Industry-tied Department of Energy study finds gas exports will drive fracking, makes no mention of climate

On December 28, Bloomberg reported on a US Department of Energy analysis that found that increasing exports of liquefied natural gas (LNG) from the United States would result in a 5% decrease in natural gas prices in Asia along with a 1% increase in US prices. The contracted researchers concluded that this would be a net benefit for the US economy as higher gas prices would result in larger profits for US gas companies and more spending on increasing gas drilling.

The study, conducted by researchers at the consulting firm Oxford Economics and the James A Baker III Institute for Public Policy at Rice University, does not appear to contemplate the climate effects of increased natural gas drilling and burning, despite the fact that experts have identified climate change as a significant threat to US security interests and the economy. In fact, the word climate only appears once in the entire report (in a passing reference to the COP21 climate negotiations), and the researchers built the assumption that there would be no change in environmental policies into their models.

The researchers found that increasing LNG exports would expand natural gas drilling in the United States. In the first of the key points in the report’s executive summary, the authors write: “The majority of the increase in LNG exports is accommodated by expanded domestic production rather than reductions in domestic demand.”

The authors’ second key point is that the increased LNG exports advocated will result in higher energy prices in the United States. From the executive summary: “In every case, greater LNG exports raise domestic prices and lower prices internationally.” Higher prices with no reduction in demand, as well as access to international markets, would entail bigger profits for US drillers.

The increase in GDP from gas producers’ higher profits would offset the negative impact of higher prices on the US economy, according to the report.

As mentioned above, the study was conducted on contract by economists at Oxford Economics, a UK-based consulting firm, and by Kenneth Medlock III, the James A. Baker, III, and Susan G. Baker Fellow in Energy and Resource Economics at Rice University. On its website, Oxford Economics touts its work for multinational corporate clients, including a number of oil and gas firms. Oxford’s clients include supermajor oil producers BP, Chevron, Eni, and Shell as well as the mining giants BHP Billiton and Rio Tinto.

The James A Baker III Institute for Public Policy, where report author Medlock is a fellow, is an oil-and-gas-industry-funded unit at Rice University. Its members, which fund the institute at levels between $25,000 and $75,000 per year, include BP, Chevron, ConocoPhillips, ExxonMobil, and Shell as well as LNG export company Cheniere Energy. FTI Consulting, a public relations firm that runs the Independent Petroleum Association of America’s Energy in Depth campaign, is a “Director’s Circle” member of the Baker Institute, paying $75,000 per year for access to the institute’s advisory meetings and conferences and private briefings at their headquarters. In 2012, the Baker Institute, in conjunction with Harvard’s industry-funded Belfer Center, published “The Geopolitics of Natural Gas,” a project steered by a Shell employee and funded by ConocoPhillips, that also endorsed increasing LNG exports.

The Department of Energy study, dated October 29, 2015, seems to be another iteration of the Obama administration’s climate ambivalence. As the President publicly describes climate change as a major threat that can’t be dealt with “through pouring money at it,” his administration has relied on analyses by oil and gas industry consulting firms to justify policies that promise to increase the production and consumption of fossil fuels. Since Obama has taken office, his administration has issued permits to liquefy and export natural gas, approved oil drilling in the Arctic Ocean, and, most recently, approved a budget deal lifting the ban on crude oil exports.

PAI has covered the industry-tied science used to advance the oil and gas industry’s agenda in great depth since 2012. This study, and others, can be found in our database of “frackademic” studies here. We have also created a guide to the “frackademia” phenomenon, with profiles of its major players, which is available here.

Update (January 11, 2016):
Itai Vardi published an examination of Rice University’s Baker Institute at DeSmogBlog that goes into the institute’s oil and gas ties in greater depth than the discussion above.

The Baker Institute’s oil and gas backing and its experts’ connections to the industry are mapped below using the LittleSis oligrapher tool:

How the defense and security industry is tied to police biosurveillance in California

Top national security officials in the United States are leveraging recent terror attacks in the West to advocate for greater surveillance at home and militarism abroad. On December 6, days after ISIS-inspired murders in San Bernardino, President Obama announced that he would “urge high-tech and law enforcement leaders to make it harder for terrorists to use technology to escape from justice.” A month earlier, following the massacres in Paris, the Vice Chair of the Homeland Security Advisory Counsel and Commissioner of the New York Police Department, William Bratton, called the attacks a “game-changer” and advocated for an intelligence-gathering offensive.

