natural gas

Rail CEOs to Investors: "Bomb Trains" Safe At Almost Any Speed

Burlington Northern Santa Fe (BNSF) recently said it would proceed with plans to increase speeds for oil-by-rail unit trains in Devil’s Lake, N.D. to 60 MPH from 30 MPH, despite opposition from local officials

BNSF’s announcement came merely a week after the Obama Administration announced its proposed regulations for trains carrying oil obtained via hydraulic fracturing (“fracking”) from North Dakota's Bakken Shale basin.  

The rail industry’s position on speed limits for “bomb trains” is simple: they continuously claim velocity has nothing to do with oil-by-rail accidents or safety.

For example, Big Rail — as revealed by DeSmogBlog — lobbied against all proposed oil train speed reductions in its dozen or so private meetings at the Obama White House before the unveiling of the proposed oil-by-rail regulations. 

Recent statements by rail industry CEOs during investor calls put the heads of many companies on record opposing oil-by-rail speed limits for the first time.

Four Years Later, Systemic Failures That Led To Gas Pipeline Explosion Revealed

Last Monday, the mayor of San Bruno stood on the steps of the California Public Utilities Commission offices in San Francisco and called for a complete overhaul of the state agency, including the firing of key CPUC officials.

The next day, a federal grand jury indicted PG&E on charges related to its handling of the 2010 natural gas pipeline explosion in San Bruno that destroyed 38 homes and killed eight people.

Mayor Jim Ruane says that emails exchanged between staff at the CPUC and employees of PG&E in the wake of the disaster show that a far-too-cozy relationship exists between the state agency and the public utility it is supposed to regulate.

PG&E has made illegal efforts to influence the CPUC decisions makers to protect the utility's financial interests,” Ruane said. “Sadly and shockingly, the CPUC has participated in the illegal conduct.”

Some 7,000 pages of emails were released to San Bruno by the CPUC only after the city filed a lawsuit to gain access to the documents.

City manager Connie Jackson says that the emails provide further evidence to support the official conclusions of the investigation carried out by the National Transportation Safety Board (NTSB).

“The NTSB produced a report within one year of the explosion that exhaustively demonstrated a number of conclusions and recommendations for correction in the wake of the explosion,” Jackson says. “And among the things they identified as a key causal factor related to the explosion was what they described as a too-cozy relationship between the regulator and the utility. These emails demonstrate that that is in fact true.”

Specifically, Jackson says that CPUC President Mike Peevey engaged in illegal ex parte communications with PG&E. “We are continuing to call for the removal, or minimally the recusal, of President Peevey,” Jackson says.

Peevey is not alone in being implicated for having engaged in illegal communications with PG&E employees who were responsible for the company's response to the disaster. As KTVU reported, one email, “from no less than PG&E's head of regulatory relations to a CPUC administrative law judge, ends with 'love you.'”

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.”

Documents: Cheniere Fuels ALEC’s New Push for Fracked Gas Exports

Today, legislative and lobbyist members of the American Legislative Exchange Council (ALEC) voted on model legislation promoting both exports of gas obtained via hydraulic fracturing (“fracking”) and vehicles powered by compressed natural gas (CNG)

Dubbed a “corporate bill mill” by its critics, ALEC is heavily engaged in a state-level effort to attack renewable energy and grease the skids for exports of U.S. oil and gas. Today's bills up for a vote — as conveyed in an ALEC mailer sent out on June 25 by ALEC's Energy, Environment and Agriculture Task Force — are titled “Resolution In Support of Expanded Liquefied Natural Gas Exports“ and “Weights and Measures and Standards for Dispensing CNG and LNG Motor Fuels.” 

An exclusive investigation conducted by DeSmogBlog reveals that Cheniere — the first U.S. company to receive a final liquefied natural gas (LNG) export permit by the U.S. Federal Energy Regulatory Commission (FERC) — has acted as the lead corporate backer of the LNG exports model resolution. 

Further, Clean Energy Fuels Corporation, owned by energy baron T. Boone Pickens, of Pickens Plan fame, and trade associations it is a member of, served as the main pusher of the CNG model resolution.

ALEC has served as a key vehicle through which the fracking industry has curried favor and pushed for policies favorable to their bottom lines in statehouses nationwide. Now ALEC and its corporate backers have upped the ante, pushing policies that will lock in downstream demand for fracked gas for years to come. 

With Cheniere becoming an ALEC dues-paying member in May 2013 and with America’s Natural Gas Alliance (ANGA) — the fracking industry's tour de force — crowned an ALEC member in August 2013, it looks like many more fracking-friendly model bills could arise out of ALEC in the months and years ahead.

