As the west scrambles for a geopolitical response to Russia’s play for the Crimean peninsula, advocates for the oil and gas industry have used the situation to redouble the push to export liquefied natural gas (LNG). Framing the issue as a matter of protecting a fledgling democracy and ensuring security for United States allies, oil- and gas-affiliated pundits, lobbyists, and politicians have begun banging the drum to increase gas exports as a way for the United States to win this standoff with its Cold War rival. However, approving more LNG export facilities is unlikely to have any effect on the current crisis as construction of terminals will take years and billions of dollars and there is no way to ensure that gas will go to Ukraine or any European country when it fetches a higher price in Asia.
Though increased gas exports would not likely score the US a geopolitical win in Crimea, it would help the oil and gas industry to increase their bottom line by selling natural gas, which is currently barely profitable to drill for, to high-priced Asian markets.
As Republic Report’s Lee Fang showed, many in the commentariat calling for exports as a solution have ties to oil and gas lobbying groups and Koch-funded think tanks. We wrote last week on former New Mexico Governor Bill Richardson, who penned an op-ed arguing to use LNG to “[secure] regional independence from Russia,” without disclosing that his employer had been employed as recently as December as a consultant to Ukraine on an LNG project.
Members of Congress have also been speaking out on the issue and have introduced several bills in the House and Senate to expedite Department of Energy approval of LNG export permits. We found that some of the legislators most vocal about LNG and Ukraine have been the recipients of large amounts of campaign cash from the oil and gas industry – the five profiled below have brought in more than $1.5 million since 2009.
Last week, the Center for Sustainable Shale Development announced it had hired Susan Packard LeGros, a Philadelphia-area environmental attorney, as its executive director. LeGros is replacing interim director Andrew Place, who is also the head of public policy research for Pittsburgh gas driller EQT Corporation.
As we discussed in our report “Big Green Fracking Machine,” though CSSD bills itself as an “unprecedented collaboration” between the drilling industry and environmental groups “to support continuous improvement and innovative practices through performance standards and third-party certification,” the group is dominated by oil and gas interests and appears to be less an independent certifier than a greenwash effort to improve the natural gas industry’s public image. LeGros is an apt complement to CSSD’s model. She comes to the Center from Stevens & Lee, a law firm with several offices in the Mid-Atlantic region that lists her as a contact for its oil and gas practice. LeGros is also a former director of the Pennsylvania Environmental Council, an environmental group whose friendly ties to the gas industry we detailed on this blog last year.
Along with its announcement of LeGros’s hiring, CSSD announced that it will begin certifying gas drillers as “sustainable” this year, though the third party auditor will be Bureau Veritas rather than the previously reported ICF International. After the controversy surrounding CSSD board member and now former Heinz Endowments President Bobby Vagt‘s failure to disclose his board position on pipeline company Kinder Morgan, the involvement of one of CSSD’s main fiscal sponsors became questionable. This week’s announcements signal that, with or without the involvement of the Heinz Endowments, the show will go on at the Center for Sustainable Shale Development.
This fall, Blank Rome LLP, a Pennsylvania-based law and lobbying firm, held two events titled “Environmental Issues Affecting Midstream & Downstream Oil & Gas Development.” The events, one in Philadelphia and one in Harrisburg, were co-hosted by Hull & Associates, a shale oil and gas project management and consulting firm, and featured a slew of presenters from variety of industry affiliates, including Blank Rome energy chair (and former Pennsylvania DEP Secretary) Michael Krancer; Stephanie Catarino-Wissman, the executive director of the American Petroleum Institute‘s Pennsylvania office; and Chris Tucker, the leader of Energy in Depth, the Independent Petroleum Association of America’s public relations campaign.
Also among the presenters were E Christopher Abruzzo, Krancer’s replacement as DEP Secretary, and Robert F Powelson, the chairman of Pennsylvania’s Public Utility Commission (PUC).
