Department of Energy

Sat, 2014-08-02 07:31Sharon Kelly
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As Energy Department Announces Methane Measures, Critics Call for Stronger Action

On Tuesday, the White House released a report estimating that delaying action on climate change could cause $150 billion a year in damage to the U.S. economy.

“These costs are not one-time, but are rather incurred year after year because of the permanent damage caused by increased climate change resulting from the delay,” the assessment warned.

That same day, President Obama announced moves to help reduce greenhouse gasses. But some critics charge that the President's actions have so far failed to be proportionate to the crisis the White House predicts.

As DeSmog reported, on Tuesday, the Environmental Protection Agency's program on natural gas pipeline leaks came under fire from the EPA's own internal watchdog. The EPA inspector general lambasted the agency for setting up rules that rely heavily on voluntary leak repairs by pipeline companies while turning a blind eye to state policies that allow those companies to simply pass the price of leaking gas to consumers instead of making costly repairs.

The resulting leaks, the EPA audit concluded, cost consumers over $192 million and the resulting greenhouse gasses each year were equal to putting an addition 2.7 million cars on the road.

On the heels of that report, the Obama administration announced that it would adjust its methane pollution controls — but the measures they announced fell far short of what some experts argue is necessary to curtail methane's climate hazards. The Department of Energy's new measures include adjustments to its voluntary leak control program and add funding for research into ways to better curb leaks.

While we applaud the commitments made by DOE, labor unions, utility groups, and other stakeholders,” Earthworks Policy Director Lauren Pagel told the Oil and Gas Journal, “voluntary measures and new research initiatives don’t adequately protect communities and the climate.”

Fri, 2014-06-27 01:00Steve Horn
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Revealed: Heather Zichal Met with Cheniere Executives as Obama Energy Aide Before Board Nomination

Heather Zichal, former deputy assistant for energy and climate change to President Barack Obama and nominee to sit on the board of directors of LNG export company Cheniere Energy Inc., held two meetings with Cheniere executives while working for the White House. 

White House meeting logs show Zichal attended the meetings with three executives from Cheniere, owner of the Sabine Pass LNG (liquefied natural gas) export facility, the first terminal to receive a final approval from the U.S. Federal Energy Regulatory Commission (FERC) during the hydraulic fracturing (“fracking”) boom.

The meetings appear to have taken place just over two weeks apart from one another, according to the meeting logs. The first meeting was on January 14, 2013, and the second on January 29, 2013. Just over eight months later, Zichal resigned from her White House job, with Reuters citing “plans to move to a non-government job.”

Cheniere CEO Charif Souki — who is facing a major ongoing class-action lawsuit — sat in on both of those meetings. He was joined by Cheniere executives Patricia Outtrim, vice president of governmental and regulatory affairs, and Ankit Desai, vice president of government relations.

Desai, a Cheniere lobbyist, formerly worked with Zichal on U.S. Secretary of State John Kerry's 2004 presidential campaign, serving as his budget director. Desai also formerly served as political director for then-U.S. Senator and now Vice President Joe Biden.


President Barack Obama (L), Heather Zichal (Center), Sec. of State John Kerry (R); Photo Credit: Facebook

Zichal served as Kerry's energy and environment policy adviser for the 2004 campaign and in 2006, became his legislative director, a job she held until becoming policy director for energy, environment and agriculture for President Barack Obama's 2008 presidential campaign

Fri, 2014-06-20 10:25Steve Horn
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Heather Zichal, Former Obama Energy Aide, Named to Board of Fracked Gas Exports Giant Cheniere

Heather Zichal, former Obama White House Deputy Assistant to the President for Energy and Climate Change, may soon walk out of the government-industry revolving door to become a member of the board of directors for fracked gas exports giant Cheniere, who nominated her to serve on the board. 

The announcement, made through Cheniere's U.S. Securities and Exchange Commission Form 8-K and its Schedule 14A, comes just as a major class-action lawsuit was filed against the board of the company by stockholders.

In reaction to the lawsuit, Cheniere has delayed its annual meeting. At that meeting, the company's stockholders will vote on the Zichal nomination.

