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August 03 2012

12:00

Delaware Tax Haven: The Other Shale Gas Industry Loophole

Most people think of downtown Houston, Texas as ground zero for the oil and gas industry. Houston, after all, serves as home base for corporate headquarters of oil and gas giants, including the likes of BP America, ConocoPhillips, and Shell Oil Company, to name a few.

Comparably speaking, few would think of Wilmington, Delaware in a similar vein. But perhaps they should, according to a recent New York Times investigative report by Leslie Wayne.

Wayne's story revealed that Delaware serves as what journalist Nicholas Shaxson calls a "Treasure Island" in his recent book by that namesake. It's an "onshore tax haven" and an even more robust one than the Caymen Islands, to boot.

The Delaware "Island" is heavilized utilized by oil and gas majors, all of which are part of the "two-thirds of the Fortune 500" corporations parking their money in The First State.

Delaware is an outlier in the way it does business,” David Brunori, a professor at George Washington Law School told The Times. “What it offers is an opportunity to game the system and do it legally.”

The numbers are astounding. "Over the last decade, the Delaware loophole has enabled corporations to reduce the taxes paid to other states by an estimated $9.5 billion," Wayne wrote

"More than 900,000 business entities choose Delaware as a location to incorporate," explained another report. "The number…exceeds Delaware's human population of 850,000."

Marcellus Shale Frackers Utilize the "Delaware Loophole" 

The New York Times story also demonstrated that the shale gas industry has become an expert at utilizing the "Delaware Loophole" tax haven to dodge taxes, just as it is a champion at dodging chemical fluid disclosure and other accountability to the Safe Drinking Water Act, thanks to the "Halliburton Loophole." The latter is explained in great detail in DeSmogBlog's "Fracking the Future."

Utilization of the "Delaware Loophole" is far from the story of a few bad apples gone astray for the industry. As Wayne explains, the use of this "onshore tax haven" is the norm.

More than 400 corporate subsidiaries linked to Marcellus Shale gas exploration have been registered in Delaware, most within the last four years, according to the Pennsylvania Budget and Policy Center, a nonprofit group based in Harrisburg that studies the state’s tax policy.

In 2004, the center estimated that the Delaware loophole had cost the state $400 million annually in lost revenue — and that was before the energy boom.

More than two-thirds of the companies in the Marcellus Shale Coalition, an industry alliance based in Pittsburgh, are registered to a single address: 1209 North Orange Street, according to the center.

These fiscal figures, as Wayne points out, predate the ongoing shale gas "Gold Rush" in the Marcellus. SEIU of Pennsylvania has calculated $550 million/year in lost tax revenue in the state from the shale gas industry due to the loophole.

The Pennsylvania House of Representatives set out to tackle the "Delaware Loophole" quagmire in the spring of 2012, but merely offered half-measure legislation that would have allowed corporations - including the frackers - to continue gaming the system. Coryn S. Wolk of the activist group Protecting Our Waters summarized the bill in a recent post:

In March, 2012, the Pennsylvania House of Representatives created a bipartisan bill, HB 2150, aimed at closing corporate tax loopholes. However, as the Pennsylvania Budget and Policy Center noted in their detailed opposition to the bill, the bill would have cost Pennsylvania more money by soothing corporations with major tax cuts and leaving the loopholes accessible to any clever accountant.

Tax cheating in Delaware goes far above and beyond the Marcellus Shale. All of the oil and gas majors, with operations around the world, take full advantage of all Delaware has to offer.

"Piping Profits"

If things in this sphere were only limited to shale gas companies operating in the Marcellus Shale, the battle would seem big. Big, but not insurmountable.

Yet, as the Norway-based NGOPublish What You Pay points out in a recent report titled, "Piping profits: the secret world of oil, gas and mining giants," the game is more rigged than most would like to admit.

How rigged? Overwhelmingly so.

The report shows that ConocoPhillips, Chevron, and ExxonMobil have 439 out of their combined 783 subsidiaries located in well-known tax havens around the world, including in Delaware. All three companies maintain fracking operations, as well, meaning they benefit from both the Halliburton and Delaware Loopholes.

Adding BP and Shell into the mix, Publish What You Pay revealed that the five majors have 749 tax haven subsidiaries located in Delaware out of a grand total of 3,632 global tax haven subsidiaries. This amounts to 20.6-percent of them, to be precise.

These figures moved Publish What You Pay's Executive Director, Mona Thowsen, to conclude, “What this study shows is that the extractive industry ownership structure and its huge use of secrecy jurisdictions may work against the urgent need to reduce corruption and aggressive tax avoidance in this sector."

Tax Justice Network: $21-$32 Trillion Parked in Offshore Accounts

A recent lengthy report titled "The Price of Offshore Revisited" by the Tax Justice Network reveals just how big of a problem tax havens are on a global scale, reaching far beyond Delaware's boundaries.

As Democracy Now! explained,

[The] new report…reveals how wealthy individuals and their families have between $21 and $32 trillion of hidden financial assets around the world in what are known as offshore accounts or tax havens. The conservative estimate of $21 trillion—conservative estimate—is as much money as the entire annual economic output of the United States and Japan combined. The actual sums could be higher because the study only deals with financial wealth deposited in bank and investment accounts, and not other assets such as property and yachts.

The inquiry…is being touted as the most comprehensive report ever on the "offshore economy." 

The Democracy Now! interview below is worth watching on the whole, as oil and gas industry "offshoring" is but the tip of the iceberg.

Photo CreditGunnar Pippel | ShutterStock

Exhaustive Study Finds Global Elite

July 27 2012

10:30

Exposed: Pennsylvania Act 13 Overturned by Supreme Court, Originally an ALEC Model Bill

On July 26, the Pennsylvania Supreme Court ruled PA Act 13 unconstitutional. The bill would have stripped away local zoning laws, eliminated the legal concept of a Home Rule Charter, limited private property rights, and in the process, completely disempowered town, city, municipal and county governments, particularly when it comes to shale gas development.

The Court ruled that Act 13 "…violates substantive due process because it does not protect the interests of neighboring property owners from harm, alters the character of neighborhoods and makes irrational classifications – irrational because it requires municipalities to allow all zones, drilling operations and impoundments, gas compressor stations, storage and use of explosives in all zoning districts, and applies industrial criteria to restrictions on height of structures, screening and fencing, lighting and noise."

Act 13 — pejoratively referred to as "the Nation's Worst Corporate Giveaway" by AlterNet reporter Steven Rosenfeld — would have ended local democracy as we know it in Pennsylvania.

"It’s absolutely crushing of local self-government," Ben Price, project director for the Community Environmental Legal Defense Fund (CELDF), told Rosenfeld. "It’s a complete capitulation of the rights of the people and their right to self-government. They are handing it over to the industry to let them govern us. It is the corporate state. That is how we look at it."

Where could the idea for such a bill come from in the first place? Rosenfeld pointed to the oil and gas industry in his piece.

That's half of the answer. Pennsylvania is the epicenter of the ongoing fracking boom in the United States, and by and large, is a state seemingly bought off by the oil and gas industry.

The other half of the question left unanswered, though, is who do oil and gas industry lobbyists feed anti-democratic, state-level legislation to?

The answer, in a word: ALEC.

PA Act 13, Originally an ALEC Model Bill 

The American Legislative Exchange Council (ALEC) is in the midst of hosting its 39th Annual Meeting this week in Salt Lake City, Utah. ALEC is appropriately described as an ideologically conservative, Republican Party-centric "corporate bill mill" by the Center for Media and Democracy, the overseer of the ALEC Exposed project. 98 percent of ALEC's funding comes from corporations, according to CMD**.

ALEC's meetings bring together corporate lobbyists and state legislators to schmooze, and then vote on what it calls "model bills." Lobbyists have a "voice and a vote in shaping policy," CMD explains. They have de facto veto power over whether their prospective bills become "models" that will be distributed to the offices of politicians in statehouses nationwide.

A close examination suggests that an ALEC model bill is quite similar to the recently overturned Act 13. 

It is likely modeled after and inspired by an ALEC bill titled, "An Act Granting the Authority of Rural Counties to Transition to Decentralized Land Use Regulation." This Act was passed by ALEC's Energy, Environment, and Agriculture Task Force at its Annual Meeting in August 2010 in San Diego, CA

The model bill opens by saying that "…the planning and zoning authority granted to rural counties may encourage land use regulation which is overly centralized, intrusive and politicized." The model bill's central purpose is to "grant rural counties the legal authority to abandon their planning and zoning authority in order to transition to decentralized land use regulation…"

The key legal substance of the bill reads, "The local law shall require the county to repeal or modify any land use restriction stemming from the county’s exercise of its planning or zoning authority, which prohibits or conditionally restricts the peaceful or highest and best uses of private property…"

In short, like Act 13, this ALEC model bill turns local democractic protections on their head. Act 13, to be fair, is a far meatier bill, running 174 pages in length. What likely happened: Pennsylvania legislators and the oil and gas industry lobbyists they serve took the key concepts found in ALEC's bill, ran with them, and made an even more extreme and specific piece of legislation to strip away Pennsylvania citizens' rights.

