You are browsing the archive for unconventional oil.

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.”
Untitled
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”

Read the rest of this entry →

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 →

Southwestern Energy Exec Mark Boling Admits Fracking Link to Climate Change

8:03 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

Fracking Rig

Even energy executives admit the high environmental cost of fracking.

An Executive of a major shale gas development company has conceded what scientists have been saying for years: global shale gas development has the potential to wreak serious climate change havoc.

Best known for his company’s hydraulic fracturing (“fracking”) activity,Southwestern Energy Executive Vice President Mark Boling admitted his industry has a methane problem on the May 19 episode of Showtime’s Years of Living Dangerously in a segment titled, “Chasing Methane.”

“I think some of those numbers, they certainly concern me,” Boling says on the show. “How could you say that that methane emission rate was one and a half percent – very, very difficult to there from here for that.”

Boling goes toe to toe in the segment with Cornell University Professor Anthony Ingraffea, who co-authored the 2011 paper now best known as the “Cornell Study.”

That study was the first to say that over its entire lifecycle, shale gas production is dirtier than coal due to the greenhouse gas trapping capacity of leaking methane. Numerous studies since then have depicted high leakage rates throughout the production lifecycle.

Brendan DeMelleDeSmogBlog Executive Director and Managing Editor, is also a featured guest on tonight’s episode. He discusses the well-funded climate change denial machine and attacks on renewable energy development in a segment titled, “Against the Wind.”

The Years of Living Dangerously episode coincides with the release of a new paper on fracking’s climate change impacts by Cornell Study co-author Professor Robert Howarth.

Howarth’s latest paper is titled, “A bridge to nowhere: methane emissions and the greenhouse gas footprint of natural gas,” a wordplay on the industry’s self-promotional pitch about gas being a “bridge fuel” to a clean energy future.

“Smoking is Addictive” Redux

Over 16 years ago, then Philip Morris chairman Geoffrey Bible testified before Congress that “tobacco is a risky product,” “plays a role in lung cancer” and that “cigarette smoking is addictive.”

It was a watershed moment for Big Tobacco. Only four years before that hearing, several tobacco industry CEOs testified under oath to Congress that nicotine is not addictive.

While not stated under congressional oath, Boling’s statement depicts the reality of shale gas development. That reality is denied by those such as former Chesapeake Energy CEO Aubrey McClendon, who says shale gas is “clean” and U.S. Rep. Nancy Pelosi (D-CA), who once said gas is both “clean” and not even a fossil fuel.

Put another way, history has repeated itself, with Mark Boling serving as fracking’s Geoffrey Bible. But does that mean Southwestern Energy plans to stop fracking? Hardly.

“No question, there’s work to be done,” he said on the show. “But we can all waste our time about ‘is it 4%, is it 8%, is it 1%’ or we could all just say ‘I don’t care what anyone thinks it is, let’s go out and fix the problem.’”

“Green Completions” the Fix?

Boling, along with others such as industry front group Energy in Depth and theEnvironmental Defense Fund, believe “green completions” of wells during the fracking process are the fix to the problem of methane leakage and accompanying climate change impacts.

Read the rest of this entry →

Explosive Virginia Train Carried Fracked Bakken Oil, Headed to Potential Export Facility

10:34 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Platts confirmed CSX Corporation’s train that exploded in Lynchburg, Virginia was carrying sweet crude obtained via hydraulic fracturing (“fracking”) in North Dakota’s Bakken Shale basin. CSXCEO Michael Ward has also confirmed this to Bloomberg.

“Trade sources said the train was carrying Bakken crude from North Dakota and was headed to Plains All American’s terminal in Yorktown,”Platts explained. “The Yorktown facility can unload 130,000 b/d of crude and is located on the site of Plains oil product terminal.”

In January, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration issued a Safety Alert concluding Bakken crude is more flammable than heavier oils. Hence the term “bomb trains.”

At least 50,000 gallons of the oil headed to Yorktown is now missing, according to ABC 13 in Lynchburg. Some of it has spilled into the James River, as previously reported on DeSmogBlog.

map available on CSX’s website displaying the routes for its crude-by-rail trains offers a clear indication of where the train was headed.

Formerly a refinery owned by Standard Oil and then BP/Amoco, Plains All American has turned the Yorktown refinery into a mega holding facility.

Yorktown may become a key future site for crude oil exports if the ban on exports of oil produced domestically in the U.S. is lifted.

Yorktown: Future Oil Export Mecca?