The class-action lawsuit was filed by plaintiff and stockholder James B. Jones, who alleges the board gave stock awards to CEO Charif Souki in defiance of both a stockholders' vote and the company's by-laws. 

Souki — a central character in Gregory Zuckerman's book “The Frackers“ — became the highest paid CEO in the U.S. as a result of the maneuver, raking in $142 million in 2013, $133 million of which came from stock awards.

Cheniere CEO Charif Souki; Photo Credit: Getty Images

Zichal was nominated to join Cheniere's audit committee of the board, and will be paid $180,000 per year for the gig if elected.

Among the audit committee duties: “Prepare and review the audit committee report for inclusion in the proxy statement for the company's annual meeting of stockholders,” which is now set for September 11 after the push-back following the filing of the stockholder class-action lawsuit.

“The audit committee’s responsibility is oversight, and it recognizes that the company’s management is responsible for preparing the company’s financial statements and complying with applicable laws and regulations,” Cheniere's audit committee charter further explains.

Mon, 2014-05-05 05:00Sharon Kelly
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Fine Print on Baker Hughes New Fracking Fluid Disclosure Policy Draws Skepticism

Back in 2008, Cathy Behr, a nurse who worked at a Durango, Colorado hospital was hospitalized after suffering a cascade of organ failures. Days earlier, Ms. Behr had treated an oil and gas field worker who arrived in the emergency room doused in a fracking chemical mix called Zeta-Flow, the fumes from which were so powerful that the emergency room had to be evacuated. All told, 130 gallons of the apparently noxious fluid had spilled onto the Southern Ute Indian Reservation, an EPA report later noted, although the spill was never reported to local officials.

So what's in Zeta-Flow? Because the formula for the chemical, marketed as increasing gas production by 30 percent, is considered a trade secret, oilfield services company Weatherford International was never required to make the full answer public.

This secrecy was one of the first issues to be raised by public health officials investigating fracking pollution claims, who pointed out that without knowing what chemicals are used by the industry, it’s difficult or impossible to know what toxins to test for.

So at first blush, it seems like a major development that Baker Hughes, a major oil field services company, has agreed to stop asserting that the ingredients in its fracking fluids are “trade secrets” when it voluntarily provides information on the website FracFocus.

Indeed, the Department of Energy recently lauded the move by Baker Hughes to voluntarily disclose the chemicals used in its fracking formulas without invoking the controversial exemption commonly claimed by drillers. Deputy Assistant Energy Secretary Paula Gant called Baker Hughes' move “an important step in building public confidence,” adding that the department “hopes others will follow their lead.”

But a look at the fine print on that promise — and the company’s track record on disclosures — suggests that Baker Hughes' new policy may not be enough to keep the public adequately informed about the chemicals used in its fracturing fluids.

Thu, 2013-11-07 09:00Sharon Kelly
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Could California's Shale Oil Boom Be Just a Mirage?

Since the shale rush took off starting in 2005 in Texas, drillers have sprinted from one state to the next, chasing the promise of cheaper, easier, more productive wells. This land rush was fueled by a wild spike in natural gas prices that helped make shale gas drilling attractive even though the costs of fracking were high.

As the selling price of natural gas sank from its historic highs in 2008, much of the luster wore off entire regions that had initially captivated investors, like Louisiana’s Haynesville shale or Arkansas’s Fayetteville, now in decline.

But unlike natural gas prices, oil prices remain high to this day, and investors and policymakers alike remain dazzled by the heady promise of oil from shale rock. Oil and gas companies have wrung significant amounts of black gold from shale oil plays like Texas’s Eagle Ford and North Dakota’s Bakken.

Shale oil, they say, is the next big thing.

“After years of talking about it, we’re finally poised to control our own energy future,” President Obama said in his most recent State of the Union address. “We produce more oil at home than we have in 15 years.”

But once again, the reality may be nothing like the hype. Consider California.

Wed, 2013-09-25 05:00Sharon Kelly
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What a Secretly-Negotiated Free Trade Agreement Could Mean for Fracking in the U.S.

