Tag Archives: oil

Who’s profiting from drilling Los Angeles?

by Rob Galbraith and Gin Armstrong

Freeport-McMoRan is far and away the largest oil and gas producer in Los Angeles, with 1,311 active wells in Los Angeles County according California’s Division of Oil, Gas, and Geothermal Resources. The corporation, a multinational mining giant, acquired most of its Los Angeles wells in its 2012 purchase of Plains Exploration and Production, which brought the Inglewood oil field, the largest urban oilfield in the United States, into Freeport-McMoRan’s portfolio. The Inglewood oil field is home to 911 wells, 16% of all wells in Los Angeles County.

At Freeport’s annual meeting on June 8, the shareholder advocacy group As You Sow introduced a resolution requesting that the company report on its enhanced oil recovery operations, including steps it is taking to mitigate negative environmental and health effects. The proposal noted that “oil operations have the potential to contaminate water supplies, release toxic fumes, and harm communities.”

The board of directors urged shareholders to vote against the resolution.

Freeport’s board – primarily wealthy white men – are unlikely to directly face the health impacts of their company’s drilling. A 2014 Natural Resources Defense Council report found that the impacts of drilling in California are disproportionately visited upon low-income communities and communities of color and that in Los Angeles County, 78% of the people living within a quarter mile of a gas well were black or Latino.

Continue reading Who’s profiting from drilling Los Angeles?

Oil pipeline company spends heavily on Cuomo-tied lobbying firm

PAI’s most recent report showed how companies behind major New York State natural gas infrastructure projects have been increasing lobbying expenditures and contracting with firms tied to New York Governor Andrew Cuomo’s family and administration.

This trend is not confined to the natural gas sector: at least one oil infrastructure company is employing the same tactic.

According to filings with New York’s Joint Committee on Public Ethics (JCOPE), Pilgrim Transportation of New York, the company behind the proposed Pilgrim Pipeline, spent a total of $216,250 on lobbying from 2013 through 2015. If it goes forward, the Pilgrim Pipeline will transport gasoline and other petroleum products from New York to New Jersey

Pilgrim’s annual lobbying spending has accelerated rapidly; the company spent more than twice as much in 2015 – $146,500 – as it did in 2014 – $62,250, and is on pace to spend $174,000 in 2016.

More than two thirds of Pilgrim’s total lobbying expenditures have been with the Cuomo-tied firm Bolton-St. Johns.

From PAI’s report “Natural gas infrastructure lobby ramps up spending in New York State:”

Bolton’s top lobbyist, Giorgio DeRosa, is the father of Cuomo’s Chief of Staff Melissa DeRosa and wife of one-time Cuomo patronage chief Maureen DeRosa. Giorgio DeRosa lobbied against the fracking moratorium for the Pipe Trades Association and American Petroleum Institute, and lobbied for Bluestone Gas around its Broome County pipeline. The most recent lobbying disclosure for Bolton show DeRosa was still lobbying for API. He has personally given $10,000 to Cuomo’s campaigns, and given $14,018.94 to his Bolton St. Johns political action committee, BOLT-PAC, which donated $12,000 to the governor.

Another key lobbyist at Bolton St. John’s, Emily Giske, has given $6,250 to Cuomo’s campaigns and volunteered to coordinate floor operations during Cuomo’s campaign for attorney general. She joined DeRosa on the team lobbying on behalf of API in the most recent lobbying cycle for which there are filings.

Bolton St. Johns has donated $42,500 to the governor.

Bolton-St. Johns’ ties to Governor Cuomo can be seen in the map below.

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:

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.

Los Angeles Times interviews fracking expert, fails to disclose industry ties

On Tuesday, the Los Angeles Times published an interview with Stanford professor of geophysics Mark Zoback in which he argued against a moratorium on fracking in California and lauded the oil and gas regulatory regimes in Pennsylvania and Texas. At the beginning of the article, Zoback is identified as “Stanford geophysicist since 1984, member of the National Academy of Engineering’s Deepwater Horizon investigation committee, personal ‘decarbonizer,’ [and] fracking expert.”

What the LA Times left off of Zoback’s CV is his role as an oil and gas industry insider. In addition to his position at Stanford and role on President Obama’s industry-stacked Natural Gas Subcommittee of the Energy Advisory Board, Zoback is a senior executive advisor to the oilfield services company Baker Hughes, the former chair the oil and gas consulting firm GeoMechanics International (purchased by Baker Hughes in 2008), and a director of the Research Partnership to Secure Energy for America, a federally funded think tank dedicated to “exploring, producing and transporting-to-market energy or other derivative products from ultra-deepwater and unconventional natural gas and other petroleum resources.”

Continue reading Los Angeles Times interviews fracking expert, fails to disclose industry ties

Bill Richardson stands up to the global climate crisis…by joining the board of an oil and gas company

Two weeks ago we reported on former New Mexico governor Bill Richardson’s failure to disclose his Advisor and Chairman positions at consulting firm APCO Worldwide, in his TIME op-ed promoting exporting liquified natural gas (LNG). From December 2012 to January 2014, APCO was contracted by the Ukrainian State Agency for Investment and National Projects for $330,000 to consult on improving the image of an LNG infrastructure project in the country. In November 2013 Richardson was busted for not disclosing this conflict of interest in an article he authored for the Financial Times on exporting LNG to Europe. The Financial Times was forced to issue a correction.

It seems that Richardson has yet to learn his lesson, and is in fact poised to benefit from his high-profile stance supporting LNG exports. On “Platts Energy Week TV” Sunday, Richardson supported speeding up the Department of Energy’s review process for LNG export terminal applications and stressed the role of LNG in providing security to countries in Europe:

“I think it’s important that the United States, as a nation, either pass legislation or executive orders that make it easier to construct these LNG terminals, export natural gas and oil, and increase our energy friendship with these countries that are really fearful of what’s going to happen to them, like what happened to Ukraine.”

You can view the full interview below:

Continue reading Bill Richardson stands up to the global climate crisis…by joining the board of an oil and gas company

In Colorado, “grassroots” pro-fracking groups hire former legislator to campaign against moratoria

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.

Continue reading In Colorado, “grassroots” pro-fracking groups hire former legislator to campaign against moratoria