In February, Plains CEO Greg Armstrong said on the company’s quarter four earnings call that Yorktown is ideally situated geographically to become an oil export mecca if the ban is lifted.

When asked by an analyst from Bank of America about the ongoing debate over lifting the crude oil export ban, Armstrong discussed how Plains could stand to profit from exports.

“Ultimately we’re positioned, we think well for either answer if they allow blanket exports we have assets in the right places that can help build that market niche,” said Anderson.

Harry Pefanis, President and COO for Plains, sang a similar tune to Anderson.

“I guess if I also just add to that if there was export…we’ve got couple of locations that we could load ocean-going vessels. Yorktown is a location where we can rail-in and load out an ocean-going vessel,” Pefanis explained.

The industry lobbying effort to lift the U.S.-produced oil export ban has picked up major steam in 2014, with the geopolitical crisis in Ukraine and Russia serving as the hook.

Keystone XL Connection

It’s only a matter of time until the familiar oil industry overture begins. That is, pointing to the Lynchburg disaster as the reason why the northern leg of TransCanada’s Keystone XL tar sands pipeline must be built.

Read the rest of this entry →

“Our Energy Moment:” The Blue Engine Behind Fracked Gas Exports PR Blitz

11:52 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

Our Energy Moment log

Blue Engine Media’s pro-fracking moment

Behind nearly every major corporate policy push there’s an accompanying well-coordinated public relations and propaganda campaign. As it turns out, the oil and gas industry’s push to export liquefied natural gas (LNG) obtained via hydraulic fracturing (“fracking”) plays the same game.

And so on February 5, “Our Energy Moment” was born. The PR blitz is described in a press release announcing the launch as a “new coalition dedicated to raising awareness and celebrating the many benefits of expanded markets for liquefied natural gas.”

Its member list includes industry heavy hitters such as Cheniere Energy, Sempra Energy, Louisiana Oil and Gas Association and Freeport LNG.

Since its launch, “Our Energy Moment” has disseminated press releases about theU.S. Department of Energy’s (DOE) conditional approval of Jordan Cove LNGexport facility in Coos Bay, Oregon and its conditional approval of Cameron LNG export facility in Hackberry, Louisiana.

So the industry is funding a PR campaign clearly in its self interest. But so what? You have to read all the way to the bottom of the press releases to find what’s perhaps the most interesting tidbit.

At the very bottom of “Our Energy Moment’s” releases, a contact person named Tiffany Edwards is listed with an email address ending in @blueenginemedia.com. If you visit blueenginemedia.com you’ll find the website for PR and advertising firm Blue Engine Message & Media.

Further, a domain name search for ourenergymoment.org reveals the website was registered by another PR and web development firm called Liberty Concepts by its founder and president Jonathan Karush. Karush registered the site on May 8, 2013, a full ten months before the campaign’s official launch date.

Who are these firms and why do they matter? That’s where the fun begins.

Blue Engine Media

According to its website, Blue Engine helps “develop and implement strategic public policy campaign plans for corporations, coalitions, non-profits and national trade associations, particularly when reputation, brand or market position face a threat or opportunity.”

Clients past and present include Citibank, Ford, Delta, American Federation of Teachers (AFT), the 2008 and 2012 Democratic National Conventions and Obama for President in 2008 and 2012, among others.

The firm was founded by Erik Smith — self-described “recovering political hack & aspiring corporate hack“ — served as senior advisor for advertising and message development for President Barack Obama’s 2008 and 2012 presidential campaigns and former Communications Director for the Democratic Congressional Campaign Committee.

Smith also founded and helped coordinate the Common Purpose Project, set up to “discuss White House plans, priorities, and messages with [progressive] groups,” according to Mother Jones’ David Corn. “But some of the outside participants considered the meetings mostly sessions where the administration tossed out talking points and marching orders.”

Common Purpose has received strong criticism from both investigative journalist Jeremy Scahill and founder of FireDogLakeJane Hamsher.

Internal Revenue Service (IRS) 990 tax forms show Common Purpose was run out of Blue Media’s office as of 2012 (the phone number listed on its IRS 990 formsmatches the one listed on Blue Engine’s website, as well) and Erik Smith received over $1.3 million between 2009 and 2012 to work on this account.