A trade agreement being secretly negotiated by the Obama administration could allow an end run by the oil and gas industry around local opposition to natural gas exports. This agreement, called the Trans-Pacific Partnership, is being crafted right now – and the stakes for fracking and shale gas are high.

While the vast majority of the opposition to fracking in the US has focused on domestic concerns – its impact on air and water, local land rights, misleading information about its finances – less attention has been paid to a topic of colossal consequence: natural gas exports.

At least 15 companies have filed applications with the federal Department of Energy to export liquified natural gas (LNG). The shale gas rush has caused a glut in the American market thanks to fracking, and now the race is on among industry giants to ship the liquefied fuel by tanker to export markets worldwide, where prices run far higher than in the U.S.

As drilling has spread across the U.S., grassroots organizing around unconventional oil and gas drilling and fracking has grown to an unprecedented level in many communities. Public hearings and town halls from New York to California have been flooded with concerned scientific experts, residents and small business owners and farmers who stand to be impacted by the drilling boom.

Drilling advocates have become increasingly concerned about how grassroots organizing has expanded over the past 5 years. “Meanwhile, the oil and gas industry has largely failed to appreciate social and political risks, and has repeatedly been caught off guard by the sophistication, speed and influence of anti-fracking activists,” one consultant warned the industry last year.

Some of the most resounding setbacks the drilling industry has faced have come at the state or local level. Bans and moratoria have led drilling companies to withdraw from leases in parts of the country, abandoning, at least for the short term, plans to drill.

But when it comes to natural gas exports – which many analysts have said are key for the industry’s financial prospects –independent experts and local organizers may soon find themselves entirely shut out of the decision-making process, if the oil and gas industry has its way.

Fri, 2013-09-13 06:00Sharon Kelly
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Never-Released Energy Department Report Predicts Increasing Domestic Conflicts over Water, Energy

Last summer, the United States experienced the worst drought since the Dust Bowl in the 1930s.

At the same time, the country was experiencing one of the biggest onshore drilling booms in history, powered by one of the most water-intensive extraction technologies ever invented: hydraulic fracking.

The tension between these two realities could not be clearer.

This year, as the drilling industry drew millions of gallons of water per well in Arkansas, Colorado, Oklahoma, Texas, Utah and Wyoming, residents in these states struggled with severe droughts and some farmers opted to sell their water to the oil and gas industry rather than try to compete with them for limited resources.

Even the Atlantic coast's mighty Susquehanna River faced record lows last year, leading regulators to suspend dozens of withdrawal permits – the majority of which were for fracking Pennsylvania’s Marcellus shale.

Researchers for the Federal Department of Energy saw problems like this coming, according to thousands of pages of documents about the topic provided to DeSmog, but their recommendations and warnings were consistently edited and downplayed and the final version of their report has yet to be released.

Wed, 2013-09-11 12:45Steve Horn
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Breaking: First Marcellus Fracked Gas Export Permit Approved by Energy Dept

The U.S. Department of Energy (DOE) has granted the first ever LNG export permit license to Dominion Resources, Inc. to export gas obtained from the controversial hydraulic fracturing (“fracking”) process in the Marcellus Shale basin.  

It's the fourth ever export terminal approved by the DOE, with the three others along the Gulf Coast: Cheniere's Sabine Pass LNG, Freeport LNG (50-percent owned by ConocoPhillips) and Lake Charles Exports, LLC

Located in Lusby, Maryland, the Dominion Cove Point LNG terminal will be a key regional hub to take gas fracked from one of the most prolific shale basins in the world - the Marcellus - and ship it to global markets, with shale gas exports a key geopolitical bargaining chip with Russia, the biggest producer of conventional gas in the world.

Dominion owns not only Cove Point, but also the pipeline infrastructure set to feed the terminal.

“Dominion…owns both the existing Cove Point LNG Terminal and the 88-mile Cove Point pipeline,” explained industry publication LNG Global. “Dominion Cove Point…stated in their application that natural gas will be delivered to the Cove Point Pipeline from the interstate pipeline grid, thereby allowing gas to be sourced broadly.”

