John Deutch

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.

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.

Wed, 2012-05-02 10:04Steve Horn
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ALEC Wasn't First Industry Trojan Horse Behind Fracking Disclosure Bill - Enter Council of State Governments

19th Century German statesman Otto von Bismarck once said, “If you like laws and sausages, you should never watch either one being made.”

The American Legislative Exchange Council (ALEC), put on the map by the Center for Media and Democracy in its “ALEC Exposed” project, is the archetype of von Bismarck's truism. So too are the fracking chemical disclosure bills that have passed and are currently being pushed for in statehouses nationwide.

State-level fracking chemical disclosure bills have been called a key piece of reform in the push to hold the unconventional gas industry accountable for its actions. The reality, though, is murkier.

On April 21, The New York Times penned an investigation making that clear. The Times wrote:

Last December, ALEC adopted model legislation, based on a Texas law, addressing the public disclosure of chemicals in drilling fluids used to extract natural gas through hydraulic fracturing, or fracking. The ALEC legislation, which has since provided the basis for similar bills submitted in five states, has been promoted as a victory for consumers’ right to know about potential drinking water contaminants.

A close reading of the bill, however, reveals loopholes that would allow energy companies to withhold the names of certain fluid contents, for reasons including that they have been deemed trade secrets. Most telling, perhaps, the bill was sponsored within ALEC by ExxonMobil, one of the largest practitioners of fracking — something not explained when ALEC lawmakers introduced their bills back home.

The Texas law The Times refers to is HB 3328, passed in June 2011 in a 137-8 roll call vote, while its Senate companion bill passed on a 31-0 unanimous roll call vote. Since then, variations of the model bill have passed in two other key states in which fracking is occuring.

Like dominos falling in quick succession over the following months, ColoradoPennsylvania and, most recently, the Illinois Senate passed bills based on the ALEC model. Louisiana also has introduced a similar bill. 

Thu, 2011-08-11 06:53Carol Linnitt
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Scientists Say Obama Fracking Panel is Financially Tied to Gas Industry

The Natural Gas Subcommittee of the Secretary of the Energy Advisory Board released their draft report today, which outlines immediate actions to improve the health and environmental risks associated with hydraulic fracturing. The report, a culmination of 90 days of research, is a part of President Obama’s larger plan for unconventional gas in his “Blueprint for a Secure Energy Future.” 

The panel, handpicked by Secretary of Energy Steven Chu, is directed to investigate the safety of shale gas development and to make recommendations for both improvements to the process as well as ‘best practice’ strategies that can act as recommendations to relevant agencies. 

The 41-page report makes clear the conviction that the current state of distrust surrounding the gas industry is bad for business. The industry, the panel suggests, needs to become more transparent, well-regulated and engaged. “And industry response that hydraulic fracturing has been performed safely for decades rather than engaging the issues concerning the public will not succeed.”

Besides, the report goes on, modern hydraulic fracturing has really only been performed since 2002 or 2003 and not since the 1940’s

Despite the panel’s recommendations to make the gas production process more transparent to the public, there is still a strong industry back-bone running throughout the report’s body.

Wed, 2011-06-15 16:14TJ Scolnick
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President Obama’s Fracking Panel Unmoved By Pennsylvanians’ Water Concerns

On Monday, the Natural Gas Subcommittee, from Energy Department Secretary Stephen Chu’s Energy Advisory Board (SEAB), held its second public meeting.  Around 400 people packed a cramped auditorium at Washington Jefferson College in western Pennsylvania to discuss the effects of hydraulic fracturing (a.k.a. fracking) on water supplies, air quality and other threats from the controversial practice.

The crowd split into two camps, those opposing and those supporting the highly contentious drilling method which has spread across Pennsylvania. Fracking opponents argued that fracking is a dangerous and destructive process that must be banned immediately, while those in favour yelled out “drill, baby, drill.”

Given the circumstances it was not surprising that the pro-frackers won the evening. This was due, in large part, to the work of gas industry front-group Energy in Depth who sent out emails to Pennsylvania and New York residents supportive of fracking, offering them airfare, hotels and meals to attend. Tickets to see the Pittsburgh Pirates play the New York Mets were even offered, although later retracted.

Thu, 2011-05-12 11:18Farron Cousins
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Fracking Study Panel Filled With Gas Industry Insiders

In an under-reported move on May 5th, the Obama administration announced the members of a government panel created to study the practice of hydraulic fracturing (fracking), and determine if there are ways, or even a necessity, to make it safer for the environment and public health. Unfortunately, according to a report by the Environmental Working Group (EWG), the administration stacked the panel with oil and gas industry insiders.

As DeSmogBlog reports have detailed, the practice of fracking has been linked to numerous environmental dangers, including the release of methane into drinking water supplies as well as releasing carbon dioxide, sulfur dioxide, nitrogen oxide, and carbon monoxide into the atmosphere. In spite of these findings, the energy industry continues to insist that fracking is safe, and with industry insiders packing the Administration’s new safety panel, their findings will likely mirror those of the industry.

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