There were many shale gas industry lobbyists and those affiliated with like-minded think-tanks in the house for the Dec. 2010 San Diego Energy, Environment, and Agriculture Task Force Meeting where this prospective ALEC model bill became an official ALEC model bill. They included Daren Bakst of the John Locke Foundation (heavily funded by the Kochs), Russel Harding of the Mackinac Center for Public Policy (also heavily funded by the Koch Family Fortune), Kathleen Hartnett White of the Texas Public Policy Foundation (again, heavily funded by the Kochs), Mike McGraw of Occidental Petroleum, and Todd Myers of the Washington Policy Center (a think tank that sits under the umbrella of the Koch Foundation-funded State Policy Network).

A Model That's Been Passed and Proposed Elsewhere

The Act Granting the Authority of Rural Counties to Transition to Decentralized Land Use Regulation model bill has made a tour to statehouses nationwide, popping up in Ohio, Idaho, Colorado, and Texas. The model passed in some states, while failing to pass in others.

Here is a rundown of similar bills that DeSmogBlog has identified so far:

Ohio HB 278

Long before the ALEC model bill was enacted in 2010, Ohio passed a similar bill in 2004, HB 278, which gives exclusive well-permitting, zoning, and regulatory authority to the Ohio Department of Natural Resources (ODNR). Ohio is home to the Utica Shale basin.

Mirroring ALEC's model, HB 278 gives the "…Division of Mineral Resources Management in the Department of Natural Resources…exclusive authority to regulate the permitting, location, and spacing of oil and gas wells in the state.."

Could it be that the ALEC model bill was actually inspired by HB 278? It's very possible, based on recent history.

As was the case with ALEC's hydraulic fracturing chemical fluid "disclosure" model bill (actually rife with loopholes ensuring chemicals will never be disclosed), ALEC adopted legislation passed in the Texas state legislature as its own at its December 2011 conference.

Idaho HB 464 

Idaho's House of Representatives passed HB 464 in February 2012 in a 54-13-3 roll call vote. A month later, the bill passed in the Senate in a 24-10-1 roll call vote. Days later, Republican Gov. Butch Otter signed the bill into law.

Key language from HB 464 reads

It is declared to be in the public interest…to provide for uniformity and consistency in the regulation of the production of oil and gas throughout the state of Idaho…[,] to authorize and to provide for the operations and development of oil and gas properties in such a manner that a greater ultimate recovery of oil and gas may be obtained.  (Snip)

It is the intent of the legislature to occupy the field of the regulation of oil and gas exploration and production with the limited exception of the exercise of planning and zoning authority granted cities and counties…

The Democratic Party State Senate Minority Office was outraged about the bill's passage. 

"[HB] 464 establishes Idaho law governing oil and gas exploration and development including limits to local control over the location of wells, drilling processes, water rights and the injection of waste materials into the ground," reads a press release by the Idaho State Senate Minority Office. "[HB 464] preempts local land-use planning statute dating back to 1975. Counties will have little input in the permitting process whereby well sites are selected (or restricted) and no role in planning and zoning."

Sound familiar? Like PA Act 13 and the ALEC model? It should.

Full-scale fracking has yet to take place in Idaho, though the race is on, with Idahoans signing more and more leases with each passing day. Thanks to gas industry lobbyists' use of ALEC's model bill process, the industry will have far fewer hurdles to clear in the state when the race begins. 

Colorado SB 88

The Demoratic Party-controlled Colorado State Senate struck down an ALEC copycat bill, SB 88, in February 2012.

The Bill Summary portion of SB 88 explains the bill concisely, mirroring, once again, PA Act 13 and the ALEC Model Bill: "…the Colorado oil and gas conservation commission has exclusive jurisdiction to regulate oil and gas operations, and local regulation of oil and gas operations is preempted by state law."

Colorado sits atop the Niobrara Shale basin. Like Pennsylvania, it has seen many cities successfully move to ban fracking, making the goal of a bill of this nature all the more obvious.

From Colorado Springs to Boulder County, cities and counties across Colorado have passed measures against fracking,” Sam Schabacker of Food and Water Watch told the Colorado Independent at the time SB 88 was struck down. “This bill is an attempt by the oil and gas industry to strip local governments of what little power they have to protect their citizens and water resources from the harms posed by fracking.” 

Far from a completed debate, as covered in a June 2012 follow-up story by the Colorado Independent, things are just getting underway on this one in The Centennial State.  

I don’t know where it goes from here. I suspect there is a happy medium and there is a compromise that can be reached,” Democratic Party State Senate President Brandon Shaffer told the Independent. “I also suspect next year additional legislation will come forward on both sides of the spectrum. Ultimately I think the determination will be made based on the composition of each of the chambers. If the Democrats are in control of the House and Senate, there will be more emphasis on local control.”  

Former Sen. Mike Kopp (R) was one of the public sector attendees at the Dec. 2010 Energy, Environment, and Agriculture Task Force Meeting where the ALEC model bill passed. 

Texas HB 3105 and SB 875

In May 2011, TX SB 875 passed almost unanimously. The bill essentially calls for the elimination, in one fell swoop, of the common law of private nuisance in Texas.

SB 875's key operative paragraph explains,

[Entities] subject to an administrative, civil, or criminal action brought under this chapter for nuisance or trespass arising from greenhouse gas emissions [have] an affirmative defense to that action if the person's actions that resulted in the alleged nuisance or trespass were authorized by a rule, permit, order, license, certificate, registration, approval, or other form of authorization issued by the commission or the federal government or an agency of the federal government…

Texas — home to the Barnett Shale basin and the Eagle Ford Shale basin — played a dirty trick here, but what else would one expect from the government of a Petro State?

The ALEC model bill calls for a transition from centralized power by local governments to individual property rights under the common law of private nuisance, a civil suit that allows those whose private property has been damaged to file a legal complaint with proper authorities. Now, under the dictates of SB 875, even these rights have been eviscerated.

Perhaps Texas exemplifies a realization of the oil and gas industries' ideal world: legal rights for no one except themselves.

"This [bill allows] the willful trespass onto private property of chemicals and or nuisances, thus destroying the peaceful enjoyment of private property, which someone may have put their life savings into," Calvin Tillman, former Mayor of Dish, Texas and one of the stars of Josh Fox's Academy Award-nominated documentary film, "Gasland," wrote in a letter. "Therefore, private citizens would have no protection for their private property if this amendment was added."

HB 3105's key language, meanwhile, makes the following illicit (emphases mine): 

the adoption or issuance of an ordinance, rule, regulatory requirement, resolution, policy, guideline, or similar measure…by a municipality that..has effect in the extraterritorial jurisdiction of the municipality, excluding annexation, and that enacts or enforces an ordinance, rule, regulation, or plan that does not impose identical requirements or restrictions in the entire extraterritorial jurisdiction of the municipality…or damages, destroys, impairs, or prohibits development of a mineral interest

This bill, unlike SB 875, never passed, though if it did, it would do basically the same thing as PA Act 13 and the ALEC model. If it ever does pass, however, it would mean that Texans would have literally no legal standing to sue the oil and gas industry for wrongdoing in their state.

ALEC's Bifurcated Attack: Erode Local Democracy, Strip Federal Regs,

Coming full circle, though PA Act 13 was struck down, for now, as constitutional, that doesn't necessarily mean ALEC copycat versions like it won't start popping up in other statehouses nationwide. 

Sleep on this for awhile. There's more to come.

Part two of DeSmog's investigation on ALEC's dirty energy agenda will show that, along with pushing for the erosion of local democracy as we know it today, ALEC has also succeeded in promulgating legislation that would eliminate Environmental Protection Agency (EPA) power to regulate greenhouse gas emissions - another Big Business giveaway of epic proportions.

If anything is clear, it's this: statehouses have become a favorite clearinghouse for polluters to install the "Corporate Playbook" in place of democracy.

Stay tuned for Part Two of DeSmog's investigation, coming soon.

(**Full Disclosure: Steve Horn is a former employee of CMD and worked on the ALEC Exposed project)

Image Credit: Center for Media and Democracy | ALEC Exposed

January 20 2012

05:24

72 Percent of Ohioans Want A Fracking Moratorium, Citing Need For More Study

The unconventional gas industry's latest rush in the United States will land it in the state of Ohio, but a recent poll shows that the state's residents are not rolling out the red carpet for an industry famous for threatening drinking water supplies, causing earthquakes, noise and air pollution and trying to proliferate global addiction to fossil fuels.

Results from a Quinnipiac University poll released today shows that 59 percent of those polled have heard of or read about hydraulic fracturing, or "fracking," the complex and risky process that enables unconventional gas drilling. A whopping 72 percent of Ohioans familiar with fracking support a moratorium on the process until it is studied further.

The other 41-percent of citizens are likely to follow suit once they discover what is headed their way, and how little this industry will help them from a financial point of view in the long run.

Ohio recently found itself with the fracking shakes, as magnitude 4.0-level earthquakes struck near Youngstown on New Year's Eve. Scientists suspect the earthquakes resulted from a wastewater injection well disposing of fracking brine from Pennsylvania. The Christian Science Monitor explained in a story that the "quake triggered shaking reportedly felt as as far away as Buffalo, N.Y., and Toronto." 

These fracking-related earthquakes are not an aberation, but rather a repeated occurence linked to fracking in Texas, Oklahoma, and Arkansas, as well as abroad in the U.K., in the city BlackpoolAl Jazeera English recently ran a story on the Ohio fracking-induced earthquakes. Watch:

  

Fears 'fracking' causes Ohio Quakes

Multinational Gas Corporations Head to Ohio

On the financial side of things, the gas industry's rush to drill the Utica Shale is led by the nation's largest unconventional gas corporation, Chesapeake Energy. Chesapeake has a huge joint ownership stake in the Utica Shale with Total SA, the French oil and gas conglomerate. As DeSmogBlog wrote a bit over a month ago, "Total S.A. is positioning itself to acquire 25 percent of Chesapeake Energy’s stake in Ohio's Utica Shale, valued at $2.14 Billion." 