Other Blue Engine luminaries include:

  • Adam Abrams: The former regional communications director and spokesperson for President Barack Obama, Abrams was also on the communications team at the Democratic Congressional Campaign Committee and sat on the communications staff for both the Obama 2008 and John Kerry 2004 presidential campaigns.
  • Amber McDowell and Jacob Sittig: McDowell formerly served as Communications Director for U.S. Sen. Mary Landrieu (D-LA), the new head of theU.S. Senate Energy and Natural Resources Committee. Sittig was Landrieu’s former Deputy Press Secretary.
  • Jessica Borchert: Borchert worked on the Obama 2012 campaign. In that capacity, she did “production of the Democratic National Convention in Charlotte, North Carolina and [worked] on the ground in Colorado coordinating press operations.”
  • Catherine Lavelle: Lavelle worked on the Obama for President team in 2012 and also was the Media Logistics Manager for the 2012 Democratic National Convention.

Further, Laura Burton Capps — former Assistant to George Stephanopoulos in the Bill Clinton White House and speechwriter for Clinton — was a Blue Engine principal until 2013. Capps also formerly worked on the staff for the Common Purpose Project and is listed as the principal officer on its 2011 IRS 990 form.

Laura Capps is married to Bill Burton, former Deputy Press Secretary for Obama and co-founder of Priorities USA, a “dark money” Democratic Super-PAC set up to compete with Republican “dark money” Super-PAC Crossroads GPS.

And then there’s Tiffany Edwards, the point person for the “Our Energy Moment” file and where this whole inquiry began.

Before coming to Blue Engine, Edwards served as Deputy Press Secretary at the Department of Energy — the agency with final legal decisionmaking power overLNG export proposals — for the first two years of the Obama Administration. Prior to that, she worked for the 2008 Obama campaign’s press staff in the Chicago headquarters.

Roll Call reported she was hired on February 3, meaning “Our Energy Moment” was likely the first file on her Blue Engine account. Edwards hasn’t responded to questions sent to her via email by DeSmogBlog.

Liberty Concepts

Like Blue Engine, Liberty Concepts maintains tight ties with the Democratic Party and groups with close ties to the party, describing itself as a “full service digital communications agency that specializes in helping create brands and develop online communities around them.”

Read the rest of this entry →

Admiral Dennis Blair: “We Sent Troops to Middle East…Because of Oil-Based Importance of Region”

1:02 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

Official portrait of Dennis Blair

A former Director of National Intelligence blatantly admitted the real Middle East agenda.

At the just-completed U.S. House Committee on Foreign Affairs hearing titled, “The Geopolitical Potential of theU.S. Energy Boom,” Admiral Dennis Blair— former Director of National Intelligence, President and CEO of Institute for Defense Analyses and Commander in Chief of U.S. Pacific Command — admitted what’s still considered conspiratorial to some.

Put tersely: the U.S. and allied forces launched the ongoing occupation in Iraq and occupy large swaths of the Middle East to secure the flow of oil to the U.S. and its global allies, explained Blair.

Blair began his analysis lasting just over a minute after a line of questioning (beginning at 1:02:56 in the video below) coming from U.S. Rep. Jeff Duncan (R-SC) about TransCanada’s Keystone XL tar sands pipeline, “energy as an instrument of geopolitical power” and geopolitical tensions in Venezuela.

In response, though never asked about the Middle East specifically, Blair offered up his take on things:

We did not send troops into the Middle East to take possession of oil fields [or] to take over the oil. But we sent them there in large numbers because of the oil-based importance of that region to the world economy and therefore to the U.S. economy and the stability and security of that region was important to us from a national security point of view.

Had we not been so dependent on the Middle East in that sense, we would have treated the troubles there the way we do in other parts of the world where they’re going through turmoil, where there’s suffering going on, where there may be a combination of interests and opportunities. But this huge investment in military force there was caused by the oil-importance of that region, so I agree completely that energy security for this country — more flexibility in terms of our energy picture — would make a huge difference in terms of the position of the United States in the world.

Though investigative reporters have covered the topic closely, many books have been written about it and movies have been made about it, it’s rare a member of the U.S. national security establishment will say it as bluntly as Blair did in the hearing.

For more on the people who testified at the hearing and at two other related congressional committee hearings this week, check out DeSmogBlog’s article following the money trail behind the witnesses.

Read the rest of this entry →

Exxon’s Russia Partnerships Challenge US Energy Weapon Narrative

4:42 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Exxon Logo

Is Exxon playing both sides in the “new cold war?”

In a long-awaited moment in a hotly contested zone currently occupied by the Russian military, Ukraine’s citizens living in the peninsula of Crimea voted overwhelmingly to become part of Russia.

