Obama Administration Approves Pipeline Expansion Set to Feed First Ever Fracked Gas LNG Export Terminal

The Obama Administration has quietly approved expansion of a major pipeline carrying fracked gas destined for the global export market.

The Gulf Trace pipeline, owned by The Williams Companies, is set to feed into Cheniere Energy's Sabine Pass LNG export terminal in Louisiana. As first reported by Reuters, LNG tankers loaded with super-chilled liquefied natural gas obtained via hydraulic fracturing (“fracking”) will set sail for the first time from Sabine Pass in January 2016.

Brother of Hillary Clinton's Top Campaign Aide Lobbied for Fracked Gas Export Terminal Co-Owned by Qatar

Anthony “Tony” Podesta began lobbying in late 2013 on behalf of a company co-owned by ExxonMobil and Qatar Petroleum aiming to export liquefied natural gas (LNG) to the global market. Tony is the brother of John Podesta, former top climate change adviser to President Barack Obama and current top campaign aide for Hillary Clinton's 2016 bid for president

In October 2012, Podesta Group began lobbying on behalf of the proposed ExxonMobil-Qatar Petroleum Golden Pass LNG facility in Sabine Pass, Texas, according to lobbying disclosure forms. The forms indicate that Tony Podesta himself, not just his staff, lobbied on behalf of the terminal beginning in quarter four of 2013.

"Carbon Copy": How Big Oil and King Coal Ghost Write Letters for Public Officials, Business Groups

The Billings Gazette has revealed that coal mining company Cloudpeak Energy ghost wrote protest letters to the U.S. Department of Interior (DOI) on behalf of allied policymakers and business groups. 

Reporter Tom Lutey examined numerous letters written to DOI from Montana-based stakeholders and noticed something unusual: the language in every single letter was exactly the same. That is, the same except for a parenthetical note in one of them instructing the supposed writer of it to “insert name/group/entity.”

The “carbon copied” (pun credit goes to Lutey) letters requested for the DOI to give states a time extension to begin implementing new rules dictating the coal industry give states a “fair return” on mining leases granted to industry by the states. DOI ended up giving King Coal the 60-day extension.

“Last month, coal proponents scored a major victory by convincing the Department of Interior to hold off on its rule making for 60 days so that more people could respond,” Lutey wrote. “Members of the Montana Legislature, along with county commissioners and mayors from Montana and Wyoming communities put the weight of their political offices behind letters asking the DOI for more time. What they didn’t offer were their own words.”

Among those who submitted a “carbon copied” letter originally written by Cloudpeak Energy include the Montana Chamber of Commerce, Billings Chamber of Commerce, Montana Coal Council, Montana Sen. Debby Barrett and the Yellowstone County Board of Commissioners.  

Unlike others, the Montana Chamber of Commerce embarassingly forgot to take out the boilerplate “insert name/group/entity” language. 

Montana Chamber of Commerce Ghostwriting Coal Letter
Image Credit: Quit Coal

Cloud Peak responded by saying this was a “sample letter…included as part of…briefings,” but did not clarify if those allied stakeholders were supposed to send them to DOI in verbatim fashion, as did the Montana Chamber.

Former Treasury Secretary Timothy Geithner's Warburg Pincus May Profit from Tar Sands Exports

Several environmental groups have filed a lawsuit against the U.S. Department of State and Secretary John Kerry over the permitting of a controversial border-crossing northern leg of a pipeline system that DeSmogBlog has called Enbridge's “Keystone XL Clone.”

The Keystone XL Clone is designed to accomplish the same goal as TransCanada's Keystone XL: bringing Alberta's tar sands to Gulf coast refineries and export market. It consists of three legs: the Alberta Clipper expansion as the northern leg, the Flanagan South middle leg and the Seaway Twin southern leg.

Green groups have called the northern leg an “illegal scheme” because the Enbridge Alberta Clipper expansion proposal didn't go through the normal State Department approval process. Instead, State allowed Enbridge to add pressure pumps to two separate-but-connected pipelines on each side of the border and send Alberta's diluted bitumen (“dilbit”) to market.

Enbridge dodged a comprehensive State Department environmental review, which involves public hearings and public commenting periods. The groups say this is illegal under the National Environmental Policy Act (NEPA) and have demanded a re-do for Enbridge's application process.

“The only thing worse than dirty oil is dirty oil backed by dirty tricks. This is the fossil fuel equivalent of money laundering,” Kieran Suckling, executive director of the Center for Biological Diversity, said in a press release announcing the lawsuit. “The Obama administration should be ashamed of itself for letting Enbridge illegally pump more dirty tar sands oil into the United States.”