While it is important for industries to be kept abreast of the issues regulators are looking at, the Blank Rome program, which included presentations on how midstream and downstream companies can mitigate public relations fallout from an environmental crisis, is another illustration of the cozy relationship in Pennsylvania between the oil and gas industry and the governmental bodies tasked with overseeing it.
While we have been giving a lot of blog attention to New York State over the past few weeks, highlighting Governor Cuomo’s ties to the business lobbies pushing for natural gas in New York, Pennsylvania’s titans of business and politics paid their respects to the Empire State this past weekend, making their annual pilgrimage to New York City’s Waldorf-Astoria for the Pennsylvania Society Weekend.
Alternately called a “weekend-long marathon of dinners and cocktails” that “brings together political, civic and business leaders from across Pennsylvania and across the aisle” and an “orgy of eating, drinking and, needless to say, politicking by the state’s most powerful and influential people,” the Pennsylvania Society weekend is a 114-year-old tradition wherein Pennsylvania elites, “[p]oliticians from the governor down, lobbyists and lawyers seeking their favor, corporate chiefs from Pittsburgh and Philadelphia inclined to write campaign checks,” gather in New York for what has expanded to more than 60 events sponsored by candidates, law firms, and interest groups.
Former Governor Ed Rendell told the New York Times that the weekend of schmoozing is a compulsion: “For politicians, it’s like salmon swimming upstream to give birth. We do it by instinct.”
Like all things political in Pennsylvania, the natural gas industry has a pervasive presence at the Pennsylvania Society, where revolving door lobbyists tipple with policymakers and hopefuls at thousand dollar a head receptions and break bread at invitation-only dinners all in the twinkly, gilded grandeur of midtown Manhattan in December.
Last week, Capital New York reported on “belt-tightening” at the Independent Oil and Gas Association (IOGA) of New York that included downsizing its staff and severing its relations with the lobbying firm Hinman Straub and its affiliate Corning Place Communications. Brad Gill, director of IOGA of NY, told Capital New York that his group “doesn’t have the resources to push back against” anti-fracking groups in the state. According to the story, IOGA of NY has lost 20% of its members with the big players all but giving up on the state. “Right now, Shell could care less about New York,” Gill told Capital New York.
One of the ads from IOGA of NY’s $2 million campaign last year
While IOGA of NY’s membership may indeed be dwindling, their claim that the gas industry is short on resources compared to the anti-fracking movement seems somewhat disingenuous. In 2012, the group spent $2 million from ExxonMobil on an ad campaign supporting fracking in New York.
Unshackle Upstate’s LNG coalition
By Rob Galbraith • Dec 02, 2013 at 16:10 EST
Last week the Buffalo Niagara Partnership announced its 2014 policy agenda for the Western New York region, with support for liquefied natural gas (LNG) fueling stations as a top priority. Currently, New York environmental law does not allow LNG facilities in residential areas or “in dangerous proximity to contiguous populations.” Bills now under consideration in the state legislature would change this, exempting LNG storage and transportation facilities with a capacity less than 40,000 gallons from the siting law and allowing LNG stations to be constructed outside of any city with a population of 1 million or more (i.e. outside New York City).
Using natural gas as automobile fuel would be a boon to a natural gas industry that is struggling to turn a profit on the glut of gas produced in the fracking age. In addition to LNG for automobiles, gas producers are promoting compressed natural gas (CNG) as vehicular fuel as well as LNG exports to increase demand for their product.
As we have pointed out before, BNP is a powerful business lobby in the region with strong ties to both the natural gas industry and New York State government. To push its LNG plans, BNP has co-founded a coalition called LNG for NY.
Last week the Rochester Democrat & Chronicle reported that New York Lieutenant Governor Robert Duffy had applied for a job with the Rochester Business Alliance (RBA), a local chamber of commerce and business lobbying group. Duffy confirmed in an interview with the Democrat & Chronicle that on October 5th he had interviewed for the group’s executive director position, which is currently held by Sandra Parker, co-founder of Unshackle Upstate, a business organization that has lobbied heavily for fracking in addition to pushing Governor Andrew Cuomo’s economic agenda, and former owner of the lake house that Duffy purchased below market value in May.