Also in on the hunt for gas in the Utica are industry giants Royal Dutch ShellChevronExxonMobil, Anadarko Petroleum, and Range Resources, a corporation now infamous for its use of psychological warfare tactics to "win the hearts and minds" of U.S. citizens in the neighboring Marcellus Shale basin.

So much for "energy independence," "boosting the local economy," and small, independent "mom and pop" gas industry start-ups.

Thankfully, Ohioans aren't drinking the kool-aid and have chosen, like the citizens of Bulgaria</a> recently did, to <a href=" https:="">fight back against the industry's destructive deceit. They are wise to demand a moratorium on fracking, which DeSmogBlog called for in Fracking The Future.

Time will tell if they succeed.

December 11 2011

23:32

"Raising Elijah": An Interview With Ecologist and Author Sandra Steingraber

Q: In light of your new book Raising Elijah: Protecting Children in an Age of Environmental Crisis, which raises the specter of raising children in troubled times, both environmentally and ecologically, are you surprised that natural gas corporations have been producing public relations and propaganda materials like coloring books (recall Talisman Energy's Terry the Fracasaurus, and Chesapeake Energy's coloring books), going into schools and giving scholarships, etc.? 

A: Not at all. This is an attempt at deflection and drawing attention away from the bad public relations problems the industry has. It is hypocritical and cynical to go into communities, do fracking (see DeSmogBlog's Fracking the Future: How Unconventional Gas Threatens our Water, Health, and Climate), and then do these types of things.

For example, there are increased rates of crime, drug abuse, and motor vehicle accidents in areas in which fracking takes place. Roads in areas in which fracking is taking place are full of 18-wheelers hauling around toxic chemicals. It is a stunning move, based on all of these things.

For the Pennsylvania Breast Cancer Coalition and Chesapeake Energy’s corporate sponsorship of it, it is the ultimate case of cynicism, based on what they do on a daily basis. For them to get involved shows that they’re trying to deflect attention away from what they’re actually doing to cause these things in the first place.

The idea that they’re aligning themselves with the breast cancer movement is creepy and is like cigarette companies getting involved in fighting against cancer, while they are the ones also causing it.

Q: Why do you think these corporations are stooping so low, and why now? What type of reputation do these natural gas corporations have, at-large, in an area like the Marcellus Shale, for example?

A: Public opinion is deeply opposed to gas drilling in the Marcellus Shale in upper state New York and the anti-fracking resistance movement is solidifying and growing there. Therefore, partnerships with chartiable organizations are an attempt to alter public opinion.

That said, doing this is expensive for corporations, so it is a sign of desparation on their side of things to make fracking look like a warm and fuzzy and friendly thing. They want a different kind of association. When you hear name of their company, they hope you have warm, fuzzy feelings about them, when, in actuality, they’re actually going to come in and destroy the community.

Q: Can you explain a bit more about your book, Raising Elijah, and in particular, what role you see your new book playing in combating this benevolent role the gas industry ruthlessly tries to portray for itself? Also, can you explain what personally motivated you to write such a book?

A: Benevolent is the perfect adjective. These new partnerships are like an abusive spouse who’s trying to deflect attention away from his actual crime by funding a home for people who’ve suffered domestic abuse. The best way to solve the problem of carcinogens in the air is not to put them in the air in the first place. The best way to prevent children from being abused is to create an actual sustainable community and healthy ecosystem.

My book has been in the works for 8 years and I wanted to continue where I left off in the last book. This one takes a look at how exposure to environmental toxics impacts childhood development.

Fracking was not originally on my radar, but it was hard to ignore come 2007 and 2008. I learned more and more about it and was eventually asked to speak on panels on the topic. It is the biggest threat to childrens’ health that I’d ever encountered. The final chapter in book is entirely devoted to fracking.

Beating fracking is the environmental cause of our time. We are standing at a cross-roads — easy fuels are gone, and energy extremism is all that’s left. Mountain top removal is one, tar sands crude is another, offshore drilling is the third, and fracking is the fourth.

Fracking hits home the closest. It is occurring in 34 states, often in densely populated areas. The possibility of it exposing people to these toxins is immediate and the possibility that we’ll contaminate water, air, and food are also great.

Air contamination is also a guarantee, via compressors. Chances are, we’ll blanket the northeast in smoggy air, which already was dirty air to begin with, with regular ozone alerts. Surface and ground water and food resources are now also all at risk. The dairy industry is huge in New York, but now that is also at risk.

The Marcellus Shale basin is now a radioactive place, and thus, all of this stuff is now in peril. There needs to be a public conversation about this, if only because of the costs of helping children from cradle to grave. Asthma, for example, is a very expensive problem and leading cause of absenteeism in schools. It will become more common with fracking - much more common.

The Environmental Impact Statement done by the New York Department of Environmental Protection was also a sham, with public health impacts not even discussed. There was nothing in it on any of the scores of environmental and ecological costs associated with fracking that will arise in the future.

All of this is the explanation for why I wrote the book. The secrecy the industry enjoys makes it hard for researchers to go as deep as they possibly could if there were no veil of secrecy. It is hard to say exactly what kind of chemicals people are inhaling and consuming.

Q: You recently won the Heinz Award, given for significant achievements benefiting the environment, which earned you a $100,000 award and afterward, you wrote that you would devote that money to fighting fracking in upstate New York.

Bearing that in mind, can you explain, based your own experiences and personal convictions, as well as the lessons taught in your book, what type of activism is best geared toward defeating fracking?

Put another way, what form of activism gets the movement to ban fracking the best bang for its buck and do you see more nonviolent direct action and civil disobedience in the anti-fracking movement’s future?

A: $100,000 is NOTHING to the big boys in the corporate natural gas world. The only way money will work if it will also embolden others to do big things. The only reason I’m even going public with the fact that I’m investing money in the fight against fracking is to inspire other people to start fighting back.

We’re at the 11th hour now. The moratorium was here before, but now that’s over. Now is the time if you don’t want to be fracked. As a cancer survivor, whatever money I have ends up going into paying medical bills. When you live in an area surrounded by frackers, what point is it to even try to do that if the water, air, community, etc., will be gone and destroyed and the area becomes a toxic wasteland?

So, what better use of money than to defend and protect this place? I couldn’t think of better thing to do, with even more of a public platform, to highlight lunacy of fracking. I want others to feel that they shouldn’t give up before they start the fight. Self-defeatism is what’s beating us — learned helplessness — beats us even more than the formidable power of natural gas industry.

Whatever I can do to get people out of that place — if you want to be the hero, now’s your chance. I hope to use the money to open up space for speech, and not silence.

One suggestion is to put all eggs in one basket, but it is probably better to spread it around. The fight of townships to ban fracking locally — see Dryden case study — is one option. There’s also fight at state level with regards to Cuomo. 

The international human rights movement is also against dependence on fossil fuels. There is also the example of the civil disobedience that was used to stop the tar sands pipeline. There are fights everywhere, which go from the global level all the down to village level.

I am, in short, still in the thinking stage about funding and where it’ll all end up.

December 09 2011

18:34

Another LNG Deal Inked, Fracking Export Bonanza Continues

On December 7, the Federal Energy Regulatory Commision (FERC) granted a 30-year license to Jordan Cove LNG (liquefied natural gas), located in Coos Bay, Oregon, to transform its existing import terminal license into an export terminal license. It would be the first LNG export terminal on the west coast of the U.S., with multiple LNG export terminals also in the negotiation phase, set to be located on the west coast in Kitimat, British Columbia.

KMTR-TV explains where the unconventional gas, procured via the toxic fracking process explained thoroughly in DeSmogBlog's "Fracking the Future: How Unconventional Gas Threatens our Water, Health, and Climate," will come from for Jordan Cove:

Construction of the Ruby Pipeline has brought gas from Wyoming to Southern Oregon, where it is sent to California. Construction of a new pipeline would link Ruby with Jordan Cove.

El Paso Natural Gas, a subsidiary of El Paso Corporation, owns the Ruby Pipeline. "Ruby is a 680-mile, 42-inch interstate natural gas pipeline," according to its website.

The pipeline that KMTR-TV is referring to, which would link Ruby with Jordan Cove, is called the Pacific Connector Pipeline, and is proposed to be a "234-mile, 36-inch diameter pipeline," according to its website

Wyoming is home to the Niobrara Shale basin, which the Environmental Protection Agency recently revealed as a site of groundwater contamination linked to the fracking process.

LNG from Jordan Cove LNG will be exported to the Asian market, which is willing to pay three times more for the fracked gas than the domestic market. In a September interview with the business journal Platts, Jordan Cove LNG project manager Robert Braddock stated the rationale behind converting Jordan Cove into an export terminal: "we would have certainly much closer access to the Asian markets."

This is but a small piece of a much bigger, broader picture of foreign-based multinational corporations investing in U.S. shale operations in order to benefit from the export potential. This will mean higher prices for U.S. consumers, despite industry claims to champion U.S. energy independence and "affordable" energy.