The maneuver has a key beneficiary: former Obama Administration Secretary of the Treasury, Timothy Geithner, who now serves as President of the private equity giant Warburg Pincus.

Geithner's connection to the lawsuit not only adds intrigue, but also reveals the purpose of Enbridge's Keystone XL Clone: an export fast-track to the global market.

Labor Day News Dump: FERC Hands Enbridge Permit for Tar Sands by Rail Facility

On the Friday before Labor Day — in the form of an age-old “Friday News Dump“ — the Federal Energy Regulatory Commission (FERC) handed a permit to Enbridge, the tar sands-carrying corporate pipeline giant, to open a tar sands-by-rail facility in Flanagan, Ill. by early-2016. 

With the capacity to accept 140,000 barrels of tar sands product per day, the company's rail facility serves as another step in the direction towards Enbridge's quiet creation of a “Keystone XL Clone.” That is, like TransCanada's Keystone Pipeline System sets out to do, sending Alberta's tar sands all the way down to the Gulf of Mexico's refinery row — and perhaps to the global export market.

Flanagan sits as the starting point of Enbridge's Flanagan South pipeline, which will take tar sands diluted bitumen (“dilbit”) from Flanagan to Cushing, Okla. beginning in October, according to a recent company earnings call. From there, Enbridge's Seaway Twin pipeline will bring dilbit to Port Arthur, Texas near the Gulf.

Enbridge made the prospect of a tar sands-by-rail terminal public for the first time during its quarter two investor call.

“In terms of the rail facility, one of the things we're looking at is – and the rail facility is really in relation to the situation in western Canada where there is growing crude oil volumes and not enough pipeline capacity to get it out of Alberta for a two or three year period,” Guy Jarvis, president of liquids pipelines for Enbridge, said on the call.

“So, one of the things we're looking at doing is constructing a rail unloading facility that would allow western Canadian crudes to go by rail to Flanagan, be offloaded, and then flow down the Flanagan South pipeline further into Seaway and to the Gulf.”

FERC has given Enbridge the permit it needs to make that happen.

Judge Nixes Cove Point LNG Zoning Permit as Dominion Says Will Soon Receive Federal Permit

Co-Written with Caroline Selle

An August 6 court decision handed down by Calvert County Circuit Court Judge James Salmon could put Dominion Resources’ timeline for its proposed Cove Point liquefied natural gas (LNG) export facility in jeopardy.

Salmon ruled that an ordinance exempting the Lusby, Md.-based LNG project from local zoning laws — Ordinance 46-13 — violated both a section of a state Land Use law, as well as Maryland's constitution. The facility will be fueled by gas obtained via hydraulic fracturing (“fracking”).

In the ruling, Judge Salmon described the zoning exemption as “a very unusual situation.” In 2013, the Calvert County Board of County Commissioners and the Calvert County Planning Commission carved out both LNG export and import facilities from zoning laws.

“To my knowledge no other municipality or county in Maryland has attempted to do what the Calvert County Board of County Commissioners has attempted to do, i.e. completely exempt two uses from being covered by zoning regulations while requiring everyone else in the County to abide by those regulations,” wrote Salmon.

Environmental groups fighting against the Cove Point LNG export terminal hailed Salmon's judgment as a major grassroots victory.

“At a minimum, this ruling will likely cause real delay in the ability of Dominion to begin major construction of this controversial $3.8 billion fossil fuel project,” Mike Tidwell, executive director of Chesapeake Climate Action Network (CCAN), said in a press release. “The ruling should certainly give pause to the Wall Street investors that Dominion is seeking to recruit to finance this expensive, risky project.”

The plaintiffs in the lawsuit, AMP Creeks Council (shorthand for Accokeek Mattawoman Piscataway Creeks Council), came to a similar conclusion.

“This is a remarkable victory for the people of Lusby, Maryland, and folks fighting fracking and LNG exports throughout the Mid-Atlantic region,” Kelly Canavan, President of AMP Creeks Council, said in a press release.

Yet, Salmon concluded the ruling out by stating his decision “has no direct bearing on whether the facility will be built or not.” And even AMP Creeks acknowledged in its press release that its legal team “is still sorting out the implications of this ruling.”

Further, Canavan told DeSmogBlog in an interview that she agrees with Salmon, at least in terms of the legal argument he put forward about his role in the final destiny of the Cove Point LNG export facility. 