Duffy’s interview came less than two weeks after we reported on ties between the Cuomo administration and Unshackle Upstate: Both Parker and the group’s other co-founder, Andrew Rudnick, served on the board of Cuomo-coordinated Committee to Save New York; both co-founders are appointees to Cuomo’s regional economic development councils; and other three other Unshackle Upstate leaders have been appointed by the Governor to various economic development positions.
Harvard University announced this week that Gen. David Petraeus, former director of the CIA and current chair of private equity giant KKR’s global institute, has been appointed as a non-resident senior fellow at the Belfer Center for Science and International Affairs, a unit of the university’s Kennedy School of Government. According to the school’s press release, Petraeus will be jointly leading a Belfer Center project on “The Coming North America Decades,” which shares the name with the course he is currently teaching at the City University of New York (CUNY) Macaulay Honors College. As DeSmogBlog revealed this summer, Petraeus’s imminent “North American decades” will be partially attributable to the embrace of hydraulic fracturing and the exportation of liquefied natural gas (LNG); among the required readings for his course at Macaulay are two industry-funded studies endorsing natural gas as safe for the environment.
Petraeus’s enthusiasm for natural gas gels nicely with his position at KKR, which was the subject of a Forbes article titled “Guess Who’s Fueling the Fracking Boom?” last year thanks to its massive investments in shale gas companies over the past several years. His voice also is a natural fit at the Belfer Center, which has extensive ties to the oil and gas industry and is home to the BP-funded Geopolitics of Energy Project.
This week the Denver Post reported that according to campaign filings, the Colorado Oil and Gas Association (COGA), an industry trade group, has spent more than $600,000 to defeat local fracking moratoria along the front range of the Rockies, donating to a number of groups with names such as Boulder Citizens for Rational Energy Decisions and Lafayette Campaign for Energy Choice.
Though they have the appearance of grassroots citizens’ campaigns, the groups appear to be part of a coordinated industry effort to defeat ballot initiatives in Boulder, Broomfield, Fort Collins, and Lafayette that would enact a five-year moratorium on hydraulic fracturing in each of the municipalities. Thanks to the money from COGA, the pro-fracking groups are poised to outspend groups supporting the moratoria 30-1. Most of that money has gone to iKue Strategies, a Denver consulting firm for which B.J. Nikkel, a former Colorado legislator, is advising the campaign.
Cuomo “shackled” to fracking lobby?
By Rob Galbraith • Sep 23, 2013 at 14:09 EST
In early September, Unshackle Upstate, a pro-business lobbying group based in Rochester, New York, announced a proposal to cut taxes on upstate New York businesses, suggesting that the cuts be paid for through revenue generated by allowing natural gas production through hydraulic fracturing. Unshackle Upstate has long been a supporter of fracking in New York State, operating as the political arm of two upstate business groups: the Buffalo Niagara Partnership and the Rochester Business Alliance. The group is also closely aligned with New York Governor Andrew Cuomo; co-founders Andrew Rudnick and Sandra Parker both had positions at the Committee to Save New York, the now-defunct lobbying group that coordinated with the governor and are Cuomo appointees to the Western New York and Finger Lakes Regional Economic Development Councils respectively.
Though publicly Governor Cuomo has not taken a firm stance on fracking (recently he called the economic benefits “inarguable”, but said the question was still open as to whether they outweighed the practice’s environmental and health effects), the business elites that he has enlisted to push his economic agenda are staunch supporters. We first highlighted Governor Cuomo’s ties to the pro-fracking community through the Committee to Save New York last summer. With the fracking issue still undecided and with Unshackle Upstate’s new push to permit it, it’s worth taking a closer look at how this group of connected businesspeople is tied both to the governor and to the fracking industry.