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The Underlying Politics and Unconventional Well Fundamentals of an Appalachian Storage Hub

FracTracker is closely mapping and following the petrochemical build-out in Appalachia, as the oil and gas industry invests in petrochemical manufacturing. Much of the national attention on the build-out revolves around the Appalachian Storage Hub (ASH), a venture spearheaded by Appalachian Development Group.

The ASH involves a network of infrastructure to store and transport natural gas liquids and finds support across the political spectrum. Elected officials are collaborating with the private sector and foreign investors to further development of the ASH, citing benefits such as national security, increased revenue, job creation, and energy independence.

Left out of the discussion are the increased environmental and public health burdens the ASH would place on the region, and the fact that natural gas liquids are the feedstock of products such as plastic and resins, not energy.

The “Shale Revolution”

the allegheny plateau

The Allegheny Plateau. Wikipedia

The “Shale Revolution” brought on by high-volume hydraulic fracturing (fracking) in this region encompasses thousands of wells drilled into the Marcellus and Utica-Point Pleasant shale plays across much of the Allegheny Plateau. This area spans from north of Scranton-Wilkes Barre, Pennsylvania, just outside the Catskills Mountains to the East in Susquehanna County, Pennsylvania, and down to the West Virginia counties of Logan, Boone, and Lincoln.  The westernmost extent of the fracking experiment in the Marcellus and Utica shale plays is in Noble and Guernsey Counties in Ohio.

Along the way, producing wells have exhibited steeper and steeper declines during the first five years of production, leading the industry to develop what they refer to as “super laterals.” These laterals (the horizontal portion of a well) exceed 3 miles in length and require in excess of 15 million gallons of freshwater and 15,000 tons of silica sand (aka, “proppant”)[1].

The resource-intense super laterals are one way the industry is dealing with growing pressure from investors, lenders, the media, state governments, and the public to reduce supply costs and turn a profit, while also maintaining production. (Note: unfortunately these sources of pressures are listed from most to least concerning to industry itself!)

Another way the fracking industry is hoping to make a profit is by investing in the region’s natural gas liquids (NGLs), such as ethane, propane, and butane, to support the petrochemical industry.

The Appalachian Storage Hub

Continued oil and gas development are part of a nascent effort to establish a mega-infrastructure petrochemical complex,  the Appalachian Storage Hub (ASH). For those that aren’t familiar with the ASH it could be framed as the fracking industry’s last best attempt to lock in their necessity across Appalachia and nationwide. The ASH was defined in the West Virginia Executive as a way to revitalize the Mountain State and would consist of the following:

“a proposed underground storage facility that would be used to store and transport natural gas liquids (NGLs) extracted from the Marcellus, Utica and Rogersville shales across Kentucky, Ohio, Pennsylvania and West Virginia. Construction of this hub would not only lead to revenue and job creation in the natural gas industry but would also further enable manufacturing companies to come to the Mountain State, as the petrochemicals produced by shale are necessary materials in most manufacturing supply chains…[with] the raw materials available in the region’s Marcellus Shale alone…estimated to be worth more than $2 trillion, and an estimated 20 percent of this shale is composed largely of ethane, propane and butane NGLs that can be utilized by the petrochemical industry in the manufacturing of consumer goods.”

This is yet another example of fracking rhetoric that appeals to American’s sense of patriotism and need for cheaper consumer goods (in this case, plastics), given that they are seeing little to no growth in wages.

While a specific location for underground storage has not been announced, the infrastructure associated with the ASH (such as pipelines, compressor stations, and processing stations) would stretch from outside Pittsburgh down to Catlettsburg, Kentucky, with the latter currently the home of a sizeable Marathon Oil refinery. The ASH “would act like an interstate highway, with on-ramps and off-ramps feeding manufacturing hubs along its length and drawing from the available ethane storage fields. The piping would sit above-ground and follow the Ohio and Kanawha river valley.”

The politics of the ASH – from Columbus and Charleston to Washington DC

Elected officials across the quad-state region are supporting this effort invoking, not surprisingly, its importance for national security and energy independence.

State-level support

West Virginia Senator Joe Manchin (D) went so far as to introduce “Senate Bill 1064 – Appalachian Energy for National Security Act.”  This bill would require Secretary of Energy Rick Perry and his staff to “to conduct a study on the national security implications of building ethane and other natural-gas-liquids-related petrochemical infrastructure in the United States, and for other purposes.”

Interestingly, the West Virginia Senator told the West Virginia Roundtable Inc’s membership meeting that the study would not examine the “national security implications” but rather the “additional security benefits” of an Appalachian Storage Hub and cited the following to pave the way for the national security study he is proposing: “the shale resource endowment of the Appalachian Basin is so bountiful that, if the Appalachian Basin were an independent country, the Appalachian Basin would be the third largest producer of natural gas in the world.”

Senator Manchin is not the only politician of either party to unabashedly holler from the Appalachian Mountaintops the benefits of the ASH. Former Ohio Governor, and 2016 POTUS primary participant, John Kasich (R) has been a fervent supporter of such a regional planning scheme. He is particularly outspoken in favor of the joint proposal by Thailand-based PTT Global Chemical and Daelim to build an ethane cracker in Dilles Bottom, Ohio, across the Ohio River from Moundsville, West Virginia. The ethane cracker would convert the region’s fracked ethane into ethylene to make polyethylene plastic. This proposed project could be connected to the underground storage component of the ASH.

The Democratic Pennsylvania Governor Tom Wolf has consistently advocated for the project, going so far as to sign “an unprecedented agreement at the Tri-State Shale Summit, promising collaboration between the states in securing crackers for the region and, by extension, support of the storage hub.”

Dilles Bottom, OH ethane cracker site. Photo by Ted Auch, aerial assistance provided by LightHawk.

Not to be outdone in the ASH cheerleading department, West Virginia Governor Jim Justice (R), who can’t seem to find any common ground with Democrats in general nor Senator Manchin specifically, is collaborating with quad-state governors on the benefits of the ASH. All the while, these players ignore or dismiss the environmental, social, and economic costs of such an “all in” bet on petrochemicals and plastics.

Even the region’s land-grant universities have gotten in on the act, with West Virginia University’s Appalachian Oil and Natural Gas Research Consortium and Energy Institute leading the way. WVU’s Energy Institute Director Brian Anderson pointed out that, “Appalachia is poised for a renaissance of the petrochemical industry due to the availability of natural gas liquids. A critical path for this rebirth is through the development of infrastructure to support the industry. The Appalachian Storage Hub study is a first step for realizing that necessary infrastructure.”

National-level support

The Trump administration, with the assistance of Senator Manchin’s “Senate Bill 1337 – Capitalizing on American Storage Potential Act”, has managed to stretch the definition of the Department of Energy’s Title XVII loan guarantee to earmark $1.9 billion for the Appalachian Development Group, LLC (ADG) to develop the ASH, even though any project that receives such a loan must:

  1. utilize a new or significantly improved technology;
  2. avoid, reduce or sequester greenhouse gases;
  3. be located in the United States; and,
  4. have a reasonable prospect of repayment.

This type of Public-Private Investment Program  is central planning at its finest, in spite of the likelihood that the prospects of the ASH meeting the second and fourth conditions above are dubious at best (even if the project utilizes carbon capture and storage technologies).

Public-Private Investment Programs have a dubious past. In her book “Water Wars,” Vandana Shiva discusses the role of these programs globally and the involvement of institutions like the World Bank and International Monetary Fund:

“public-private partnerships”…implies public participation, democracy, and accountability.  But it disguises the fact that the public-private partnership arrangements usually entail public funds being available for the privatization of public goods…[and] have mushroomed under the guise of attracting private capital and curbing public-sector employment.”

In response to the Department of Energy’s Title XVII largesse, Congresswoman Pramila Jayapal and Ilhan Omar introduced Amendment 105 in Rule II on HR 2740. According to Food and Water Watch, this amendment would restrict “the types of projects the Department of Energy could financially back. It would block the funding for ALL projects that wouldn’t mitigate climate change.”