EPA Internal Audit Finds Flawed Pipeline Oversight Adds $192 Million a Year to Gas Bills, Harms Climate

On Friday, the Environmental Protection Agency's internal watchdog, the inspector general released a scathing report on the agency's failure to control leaks from the nation's natural gas distribution system.

The report, titled “Improvements Needed in EPA Efforts to Address Methane Emissions From Natural Gas Distribution Pipelines,” describes a string of failures by the EPA to control leaks of one of the most potent greenhouse gases, methane, from the rapidly expanding natural gas pipeline industry.

“The EPA has placed little focus and attention on reducing methane emissions from pipelines in the natural gas distribution sector,” the report begins. “The EPA has a voluntary program to address methane leaks — Natural Gas STAR — but its efforts through this program have resulted in limited reductions of methane emissions from distribution pipelines.”

To date, the industry has faced little binding regulation on leaks, in part because the EPA assumes that pipeline companies will not allow the product they are attempting to bring to market to simply disappear. But the reality is that when gas is cheap and repairs are expensive, pipeline companies often put off repairs unless there's a threat of an explosion.

Under many state policies, pipeline companies would have to pay upfront costs for pipeline repairs — or they simply choose to pass the cost of lost gas from unrepaired leaks on to consumers, an issue that the audit faults the EPA for failing to take into account.

Nationwide, the Inspector General report concluded $192 million worth of natural gas was lost from pipelines in 2011 alone.

Meme with Wings: Are Western Anti-Fracking Activists Funded by Putin's Russia?

At a June 19 speaking event at London's Chatham House, North Atlantic Treaty Organization (NATO) secretary-general Anders Fogh Rasmussen claimed the Russian government is covertly working to discredit hydraulic fracturing (“fracking”) in the west from afar.

“I have met allies who can report that Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called non-governmental organisations — environmental organizations working against shale gas — to maintain European dependence on imported Russian gas,” said Rasmussen, the former Prime Minister of Denmark.

Rasmussen's comments were relayed to the press by someone in attendance who apparently broke the “Chatham House Rule” by telling outsiders about the content of a Chatham House meeting.

Anders Fog Rasmussen; Photo Credit: Wikimedia Commons

But Rasmussen left out some key context from his presentation, which he said “is my interpretation” and did not further elaborate on his “disinformation operations” comments.   

That is, while powerful actors have claimed on multiple occasions that western-based anti-fracking activists are funded by the Kremlin, no one has ever documented such a relationship in the form of a money paper trail.

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

National Gas Industry Hires Family Members of Leading Politicians

This is a guest post by Lee Fang.

In May of last year, Rep. Shelley Moore Capito, now considered the favorite to win West Virginia’s open Senate seat, stood on a small platform in Charleston, behind a row of tiny trophies in the shape of drilling rigs.

She was there to congratulate the Energy Corporation of America, a major gas exploration and distribution company, on its plans to open a new building in the state capital.

The company needed new space to accommodate over a hundred new employees in coming years.

I am honored to attend the groundbreaking celebration of the ECA’s new eastern headquarters,” Capito told the crowd, according to an ECA press release. “This privately held company has brought economic growth to West Virginia.”

Though there’s no record of her having acknowledged it publicly, among those hired by the growing firm is her own son, Arch Moore Capito, who was retained as in-house counsel by ECA after his graduation from Washington & Lee University’s law school in 2011.

The hiring of Arch, named after Capito’s father, the late West Virginia governor Arch Moore, highlights a growing trend. Major players in the  gas industry, which faces major regulatory hurdles relating to its extraction and distribution infrastructure, exports, and environmental issues, have taken to hiring the relatives of powerful politicians.

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.

“All of the Above” or “Action now?”: Obama’s Natural Gas Contradiction

At a talk in Vermont last week, the nation's top energy official offered up his thoughts on a problem the White House has said calls for “urgent action”: climate change.

“We need to mitigate the effects of climate change and need to adapt at the same time,” said Dr. Ernest Moniz, Secretary of Energy, as he described the findings of a White House report issued earlier this month outlining the dangers of global warming and the impacts already felt nationwide.

But Moniz's talk also highlighted a fundamental flaw in the approach that President Obama has taken to energy and the environment.

The president has begun sounding alarm bells about the hazards and costs of worsening climate disruption. At the same time, he has aggressively promoted the nation's ongoing shale gas rush. And yet, experts warn this drilling frenzy may have wiped out most of the gains made by slashing carbon dioxide emissions from burning coal.

It's a paradox that the Washington Post labeled “a jarring juxtapostion” and “the contradiction at the heart of President Obama's climate change policy.” 


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