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Tue, 2012-07-03 15:51Ben Jervey
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Bloomberg Stunner: How Chesapeake Energy Paid Less Than a 1% Tax Rate On $5.5 Billion in Profits

Chesapeake Energy, a company that is no stranger to financial scandals, has found itself on the front page of the financial papers again. This time, the subject is taxes. Or how Chesapeake barely pays them.  

Over its 23-year history, Chesapeake Energy, the second largest producer of natural gas in the U.S., and the company described by its founder and CEO Aubrey McClendon as “the biggest frackers in the world,” has earned roughly $5.5 billion in pre-tax profits. To date, the company has paid $53 million in taxes. That’s an effective tax rate of under 1 percent - a massive taxpayer subsidy.

The corporate income tax rate in the U.S. is 35 percent. 

The Bloomberg article that exposed these stunning figures is quick to note that this is far less than the 12 percent rate that GE paid in 2010 that caused such public outrage, and even a tiny percentage of the 18 percent effective rate that Google had to answer for.

So how does Chesapeake pull this off? Mostly, it’s due to a rule written in 1916 that allows oil and gas producers to, according to Bloomberg, “postpone income taxes in recognition of the inherent risk of drilling wells that may turn out to be dry.

The break may be outdated for companies such as Chesapeake, which, thanks to advances in technology, struck oil or gas in 99.6 percent of its wells last year.“ When the policy was written, drillers struck “dry wells” roughly 80 percent of the time.

Sat, 2012-06-30 09:00Ben Jervey
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The DilBit Disaster: InsideClimate News' Incredible In-Depth Report on Enbridge's Kalamazoo Oil Spill

Update 7/3: On Monday, June 2, the Pipeline and Hazardous Materials Safety Administration of the Department of Transportation announced that Enbridge would be fined $3.7 million for 24 safety violations associated with the Kalamazoo River oil spill, including the damning charge that Enbridge had identified corrosion on the faulty pipeline more than six years before it failed. The $3.7 million claim is a record civil penalty, and Enbridge has 30 days to decide whether to accept the decision. 

Fri, 2012-06-22 09:34Ben Jervey
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Trailbreaker Lives: How Plans to Bring Tar Sands Crude to the East Coast are "Going in Reverse"

With efforts to pump tar sands crude south and west coming up against fierce resistance, Canada’s oil industry is making a quiet attempt at an end run to the east.

The industry is growing increasingly desperate to find a coastal port to export tar sands bitumen, especially now that the highly publicized and hotly contested Keystone XL pipeline is stalled, at least temporarily, and the proposed Northern Gateway pipeline project that would move tar sands crude across British Columbia to terminals on Canada’s west coast is running into equally tough opposition.

And by all indications, as laid out in a new report, Going in Reverse: The Tar Sands Threat to Central Canada and New England, by 19 advocacy groups including the Natural Resources Defense Council, Conservation Law Foundation, Greenpeace Canada, the National Wildlife Federation, and 350.org, Enbridge is taking the lead in finding that new outlet.

The company is resuscitating an old industry plan to link the pipeline system in the American Midwest to a coastal terminal in Portland, Maine, traveling through Ontario and Quebec, and then across northern New England. When first proposed in 2008, this project was called Trailbreaker, but Enbridge appears to be avoiding any mention of the former proposal, which spurred quick and firm resistance.

Tue, 2012-06-19 13:57Ben Jervey
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Senator John Kerry Speaks the Scary, Ugly Truth on Climate Change

There are precious few voices in the U.S. capital these days that are speaking the truth about climate change. Which is what makes Senator John Kerry's speech on the Senate floor today so powerful, and so necessary. 

In his speech, which clocked in at nearly 55 minutes, Senator Kerry attacked a “calculated campaign of disinformation” that, he says, “has steadily beaten back the consensus momentum for action on climate change and replaced it with timidity by proponents in the face of millions of dollars of phony, contrived ‘talking points,’ illogical and wholly unscientific propositions and a general scorn for the truth wrapped in false threats about job loss and tax increase.”

The senator from Massachusetts' words were clearly timed to inject some energy into the Rio+20 meetings of the United Nations Conference on Sustainable Development, which begin in earnest tomorrow and which are struggling to stay relevant during a time when Europe is barely functioning and the U.S. is moving into election season. President Obama's decision not to attend the meetings has many diplomats and activists gathering in Brazil questioning the American committment to climate change and the great global environmental challenges.

Senator Kerry didn't mince words in his talk, calling out the “disgraceful” campaign of climate denial as the “conspiracy” that it is, and also placing some blame on the media for its reluctance or inability to bring reason and truth to the climate conversation.

Thu, 2012-05-03 12:01Ben Jervey
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Exporting Coal: Struggling U.S. Coal Industry Trying to Stay Relevant By Shipping Through the Northwest

coal train exporting coal pacific northwest

U.S. coal companies are facing some tricky math these days. Production levels have remained more or less the same since 2005, according to the Energy Information Agency (EIA), but during that time domestic consumption has dropped nearly 11 percent.

Where is all that extra coal going? Some is piling up at power plants, but increasingly, more and more of it is being shipped overseas.

The coal industry is hoping to accelerate that export trend, but their ability to keep delivering steady volumes of coal is entirely dependant on their ability to open up new export terminals at coastal ports around the country, particularly in the Pacific Northwest where the dirty rock could be more directly shipped to the burgeoning Asian markets.  

Still, aside from some regional coverage and some incredible work from organizations like the Sightline Institute and Climate Solutions, these Northwest export terminals aren’t getting nearly the amount of attention from environmentalists and climate activists as, say, tar sands pipelines.

This post will serve as a basic overview of the current state of coal production and exports, and what the industry hopes to accomplish in coming years.

Thu, 2012-04-26 05:45Ben Jervey
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Coal Train to Boardman: EPA Warns of "Significant" Public Health Threats in Northwest Coal Export Proposal

As demand for coal in the United States has cooled off in recent years, coal mining companies have been scrambling to deliver their dirty loads to customers abroad. But what does this mean for communities along the transportation routes, particularly at the ports and export terminals where the coal is offloaded from trains and onto boats?

The U.S. EPA, for one, is warning of the potential for “significant impacts to public health” in one such port town.

Coal exports have more than doubled over the past six years, and are at their highest levels in over two decades. According to an Associated Press evaluation of Energy Information Agency coal data, more than 107 million tons of coal were exported in 2011.

But that’s a small drop in the bucket (or lump in the stocking? sorry, couldn’t resist) of what coal companies hope to export in the very near future. (Farron Cousins covered the coal export trend here on DeSmogBlog earlier this year.)

Nowhere is the push to export coal being felt more than in the Pacific Northwest, where there are currently plans to ship more than 100 million tons each year, according to the Sightline Institute.

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