On Wednesday, June 19th Congress voted 233-200 along party lines to pass the amendment, preventing funds from the Energy Policy Act of 2005  to be provided to any “project that does not avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases”.

International interest

The only condition of Department of Energy’s Title XVII loan program ASH is guaranteed to meet is the third (be located in the United States), but as we’ve already mentioned, the level of foreign money involved complicates the domestic facade.

Foreign involvement in the ASH lends credence to Senator Manchin’s and others’ concerns about where profits from the ASH will go, and who will be reaping the benefits of cheap natural gas. The fact that the ASH is being heavily backed by foreign money is the reason Senator Manchin raised an issue with the outsized role of state actors like Saudi Arabia and China as well as likely state-backed private investments like PTT Global Chemical’s. The Senator even cited how a potential $83.7 billion investment in West Virginia from China’s state-owned energy company, China Energy, would compromise “domestic manufacturing and national security opportunities.”

“Critical” infrastructure

With all of the discussion and legislation focused on energy and national security, many don’t realize the output of the ASH would be the production of petroleum-based products: mainly plastic, but also fertilizers, paints, resins, and other chemical products.

Not coincidentally, Republican Ohio State Representatives George Lang and Don Jones just introduced House Bill 242, and attempt to support the plastic industry by “prohibit[ing] the imposition of a tax or fee on [auxiliary or plastic] containers, and to apply existing anti-littering law to those containers.”

There will most certainly be a battle in the courts between the state and urban counties like Cuyahoga County, Ohio, who’s council just voted to ban plastic bags countywide on May 28.

Bills like this and the not unrelated “critical infrastructure” bills being shopped around by the American Legislative Exchange Council will amplify the rural vs urban and local vs state oversight divisions running rampant throughout the United States.  The reason for this is that yet another natural resource boom/bust will be foisted on Central Appalachia to fuel urban growth and, in this instance, the growth and prosperity of foreign states like China.

Instead of working night and day to advocate for Appalachia and Americans more broadly, we have legislation in statehouses around the country that would make it harder to demonstrate or voice concerns about proposals associated with the ASH and similar regional planning projects stretching down into the Gulf of Mexico.

Producing wells mapped

Impacts from the ASH and associated ethane cracker proposals will include but are not limited to: an increase in the permitting of natural gas wells, an increase in associated gas gathering pipelines across the Allegheny Plateau, and an exponential increase in the production of plastics, all of which are harmful to the region’s environment and the planet.

The production of the region’s fracked wells will determine the long-term viability of the ASH. From our reading of things, the permitting trend we see in Ohio will have to hit another exponential inflection point to “feed the beast” as it were. Figure 1 shows an overall decline in the number of wells drilled monthly in Ohio.

Figure 2, below it, shows the relationship between the number of wells that are permitted verse those that are actually drilled.

Figures 1. Monthly (in blue) and cumulative (in orange) unconventional oil and gas wells drilled in Ohio, January, 2013 to November, 2018

 

 Figure 2. Permitted Vs Drilled Wells in Ohio, January, 2013 to November, 2018

That supply-demand on steroids interaction will likely result in an increased reliance on “super laterals” by the high-volume hydraulic fracturing industry. These laterals require 5-8 times more water, chemicals, and proppant than unconventional laterals did between 2010 and 2012.

Given this, we felt it critical to map not just the environmental impacts of this model of fracking but also the nuts and bolts of production over time. The map below shows the supply-demand links between the fracking industry and the ASH, not as discrete pieces or groupings of infrastructure, but rather a continuum of up and downstream patterns.

The current iteration of the map shows production values for oil, natural gas, and natural gas liquids, how production for any given well changes over time, and production declines in newer wells relative to those that were fracked at the outset of the region’s “Shale Revolution.” Working with volunteer Gary Allison, we have compiled and mapped monthly (Pennsylvania and West Virginia) and quarterly (Ohio)[2] natural gas, condensate, and natural gas liquids from 2002 to 2018.

This map includes 15,682 producing wells in Pennsylvania, 3,689 in West Virginia, and 2,064 in Ohio. We’ve also included and will be updating petrochemical projects associated with the ASH, either existing or proposed, across the quad-states including the proposed ethane cracker in Dilles Bottom, Ohio and the ethane cracker under construction in Beaver County, Pennsylvania, along with two rumored projects in West Virginia.


View Map Full Screen

Conclusion

We will continue to update this map on a quarterly basis, will be adding Kentucky data in the coming months, and will be sure to update rumored/proposed petrochemical infrastructure as they cross our radar. However, we can’t be everywhere at once so if anyone reading this hears of legitimate rumors or conversations taking place at the county or township level that cite tapping into the ASH’s infrastructural network, please be sure to contact us directly at info@fractracker.org.

By Ted Auch, Great Lakes Program Coordinator, FracTracker Alliance with invaluable data compilation assistance from Gary Allison

Feature Photo: Ethane cracker plant under construction in Beaver County, PA. Photo by Ted Auch, aerial assistance provided by LightHawk.

[1] For a detailed analysis of the HVHF’s increasing resource demand and how lateral length has increased in the last decade the reader is referred to our analysis titled “A Disturbing Tale of Diminishing Returns in Ohio” Figures 12 and 13.

[2] Note: For those Bluegrass State residents or interested parties, Kentucky data is on its way!

Global oil refineries map by FracTracker - Ted Auch

Tracking Global Oil Refineries and their Emissions

Potential Conflict Hotspots and Global Productivity Choke Points

Today, FracTracker is releasing a complete inventory of all 536 global oil refineries, along with estimates of daily capacity, CO2 emissions per year, and various products. These data have also been visualized in the map below.

Total productivity from these refineries amounts to 79,372,612 barrels per day (BPD) of oil worldwide, according to the data we were able to compile. However, based on the International Energy Agency, global production is currently around 96 million BPD, which means that our capacity estimates are more indicative of conditions between 2002 and 2003 according to BP’s World Oil Production estimates. We estimate this disparity is a result of countries’ reluctance to share individual refinery values or rates of change due to national security concerns or related strategic reasons.

These refineries are emitting roughly 260-283 billion metric tons (BMT) of CO2[1], 1.2-1.3 BMT of methane and 46-51 million metric tons of nitrous oxide (N2O) into the atmosphere each year. The latter two compounds have climate change potentials equivalent to 28.2-30.7 BMT and 14.1-15.3 BMT CO2, respectively.

66 million

Assuming the planet’s 7.6 billion people emit 4.9-5.0 metric tons per capita of CO2 per year, emissions from these 536 refineries amounts to the CO2 emissions of 52-57 million people. If you include the facilities’ methane and N2O emissions, this figure rises to 61-66 million people equivalents every year, essentially the populations of the United Kingdom or France.

Map of global oil refineries


View map fullscreen | How FracTracker maps work | View static map | Download map data

BP’s data indicate that the amount of oil being refined globally is increasing by 923,000 BPD per year (See Figure 1). This increase is primarily due to improved productivity from existing refineries. For example, BP’s own Whiting, IN refinery noted a “$4-billion revamp… to boost its intake of Canadian crude oil from 85,000 bpd to 350,000 bpd.”

Figure 1. Global Oil Production 1965 to 2016 (barrels per day)

Figure 1. Global Oil Production, 1965 to 2016 (barrels per day) – Data courtesy of British Petroleum (BP) World Oil Production estimates.

 

Potential Hotspots and Chokepoints

Across the globe, countries and companies are beginning to make bold predictions about their ability to refine oil.

Nigeria, for example, recently claimed they would be increasing oil refining capacity by 13% from 2.4 to 2.7 million BPD. Currently, however, our data indicate Nigeria is only producing a fraction of this headline number (i.e., 445,000 BPD). The country’s estimates seem to be more indicative of conditions in Nigeria in the late 1960s when oil was first discovered in the Niger Delta. Learn more.