Responding to the referendum, President Barack Obama and numerous U.S. officials rejected the results out of handand the Obama Administration has confirmed he will authorize economic sanctions against high-ranking Russian officials.

“As I told President Putin yesterday, the referendum in Crimea was a clear violation of Ukrainian constitutions and international law and it will not be recognized by the international community,” Obama said in a press briefing. “Today I am announcing a series of measures that will continue to increase the cost on Russia and those responsible for what is happening in Ukraine.”

But even before the vote and issuing of sanctions, numerous key U.S. officials hyped the need to expedite U.S. oil and gas exports to fend off Europe’s reliance on importing Russia’s gas bounty. In short, gas obtained via hydraulic fracturing (“fracking”) is increasingly seen as a “geopolitical tool” for U.S. power-brokers, as The New York Times explained.

Perhaps responding to the repeated calls to use gas as a “diplomatic tool,” the U.S. Department of Energy (DOE) recently announced it will sell 5 million barrels of oil from the seldom-tapped Strategic Petroleum Reserve. Both the White House and DOE deny the decision had anything to do with the situation in Ukraine.

Yet even as some say we are witnessing the beginning of a “new cold war,” few have discussed the ties binding major U.S. oil and gas companies with Russian state oil and gas companies.

The ties that bind, as well as other real logistical and economic issues complicate the narrative of exports as an “energy weapon.”

The situation in Ukraine is a simple one at face value, at least from an energy perspective.

“Control of resources and dependence on other countries is a central theme connecting the longstanding tension between Russia and Ukraine and potential actions taken by the rest of the world as the crisis escalates,” ThinkProgress explained in a recent article. “Ukraine is overwhelmingly dependent on Russia for natural gas, relying on its neighbor for 60 to 70 percent of its natural gas needs.”

At the same time, Europe also largely depends on Ukraine as a key thoroughfare for imports of Russian gas via pipelines.

“The country is crossed by a network of Soviet-era pipelines that carry Russian natural gas to many European Union member states and beyond; more than a quarter of the EU’s total gas needs were met by Russian gas, and some 80% of it came via Ukrainian pipelines,” explained The Guardian.

Given the circumstances, weaning EU countries off Russian gas seems a no-brainer at face value. Which is why it’s important to use the brain and look beneath the surface.

ExxonMobil and Rosneft

The U.S. and Russian oil and gas industries can best be described as “frenemies.” Case in point: the tight-knit relationship between U.S. multinational petrochemical giant ExxonMobil and Russian state-owned multinational petrochemical giant Rosneft.

ExxonMobil CEO Rex Tillerson sung praises about his company’s relationship with Rosneft during a June 2012 meeting with Vladimir Putin.

“I’m pleased that you were here to be part of the signing today, and very much appreciate the strong support and encouragement you have provided to our partnership,” said Tillerson. “[N]othing strengthens relationships between countries better than business enterprise.”

A year later, in June 2013, Putin awarded ExxonMobil an Order of Friendship. But what does the friendship entail?

In 2012, ExxonMobil and Rosneft signed an agreement ”to share technology and expertise” with one another. Some of the details:

In 2013, ExxonMobil and Rosneft announced a partnership to conquer the Arctic for oil and gas, creating the Arctic Research and Design Center for Continental Shelf Development.

ExxonMobil put down the first $200 million for the initial research and development work, while Rosneft threw down $250 million later. Officially, Rosneft owns 66.67 percent of the venture and ExxonMobil owns 33.33 percent.

“[S]taff will be located with the Rosneft and ExxonMobil joint venture teams in Moscow to promote resource efficiency and interaction between technical and management staffs,” explained a press release. “The [Arctic Research Center] initially will be staffed with experts from ExxonMobil and Rosneft.”

Also part of the 2013 deal, ExxonMobil gave Rosneft a 25 percent stake inAlaska’s Point Thomson natural gas field. Further, the two companies signed a Memorandum of Understanding to study the possibility of jointly building a LNG (liquefied natural gas) facility in the Russia’s far east.

Then at the end of 2013, ExxonMobil and Rosneft inked a deal to start a pilot project for tight oil reserves development in Western Siberia’s shale basins. Rosneft owns a 51 percent stake, ExxonMobil a 49 percent stake.

Tillerson recently said the ongoing events in Crimea and Ukraine at-large will have no expected impact on his company’s partnerships with Rosneft.

“There has been no impact on any of our plans or activities at this point, nor would I expect there to be any, barring governments taking steps that are beyond our control,” he said at the company’s recent annual meeting, as reported by The Wall Street Journal. “We don’t see any new challenges out of the current situation.”

