar sands pipeline — gave the greenlight to Alaska’s controversial Pebble Mine proposal in June 2013.

The proposed Pebble Mine, located in Bristol Bay in southwest Alaska, contains mineable gold and copper. It’s also a major hub for fishing and the seafood industry, leading the Center for American Progress to call the battle over Pebble Mine a “resource war.”

“Bristol Bay…is home to the world’s largest commercial sockeye salmon fishery,” explains a November 2013 EarthWorks blog post. ”The devastation caused by a massive open pit mine would linger in perpetuity affecting not just Bristol Bay, but the commercial fishing industry everywhere in the Pacific Northwest.”

Like the Pebble Mine review, ERM’s review for the northern half of the U.S.-Canada border-crossing Keystone XL pipeline concluded the pipeline would have negligible environmental impacts.

EPA Tackles Pebble Mine, Keystone XL

Another thread tying Keystone XL and Pebble Mine together: in both cases, ERM Group’s environmental assessment flew in the face of the U.S. Environmental Protection Agency’s (EPA) assessment. In April 2013, the EPA critiqued ERM Group’s Keystone XL environmental review, while the EPA published a damning environmental review of Pebble Mine on January 15.

“The report concludes that large-scale mining in the Bristol Bay watershed poses risks to salmon, wildlife, and Native American cultures,” explains an EPA fact sheet published summarizing the study. “Bristol Bay supports the largest sockeye salmon fishery in the world, producing nearly 50 percent of the world’s wild sockeye with runs averaging 37.5 million fish each year.”

ERM scolded the EPA for not taking a balanced approach on Pebble Mine, not looking into the “positive effects” it would create if it opens for business.

“[EPA did not take] into account the positive effects of cash income from employment on a community’s overall subsistence-gathering capabilities, as well as, harvest-sharing capabilities,” wrote ERM. “Overall, the Assessment lacks discussion of potential positive effects associated with industrial development.”

U.S. Sen. Mark Begich (D-AK) didn’t toe the ERM party line, though.

“Wrong mine, wrong place, too big,” Begich said in a January 19 interview with the Anchorage Daily News. “Too many potential long-term impacts to a fishery that is pretty critical to that area but also to Alaska, to world markets. I think it will harm the environment, harm the salmon, harm the jobs that are connected to the fisheries industry out there.”

“A Polluted Process”

As documented previously here on DeSmogBlog, ERM has also green-lighted other projects with ecologically unsavory track records. These have ranged from an explosive pipeline project in the Caspian Sea to a contentious LNG project in Peru to a toxic tar sands refinery in Delaware.

All of these projects were met with backlash from environmentalists, but eventually received the customary ERM rubber stamp.

Some members of the U.S. House of Representatives have called ERM’s Keystone XL northern half environmental review into question, though.

Led by U.S. Rep. Raul Grijalva (D-AZ), 24 House Democrats sent a letter to President Obama on December 12 saying he shouldn’t green light the northern half of the pipeline until the State Department’s Office of Inspector General finishes its probe into how ERM Group was chosen and why. It’s what Friends of the Earth has called a “a polluted process.”

“The Department of State apparently overlooked these conflicts when it accepted Environmental Resources Management’s (ERM) bid to perform the analysis,” reads the letter. “Because of the seriousness of the conflicts…we believe no EIS from the company – draft or final – should be accepted by the administration before these issues are resolved.”

One thing is clear as Secretary of State John Kerry and President Barack Obama head into decision-making time on Keystone XL’s northern half: ERM has always been able to turn a blind eye to serious environmental impacts. Now it’s up to Obama and Kerry to avoid falling into the same trap. Read the rest of this entry →

TransCanada Begins Injecting Oil Into Keystone XL Southern Half

1:48 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Junk Pipeline

A Public Citizen report revealed many flawed TransCanada pipeline parts.

Keystone XL’s southern half is one step closer to opening for business. TransCanada announced that “on Saturday, December 7, 2013, the company began to inject oil into the Gulf Coast Project pipeline as it moves closer to the start of commercial service.”

The Sierra Club’s legal challenge to stop the pipeline was recently denied by the U.S. Court of Appeals for the Tenth Circuit, so the southern half, battled over for years between the industry and environmentalists, will soon become a reality.

According to a statement provided to DeSmog by TransCanada, “Over the coming weeks, TransCanada will inject about three million of [sic] barrels of oil into the system, beginning in Cushing, Oklahoma and moving down to the company’s facilities in the Houston refining area.”

In mid-January, up to 700,000 barrels per day of Alberta’s tar sands diluted bitumen (dilbit) could begin flowing through the 485-mile southern half of TransCanada’s pipeline, known as the Gulf Coast Project. Running from Cushing, Oklahoma to Port Arthur, Texas, the southern half of the pipeline was approved by both a U.S. Army Corps of Engineers Nationwide Permit 12 and an Executive Order from President Barack Obama in March 2012.

Bloomberg, The Canadian Press and The Oklahoman Gulf Coast Project pipeline is now being injected with oil. Line fill is the last key step before a pipeline can begin operations.

“There are many moving parts to this process — completion of construction, testing, regulatory approvals, line fill and then the transition to operations,” TransCanada spokesman Shawn Howard told DeSmog. “Line fill has to take place first, then once final testing and certifications are completed, the line can then go into commercial service.”

Residents living along the length of the southern half will have no clue about the rest of the start-up process, as TransCanada says it won’t provide any more information until the line is already running. ”For commercial and contractual reasons, the next update we will provide will be after the line has gone into commercial service,” the company announced.

When DeSmog asked whether the company is currently injecting conventional oil or diluted bitumen sourced from the Canadian tar sands, TransCanada’s Howard replied:

“Many people like to try and categorize the blend, etc., however we are injecting oil into the pipeline. As you’ve likely seen me quoted before, oil is oil and this pipeline is designed to handle both light and heavy blends of oil, in accordance with all U.S. regulatory standards.

I am not able to provide you the specific blend or breakdown as we are not permitted (by our customers) from disclosing that information to the media. There are very strict confidentiality clauses in the commercial contracts we enter into with our customers, and that precludes us from providing that. The reason is that if we are providing information about a specific blend, when it is in our system, etc. – that has the potential to identify who our customers may be or allow others to take financial positions in the market and profit from that information when others do not have access to the same information. This has much farther reaching impacts for the financial markets (and ultimately all of us).”

Riddled with Anomalies

The Keystone XL line fill comes just weeks after Public Citizen released an investigation revealing potentially dangerous anomalies such as dents, faulty welding and exterior damage that the group suggests could lead to pipeline ruptures, tears and spills.

Read the rest of this entry →