Is investing in – and doubling down on – oil refining capacity a smart idea for Nigeria’s people and economy, however? At this point, the country’s population is 3.5 times greater than it was in the 60’s and is growing at a remarkable rate of 2.7% per year. Yet, Nigeria’s status as one of the preeminent “Petro States” has done very little for the majority of its population – The oil industry and the Niger Delta have become synonymous with increased infant mortality and rampant oil spills.

Sadly, the probability that the situation will improve in a warming – and more politically volatile – world is not very likely. 

Such a dependency on oil price has been coupled to political instability in Nigeria, prompting some to question whether the discovery of oil was a cure or a curse given that the country depends on oil prices – and associated volatility – to balance its budget: Of all the Organization of Petroleum Exporting Countries (OPEC) countries, Nigeria is near the top of the list when it comes to the price of oil the country needs to balance its budget – Deutsche Bank and IMF estimate $123 per barrel as their breaking point. This is a valuation that oil has only exceeded or approached 4.4% of the time since 1987 (See Figure 2).

Former Central Bank of Nigeria Governor, Charles Soludo, once put this reliance in context:

… For too long, we have lived with borrowed robes, and I think for the next generation, for the 400 million Nigerians expected in this country by the year 2050, oil cannot be the way forward for the future.

Other regions are also at risk from the oil market’s power and volatility. In Libya, for example, the Ras Lanuf oil refinery (with a capacity of 220,000 BPD) and the country’s primary oil export terminal in Brega were the focal point of the Libyan civil war in 2011. Not coincidentally, Libya also happens to be the Petro State that needs the highest per-barrel price for oil to balance its budget (See Figure 2). Muammar Gaddafi and the opposition, National Transitional Council, jostled for control of this pivotal choke point in the Africa-to-Europe hydrocarbon supply chain.

The fact that refineries like these – and others in similarly volatile regions of the Middle East – produce an impressive 10% (7,166,900 BPD) of global demand speaks to the fragility of these Hydrocarbon Industrial Complex focal points, as well as the planet’s fragile dependence on fossil fuels going forward.

Weekly Spot Price of Brent Sweet Crude ($ Per Barrel) and estimates of the prices OPEC/Petro States need to balance their budgets.

Figure 2. Weekly Spot Price of Brent Sweet Crude ($ Per Barrel) and estimates of the prices OPEC/Petro States need to balance their budgets.

 

Dividing Neighbors

These components of the fossil fuel industry, and their associated feedstocks and pipelines, will continue to divide neighbors and countries as political disenfranchisement and inequality grow, the climate continues to change, and resource limitations put increasing stress on food security and watershed resiliency worldwide.

Not surprisingly, every one of these factors places more strain on countries and weakens their ability to govern responsibly.

Thus, many observers speculate that these factors are converging to create a kind of perfect storm that forces OPEC governments and their corporate partners to lean even more heavily on their respective militaries and for-profit private military contractors (PMCs) to prevent social unrest while insuring supply chain stability and shareholder return.[2,3] The increased reliance on PMCs to provide domestic security for energy infrastructure is growing and evolving to the point where in some countries it may be hard to determine where a state’s sovereignty ends and a PMC’s dominance begins – Erik Prince’s activities in the Middle East and Africa on China’s behalf and his recent aspirations for Afghanistan are a case in point.

To paraphrase Mark Twain, whiskey is for drinking and hydrocarbons are for fighting over. 

The international and regional unaccountability of PMCs has added a layer of complexity to this conversation about energy security and independence. Countries such as Saudi Arabia and Venezuela provide examples of how fragile political stability is, and more importantly how dependent this stability is on oil refinery production and what OPEC is calling ‘New Optimism.’ To be sure, PMCs are playing an increasing role in political (in)stability and energy production and transport. Since knowledge and transparency are essential for peaceful resolutions, we will continue to map and chronicle the intersections of geopolitics, energy production and transport, social justice, and climate change.


By Ted Auch, Great Lakes Program Coordinator, FracTracker Alliance; and Bryan Stinchfield, Associate Professor of Organization Studies, Department Chair of Business, Organizations & Society, Franklin & Marshall College


Relevant Data

Footnotes and References

  1. Assuming a tons of CO2 to barrels of oil per day ratio of 8.99 to 9.78 tons of CO2 per barrel of oil based on an analysis we’ve conducted of 146 refineries in the United States.
  2. B. Stinchfield.  2017.  “The Creeping Privatization of America’s Armed Forces”.  Newsweek, May 28th, 2017, New York, NY.
  3. R. Gray.  “Erik Prince’s Plan to Privatize the War in Afghanistan”.  The Atlantic, August 18th, 2017, New York, NY.

Revolving Doors & the PA Natural Gas Industry

By Susan Volz, FracTracker Alliance Intern

The result of this year’s presidential election has sent shock waves through all levels of government. Many are now wondering what the next four years will look like in terms of funding and policy decisions. Just a few days after the inauguration, the next administration’s cabinet choices have many worried. For example, the person President-Elect Trump has selected to lead the transition at the Environmental Protection Agency (EPA), Myron Ebell, has connections to the fossil fuel industry, suggesting national energy policy may embrace fossil fuel development. Of equal concern are the industry connections of former ExxonMobil CEO Rex Tillerson as Secretary of State and former Texas governor Rick Perry as Secretary of Energy.

While these transformations are happening at the federal level, Pennsylvania has its own long history of revolving doors between government and industry that deserve attention. Examination of data collected by citizen advocate, Dorina Hippauf, as well as my own independent research, shows a state government with extensive ties to the oil and gas industry. This relationship is a concern given that state responses to national energy policy and climate change will become particularly important in coming years.

The Governor’s Office

Former Governor Ed Rendell, who served from 2003-2011, has multiple ties to the natural gas industry and was governor during the initial stages of the shale gas boom in PA. During this time, Governor Rendell leased 130,000 acres of state land to gas extraction companies (he later imposed a ban on leasing state lands). After leaving office, Rendell joined Element Partners, an equity firm with investments in the gas industry. Currently, Rendell is Co-chair of Building America’s Future, a bipartisan coalition of elected officials advocating for investment in the nation’s infrastructure. As recently as August 2016, Rendell has said he makes no apologies and remains a “strong advocate” of unconventional gas extraction, also stating that weaknesses in regulation were “cured” in 2010.

Pennsylvania’s shale gas industry saw its beginnings under Governor Rendell, but the industry truly boomed under Governor Tom Corbett. Corbett, a Republican, served a single term from 2011 to 2015. One of Corbett’s first acts as governor was to sign Act 13, which revised oil and gas laws and implemented the controversial impact fee in lieu of a severance tax. Corbett overturned Rendell’s ban on leasing public lands to gas companies. Corbett accepted $1.8 million in campaign contributions from gas companies. These contributions came not only from the companies themselves but also individual contributions from industry executives. Many of the companies that donated to Corbett’s campaign also found themselves appointed to the Marcellus Shale Advisory Commission.

Pennsylvania’s current Governor, Democrat Tom Wolf, campaigned on a platform of tougher restrictions on natural gas companies, as well as a 5% severance tax. However, the severance tax has failed to be implemented due to contentious budget negotiations with the Republican-held General Assembly. There were also concerns during Wolf’s campaign when it was revealed he had received $273,000 in donations from members of the gas industry. Many environmental advocates called on Wolf to return the funds.

Another important point to consider in these transitions is that, as elected officials move through various offices, their staffers often move with them or are appointed to influential positions. For example, K. Scott Roy served as Rendell’s chief of staff while in Harrisburg. After leaving politics, Roy joined Range Resources, one of the largest gas extraction companies in Pennsylvania. In the past he has also served as Treasurer for the Marcellus Shale Coalition.

The DEP: Regulating in the Public Interest?

The Department of Environmental Protection (DEP) is the state agency responsible for enforcing and regulating the natural gas industry in PA. However, research shows a consistent thread of secretaries with ties to the oil and gas industry dating as far back as secretaries James Seif (1995-2001) and David Hess (2001-2003). Both joined lobbying firms after leaving government. Seif joined Ridge Global, LLC, a lobbying firm founded by former governor Tom Ridge, which has had contracts with the Marcellus Shale Coalition, and where Seif currently serves as Principal of Energy and Environment. Hess joined Crisci, a lobbying firm with many gas companies as clients, where he is currently the Director of Policy and Communication at Crisci.