“Even if he wanted to, he does not have the power to determine whether or not the facility will be built,” she said. “It doesn’t mean there won’t be a ripple effect.”

So, what gives? Is the decision a game-changer or something less? Dominion certainly thinks the latter, based on a review of its quarter two earnings call transcript.

Court: Key Environmental Law Doesn't Apply to Part of Enbridge Keystone XL "Clone"

Keystone XL Clone Flanagan South

A U.S. District Court for the District of Columbia has ruled that Enbridge’s 600-mile-long Flanagan South Pipeline, a Keystone XL “clone,” is legally cleared to proceed opening for business in October

Approved by the U.S. Army Corps of Engineers via a controversial regulatory mechanism called Nationwide Permit 12 (NWP 12), Judge Kentanji Brown Jackson, an Obama-appointed judge, ruled NWP 12 was not a federal government “action.” Thus, Brown posited that Enbridge did not need to use the National Environmental Policy Act (NEPA) regulatory process and NWP 12 was up to snuff.

The case pitted the Sierra Club and the National Wildlife Federation (NWF) against the Army Corps of Engineers and Enbridge and has lasted for just over a year, with the initial complaint filed on August 13, 2013 (Case #: 1:13-cv-01239-KBJ). 

Sierra Club and NWF submitted the recent precedent-setting Delaware Riverkeeper v. Federal Energy Regulatory Commission (FERC) case as supplemental authority for Sierra Club v. U.S. Army Corps of Engineers on the day that decision was handed down. 

But Jackson brushed it aside, saying it doesn't apply to Flanagan South, despite the fact that the Delaware Riverkeeper v. FERC decision said that a continuous pipeline project cannot be segmented into multiple parts to avoid a comprehensive NEPA review.

Although Enbridge will operate this project as a single pipeline, Flanagan South was broken up into thousands of “single and complete” projects by the Army Corps of Engineers. This helped Enbridge skirt the requirement of a more comprehensive and public-facing NEPA review, which involves public hearings and a public comment period.

“Here, not only was there no NEPA analysis of this massive project, there was never any public notice or opportunity for involvement before it was constructed across four states,” Sierra Club attorney for the case, Doug Hayes, told DeSmogBlog. “The entire thing was permitted behind closed doors.”

For all intents and purposes, then, Flanagan South is a fait accompli and tar sands diluted bitumen (“dilbit”) will begin pumping through it as summer turns to fall. 

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

Recent Federal Court Decision Could Muddy Waters for Keystone XL South, Flanagan South

On June 6, the U.S. Court of Appeals for the District of Columbia Circuit handed down a ruling that will serve as important precedent for the ongoing federal legal battles over the Keystone XL and Flanagan South tar sands pipelines.

In the Delaware Riverkeeper v. Federal Energy Regulatory Commission (FERC) case, judges ruled that a continuous pipeline project cannot be segmented into multiple parts to avoid a comprehensive National Environmental Policy Act (NEPA) review. This is what Kinder Morgan proposed and did for its Northeast Upgrade Project.

As reported on DeSmogBlog, the U.S. Army Corps of Engineers did the same thing to streamline permitting for both the southern leg of TransCanada's Keystone XL and Enbridge's Flanagan South. Sierra Club and co-plaintiffs were denied injunctions for both pipelines in October and November 2013, respectively.

Delaware Riverkeeper v. FERC dealt with breaking up a new 40-mile long pipeline upgrade into four segments. For the other two cases, the Army Corps of Engineers shape-shifted the two projects — both hundreds of miles long each — into thousands of “single and complete” projects for permitting purposes.

On the day of the Delaware Riverkeeper v. FERC decision, Sierra Club attorney Doug Hayes submitted the case as supplemental authority for the ongoing Flanagan South case.

On May 5, Hayes also submitted paperwork to appeal the Keystone XL South decision in front of the U.S. Court of Appeals for the Tenth Circuit, which was docketed by the clerk of Ccurt the next day.

Hayes told DeSmogBlog his side will file an opening brief for the appeal on July 30. It seems likely Delaware Riverkeeper v. FERC will be a key part of that appeal.

In a sign of the importance of the outcome for the oil and gas industry, the American Petroleum Institute (APIentered the Sierra Club v. Army Corps of Engineers case on Keystone XL as an intervenor on May 16, represented by corporate law firm Hunton & Williams.

At the federal level, Hunton & Williams lobbies on behalf of Koch Industries, a company with a major stake in tar sands leases and refining.

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.


Subscribe to FERC