“Not a U.S. Company”

In Steve Coll‘s book Private Empire: ExxonMobil and American Power, he documents that Lee Raymond — former CEO of ExxonMobil from 1993-2005 — was asked if his company would build more U.S. refineries to fend off gasoline shortages.

Raymond’s reply: “I’m not a U.S. company and I don’t make decisions based on what’s good for the U.S.”

So what does this all mean when looked at in aggregate?

Read the rest of this entry →

Testimony: Record 36% of North Dakota Fracked Gas Was Flared in December

10:29 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Fracking Rig

Why do fracking sites continue to flare gas?

The recent March 6 House Energy & Commerce Subcommittee on Energy and Power hearing titled “Benefits of and Challenges to Energy Access in the 21st Century: Fuel Supply and Infrastructure” never had over 100 online viewers watching the livestream at any point in time. And it unfolded in an essentially empty room.

But the poor attendance record had no relation to the gravity of the facts presented by testifiers. Among other things, one presenter revealed 36 percent of the gas by-product from oil obtained via hydraulic fracturing (“fracking”) in North Dakota’s Bakken Shale basin was flared off as waste during a brutally cold midwest winter with no end in sight.

These damning facts were brought forward by Coalition for Environmentally Responsible Economies (Ceres) Oil & Gas and Insurance Programs Director Andrew Logan, one of eight people called to testify around topics ranging from domestic propane markets to fossil fuels-by-rail markets, to pipeline markets and flaring.

A topic covered previously by DeSmogBlog, Logan submitted to the Subcommittee that flaring “is getting worse, not better.”

“Flaring in North Dakota hit 36% in December, a new record,” Logan told the subcommittee. ”This means that more than 1/3 of all natural gas produced in the state is going up in smoke, at the same time as consumers around the country are seeing price spikes from natural gas in this cold winter, along with actual shortages of propane in many places.”

Logan also said that wasteful flaring is also a growing quagmire in Texas, which has seen a 10-fold increase in flaring permits since 2010.

At least one influential Subcommittee member has taken notice.

U.S. Rep. Waxman: Flaring “Wasteful and Unnecessary”

During the question-and-answer portion of the hearing, U.S. Rep. Henry Waxman(D-CA) chimed in with his thoughts on flaring, calling for a follow-up hearing to focus exclusively on this issue.

“The wasteful and unnecessary flaring of natural gas is a serious problem and has no place in a modern energy infrastructure. I believe the Subcommittee should a hearing to get the facts regarding flaring and to develop real solutions to the problem,” said Waxman.

In an interview with DeSmogBlog, Logan said he believed that a hearing on this issue would go a long way toward tackling the flaring problem.

“Flaring, at least at the level we are currently seeing in the Bakken, is so obviously indefensible that simply shining a light on the problem should get us well on the way to a solution,” said Logan. “That being said, the Republicans obviously control the House — and therefore the subject of hearings at present — and so I don’t know how likely it is that we will see hearings anytime soon.”

“Wasteful” is an understatement given how much gas is flared off in the Bakken Shale. The amount flared off could heat over half a million homes per day, according to a New York Times investigation.

“In 2012 alone, flaring resulted in the loss of approximately $1 billion in fuel and the GHG emissions equivalent of adding one million cars to the road,” explained Ceres’ July 2013 report titled, “Flaring up: North Dakota Natural Gas Flaring More Than Doubles in Two Years.”

According to World Bank data, the U.S. is now one of the top five flarers in the world.

So, what’s being wasted? Not just methane gas, but also “rich [and] valuable natural gas liquids like propane and butane [which are] about the last gas you would want to flare,” according to Logan’s testimony.

The propane is being flared at the same time North and South Dakota face a propane crisis and accompanying price spike.

“In North and South Dakota, the shortage has become so acute that the Standing Rock Sioux Tribe has opened shelters to serve its population, most of whom rely on propane,” explained The New York Times.

Logan says the situation in the Dakotas epitomizes why strong federal regulations are needed.

“It’s outrageous that propane is being flared off as a waste product when Dakotans are shivering in the cold due to artificial propane shortages,” he said. “The only real solution is regulation that forces the industry to curtail flaring once and for all.”

“Flaring in North Dakota will only be solved when the regulatory structure changes so that flaring is no longer the easiest option. For that to change, the incentive structure needs to change.”