Katie McGinty was appointed by Governor Rendell and served from 2003 to 2008. Since leaving the agency she has worked for a number of energy-related companies including NRG Energy (operator of natural gas plants),  Element Partners (the same firm Ed Rendell joined), and has been senior vice-president at Westen Solutions (a consulting firm with several natural gas companies as clients). During her Senate campaign, McGinty faced criticism for the significant campaign donations she received from the natural gas industry, as well as her employment past. McGinty was succeeded by John Hanger, who served from 2008 to 2011. Hanger left the DEP to join the law and lobbying firm Eckert Seamans Cherin and Mellott, LLC, which is a member of the Marcellus Shale Coalition. One of their clients is the Pennsylvania Independent Oil and Gas Association (PIOGA).

Perhaps the most infamous DEP secretary was Michael Krancer (2011-2013), who once notoriously said, “At the end of the day, my job is to get gas done.” Prior to joining the DEP, Krancer worked for Blank Rome, a law and lobbying firm that represents gas companies and is also a member of the Marcellus Shale Coalition, where he now currently works once again. Krancer also served as a member of the Marcellus Shale Advisory Commission, the panel that advised Governor Corbett on unconventional gas drilling regulations. Krancer’s father, Ronald, was also a significant contributor to Corbett’s 2010 gubernatorial campaign. After Krancer left the DEP, Corbett appointed Christopher Abruzzo, who served for about a year, followed by Dana Ankust, who also served a single year.

When Tom Wolf took office in 2015, he appointed John Quigley to head the DEP. Due to his past working with environmental advocacy group PennFuture, there was optimism that Quigley’s appointment would take the DEP in a different direction. Quigley had also previously served as secretary of the Department of Conservation and Natural Resources. In 2014, the Pennsylvania Environmental Defense Council sued the Commonwealth to try and stop the leasing of state lands to gas companies. Quigley testified that he had felt pressure to allow the lease of public land. Quigley dramatically resigned as secretary of the DEP in May, 2016, as a result of a leaked email voicing frustration with environmental advocacy groups and gridlock in the General Assembly. Quigley is an interesting counterpoint to the trend of DEP secretaries being influenced by the shale gas industry — an environmental advocate entering a political arena hostile to the DEP’s mission.

If one looks deeper at the DEP, there is further evidence of the revolving door between the oil and gas industry and the agency. For example, Barbara Sexton served as executive deputy secretary before leaving to join Chesapeake Energy, where she is currently Director of Government Relations. Another former deputy secretary, John Hines, left the agency to work for Shell. Michael Arch, who was an inspection supervisor, left to work for PIOGA. And finally, L. Richard Adams was formerly the DEP watershed manager before joining Chief Oil and Gas.

Conclusion

These findings suggest that multiple aspects of the Pennsylvania state government have historical and presently revolving-door relationships with the oil and gas industry. In a sense, this situation is not entirely surprising. PA is one of the largest natural gas producing states in the country, and the rhetoric of energy policy sells natural gas as a cleaner, cheaper, domestically-produced alternative to coal or oil. Historically, states have acted as “laboratories of policy,” as the federal government has been slow to pass legislation addressing energy and climate change. The incoming Trump administration has shown itself to be enthusiastic about expanding the fossil fuel market. However, it’s impossible to predict what changes will happen to the EPA and federal regulations. Such unpredictability makes states all the more important in shaping environmental protection policy in the next few years. We need to be aware of these revolving doors so we can be prepared for what’s coming in the future.

AG Pruitt testifies before a congressional committee on issues surrounding energy and the environment

“Polluting Pruitt:” A Wolf to Guard the Hen House?

Guest article by Dakota Raynes, Co-Organizer of Stop Fracking Payne County (OK)

President Trump recently tapped Oklahoma Attorney General Scott Pruitt to head the Environmental Protection Agency (EPA), even though Pruitt is a self-proclaimed “leading advocate against the EPA’s activist agenda.” Pruitt is currently opposing investigation of Exxon Mobile’s handling of climate-change science based on the belief that climate change science is not yet settled and “debate should be encouraged in classrooms, public forums, and the halls of Congress.” Senate confirmation hearings regarding Pruitt’s nomination are currently ongoing – many questions have focused on Pruitt’s legacy as AG of OK and what that tells us about actions he might take as head of the EPA.

Pruitt’s Past as AG

Elected in 2010, Pruitt’s six-year tenure illuminates the full extent of the troubling stances he takes. For instance, he has fought against the overturn of DOMA, same-sex marriage rights, granting legal status to undocumented immigrants, the Affordable Care Act, access to safe and affordable birth control and abortions, and Dodd-Frank Wall Street reform. These actions demonstrate Pruitt’s inability to accept or implement procedures, policies, and programs supported by a majority of US residents, members of the nations’ highest courts, and even his own colleagues.

A Focus on Environmental Issues

More specifically related to environmental issues, he has openly criticized the EPA in congressional hearings and op-ed pieces. Due to his belief that the EPA frequently abuses its authority, Pruitt’s office has filed 14 antiregulatory lawsuits against the EPA. Investigative reporters uncovered that in 13 of these cases co-litigators included companies that had contributed significant amounts of money to Pruitt and/or Pruitt-affiliated political action committees (PACs). He also routinely joins lawsuits against other states. For example, Pruitt and five other Attorneys General challenged a California law banning the sale of eggs laid by hens living in cramped conditions, but a US District Judge ruled they lacked legal standing because they were representing the economic interests of a few industrial egg producers rather than the interests of their broader constituents.

Several such lawsuits are still pending, which legal experts and others claim presents a conflict of interest should Pruitt become the new Director of the EPA. When asked specifically about this issue during Senate confirmation hearings, Pruitt refused to recuse himself from the lawsuits, saying he would leave such a decision up to the EPA’s legal counsel team. Notably, across the course of his six-years as AG, Pruitt’s office has distributed more than 700 news releases announcing the office’s actions, his speeches and public appearances, and efforts to challenge federal regulations. More than 50 of these releases promoted the office’s efforts to sue the EPA, but not once has a release described actions the office has taken to enforce environmental laws or to hold violators accountable for their actions.

Potential Conflicts of Interest

In OK, Pruitt has made many choices, that when viewed together, strongly suggest that his loyalties reside with the industries that have donated hundreds of thousands of dollars to his election campaigns rather than with the people he is sworn to protect. Here is a short list of the most troubling examples:

  • Pruitt’s predecessor had filed suit against Tyson, Cargill, and a number of other poultry producers in OK due to inappropriate disposal of an estimated 300,000 tons of animal waste per year, which was causing toxic algae blooms along the Illinois River. But shortly after his election, Pruitt dropped the case, citing a need for more research. Some have questioned whether his decision was impacted by the fact that the poultry industry had donated at least $40,000 to his campaign that year.
  • He also quickly dismantled the Attorney General’s in-house environmental protection unit, a team of four attorneys and a criminal investigator, and replaced it with the state’s first “federalism unit,” which was created to litigate against overreach by the federal government, mostly the EPA. Pruitt has repeatedly made it clear that he believes states should handle environmental issues, regardless of the fact that environmental issues frequently cause problems that cross geopolitical boundaries such as state lines (OK’s induced seismicity issue1 is a key example, more information about induced seismicity can be found here).
  • In 2013, he created a coalition of 9 Attorneys General, major energy CEOs, and their lawyers and brought them all to OK for a strategizing session regarding how to stop government and citizen responses to the ills of the oil and gas industry; it was an all-expenses paid event funded by Mercatus, a right-wing think tank favored by the Koch brothers.
    1. Notably, the energy industry is Pruitt’s second largest campaign contributor. When he came up for re-election in 2013, he chose Harold Hamm (CEO of Continental Resources, one of the largest oil companies in OK) to co-chair his campaign. Shortly after winning reelection in 2014, Pruitt joined forces with key industry players including Oklahoma Gas and Electric and the Domestic Energy Producers Alliance (chaired by Hamm) to file several antiregulatory lawsuits, which include attempts to block the Clean Power Plan and Waters of the US rule.
    2. Pruitt has also served as leader of the Republican Association of Attorneys General, which has collected at least $4.2 million in donations from fossil-fuel related companies since 2013.
  • Recently, local investigative reporters discovered that Pruitt’s office failed to follow a state law requiring state agencies to disclose spending on outside attorneys. Their examination illuminated that Pruitt has spent more than $1 million on legal fees since FY2012 – a total that does not include costs directly related to lawsuits against the EPA or the Affordable Care Act.