A Foreign Flurry to Profit from U.S.-Based Shale Gas

Two important investigative reports on the subject came out recently, one by Food and Water Watch and another by the Pittsburgh Tribune-Review. Both of the reports show that, contrary to the claims made by the oil and gas industry that fracking for unconventional energy will "boost local economies," fracking is increasingly revealing itself as a boon for huge multinational corporations, often not even based in North America, but in foreign locales.

"Foreign investment poured into American gas and oil shale fields through three quarters of 2011, amounting to $24.5 billion of the total $39.9 billion in deals," revealed the Tribune-Review

Furthermore, as DeSmogBlog previously revealed, the Federal Energy Regulatory Commission (FERC) has approved two LNG export deals, both in Sabine Pass, Texas, with many many more FERC deals in the middle of the approval process.

The map below, produced by the Tribune-Review, best portrays who stands to gain from the North American fracking boom happening in every crevice of the United States. "Boosting the local economy"? As can be seen quite clearly, this is merely a pipe dream.

18:24

Fracking Ohio's Utica Shale to "Boost Local Economy"? A "Total" Sham

It is a well-known fact that the unconventional gas industry is involved in an inherently toxic business, particularly through hydraulic fracturing ("fracking"), which the EPA just confirmed has contaminated groundwater in Wyoming. The documentary film "Gasland," DeSmogBlog's report "Fracking the Future: How Unconventional Gas Threatens our Water, Health, and Climate," and numerous other investigations, reports, and scientific studies have echoed the myriad problems with unconventional oil and gas around the globe.

What is less well-known, but arguably equally as important, is who exactly stands to benefit economically from the destruction of our land, air, and water in the gas industry's rush to profit from the fracking bonanza. The U.S oil and gas industry would have us believe that they are principally focused on ushering in American energy independence. But their claims are increasingly suspect as the real motivation of this industry becomes clearer by the day.

A hint: it's not the small "mom and pop," independent gas companies, but multinational oil and gas corporations. Another hint: it's often not even American multinational oil and gas corporations, but rather, foreign-based multinational oil and gas corporations who stand to gain the most.

France's Total S.A. Enters Ohio's Utica Shale, as well as Uganda, South Sudan and Kenya

On December 7, Bloomberg's Businessweek reported that Total S.A. is positioning itself to acquire 25 percent of Chesapeake Energy’s stake in Ohio's Utica Shale, valued at $2.14 Billion

Total S.A., the largest oil and gas producer in France, is a multinational corporation perhaps most notorious for its involvement in Iraq's "Oil-For-Food" scandal. In 2010, Total S.A. was accused of bribing former Iraqi dictator Saddam Hussein's officials to secure oil supplies. 


Total SA also brokered another big deal on December 7, this one in Uganda, a place I recently wrote about on AlterNet in a piece titled, "Did Obama Just Kick Off Another Oil War — This Time in Africa?" It appears the question raised and answered in my article is being confirmed more and more with each passing day.

Explaining the terms of the deal, Reuters wrote, "French oil major Total said it could build a pipeline from South Sudan to Uganda that would continue to Kenya’s coast, potentially solving the fledgling state’s headache about how to export its oil."

These announcements comes on the heels of a December 1 announcement by another foreign corporation, Norway's Statoil, stating that it "would like to add to its acreage position in the Eagle Ford Shale in South Texas as it looks to grow its unconventional oil and gas position in North America."

Speaking of corruption, by the way, Ohio is a natural landing spot for Total S.A.

Ohio: Home to Big Gas Money

Common Cause of Ohio, in a recent report titled "Deep Drilling, Deep Pockets," revealed that from 2001 through June 2011, Republican Governor John Kasich received $213,519 in campaign contributions from the gas industry. The Republican Senatorial and House Campaign Committees took another $210,250 from the gas industry during that same time period.

Not to be outdone, on the other side of the aisle, former Democratic Governor of Ohio, Ted Strickland, received $87,450 during that time frame. 

Top donors included the following:

  • Ohio Oil & Gas Producers Fund - $820,285
  • British Petroleum PAC & Employees - $215,438
  • Marathon Oil PAC & Employees - $207,054

Summing things up, Common Cause wrote,

Companies engaged in fracking contributed $2.8 million to state candidates, political committees, and parties in Ohio from 2001 through June 2011, helping the natural gas industry preserve what are some of the nation’s most lenient fracking regulations. Ohio does not require full disclosure of chemicals used in the fracking process, has stripped from local governments the power to regulate fracking, and allows fracking as close as 100 feet to a residence.

All in all, this is a bad deal for the people of Ohio, but a great deal for global multinational oil corporations, a pattern all too familiar in the American political fray.

Any way one slices it, the claim that the gas industry first and foremost is a "good neighbor" who will "benefit the local economies," is a total sham. 

 

December 02 2011

21:34

Smeared But Still Fighting, Cornell's Tony Ingraffea Debunks Gas Industry Myths

Cornell University Professors Robert Howarth and Anthony Ingraffea made waves in April 2011 when they unveiled what is now known simply as the "Cornell Study."

Published in a peer-reviewed letter in the academic journal Climatic Change Letters, the study revealed that, contrary to the never-ending mythology promulgated by the gas industry, unconventional ("natural") gas, procured via the infamous hydraulic fracturing (fracking) process, likely emits more greenhouse gas pollution into the atmosphere during its life cycle than does coal. DeSmogBlog documented the in-depth details of the Cornell Study in our report, "Fracking the Future: How Unconventional Gas Threatens our Water, Health, and Climate."

Since the report was published, the Cornell Study has receieved serioius backlash from the gas industry, in particular from Energy in Depth, the industry's go-to front defensive linebackers on all things fracking related. DeSmogBlog revealed earlier this year that Energy in Depth is an industry front group created by many of the largest oil and gas companies, contrary to its preferred "mom and pop" image. 

Dr. Anthony Ingraffea wrote a must-read piece this week for CBC News, "Does the natural gas industry need a new messenger?

In his article, Dr. Ingraffea discusses and debunks many key gas industry myths, which he explained "always have at least a kernel of truth, but you have to listen to the whole story, carefully, not just the kernel."

"With decades of geopolitical influence and billions of dollars on the table, it is not surprising that the gas industry has perpetuated…myths to keep the public in the dark, regulators at bay, and the wells flowing," Ingraffea writes.

Let's review four of the myths exploded by Dr. Ingraffea:

Myth One: "Fracking is a 60-year-old, safe, well proven technology"

Dr. Ingraffea writes:

Yes, fracking is 60 years old. But using this shorthand obscures the truth that what’s at issue here isn’t really just fracking. It's the entire process of coaxing gas from shale using high-volume, slickwater fracking with long laterals from clustered, multi-well pads.

Myth Two: "Fluid migration from faulty wells is rare"

Ingraffea dismantles this one:

Fluid migration is not rare. For example, industry researchers Watson and Bachu, in a Society of Petroleum Engineers paper in 2009, examined 352,000 Canadian wells and found sustained casing pressure and gas migration…Most recently, the U.S. Environmental Protection Agency found benzene, methane and chemicals in water-monitoring wells in Pavilion, Wyoming…

Myth Three: "The use of clustered, multi-well drilling pads reduces surface impacts"

Ingraffea:

Such pad sites are large and growing, up to 10 acres or more. Newer sites, in Canada, are bigger than 50 acres, and each will leave behind clusters of wellheads and holding tanks for decades.

Cluster drilling facilitates and prolongs intense industrialization and leaves a larger, more concentrated, and very long-term footprint, not a smaller and shorter one.

Myth Four: "Natural gas is a 'clean' fossil fuel"

This one would be laughable if so many people did not believe it. As the old adage goes, "A lie can travel halfway 'round the world while the truth is putting on its shoes."

Ingraffea on this whopper:

NASA climate scientist Drew Shindell’s work, published in the prestigious journal, Science, shows that methane – natural gas – is 105 times more powerful than carbon dioxide as a global warming contributor over a 20-year time horizon, and 33 times more powerful over a century.

He proceeds to explain that methane gas is prone to leakage, which is not taken into account when proponents tout gas as a "clean" source of energy:

Leaks happen routinely during regular drilling, fracking and flowback operations, liquid unloading, processing, and along pipelines and at storage facilities.

The rate of leakage is anywhere from 3.6 per cent to 7.9 per cent of the lifetime of production of a shale gas well, which means from three to 200 per cent greater leakage rate than from conventional gas wells.

Exposing Other Mythology, Making a Plea For Truth 

Dr. Ingraffea also discusses other myths the gas industry relies upon on a daily basis, including "jobs created," "gas for energy independence," gas as a "bridge fuel" toward renewable energy, among others. All of these lies and misdirections have been debunked on multiple occasions, by numerous sources.

Concluding where he began his article, Ingraffea makes a plea to his readers: "keep asking questions, dig for the truth, and you’ll get the whole story."

December 01 2011

22:43

LNG Groundhog Day: Cheniere Energy Signs Yet Another Gas Export Deal on Gulf Coast

Another day, another unconventional gas export deal signed. Nascent North American LNG (liquefied natural gas) export deals are happening so fast and furiously that it is hard to keep track of them all.

The latest: On November 21, Cheniere Energy Partners signed a 20-year LNG export deal with Gas Natural Fenosa, an energy company which operates primarily in Spain but also in such countries as Italy, Mexico, Colombia, Argentina, and Morocco. Cheniere will maintain the Sabine Pass LNG export terminal located off of Sabine Lake between Texas and Louisiana, which feeds into the Gulf of Mexico, while Gas Natural Fenosa will ship the gas to the global market.