DOE handed Dominion a permit lasting a generation.  

Tue, 2013-09-03 14:37Steve Horn
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"Frackademia" By Law: Section 999 of the Energy Policy Act of 2005 Exposed

With the school year starting for many this week, it's another year of academia for professors across the United States - and another year of “frackademia” for an increasingly large swath of “frackademics” under federal law. 

“Frackademia” is best defined as flawed but seemingly legitimate science and economic studies on the controversial oil and gas horizontal drilling process known as hydraulic fracturing (“fracking”), but done with industry funding and/or industry-tied academics (“frackademics”). 

While the “frackademia” phenomenon has received much media coverage, a critical piece missing from the discussion is the role played by Section 999 of the Energy Policy Act of 2005. Although merely ten pages out of the massive 551-page bill, Section 999 created the U.S. Department of Energy-run Research Partnership to Secure Energy for America (RPSEA), a “non-profit corporation formed by a consortium of premier U.S. energy research universities, industry and independent research organizations.” 

Under the Energy Policy Act of 2005, RPSEA receives $1 billion of funding - $100 million per year - between 2007 and 2016. On top of that, Section 999 creates an “Oil and Gas Lease Income” fund “from any Federal royalties, rents, and bonuses derived from Federal onshore and offshore oil and gas leases.” The federal government put $50 million in the latter pot to get the ball rolling. 

The Energy Policy Act of 2005's ”Halliburton Loophole” - which created an enforcement exemption from the Clean Water Act and the Safe Drinking Water Act for fracking, and made the chemicals found within fracking fluid a “trade secret” - is by far the bill's most notorious legacy for close followers of fracking.

These provisions were helped along by then-Vice President Dick Cheney's Energy Policy Task Force, which entailed countless meetings between Big Oil lobbyists and executives and members of President George W. Bush's cabinet. Together, these lobbyists and appointees hammered out the details behind closed doors of what became the Energy Policy Act of 2005, a bill receiving a “yes” vote by then-U.S. Sen. Barack Obama.

Tue, 2013-08-06 06:00Steve Horn
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Fracking's Myriad Ties to Flawed State Dept Keystone XL Environmental Review

fracking keystone xl pipeline ERM

Most don't think of hydraulic fracturing (“fracking”) when pondering the future of TransCanada's Keystone XL tar sands export pipeline - but they should. 

There are numerous ties between key members of the fracking industry and groups pushing for approval of the Keystone XL pipeline. And these threads all lead back, one way or another, to Environmental Resources Management, Inc. (ERM Group).

ERM Group did the official U.S. State Department's environmental review for Keystone XL pipeline. The review, published in March 2013, determined the pipeline will have negligible climate change impacts (the review dealt with the northern segment of the pipeline as the southern half, now known as the “Gulf Coast Pipeline,” received an expedited Executive Order permit by President Barack Obama in March 2012).

ERM is also a paying member of the American Petroleum Institute (API), which has spent over $22 million lobbying on Keystone XL since June 2008

In its bid to provide the environmental review for the Keystone XL pipeline, ERM overtly lied on its conflict-of-interest form, saying it has no current business ties to TransCanada. ERM has an ongoing consulting relationship with the company responsible for the Alaska South Central LNG Project, also known as Alaska Gas Pipeline Project. The company, South Central LNG, is co-owned by TransCanada.

On top of lying about its current business ties, ERM stated on the conflict-of-interest form it had no “direct or indirect relationship (financial, organizational, contractual or otherwise) with any business entity that could be affected in any way by the proposed work.” In so doing, ERM may have broken federal law - 18 USC § 1001 - by making a false claim on a federal contract.

The State Department's Office of Inspector General has officially launched an inquiry into how and why State overlooked ERM's omission, allowing ERM to potentially commit a crime. 

In addition to potentially fraudulent claims about its connection to TransCanada, ERM also has significant ties to major gas industry groups and major players supporting the fracking boom in the US.

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