Induced-Seismicity and Wastewater Disposal

OK Map of Recent Earthquakes for Pruitt article

Map of Oklahoma Class II Injection Wells and Volumes 2011 to 2015 (Barrels). Click image to explore a full screen, dynamic map.

Oklahoma recently became the earthquake capital of the world due to a phenomenon referred to as injection-induced seismicity. While OK has not historically been known as a seismically active area, thousands of tremors have shaken the state since the shale gas boom began.

Several researchers have used geospatial analysis to demonstrate how these quakes are caused by the high-pressure injection of oil and gas industry wastes such as the flowback and produced water created by the unconventional oil and gas production process known as hydraulic fracturing. The map above shows where injection wells (tan dots) are located and where earthquakes (green dots) occurred from 2011-2015.

Oklahomans have been harmed by the implicitly pro-fracking stance Pruitt has taken, as evidenced by his lack of action regarding induced seismicity – as well as air, water, and soil contamination due to oil and gas industry activities. Several people, including Johnson Bridgewater (Director of OK Chapter of the Sierra Club) have noted that:

There are various places where the attorney general’s office could have stepped in to fix this overall problem…Its job is to protect citizens. Other states were proactive and took these issues on…[yet] Pruitt has been completely silent in the face of a major environmental problem for the state and its taxpayers.

Specifically, the AG’s office could have responded to the legal question of whether the state could limit or ban transport of fracking-related wastewater, sent by other states for disposal in underground injection wells in OK.

He also did nothing to address the phenomenally low earthquake insurance claim approval rate; after the 5.8M quake shook Pawnee in September of 2016, 274 earthquake damage claims were filed but only 4 paid out. Estimates of statewide approval rates generally suggest that approximately 1% of claimants receive funds to aid repairs.

Lastly, there are a number of class action lawsuits against a variety of industry actors regarding earthquake damages, yet Pruitt’s office has not entered any of these as an intervenor even though AGs in other states have done so.

Pruitt not at fault?

Photo Credit: JIM BECKEL/The Oklahoman

Earthquake damage. Photo Credit: Jim Beckel/The Oklahoman

Pruitt was recently called out by investigative reporters who used open-records requests to reveal that letters, briefs, and lawsuits that he submitted were written in whole or in part by leading energy firms such as Devon (another of OK’s largest oil and gas companies). Pruitt’s response was that he had done nothing wrong, nothing even potentially problematic. Rather, he said, of course he was working closely with industry and isn’t that what he should be doing. Some would argue that as AG what he should be doing is working closely with the people of Oklahoma, especially those whose homes, lives, and livelihoods have crumbled under the weight of attempting to repair earthquake damage due to industry activities.

Historical AG Influence

It is important to remember, though, that what’s happening with Pruitt is not isolated. Rather, as several long-time reporters have noted, increased attention to developing beneficial relationships with AGs is a result of historical processes.

About 20 years ago more than 40 state AGs banded together to challenge the tobacco industry, which led to a historic $206 billion settlement decision. Later, Microsoft, the pharmaceutical industry, and the financial services industry each faced similar multistate challenges regarding the legality or illegality of particular business practices.

As some AGs began hiring outside law firms to investigate and sue corporations, industry leaders realized that AGs’ actions were far more powerful and immediate than those of legislative bodies. So, they began a heretofore unprecedented campaign to massively increase their influence at this level.

Several people have critiqued the ways in which such actions undermine democratic processes, prompt troubling questions about ethics, and negatively impact attorney generals’ abilities to fulfill their duties to the state and its residents.

A Mission at Risk

Those of us on the frontlines here in OK have seen just how powerful such coalitions can be, how much sway they can have on local and state officials, how they destabilize people’s faith and trust in the systems that are supposed to protect them, and how coalitions undercut people’s hope and desire to be civically engaged. The mission of the US Environmental Protection Agency is to protect human health and the environment. If confirmed to lead the EPA, it is very likely Pruitt will prioritize his relationships with industry over the health and welfare of the people and environment he’s directed to protect.

Footnotes

  1. To learn more about induced seismicity read an exclusive FracTracker two-part series from former VTSO researcher Ariel Conn: Part I and Part II. Additionally, the USGS has created an Induced Earthquakes landing page as part of their Earthquake Hazards Program.
Pipeline build out - Photo by Sierra Shamer - Oil and gas pipeline

Infrastructural Challenges: The Direction of Drilling, Pipelines, and Politics in Pennsylvania

Sierra Shamer, Visiting Scholar, FracTracker Alliance

While neighboring states New York and Maryland work to regulate the natural gas industry, Pennsylvania makes way for a pipeline build-out and continued unconventional oil and gas drilling. The industry, legislature, and state agencies claim that continued natural gas development is necessary, can be carried out safely, and will provide money, jobs, and energy to Pennsylvania. However, the price is increasingly evident, and the realization of these claims is yet to come.

PA residents are quickly learning that pipelines come with a cost; their permitting, construction, and supporting facilities infringe on private property rights, cause water and air pollution, and threaten public safety. On Friday April 29th in Westmoreland County, for example, Spectra Energy’s Texas Eastern 30″ gas pipeline exploded, severely burning one man, destroying his home, and damaging homes nearby. The local fire chief recounted his awe at the explosion. For him, it was “… like you were looking down into hell.” These costs prompt communities to consider whether the advertised benefits of pipelines will actually outweigh the costs. Active grassroots resistance has emerged throughout the state, and as it grows, it is consistently met with industry aggression and state repression.

This article provides an overview of the pipeline build-out in Pennsylvania, the political and economic environment promoting it, growing community activism, and, how the industry and state respond. An interactive map of existing and proposed pipelines in PA is featured at the end of the article.

The Shale in Pennsylvania

Pipeline build-out: Extent of the Utica (brown) and Marcellus (orange) shale formations.

Extent of the Utica (brown) and Marcellus (orange) shale formations. Click to expand.

The existing interstate pipeline network moves domestic and imported oil and gas to consumers and markets within North America. These pipelines extend from regions of conventional drilling to domestic and foreign energy markets. The recent development and expansion of unconventional drilling provides access to energy reservoirs that could not be extracted before. Within the past five years, the US overtook Russia to become the largest producer of natural gas in the world.

The Marcellus and Utica shale formations exist below the Appalachian Mountains in the northeast U.S. and into Canada. The Marcellus lies beneath Pennsylvania, Virginia, Maryland, West Virginia, Ohio, and New York. The Marcellus is now the largest region of natural gas production in the United States. Geologists estimate that 4-8,000 ft. underground, over 600 trillion cubic ft. of natural gas is accessible. The Utica formation lies underneath the Marcellus, extending north into Ontario and New York, and south into Virginia, Kentucky, and Tennessee. Geologists estimate over 38 trillion cubic ft. of natural gas is accessible – in some locations over 10,000 feet underground.

Extraction in Pennsylvania

Almost 10,000 unconventional wells in Pennsylvania produce millions of cubic feet of gas each day. This rapid extraction flooded the market, causing natural gas prices to drop dramatically. Marcellus production also outpaced the capacity of the current pipeline network. The location and flow direction of existing pipelines is not ideal for transporting Marcellus gas to markets with higher demand. Additionally, well productivity drops 70% within the first year, so new wells must be drilled to keep the gas flowing. However, the low price of gas reduced revenues, and the cost of drilling new wells remains high. Combined, these factors have paused drilling activity throughout the state. In order to overcome this, gas companies are proposing construction of new pipelines and expansions of existing ones, resulting in the current pipeline build-out.