The call for beefed up security among law enforcement coincides with a rising war effort in Syria, with the United States, France, the United Kingdom and Russia increasing airstrikes over the last month and, in some cases, putting boots on the ground. These have been boom times for the defense industry; the stock values of war and security technology makers have generally risen since the Paris attacks. This includes well known arms manufacturers like Lockheed Martin and Northrop Grumman, but also communication-focused firms like L-3 Communications and Booz Allen Hamilton.

A growing segment of both the defense and security industries is biometrics: The software (facial identification algorithms, mobile networking, databases of irises and fingerprints) and hardware (eye, fingerprint, and palm scanners, license plate readers, and many, many cameras) that will further integrate police and soldiers into one militarized backbone. Some of the smaller companies that are now supplying biometric technology to local police were started by veterans of the defense industry. Others have even more direct ties to the military-surveillance complex.

Continue reading How the defense and security industry is tied to police biosurveillance in California

Oil-financed Senate banking committee poised to greenlight oil exports

Despite signaling earlier this year that President Obama would veto bills repealing the current ban on exporting crude oil produced in the United States, the administration has since walked back that position. Yesterday, Politico reported (subscription required) that White House spokesman Josh Earnest declined to rule out lifting the ban in exchange for other administration priorities in negotiations over a spending bill due Friday.

Meanwhile, another bill that would repeal the export ban, already passed in the House, is under consideration by the Senate Committee on Banking, Housing, and Urban Affairs. Members of that committee from both major political parties are long-time allies of the oil and gas industry, and data from the Center for Responsive Politics show that current committee members have received $2.9 million in campaign contributions from individuals and PACs affiliated with oil and gas companies since 2011.

Tom Cotton, Republican Senator from Arkansas, received the most oil and gas money of anyone on the committee. Cotton has brought in $467,055 from the industry since 2011, according to CRP’s OpenSecrets database. The oil industry is Cotton’s 4th largest donor, and though the senator does not explicitly deny the existence of climate change, he did claim in 2014 that the Earth’s temperature had not risen in the past 16 years. (The top 10 hottest years on record have come since 1998, with 2014 taking the top spot, though 2015 will in all likelihood displace it.)

North Dakota Senator Heidi Heitkamp received the most oil and gas industry money of all the Democrats on the Banking Committee, garnering $233,574 in industry contributions since 2011. Oil and gas donors comprise the senator’s third largest industry donor group according to OpenSecrets. Senator Heitkamp’s state is home to one of the largest shale oil fields in the country, the Bakken Shale, which has seen explosive growth from the oil and gas industry since the advent of hydraulic fracturing and horizontal drilling. Heitkamp has been a staunch proponent of the petroleum industry’s agenda in Washington; in 2013 she co-sponsored a bill to expedite permits to export liquefied natural gas (LNG) from the United States, pitched as a measure to undermine Russia’s near monopoly on the European gas market, but long a priority of oil and gas producers facing depressed prices due to overproduction from the fracking boom.

A third senator allied with the oil and gas industry on the committee considering the export ban is David Vitter of Louisiana, who this year lost his bid for Governor of that state. As we wrote in a 2014 post on efforts to expand LNG exports, Vitter is the son of a Chevron executive and owns a considerable portion of Chevron stock. The oil and gas industry has been Vitter’s top donor since 2011, contributing $189,400 to his campaigns.

As policymakers consider lifting the crude oil export ban, which the Center for American Progress estimates would result in an addition 515 million metric tons of carbon pollution every year, government officials are being targeted by a multifaceted campaign by the oil industry advocating the same. As PAI reported this week, several prominent US think tanks with deep financial and governance ties to the industry have been pushing to repeal the ban. Like the senators on the banking committee, the think tanks advocating the ban cross the mainstream political spectrum – from the Brookings Institution and the Center for Foreign Relations to the American Enterprise Institute and the Heritage Foundation.

That Democrats appear willing to consider acceding to lifting the ban, even as President Obama recognized America’s role in driving climate change at the COP21 negotiations in Paris, indicates that the oil industry’s campaign is working.