Cheniere, which made waves when its CEO Charif Souki announced that his corporation's business model would center exclusively around LNG export terminals, also recently signed a 20-year export deal with BG Group, short for British Gas Group.

Like the recent export deal with BG Group, which involves carrying fracked unconventional gas from various shale basins around the United States via pipelines to the Sabine Pass LNG export terminal, the Gas Natural Fenosa deal also centers around the export of gas from Sabine Pass to the global market.

This new deal will presumably center around shipment of LNG to the Latin American market, whereas the BG Group deal centers around exports to the European market.

A press release explaining the details of the deal reads, “LNG will be loaded onto Gas Natural Fenosa's vessels…[with] twenty years commencing upon the date of first commercial delivery, and an extension option of up to ten years. LNG deliveries are expected to commence in 2016.”

It is increasingly clear that export is the name of the game for the gas companies fracking all over America, exploding the industry's claims to support U.S. energy independence.

A recent Senate hearing confirmed that the industry's plans to export gas from the U.S. will raise gas prices for Americans.

So much for that oil and gas industry canard that unconventional gas fracking "promises more affordable energy for Americans."

 

Image Credit: Oleksandr Kalinichenko / Shutterstock

November 29 2011

23:06

To Understand What's Happening with Fracking Decisions in New York, Follow the Money

In a November 25 article titled, "Millions Spent in Albany Fight to Drill for Gas," The New York Times reported:

Companies that drill for natural gas have spent more than $3.2 million lobbying state government since the beginning of last year, according to a review of public records. The broader natural gas industry has been giving hundreds of thousands of dollars to the campaign accounts of lawmakers and the governor…The companies and industry groups have donated more than $430,000 to New York candidates and political parties, including over $106,000 to Mr. Cuomo, since the beginning of last year, according to a coming analysis of campaign finance records by Common Cause.

Those who were wondering the motive behind NY Democratic Governor Anthony Cuomo's decision to lift New York's moratorium on fracking now have a better sense for his enthusiasm: campaign cash.

Back in June, I wrote,

Despite the copiously-documented ecological danger inherent in the unconventional drilling process and in the…gas emissions process, as well as the visible anti-fracking sentiment of the people living in the Marcellus Shale region, Cuomo has decided it's 'go time.' Other than in New York City's watershed, inside a watershed used in the city of Syracuse, in underground water sources deemed important in cities and towns, as well on state lands, spanning from parks and wildlife preserves, 85% of the state's lands are now fair game for fracking, according to the New York State Department of Environmental Conservation (DEC).

It is clear that Cuomo did not have science on the top of his priority list when making his decision to lift the moratorium. 

But as any good reporter knows, possibly one of the most crucial tenets of good jouranlism is to follow the money, which is just what the Times and Common Cause did. 

What we are seeing is the concerted application of really a substantial amount of money to try to move public policy into a pro-fracking stance. It is a tremendous amount of pressure on our state government," said Susan Lerner, Executive Director of Common Cause New York, to The New York Times.

Common Cause and The New York Times, then, have shed more light as to why Cuomo decided to make this decision and the light is colored green, the color of money

November 18 2011

13:15

ExxonMobil and Shell Eyeing North American LNG Export Deals

Yesterday, LNG World News reported that ExxonMobil Vice President Andrew Swiger announced, at a conference hosted by Bank of America Merrill Lynch, that it was actively seeking LNG (liquefied natural gas) export terminals throughout North America, including, but not limited to, in British Columbia and on the Gulf Coast.

In terms of exports from North America, whether it is the Gulf Coast or whether it is Western Canada, it’s something we’re actively looking at,” said Swiger.

So, where are these prospective export terminals located, what are the key pipelines carrying the unconventional gas produced from shale basins, and what are the key shale basins in the mix? Hold tight for an explanation.

Golden Pass LNG Terminal and Golden Pass Pipeline

The LNG World News article explains that ExxonMobil "has a stake in the Golden Pass LNG Terminal in Texas," but does not explain exactly what the "stake" is.

A bit of research shows that ExxonMobil is a 17.6% stakeholder in the Golden Pass LNG Terminal, according to a March 2011 article publshed by Platts. It is co-owned by ConocoPhillips and Qatar Petroleum, who own a 12.4% and 70% stake in Golden Pass LNG, respectively.

Golden Pass LNG is stationed in Sabine Pass, TX, located on the Gulf Coast on the Texas-Louisiana border, which is in close proximity to Cheniere's Sabine Pass LNG export terminal, a terminal which has been written about in-depth by DeSmogBlog.

As of now, Golden Pass is an import terminal, and "is among the largest LNG import facilities worldwide, with the capacity to import 15.6 million metric tons of LNG annually," explains LNG World News. But many import facilities have turned into export facilities, including the Jordan Cove LNG terminal in Coos Bay, Oregon, the Dominion Cove LNG terminal in Lusby, Maryland, and Kitimat LNG terminal in Kitimat, British Columbia. Gas corporations often execute the bait-and-switch, transforming what were originally import terminals into export terminals.

If history repeats itself, which is highly likely based on this latest report from LNG World News, then the Golden Pass LNG Terminal could soon be transformed into an export terminal, making it export terminal number two in Sabine Pass.

It appears for now that the gas would come from the shale basins surrounding Sabine Pass, meaning the Barnett Shale, the Eagle Ford Shale, the Haynesville Shale, and the Fayetteville Shale, and flow out these respective shale basins via an extensive pipeline system, to the key Golden Pass and Sabine Pass hubs. 

For example, Golden Pass also owns Golden Pass Pipeline, which runs from the Haynesville Shale down to the Golden Pass LNG terminal.

Horn River Basin Shale and Pacific Trail Pipelines

LNG World News' article also mentions that ExxonMobil "has 340,000 shale gas acres in Western Canada’s Horn River Basin." The Horn River Shale Basin is located in northeastern British Columbia and sits on 250 trillion cubic feet of unconventional gas, producred through the toxic hydraulic fracturing, or fracking process. 

Assuming ExxonMobil holds true to the pronouncement made by Swiger, much of the gas produced in the Horn River Basin will flow westward to Kitimat LNG export terminal, which ships gas to the Asian market. 

One of these facilities is co-owned by EOG Resources (EOG), EnCana Corporation (EnCana), and Apache Corporation (Apache). In October 2011, Canada’s National Energy Board, the Canadian equivalent to the U.S. Federal Energy Regulatory Commission, granted Kitimat LNG a 20-year Export Licence to serve international markets. The Pacific Trail Pipelines connect the Horn River Basin to the Kitimat LNG facility and are also co-owned by EOG, EnCana, and Apache. 

Another key LNG export terminal in the works will be co-owned by Shell, Korea Gas Corporation, China National Petroleum Corporation, and Mitsubishi Corporation.

The Globe and Mail explained the looming deal, writing

Shell is examining plans for a 3.6 billion cubic feet a day project, which would be among the largest under consideration in the world…Kitimat LNG intends to build a 700-million cubic foot facility first, at a cost greater than $5-billion, but has received an export licence that allows it to double that. The partnership intends to make a final investment decision early next year, but is already spending several hundred million dollars to terrace the sloped site of the intended terminal, the first step in construction.

A pipeline arrangement paralleling the EOG, EnCana, Apache agreement will likely follow the Shell export deal announcement, carrying gas fracked from the Horn River Shale Basin to Kitimat, in order to be exported, in the form of LNG, to the profitable Asian market. 

North American Export Market a Huge Racket

As is now perfectly clear and has been made clear by DeSmogBlog on multiple occasions, not only is the unconventional gas industry unconcerned with the "domestic consumption" of gas for "national security" purposes, but perhaps even more importantly, two of the largest fossil fuel corporations in the world, Shell and ExxonMobil, are now in the fray of the export game.

Deals of this nature will likely proliferate as time progresses, with what has been coined the "one-percent" by the Occupy Wall Street movement, standing with the most to gain from them.

November 14 2011

20:16

New Report: CCPA and the Wilderness Committee on BC's "Reckless" Desire to Frack

If British Columbia wants to pursue economic, environmental and human health then the province must slow its furious pace of unconventional gas production, says a new report released by the Canadian Centre for Policy Alternatives (CCPA) and the Wilderness Committee. The CAPP report, part of their partner Climate Justice Project with the University of British Columbia, concludes that BC’s natural gas sector is putting the industry’s needs before those of British Columbians, and doing so with the government’s help.

Ben Parfitt of the CCPA authored the report and has written extensively on the energy/water nexus surrounding BC’s shale gas boom. According to Parfitt, “BC’s shale gas production is the natural gas equivalent of Alberta’s oilsands oil.” The comparison is due to the tremendous water required to frack deep shale deposits, an extraction process that also releases dangerous amounts of methane, one of the most powerful global warming gasses.
 
As expanded in the report, Fracking Up Our Water, Hydro Power and Climate: BC’s Reckless Pursuit of Shale Gas, the unconventional gas industry enjoys exclusive access to the province’s pristine water resources and the government’s lax greenhouse gas (GHG) policy. Last year, the Pacific Institute for Climate Studies (PICS) announced that if BC wants to meet its climate targets, the regulatory regimes surrounding unconventional gas production must become significantly more strict and forward thinking. But despite such a warning, no meaningful administrative changes have been made to suggest the BC government is listening.
 
Given the favorable conditions, says Parfitt, gas production in BC could amount to 22% of North American annual production by 2020.
 