The Economics of Pipelines

Obama discussing LNG

The dominant narrative, promoted by industry and state, weaves a story of economic prosperity gained by drilling the Marcellus, eclipsing concerns of pipeline necessity and safety. Each pipeline project claims an economic impact in dollar amounts and jobs. Williams claims that their proposed Atlantic Sunrise pipeline will “increase economic activity by $1.6 billion in project regions” and create job opportunities. Sunoco Logistics claims that the Mariner East pipeline will “add $4.2 billion to Pennsylvania’s economy, supporting more than 30,000 jobs during the construction period and … 300-400 permanent jobs.” Often, the specifics of money and jobs are not explained, and when construction begins, communities are invaded by out of state workers and left with little economic benefit.

Response to this buildout arises at all levels. Support pours down from federal and state government while resistance pushes up from the grassroots. The EPA and Obama administration work to shut down coal and promote natural gas, claiming it’s a “bridge fuel” to renewable energy. Pennsylvania’s legislature and Dept. of Environmental Protection (DEP) have battled over drilling regulations, and the push for pipelines presents a different set of challenges. While some consider the build-out necessary to maintain the natural gas industry in PA, others, such as Phil Rinaldi, envision ways in which pipelines can bring money to the state.

Philadelphia Energy Hub

Aware that interstate pipelines carry Pennsylvania shale to out-of-state markets, Phil Rinaldi, the CEO of Philadelphia Energy Solutions (PES) views the shale boom as an opportunity to maintain resource and revenue in state. In 2013 he established the Greater Philadelphia Energy Action Team (GPEAT), a group of over 80 industry, manufacturing, labor, and government stakeholders. Their objective is to capitalize on shale by promoting pipeline construction and bringing energy-intensive manufacturing to the Greater Philadelphia area. In March of this year, the GPEAT released a report titled, “A Pipeline for Growth: Fueling Economic Revitalization with Marcellus and Utica Shale Gas.” This reports details strategies to hasten the transformation of Philly into the “energy hub” of the East by inviting chemical manufacturing industries, and supporting pipeline projects to Philadelphia.

At Ground Level

2016: Columbia 26" pipeline construction near a home in Northern Maryland (Photo: Sierra Shamer)

2016: Columbia 26″ pipeline construction near a home in Northern Maryland (Photo: Sierra Shamer)

At a ground level, impacted communities, public health professionals, and environmental organizations face a ravenous industry. Unaccountable for property takings, fair compensation, and pollution, it as an industry that disregards public health and ecosystems within the shalefields. As a result, grassroots and advocacy groups organize and mobilize throughout Pennsylvania to amplify the voices of impacted residents and communities and to hold the industry and government accountable to the people.

Although pipelines bring large revenues for companies, industry, and the state, the story on the ground is different. New pipelines are either constructed on existing land easements, or new ones must be purchased from landowners along the proposed right-of-way. Pipeline operators have one goal: to find the most direct and least complicated route from supply to demand. While this lower their bottom line, new pipeline routes often disregard nearness to homes, schools, and other populated areas, and cause significant damage to farmland and ecosystems.

Frontline Communities

Pipeline companies often have the power of eminent domain, the ability to take possession of land in court if the property owner refuses a contract. Negotiating fair agreements requires landowners to hire their own appraiser and lawyer, which is not an option for everyone. Unlike drilling wells, landowners do not receive royalties for the pressurized gas flowing underneath their property, facing instead declines in property values and an inability to sell their home. As a result, landowners are left undercompensated, their land forcibly taken away in an unjust process.

Landowners along the right-of-way are the most immediately impacted, but neighbors and communities are affected as well. Each pipeline has a “potential impact radius” or “hazard zone,” the area within which an explosion causes immediate destruction. Residents within this distance experience a decrease in their property values, but currently have no legal recourse for compensation. Pipelines also require numerous compressor stations, facilities that operate 24-7 to maintain the pressure of the gas within the pipeline. Compressor stations are industrial, air polluting facilities that release greenhouse gases, neurotoxins, cancer causing agents, and other pollutants that negatively impact human health and the environment. Residents living near compressor stations experience various respiratory, sinus, and nervous system health issues. These are caused by both everyday operation and periodical gas blowdowns – facility operations when large amounts of methane and other chemicals are released directly into the air for station maintenance or emergencies.

Pipeline Regulation

FERC holds Public Meetings for the Atlantic Sunrise Pipeline (Photo: Justin Engle/The Daily Item)

FERC holds Public Meetings for the Atlantic Sunrise Pipeline (Photo: Justin Engle/The Daily Item)

In Pennsylvania, no single agency is responsible for permitting, monitoring, or regulating pipelines. The Federal Energy Regulatory Commission (FERC) permits interstate pipelines, those that cross state boundaries or carry product that does. Pipelines within the state are under the jurisdiction of the Public Utility Commission (PUC), the DEP, and/or the Dept. of Conservation and Natural Resources (DCNR).

Typically, the PUC is responsible for pipelines that provide directly to consumers. However, in 2011 Act 127 gave the PUC authority to permit and inspect gathering lines, those that move gas from well pads to larger transmission pipelines. All gathering lines have national safety standards except Class 1, those with no more than ten buildings within 220 yards. The PUC maintains a registry of the location, size, and length of gathering lines, but is only includes length for Class 1.  Over 12,000 miles of Class 1 pipelines currently exist in PA, a number expected to quadruple by 2030.

Pipeline Infrastructure Task Force

The complex regulation and unprecedented increase in proposals prompted Governor Wolf to create the Pipeline Infrastructure Task Force (PITF) in 2015. Headed by former Secretary of the DEP, John Quigley, the Task Force included regulatory agencies, industry representatives, and government officials. Their mission: to “engage stakeholders in a collaborative process to achieve a world-class pipeline infrastructure system” and to develop “policies, guidelines, and tools to assist in pipeline development.” The DEP offered live stream of meetings, provided public information, and opportunity for public input in an attempt to be transparent.

Task Force meetings eventually resulted in a final report, outlining challenges and providing suggestions for pipeline construction. First, the Task Force recommended an increase meaningful public participation and the development of long term maintenance plans to ensure safety. Second, they suggested reducing environmental impact by improving pipeline siting and construction and maximizing efficient permitting. Finally, they recommended enhancing the workforce and economic development from pipeline projects.

The Task Force openly acknowledged problems of the pipeline build-out, stating that “permits are not reviewed for the cumulative and long term impacts at a landscape level…they do not necessarily avoid sensitive lands, habitats, and natural features, nor are the impacts to natural and cultural resources, landowners, and communities…always minimized or mitigated.” Despite this, the administration and the Task Force maintain that pipelines can be built responsibly.

Community Opposition and Criticism

2016: Landowners and supporters protest the Constitution Pipeline in Northeast PA. (Photo: DC Media Group)

2016: Landowners and supporters protest the Constitution Pipeline in Northeast PA. (Photo: DC Media Group)

Challenges to the pipeline build-out exist in many forms. Landowners challenge the bullying, harassment, and eminent domain condemnations of pipeline companies. Communities criticize the acceptance of industry funding and pipelines by local representatives. Additionally, grassroots groups and environmental non-profits challenge the minimal regulation, permitting process, and lack of public participation allowed by the DEP, and the FERC “rubber stamp” permitting process.

Awareness and opposition grow with each proposal, condemnation, rupture, and explosion. This rapid construction is compromising pipeline quality and public safety, according to a report conducted by the Pipeline Safety Trust. They found that pipelines built after 2010 had higher rates of failure than those in decades past. Whistleblowers who worked for Spectra Energy have attested to the neglect of proper inspection in the haste to construct pipelines. Spectra’s Texas Eastern pipeline, completed in 1981, was built in a decade when pipelines failed at one-sixth the rate they do today. However, their preliminary investigation indicates that the explosion in Salem Township was likely the result of corrosion due to a “possible flaw in the coating material applied to the weld joints.”

