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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.

Thu, 2014-05-22 14:13Steve Horn
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Documents: Petraeus Fracking Field Trip Reveals ND Government, Oil, Private Equity Nexus

DeSmogBlog has obtained hundreds of documents portraying the blurred lines between North Dakota's government, the oil and gas industry and the private equity world. They also offer one of the first looks inside the professional life of former CIA Director Gen. David Petraeus after he resigned from the agency in 2012.

The documents reveal Kohlberg Kravis Roberts (KKR) — a private equity firm where Petraeus now works at the KKR Global Institute — wrote a press release for North Dakota's State Treasurer announcing the Petraeus visit, meticulously counseled the state treasurer's office on media strategy and hosted the state treasurer on its company plane.

A large part of Petraeus' visit centered around a tour of the state's Bakken Shale basin, where upwards of 1 million barrels of oil are extracted each day via hydraulic fracturing (“fracking”). The Bakken pumped out its billionth barrel of oil during his stay.

KKR, with $87 billion in assets, owns two major Bakken entities: The Ridge in Williston, ND, and Samson Resources.

The Ridge is a KKR-owned housing complex for Bakken oil and gas workers, while Samson Resources is a major company fracking for oil and gas throughout the U.S., including in the Bakken.  

With over $4 billion sitting in an energy investment fund as of June 2012, KKR also owns over $950 million in oil and gas industry assets. Marc Lipschultz, head of energy and infrastructure for KKR, called the firm a “mini oil and gas company“ in an April 2013 interview with Privcap.

“We have our own technical abilities attached to the firm we have our own back office [and] we can manage the daily flows of oil and gas in drilling wells and managing our own hedges,” said Lipschultz. 

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. 

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