This steady increase in production will drastically impede BC’s ability to reach its legislated climate targets.  If BC production climbs to these accelerated rates the province’s GHG emissions from fracking will double, reaching an astounding 22 million tonnes by 2020. The tremendous atmospheric pollution caused by fracking means that, if BC plans on meeting is climate targets, “every other sector of the provincial economy will have to cut their emissions in half,” according to CCPA’s press release.
 
But there’s more to fracking the province’s northeast than water and GHG emissions. If the shale gas industry “expands as projected, shale gas companies will need two to three times the amount of power that the proposed Site C dam would provide. In other words, large amounts of publicly owned clean water and hydro power will have to be found to produce more and more dirty fossil fuel,” says Parfitt in the press release.
 
“I don’t think British Columbians are comfortable with that.”
 
As DeSmogBlog reported last week, the province has earned an industry-friendly reputation recently for its generous water policy and nearly absent regulatory structure. Due to the generosity of the government and a total absence of any public consultation process the BC Tap Water Alliance has called for the resignation of Energy Minister Rich Coleman.
 
And although British Columbians will suffer much of the pollution and resource depletion, the gas industry is preparing to export incredible amounts of BC’s gas to Asia via the Kitimat LNG terminal. To worsen the overall deal, Parfitt exposes the heavy reliance of tar sands production on BC gas, making the climate and resource costs associated with the process even higher.
 
Projects from the non-gas industrial sector in BC are subject to scrutiny from the BC water stewardship branch. However, the BC Oil and Gas Commission freely allocates water to the gas industry, often without significant environmental review or charge. The government, not surprisingly, has been accused of facilitating, rather than regulating, the industry.
 
In order to secure BC from the threats to economic, environmental and human health that the rush to extract fracked gas poses, Parfitt recommends a cap on annual shale gas production, an end to all government subsidies of the natural gas industry, that the BC government explain its climate strategy, and that the industry pay full prices for the water and electricity necessary to support their projects.
 
According to Tria Donaldson, the Pacific Coast Campaigner for the Wilderness Committee, “it’s time to curb this industry before it’s too late for our climate, our water and our hydroelectric resources.” There also need to be limits put on the industry as well. “We want firm no-go zones established where industry activities are restricted and we want a moratorium on fracking in undeveloped watersheds, pending full surface water and groundwater studies.”
 
Parfitt seems to agree: “We need to manage this industry for wind-down, not wind-up, and ensure that while the industry is operating the public gets a fair return.”
 
To get a better picture, you can watch this CCPA video of what fracking means in BC's northeast:
See video

November 08 2011

00:37

BC Tap Water Alliance Calls for Resignation of Energy Minister Coleman Over Fracking

The B.C. Tap Water Alliance (BCTWA) called today for the resignation of British Columbia’s Energy Minister Rich Coleman. The demand comes on the heels of a Global TV program 16:9 which on Saturday evening aired Untested Science, an investigation into the recent surge of fracking across BC and Alberta.  During the program Minister Coleman is berated by investigators for failing to keep his promise to implement a public consultation process in BC, a province beset by some of the largest fracking operations in the world.

The BC public has been largely kept in the dark regarding the unconventional gas operations spreading throughout the Horn River and Montney Basins. But the rapid and experimental development of the resources caused BC’s two Independent MLAs to call for a province-wide, independent review of the process. So far, their request has been met with silence and, as Minister Coleman demonstrated, hollow gestures.
 
On June 1, 2011, Minister Coleman guaranteed the British Columbian public that “an extensive process of public consultation” would be put into place to allow the public to comment and become a part of the approval process that determines the gas industry’s reign in the province’s northeastern shale gas plays. Despite this promise, the gas industry has been granted numerous water withdrawal permits since then without any consultation of the public.
 
As DeSmogBlog reported at the time, the BC Oil & Gas Commission had already allotted 78 million cubic meters of water to fracking companies each year, free of charge, before adding an additional 3.65 million cubic meters to that total for Talisman Energy in July of this year. The water is pumped from BC’s largest fresh water body, the Williston Reservoir. The company withdrawal permits are valid for 20 years.
 
According to a press release from the BCTWA, Talisman and another unconventional gas company, Canbriam Energy, have nearly completed the 60-kilometer twin water pipeline that connects the Williston Reservoir directly to the Farrell Creek gas play, north of Hudson’s Hope where Talisman alone will frack nearly 1,400 wells. 
 
In BC a single gas pad may host up to 20 gas wells and each can be fracked up to 20 times. Each individual frack job can require more than 4,000 cubic meters of water, according to the BCTWA, the equivalent of 4 million liters of water, or about one-and-a-half Olympic sized swimming pools. 
 
In order to retrieve the gas trapped within shale deposits, companies must mix the fresh water with tens of thousands of gallons of highly toxic chemicals which pose a serious threat to other sources of surface and underground water.
 
The BC government’s abysmal lack of oversight has earned the province an industry-friendly reputation. According to Alberta Oil Magazine, “it’s not just geology that has smiled on northeastern B.C.’s shale plays – government policies have as well.”

As the magazine describes it, the province’s land tenure, leasing and royalty systems all work together for the industry’s good. The generous royalty program in BC, most notably, by allowing companies to pay their royalties in kind by building roads and infrastructure…to new industry gas and pipeline projects.
 
But BC’s poor record of public consultation, combined with its anemic oversight structure, is starting to anger the masses.
 
The BCTWA press release quotes independent MLA Bob Simpson, one of the voices calling for a provincial investigation into the process, saying,
“Despite the Minister’s promise, the Oil & Gas Commission approved the pipeline without consulting the public and before the water licenses were even approved. The this week a water license was approved without any notification to the public, let alone holding ‘extensive’ consultations and discussions.”
Instances such as the Williston Reservoir pipeline demonstrate the “complete absence of public policy guiding BC’s natural gas industry,” says the BCTWA.
 
The press release adds that although Talisman Energy originally agreed to be interviewed by Global TV, the company later refused to participate. 
 
Will Koop, Coordinator of the BCTWA, is demanding reparations. “Mr. Coleman misled the Speak of the House, the Legislative Assembly and the public in its court of law. The Minister’s misgivings and sorry excuse in 16:9’s interview about granting the 20-year contracts on a topic rife with controversy, amidst growing public awareness without public planning, is utterly inexcusable,” said Koop in the press release.
 
“Mr. Coleman failed the public. The Premier must not only call for his resignation, but enact our request for a public inquiry and a moratorium on fracking in BC.”
 

The BCTWA has been at the helm of other meaningful calls for accountability on behalf of the BC government. Let's hope this time their concerns are more meaningfully heeded.

September 19 2011

20:01

Counterpoint on Shale Gas and the Future of Fracking

Recently the peer-reviewed scientific journal Nature published a ‘pros vs. cons’ piece on the production of unconventional gas from shale. The tête-à-tête, led by Terry Engelder on the pro side and Robert Howarth and Anthony Ingraffea on the con side, weighs the risks and benefits of gas production as it relates to the economy and human and environmental health.

Howarth and Ingraffea, authors of the first peer-reviewed study on lifecycle emissions from unconventional gas production, are solemn in their assessment: “shale gas isn’t clean, and shouldn’t be used as a bridge fuel” to a clean energy future. Their recommendation is based on the risks involved with high-volume slick-water hydraulic fracturing, or fracking, as it exists in its present form.
 
Although the industry claims to have performed over one million fracking operations since the 1940s, Howarth and Ingraffea counter that the current technology is still relatively new and has only been in operation for a decade. Modern fracking bears little resemblance to its historic counterpart and requires greater amounts of water and chemicals, deeper drilling and higher pressures. All these differences combine to make fracking an unavoidably dangerous process. Howarth and Ingraffea also claim that a switch to unconventional gas will not substantially alleviate global warming in the near future.
 
Unconventional gas drilling creates problematic waste, not only for the air, but also for land and water. And despite progress made in the regulatory structure surrounding gas drilling, if there is any to celebrate, the process is still inherently dangerous, secretive and exempt from the federal statutes designed to protect human and environmental health. 
 
Overall, when you consider the risks, there is little to prop up unconventional gas as the "clean" fuel of the future. Furthermore, the amount of time and resources devoted to shale gas development stifle the production and commitment to true alternatives.

For all of these reasons, Howarth and Ingraffea call for a moratorium on fracking “to allow for better study of the cumulative risks to water quality, air quality and global climate.”
 
“Only with such comprehensive knowledge,” they claim, “can appropriate regulatory frameworks be developed,” the Cornell University professors conclude.
 
But Terry Engelder, a geologist with years of experience working for the gas industry, poses a bold counter claim to Howarth and Ingraffea: “fracking is crucial to global economic stability” and “the economic benefits outweigh the environmental risks.”

Yet Engelder’s assessment rests on a number of assumptions that may prove unsupportable in the long run. 
 
Engelder’s first assumption is that America’s unconventional gas reserves are enough to uphold tremendously high projections of gas production. Such projections underpin the ‘energy security’ of turning to unconventional gas in the wake of oil’s decline. Some say we have about a century’s worth of domestic gas to carry us through to a clean energy future. This will give us energy and economic security as well as a high employment rates and standards of living. (Howarth and Ingraffea, however, point out that emerging data, from the Post Carbon Institute and the U.S. Geological Survey, find these projections to be greatly exaggerated.)
 