The FERC is a regular target of criticism. Funded through fees received by the companies and industries it oversees, FERC rarely denies permits for pipelines. The Delaware Riverkeeper Network has filed a lawsuit against the FERC challenging the constitutionality of its decision-making.

The DEP’s dedication to protecting Pennsylvania’s environment from the natural gas industry at large is continuously questioned due to its infrastructure permitting, negligent response to water contamination complaints, and unwillingness to hold companies accountable. The DEP’s poor record on drilling regulation continues with regard to the pipeline build-out.

Pipeline Infrastructure Task Force

The Task Force is criticized for its overwhelming industry influence and lack of public inclusion. Of the 48 Infrastructure Task Force members, 56% are tied to the oil and gas industry. Specifically, 92% of the non-governmental members have industry ties. In fact, potential opposition to the build-out was intentionally absent. PA resident and documentary filmmaker Scott Cannon of the Gas Drilling Awareness Coalition (GDAC) was invited to the PITF, only to receive a letter rescinding his invitation a few days later. Additionally, concerned residents were allowed 2 minutes to make a statement, a limit strictly enforced by Secretary Quigley. While affected landowners recounted their fight for their livelihoods, the roundtable of apathetic Task Force members stared blankly. These problems resulted in escalating activist presence increasing from comments and protests outside the DEP building, to meeting disruptions and arrests.

Residents and activists weren’t the only ones unhappy with the PIFT. Cindy Ivey, representative for Williams, and Sarah Battisti, with SouthWest Energy, spoke of their frustrations. The fact that interstate pipeline projects are regulated by federal agencies, and state level organizations have a minor role caused tension in the group. According to Ivey, these issues are “hard things to try to explain gracefully.” Additionally, Battisti added that the 184 recommendations in the report wouldn’t “impact any of us in the near future.”

Despite recommendations of the Task Force, the DEP continues to issue permits that neglect cumulative impacts and complete environmental review. Unlike New York, which denied the 401 Water Quality certificate and prevented the construction of Constitution pipeline, the PA DEP granted the 401 certificate to the Atlantic Sunrise pipeline. As a result, it is under appeal by environmental groups, who argue that it violates the Clean Water Act and the Pennsylvania Code.

PA’s Political Climate

Fracking and the Revolving Door in Pennsylvania Regulations

Unfortunately, meaningful updates to oil and gas regulations in Pennsylvania are consistently challenged. Although Act 13 passed in 2012, critical components were appealed repeatedly, specifically the issue of local zoning authority of oil and gas infrastructure. Lawmakers who oppose any restriction on the industry dominate the current legislature. Recently, the House panel voted a second time to block increased DEP oil and gas regulations, in the making since 2011.

Frustrations in the process peaked when John Quigley resigned as secretary of the DEP after sending a profane email chastising environmental groups for their lack of support. Weeks later, Governor Wolf signed a bill that eliminates current regulations, aiming to start new and in agreement with the legislature. As a result, many environmentalists feel that the Governor has consistently compromised on the environment, putting the lives of PA residents at risk.

Political Campaigns

The relationship between the state and the drilling industry is evident and problematic in Pennsylvania. The Marcellus Money project has tracked campaign contributions and lobbying expenses from the natural gas industry, revealing over $8 million in political contributions and $46 million for lobbying efforts. In 2013 the Public Accountability Initiative released a report revealing the “revolving door” between state government and the oil and gas industry. The report identifies individuals who have moved from the public sector to industry jobs or vice versa, and how often this occurs over the course of their careers.

NPR StateImpact Pennsylvania created an interactive webpage called, “Blurred Lines” that provides a visual exploration of the “revolving door.” As you scroll through the years, individuals slide back and forth between the private and public sector. Additionally, lawmakers have, for a third time, earmarked fiscal code legislation to fund an industry-supported non-profit Shale Alliance for Energy Research PA, (SAFER PA).

State Agencies

Financial gains from drilling support other aspect of the public sector as well. The DCNR’s annual budget became increasingly reliant upon revenues from gas leases within public lands. In 2013, oil and gas lease royalties and other payments provided one-third of the DCNR’s budget. Act 13 implemented a mandatory impact fee whereby the PUC collects money from companies based on the number of oil and gas wells in the state. This money is directed to local municipalities based on the number of wells within their boundaries. However, while 60% of the fee total goes directly to impacted counties, the remaining 40% can go anywhere in PA. While impact fees totaled over $233 billion dollars in 2014, 2016 is expected to be the lowest amount yet due to the decline in drilling activity. This statistic is one of many that highlights the risk of relying on a fluctuating resource.

Governmental and Industry Responses

US_Marshal_Holleran

2016: Armed U.S. Marshall escort the tree cutting crew for the Constitution pipeline on Megan Holleran’s property (Photo: Alex Lotorto)

Response to community opposition of pipeline projects is often militaristic in nature and exaggerated by the industry and the state. The oil and gas industry views community opposition to infrastructure as an “insurgency.” In 2011, it was revealed that the Army/Marine Corps Counterinsurgency manual is used as a tactical reference. The Gas Drilling Awareness Coalition was classified as a terrorist threat by the PA Office of Homeland security, who hired the Institute of Terrorism Research and Response to track activists provide weekly information on a bulletin sent to law enforcement and gas companies. In 2012, state law enforcement, the FBI, the PA Office of Homeland Security, and the oil and gas industry established the Marcellus Shale Operators’ Crime Committee (MSOCC). This committee actively targeted activists and environmentalists in their homes.

Landowners who refuse to sign easements face an uphill battle against companies, law enforcement, and the state as they advocate for their rights. Megan Holleran of Susquehanna County lost her family’s maple syrup trees to Williams’ proposed Constitution pipeline. After protesting and challenging in court, the judge upheld eminent domain and prohibited the family from being within 150 feet from the right-of-way. Further, armed U.S. Marshalls escorted and guarded the tree cutting crew against peaceful protest. Additionally, in Huntingdon County, Elise and Ellen Gerhart faced tree clearing of their woods for Sunoco’s Mariner East pipeline. Once again, armed police escorted tree cutting crews and made several arrests of protesters, who faced bails of up to $200,000.

Pipeline Build-Out Map

The map below shows the existing major pipeline infrastructure in Pennsylvania and proposed pipelines, with the option of also viewing the unconventional wells in the Marcellus and Utica shale. For more information on pipeline regulation and public information, please view our Intro to Pipelines resource page. It includes details about current and proposed pipeline projects in Pennsylvania and throughout the country. Additionally, the intro links to a map of all proposed pipeline projects in North America.


View map full screen | How FracTracker maps work

While it is clear that companies go to every length to construct pipelines, it is equally clear that state agencies, courts, and law enforcement support pipeline development. The direction of drilling, pipelines, and politics in the state of Pennsylvania serves the bottom line of the natural gas industry. This is evidenced by the proposed pipeline built-out, state support, and state suppression of public backlash. However, continued challenges to public health and environment will only serve to increase the resilience and strength of community opposition.

Politics and Campaign Financing

O&G Politics & Campaign Financing

By Ted Auch, OH Program Coordinator, FracTracker Alliance

Anyone who has been paying attention to the domestic shale gas conversation knows the issue is fraught with controversy and political leanings. The debate is made only more complicated by the extensive lobbying to promote drilling and related activities. It would be nice to look at shale gas through a purely analytical lens, but it is impossible to decouple the role of politicians and those that fund their campaigns from the myriad socioeconomic, health, and environmental costs/benefits.

As such, this article covers two issues:

  1. Who Gets Funded: the distribution of oil and gas (O&G) funds across the two primary parties in the US, as well as the limited funds awarded to third parties, and
  2. Funding Allocation to a Specialized Committee: industry financing to the Committee on Science, Space and Technology1 the primary house committee responsible for:

…all matters relating to energy research, development, and demonstration projects therefor; commercial application of energy technology; Department of Energy research, development, and demonstration programs; Department of Energy laboratories; Department of Energy science activities; energy supply activities; nuclear, solar, and renewable energy, and other advanced energy technologies; uranium supply and enrichment, and Department of Energy waste management; fossil energy research and development; clean coal technology; energy conservation research and development, including building performance, alternate fuels, distributed power systems, and industrial process improvements; pipeline research, development, and demonstration projects; energy standards; other appropriate matters as referred by the Chairman; and relevant oversight.