Why Flare? Profits

At the hearing, Waxman asked Logan why he thinks companies choose to flare at all.

“Well, it’s really all about the relative economics and also the state of regulation in places like North Dakota. So while it’s profitable to capture the gas, it’s more profitable to drill the next oil well,” Logan testified. “So if you’re an oil company with a limited amount of money to spend — as they all are — it’s a somewhat rational short-term choice to say, ‘Well look, if I don’t have to capture that gas, I’d rather spend that money to drill another well.’”

Read the rest of this entry →

Documents: MD County Housing First East Coast LNG Export Facility Signs Non-Disclosure Deal

1:48 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Co-authored by Steve Horn and Caroline Selle

DeSmogBlog has obtained documents revealing that the government of Calvert County, MD, signed a non-disclosure agreement on August 21, 2012, with Dominion Resources — the company proposing the Cove Point Liquefied Natural Gas (LNG) export terminal in Lusby, MD. The documents have raised concerns about transparency between the local government and its citizens.

The proposal would send gas obtained via hydraulic fracturing (“fracking”) from the Marcellus Shale basin to the global market. The export terminal is opposed by the Chesapeake Climate Action Network, Maryland Sierra Club and a number of other local environment and community groups.

The Accokeek Mattawoman Piscataway Creeks Council (AMP Council), an environmental group based in Accokeek, MD, obtained the documents under Maryland’s Public Information Act and provided them to DeSmogBlog.

Cornell University’s Law School explains a non-disclosure agreement is a “legally binding contract in which a person or business promises to treat specific information as a trade secret and not disclose it to others without proper authorization.”

Upon learning about the agreement, Fred Tutman, CEO of Patuxent Riverkeeper — a group opposed to the LNG project — told DeSmogBlog he believes Calvert County officials are working “in partnership with Dominion to the detriment of citizen transparency.”

“We’re unhappy that it does seem to protect Dominion’s interest rather than the public interest,” Tutman said. “The secrecy surrounding this deal has made it virtually impossible for anyone exterior to those deals, like citizens, to evaluate whether these are good transactions or bad transactions on their behalf.”

Details of the Non-Disclosure Agreement

The six-page non-disclosure agreement explains Calvert County “desires to participate in discussions regarding Calvert County property tax credits. During these discussions, [Dominion] may share certain proprietary information with the [county].”

What’s confidential? According to the non-disclosure agreement,

… any data or information…not generally known to the public, whether in tangible or intangible form, and meeting the requirements for mandatory denial of inspections pursuant to the Maryland Public Information Act…whenever and however disclosed, including, but not limited to: (i) marketing strategies, plans, financial information, or projections, operations, sales estimates, business plans and performance results relating to the past, present or future business activities of such party, its affiliates, subsidiaries and affiliated companies; (ii) plans for products or services, and customer supplier lists; (iii) any scientific or technical information, invention, design, process, procedure, formula, improvement, technology or method; (iv) any concepts, reports, data, know-how, works-in-progress, designs, development tools, specifications, computer software, source code, object code, flow charts, databases, inventions, information and trade secrets; and (v) any other information that should reasonably be recognized as confidential information of [DCP].

In a statement provided to DeSmogBlog, Calvert County Commissioner Evan K. Slaughenhoupt, Jr. said it would be the “height of naiveté” to think a government would not sign a non-disclosure agreement in this type of situation, given the stakes involved.

“When businesses have contractual concerns, and meet with elected officials in a lawful duly authorized executive session to discuss expansion of a business, I honor my responsibility to not convey what was discussed in such a session,” he said. “Citizens expect no less of that from us.”

Non-Disclosure Agreements “Normal Part of Negotiations”

The use of non-disclosure agreements by local governments is not unprecedented. Some cases in point:

Queried about Dominion’s non-disclosure agreement with Calvert County, Dominion spokesman Jim Norvelle told DeSmogBlog such agreements are “a routine, normal part of negotiations involving multi-billion dollar economic development projects.”

“Companies and counties often use non-disclosure agreements because they each need to share business-sensitive, confidential information that cannot be shared with other businesses or counties for competitive reasons,” Norvelle said. “The result this time around is certainty for both Dominion and the county.”

U.S. Congressmembers Decline Comment

Asked for comment on the agreement on multiple occasions by DeSmogBlog, Maryland’s U.S. Senators Ben Cardin (D) and Barbara Mikulski (D) declined to comment, as did U.S. Rep. and Democratic Party Whip Steny Hoyer.

Read the rest of this entry →