Engelder also presumes that public approval of fracking will support a steady increase in unconventional gas drilling across the country, the increase needed to achieve production projections. Unconventional wells only produce for a short amount of time so a steady increase in production means many new wells must be drilled. But an increase in fracking may have the consequence of increased resistance, which is something already happening across the nation. Opposition to fracking will certainly get in the way of uninhibited drilling, a point Engelder seems to overlook. In fact, Engelder seems to rely upon continued support from people in drilling regions where they are less likely to become anti-drilling activists.
 
The final assumption that Engelder makes surrounds the broad scope of human and environmental harm. Sounding much like an industry front man, Engelder downplays the risks associated with fracking, suggesting that water contamination has not and will not occur, that methane contamination is basically harmless and naturally occurring, that industry mistakes, like leaks and blowouts “are like all accidents caused by human error – an unpredictable risk with which society lives.” Engelder wants to at once suggest that there are no unmanageable problems associated with fracking and, where there are problems, call them a necessary evil.
 
In a post-Macondo world, the vague and nonchalant treatment of such serious risks is brazen and inexcusable.
 
Engelder writes that in the case of fracking “fear levels exceed the evidence.” But this statement holds none of the practical wisdom of Howarth and Ingraffea’s final words: “gas should remain safely in the shale, while society uses energy more efficiently and develops renewable energy sources more aggressively.”

September 14 2011

19:33

Battle for Fracking Public Perception Lost, Says Gas Industry Insider

The gas industry has not done itself any favors by downplaying the risks associated with fracking, something the industry is apparently just realizing. Labeling affected citizens ‘fracktivists’ or ‘uneducated’ in order to delegitimize their complaints has only emphasized the industry’s callousness and inability to respond to real fears in a meaningful way. People trust the industry less than ever before, and with increased drilling across the globe, discontent is becoming even more widespread.

 
Now, after more than a decade of reckless drilling mishaps and a strengthening anti-fracking movement, the industry is willing to admit they’ve lost the public perception battle. From the outside this looks like a perfect opportunity for the industry to become more transparent and accountable. Instead this admission has only strengthened the industry’s resolve to up the communications ante
 
The industry’s posture throughout the shale gas boom and the inglorious rise of fracking has been one of arrogance. The people and the economy need unconventional gas, they say, and they have held fast to this mantra, even in situations of environmental contamination and community harm.  In the face of protest, the industry has cited gas-funded statistics to remind the people just how much our economic stability, employment rates, environment and energy security hang upon the projected success of unconventional gas exploration. 
 
We have a better future in store, says the industry, and fracked gas is the lynchpin. The risks associated with drilling can only be understood as the unintended but necessary costs of a secure-energy future. The victims in this equation are silenced, bought out and called patriots. 
 
But the inherently dangerous drilling procedures associated with unconventional gas have become too difficult to downplay and the increasingly vocal anti-frack movement is getting better at organizing, information sharing and media communications strategies. And that is exactly where the gas industry is looking to make improvements.
 
At an oil and gas strategy conference culminating yesterday in Denver, Colorado, keynote speaker and president of the Colorado Oil and Gas Association Tisha Conoly-Schuller described the industry’s opposition as ‘evolved’ and ‘mainstream.’
 
“The public is skeptical of anything we say,” she cautions, adding “the favorable perception of the oil and gas industry polls at seven percent – that’s lower than Congress. The public does not believe us. We need someone else delivering our message for us.”
 
Naturalgaswatch.org, the ‘Official Blogger’ of the conference called “Enhancing Shale Oil & Gas Development Strategies,” recounts Conoly-Schuller’s list of recommendations to the industry representatives at the conference:
 
 - identifying other messengers to carry positive messages about oil and gas to a skeptical public; university professors, she said, polled the highest and are well positioned in that regard.
 
 - broadening the sources of information for executives — “We have sources we are comfortable with,” she said, “and they reinforce our views. We need to go beyond that, even if it makes our blood boil, so we can learn the language used by our opposition and learn what they think. These nuts make up about 90 percent of our population, so we can’t really call them nuts any more. They’re the mainstream.”
 
 - respecting industry critics — “Historically, the industry has been dismissive of its critics,” she said. “We have to understand that they are well-intentioned and believe in what they are doing.”
 
 - recognize the emotional nature of the discourse — “It’s ineffective to respond to emotion with science. We need empathy and we have to recognize that emotional is not irrational.”
 
reframe the issue of hydraulic fracturing in economic terms — “We need to talk about how energy is the building block of our economy.”
 
 - engage in dialogue about hydraulic fracturing more broadly — “Engage with people with people not necessarily to change their minds, but to learn what they know and think. That will inform what works.”
 
 - reposition the industry to appeal more broadly to young people — “The issue is serious, but we shouldn’t take ourselves so seriously. We need to become much more clever. Our industry is going to have to become hipper.” 
It will not be lost on critics of the gas industry that no suggestions are made for the kind of reform asked for by those left in fracking’s wake. The conference’s main topic, strategic communications, points to a repeat of the same faulty strategies that got the industry into this mess in the first place: little substantive changes to safety and performance, and far more aggressive public relations campaigns.  
 
Peter Sandman, who is hosting a similar ‘communications’ conference for Canadian gas companies says the industry has been miserable in its attempts to improve risk communications. The general public, he says, view an improvement as “acknowledging prior misbehaviors and current problems, sharing control, becoming more accountable to critics, etc.” But for the mistaken industry “it means doing a better job of explaining the industry’s strengths and rebutting opponents’ claims.”

The tensions splitting supporters and opponents of fracking have never been more clear, yet, instead of focusing the time and resources necessary to respond to these concerns over human and environmental health, the industry is gearing up for a public relations battle to put the tar sands committee to shame. But that battle, we already know, has been lost.
So, just what is the gas industry thinking?

July 30 2011

16:21

Promises and Problems: EnergyNOW! Releases Special Video Report on Fracking in the Marcellus

Energy politics tend to have a socially galvanizing effect. In production zones, big industrial producers promise massive social incentives to locals who are forced to juggle the often conflicting concerns of environmental conservation and economic prosperity. What were once tight-knit societies are finding themselves divided over concerns for their land, water and air.

Nowhere is this narrative more harrowingly played out than in the rural towns of America, suddenly rich with an abundance of unconventional gas. Both a blessing and a curse, these communities are discovering what the gas drilling boom brings in its wake, beyond promises of wealth.

EnergyNOW! has produced a special video report, set within the drilling rigs of the Marcellus Shale, to see how fracking and unconventional gas production have affected the small town of Bradford County, Pennsylvania. Chief correspondent Tyler Suiters interviews residents, industry representatives, state officials, including former PA Environmental Secretary John Hangar, and independent experts, including Dr. Anthony Ingraffea, to tackle relevant issues from local economics to water contamination.

Watch:

July 21 2011

18:30

Shell Forced to Retract "Misleading" Fracking Adverts in South Africa

The gas industry has finally received the slap on the hand it deserves for parroting the outdated refrain: “there are no instances of documented water contamination from hydraulic fracturing.” In South Africa, the Advertising Standards Authority (ASA) ordered oil and gas giant Shell to withdraw claims about shale gas drilling, after the authority found the company guilty of propagating misleading information in several newspapers.

The Karoo region of South Africa has become an international target for unconventional gas producers since its vast shale gas deposits were discovered in recent years. The rush to drill created a wave of public concern, after reports of fracking disasters, including water contamination, well blow-outs and explosions, have become commonplace across America. The government has called for a delay in granting drilling permits until a full-scale study is completed to address mounting concerns.

Looking to sway public opinion, Shell published numerous full-page public relations adverts in local newspapers, claiming that hydraulic fracturing is used in 90% of gas wells and has never caused water contamination.

The ASA ruled that numerous aspects of the Shell adverts are “unsubstantiated and misleading.” The claims made by Shell are “not adequately substantiated,” according to the authority, and are “in contravention” of advertising codes in South Africa, which requires such information to have “unequivocal, independent verification.”

The ASA condemned Shell for their position on water contamination, saying that the company was clearly portraying a biased perspective and should have taken to time to assess a broader spectrum of literature on the topic.

This is not the first time Shell has had to pull an advertisement from a major news source. In 2008 the British advertising authority forced the company to withdraw an advert boasting their new “sustainable” energy developments in the Canadian tar sands

The South African citizen organization Treasure the Karoo Action Group, who made the official complaint to the ASA, welcomed the ruling

Bonang Mohale, Shell South Africa chair said they are disappointed with the ruling, adding “the purpose of the advert was to provide information directly to the public to enable them to properly assess the nature of the proposed shale gas exploration in the Karoo, as well as the accompanying technology of hydraulic fracturing.”

Shell, along with others from the gas industry, has been pushing to perform preproduction fracking despite the moratorium. Test fracking, they say, is necessary to determine where and how to drill, and how much to invest.

Treasure the Karoo chairperson Jonathan Deal says that Shell is in no position to make such demands. “We do not know enough about the long-term or even the short-term damage fracking could inflict on the environment.”

The PR stunt by Shell is a deliberate attempt to misinform the public he says, and “we should not be misled by the emotional calls and manufactured facts of such adverts.”

Image Credit: www.rainharvest.co.za

July 16 2011

17:44

Post Carbon Institute Analysis Suggests Shale Gas (Still) Worse Than Coal For Climate

Shale gas cannot provide a low carbon “interim” fuel for the transition to a clean energy future, according to David Hughes, fellow at the Post Carbon Institute (PCI). Gas advocates have long advertized unconventional gas as a clean alternative to coal and other polluting fossil fuels. But the cleanliness of unconventional gas is challenged by others who claim that lifecycle greenhouse gas (GHG) emissions from shale gas are in fact higher than coal. 