Politics and Campaign Financing

Fig. 1. Relevant Oil & Gas PACs, Institutes, and Think Tanks – as well as Koch Industries and subsidiaries offices (Orange). Click to explore

1. Letting the Numbers Speak

“When somebody says it’s not about the money, it’s about the money.”

The above quote has been attributed to a variety of sources from sports figures to economists, but nowhere is it more relevant than the politics of shale gas. The figures below present campaign financing from O&G industry to the men and women that represent us in Washington, DC.

Data Analysis Process

To follow the shale money path, FracTracker has analyzed data from the: a) total contributions and b) average per representative across Democrats and Republicans. Our Third Party analysis included five Independents in the Senate as well as one Green, one Unaffiliated, one Libertarian, and two Independents in the House.

Results

Annual Senate compensation relative to average US Income Per Capita

Fig. 3. US Senate Salary (Late 18th Century to 2014) & Average American Salary (1967-2013).

There are sizable inter-party differences across both branches of congress (See Figures 2a-b). In total, Democratic and Republican senators have received $18.1 and $48.6 million from the O&G industry since data collection began in 1990. Meanwhile, Third Party senators have received a total of $385,632 in O&G campaign finance. It stands to reason that the US House would receive more money in total than the senate, given that it contains 435 representatives to the Senate’s 100, and this is indeed the case; Democratic members of the House received $28.9 million to date vs. $104.9 million allocated to the House’ GOP members – or a 3.6 fold difference. Third Party members of the House have received the smallest allotment of O&G political largesse, coming in at $197,145 in total.

To put this into perspective, your average Democratic and Republican senator has seen the gap increase between his/her salary and the average American from $27,536 in 1967 to $145,171 in 2013 (Figure 3).

These same individuals have also seen their political war chests expand on average by $151,043 and $412,007, respectively. Third Party senators have seen their campaign funds swell by an average of $64,272 since 1990. Meanwhile, the U.S. Capitol’s Democratic and GOP south wing residents have seen their O&G campaign contributions increase by an average of $50,836 and $188,529, respectively, with even Third Partiers seeing a $38,429 spike in O&G generosity.

Figure 2a

Figure 2a. Total funding received by both branches of the US legislative branch

Average funding received by oil and gas industry

Figure 2b. Average funding received by oil and gas industry

Location is a better predictor of whether a politician supports the O&G industry than his/her political affiliation. At the top of the O&G campaign financing league tables are extraction-intensive states such as Texas, Oklahoma, North Dakota, Alaska, California, and Louisiana. (See Figures 4a-h at the bottom of this article for Average Oil & Gas Contributions to US House Representatives and Senators across the US.)

2. Committee on Science, Space and Technology

The second portion of this post covers influences related to the Committee on Science, Space and Technology (CSST). There is no more powerful group in this country when it comes O&G policy construction and stewardship than CSST. The committee is currently made up of 22 Republicans and 18 Democrats from 21 states. Thirty-five percent of the committee hails from either California (6) or Texas (8), with Florida and Illinois each contributing three representatives to the committee. Almost all (94%) of the O&G campaign finance allocated to CSST has gone to its sitting GOP membership.

The top three recipients of O&G generosity are all from Texas, receiving 3.2-3.5 times more money than their party averages – totaling $1.93 million or 37% of the total committee O&G financial support. The next four most beholden members of the committee are Frank Lucas and Michael McCaul (TX, $904,709 combined), Cynthia Marie Lummis (WY, $400,400), and Kevin Cramer (ND, $343,000). The average Democratic member of the CSST committee has received 12.8 times less in O&G funding relative to their GOP counterparts; Dallas-Fort Worth Metroplex representatives Marc Veasey and Eddie Bernice Johnson collected a combined $130,350 from industry. Interestingly a member of political royalty, Joe Kennedy III, has collected nearly $50K from the O&G industry, which corresponds to the average for his House Democrat colleagues.

See Figures 5-6 for totals and percentage of party averages of O&G campaign funds contributed to current member of the US House CSST.

Total Oil & Gas campaign funds contributed to current member of the US House Committee on Science, Space and Technology.

Figure 5. Totals

Total Oil & Gas campaign funds contributed to current member of the US House Committee on Science, Space and Technology as percentage of party averages.

Figure 6. Percentage of party averages

 “Don’t Confuse Me With The Facts”

In addition to current do-nothing politicians beholden to the O&G industry, we have prospects such as Republican U.S. Senate candidate Joni Ernst going so far as to declare that the Koch Brothers various Political Action Committees (PACs) started her trajectory in politics. Promising “ ‘to abolish’ the Environmental Protection Agency, she opposes the Clean Water Act, and in May she downplayed the role that human activities have played in climate change and/or rises in atmospheric CO2.

In Ohio it seems realistic to conjecture that OH Governor John Kasich, bracing for a tough reelection campaign, is wary of biting the PAC hands that feed him. He has also likely seen what happened to his “moderate” colleagues in states like Mississippi and Virginia, and in the age of Citizens United and McCutcheon he knows that the Hydrocarbon Industrial Complex will make him pay for anything that they construe as hostile to fossil fuel business as usual.

Close to the Action

Groups like the Koch-funded Americans for Prosperity, Randolph Foundation, and American Legislative Exchange Council (ALEC)2 are unapologetically wedded to continued production of fossil fuels. Nationally and in OH, politicians appear to be listening more to the talking points and white papers of such groups than they do their own constituents.. Therefore, it is no coincidence that DC and its surrounding Virginia suburbs has been colonized by industry mouthpieces, energy policy and economic academic tanks, philanthropies, and Political Action Committees (PACs). See Figure 1 for more information.

Know Your Vote

So when you go to the polls on November 4th, remember that politicians are increasingly beholden not to their constituents but to the larger donors to their campaigns. Nowhere is this more of a concern than US energy policy and our geopolitical linkages to producers and emerging markets. More to the point, when offered an opportunity to engage said officials make sure to bring up their financial links as it relates to how they vote and the types of legislation they write, massage, customize, or outright eliminate. As Plato once said, “The price of apathy towards public affairs is to be ruled by evil men.” Our current selection of politicians at the state and federal level are not evil, but data on O&G politics and campaign financing presented herein do indicate that objectivity with respect to oil and gas legislation has been at the very least compromised.


Figures 4a-h. Average & Total O&G Industry Contributions to US House Representatives and Senators across the US mainland and Alaska

Average Total
Democratic Representatives

Average Oil & Gas Industry Contributions to Democratic Representatives

Fig. 4a

Total Oil & Gas Industry Contributions to Democratic Representatives

Fig. 4b

Democratic Senators

Average Oil & Gas Industry Contributions to Democratic Senators

Fig. 4c

Total Oil & Gas Industry Contributions to Democratic Senators

Fig. 4d

Republican Representatives

Average Oil & Gas Industry Contributions to Republican Representatives

Fig. 4e

Total Oil & Gas Industry Contributions to Republican Representatives

Fig. 4f

Republican Senators

Average Oil & Gas Industry Contributions to Republican Senators

Fig. 4g

Total Oil & Gas Industry Contributions to Republican Senators

Fig. 4h


References

  1. This committee’s minority leader Ms. Eddie Bernice Johnson (D-TX) recently proposed the H.R.5189 – Energy and Water Research Integration Act of 2014 with an as yet to be published summary.
  2. …along with like-minded entities like the Ewing Marion Kauffman Foundation and the Chamber of Commerce’s PAC. These PACs and foundations tend to fund and greatly benefit from frackademic shops like Northwestern University’s Northwestern Law Judicial Education Program and George Mason University’s Law and Economics Center.