One such claim, maintained by a group of scientists from Cornell University led by Dr. Robert Howarth, puts shale gas GHG emissions 20 to 100 percent higher than coal on a 20-year timeframe. Their study, published in the peer-reviewed Climactic Change Letters, has received enormous criticism from the gas industry and its supporters. Several reviews have challenged the integrity of the Cornell study, including a presentation given by scientist Timothy Skone from the National Energy Technology Laboratory (NETL). According to Skone, GHG emissions from gas are 48 percent lower on a 20-year timeframe.

In an analysis entitled “Lifecycle Greenhouse Gas Emissions From Shale Gas Compared to Coal,” Hughes compares the two conflicting conclusions to get to the source of the disparity. With a little number crunching, he discovers that there may be less of a disagreement than meets the eye.

The difference can be accounted for, writes Hughes, by taking a closer look at each report’s methodology and considering the veracity of their numbers. Selective data usage is significant for the outcome of any study, he says, and “depending on input assumptions, one can get any answer one wants out of the analytical process.”

The Cornell report limits its scope to shale gas, which is projected to account for 40 percent of all U.S. production by 2035. The emissions rates for shale gas production are significantly higher than those from conventional gas. The NETL presentation, in distinction, examines averages from all forms of gas: conventional, coalbed methane, tightsand and shale.

And while the Cornell study considers all aspects of extraction, processing, transmission, storage and distribution to arrive at a fugitive methane rate of 3.6 to 7.9 percent of total production, the NETL presentation estimates overall fugitive methane emissions at 1.52 percent, an amount that excludes distribution emissions. The lower percentage also assumes that gas producers use flaring techniques more frequently than venting, which will significantly reduce GHG impacts. 

The NETL figure, says Hughes, is a surprising 31 percent lower than EPA inventory data. 

NETL does not cite all of its sources and uses numerous figures for emission rates and total production estimates that differ significantly from those of the Environmental Protection Agency (EPA), Government Accounting Office (GAO) and the Energy Information Administration (EIA). The emission assumptions for the Cornell study, although at times criticized for differing from federal estimates due to data scarcity, are explicitly laid out in their peer-reviewed article. 

Hughes’ analysis demonstrates that were the NETL methane emission figures revised to reflect those reported by the EPA, the presentation’s emission findings would change drastically, jumping up to 3.31 percent, almost approaching the low end of 3.6 percent reported by the Cornell team.

Methane emissions are usually understood as percentages of total production. By assuming much higher production rates than the Cornell team, Skone arrives at significantly lower emissions percentage. The NETL presentation estimates that 3 billion cubic feet are ultimately recovered from an average well while the Cornell study averages 1.24 bcf for an average shale gas well, a number supported by EPA estimates. 

When Hughes adjusted the NETL figure to reflect EPA production and emission rates, he found that the presentation’s final numbers are “comparable” to the Cornell study, and are actually a bit higher.

Hughes has more to say about the integrity of the Cornell study, but in the end demonstrates that, no matter how you look at it, the dream of clean unconventional gas is increasingly difficult to support.

July 15 2011

18:29

Talisman Energy Shelves "Friendly Fracosaurus" Coloring Book After Colbert Smackdown

Talisman Terry, the Friendly Fracosaurus, has been officially suspended from his duties as an unconventional gas mascot. The cartoon dinosaur was used to narrate Talisman Energy’s company coloring book which described the dangerous process of unconventional gas extraction as safe, clean and patriotic.

Talisman Energy decided to shelve the promotional material after numerous reports criticized the company for engaging in child-directed propaganda. The coloring book, called “Talisman Terry’s Energy Adventures,” portrays gas drilling processes in simplistic and euphoric terms, giving the impression that these controversial drilling techniques, which are connected to numerous instances of air pollution and water contamination, are environmentally beneficial. The 24-page book features images of drilling sites with smiling wildlife and overarching rainbows.

Talisman Energy has been cited for numerous environmental violations and has one of the worst drilling records in Pennsylvania, a fact the children’s book made no mention of.

The controversial book became national news after it was reported by Stephen Colbert on Monday. “The Colbert Report” created its own Fracosaurus parody, showing Terry depressed and killing himself in a methane explosion after lighting a cigarette in the shower. Similar incidents have occurred across the States when methane contamination of domestic water supplies creates a highly explosive build up in confined spaces, like bathrooms.

Soon after the spoof, Talisman Energy announced on Fox News that they had stopped distributing the material. Company spokesperson Natalie Cox tried to downplay the tide of criticism by saying that “there’s two sides to every story.” The company is “not going to continue to dispute the intent of a children’s coloring book,” she said, adding, “we’re going to take our company’s focus to where it should be.” 

The coloring book has also received some negative response from U.S. Representative Ed Markey, D-Mass. Markey, at a recent Energy and Mineral Resources and Agriculture Joint Subcommittee hearing, referred to Talisman Terry as a “loveable dinosaur” who “playfully promotes the benefits of natural gas and paints a picture of a magical world filled with smiling rocks and grinning animals.” The problem, he says, “is that unless you are a ‘FRACK-A-SAURUS’ named ‘Talisman Terry,’ this world doesn’t exist.” 

Communities suffering the effects of unconventional gas extraction, he continues, suffer “contamination of water supplies, loss of property value, deteriorating health conditions, dead livestock, and destruction of pristine forest and agriculture lands.”

When Talisman spokesperson Cox says the company is prepared to ‘take their focus where it should be’ we can only hope she means to address these concerns for community and environmental health.

July 12 2011

21:30

Stephen Colbert Skewers Talisman Energy Over Gas Fracking Coloring Book

Stephen Colbert devoted a must-see segment of The Colbert Report last night to the subject of hydraulic fracturing (fracking), mocking gas company Talisman Terry for its coloring book propaganda, "Talisman Terry's Energy Adventure" [PDF] and generally eviscerating the gas industry's efforts to greenwash fracking in the wake of widespread public concern over water contamination and other threats posed by the industry's drilling operations.

Colbert's team certainly had fun mocking Talisman's "Friendly Fracosaurus" character, revealing some "bonus pages" of the dinosaur facing his "violated ancestors" and committing suicide - frackicide? - by lighting a cigarette in the shower.  These references were surely amusing to viewers of Gasland and other followers of the fracking controversy.

Watch the video:

Video courtesy of The Colbert Report.

July 09 2011

14:45

A Pan-European Approach To Banning Unconventional Gas?

A German member in the European parliament (MEP) is proposing a straightforward way to prevent (or outlaw) exploration and drilling for unconventional gas in the European Union (EU). His plan, bypass national strife and instead build consensus for a European-wide ban.

Jo Leinen, chair of the committee on the environment, public health and food safety, is considered one of the most influential MEP’s. He recently told The Guardian that he wants to work on a new energy quality directive that is expected to focus on penalizing and/or banning the extraction, import and use of fuels which are environmentally destructive – namely unconventional gas and even tar sands oil.

While some consider unconventional gas as a clean burning source of fuel, each day seems to bring more and more bad news about its damaging health and environmental effects.

What’s more, the International Energy Agency has found that gas reliance would be disastrous for fighting climate change. This is supported by recent findings from Cornell University which show that over a 20-year period, unconventional gas emissions are at least 20% greater than coal, and maybe as high as 50%.

At the national level, efforts to regulate the unconventional gas industry in Europe have been a mix of success and failure.

France just banned hydraulic fracturing (a.k.a. fracking), passing both the lower and upper houses of the French National Assembly. While this is a success, a full ban on unconventional gas was viewed as too prohibitive by the governing UMP party and subsequently dropped from consideration before it ever came to a vote.

In Britain, the debate around unconventional gas rages on. Huw Irranca-Davies, the Labour party’s shadow energy minister recently wrote to energy minister Charles Hendry urging him to temporarily ban gas drilling and fracking, at least until the technology and its impacts can be studied [pdf] further.

At the moment, drilling supporters in parliament outnumber detractors. The parliamentary committee on energy and climate change just rejected any possibility of a moratorium on unconventional gas. The committee stated: "We conclude that, on balance, a moratorium in the UK is not justified or necessary at present." Tax breaks to encourage drilling are still being considered.

Unfortunately, in other countries like Poland, the unconventional gas “barometer of Europe,” drilling is advancing at an “unprecedented speed.” At present, Polish leaders are touting unconventional gas as a pan-European project.

Jesse Scott, program leader with E3G, a British NGO promoting sustainable development, said the portrayal of unconventional gas as the "European solution" is a battle yet to be won.

This fight will soon be waged in Germany, where diversifying sources of energy has become especially important, since parliamentarians recently voted to end the use of nuclear energy by 2022. Without nuclear, Germany will rely more and more on alternative energy options like hydropower, wind and solar, which it already wants to grow to at least 35% by 2020.

With many countries in Europe either reluctant to ban unconventional gas drilling or ready to push ahead with it - and with unconventional gas drillers trying to label their fossil fuel as a green energy source - Leinen’s proposed energy directive faces an uphill struggle.  But it may encounter success at the European level where MEPs previously passed Europe’s “20-20-20” targets (20% less carbon emissions and 20% of energy production from renewables by 2020).

Photo Credit: The Economist

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