Chesapeake "Declaration of Energy Independence": NAT GAS Act Embodied

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This article has been cross-posted with permission of the Center for Media and Democracy’s PR Watch.

On July 11, Chesapeake Energy, the second largest methane gas corporation in the United States, announced its  “bold new plan”: a “Declaration of Energy Independence” for America’s energy future. (“Natural gas” is the public relations term the industry uses for methane gas, because it sounds so much more appealing than the real name.)

The plan is double-pronged and will no doubt lead to increased levels of fracking, the process drilling companies use to extract methane gas in areas like the Marcellus Shale and other shale deposits throughout the country. Fracking is a dirty process, as covered in-depth by DeSmogBlog in an April 2011 report titled, “Fracking the Future: How Unconventional Gas Threatens our Water, Health, and Climate.”

First, Chesapeake will pour $150 million into Clean Energy Fuels Corporation (CEF). Energy tycoon and hedge fund manager T. Boone Pickens sits on CEF’s Board of Directors and owns a 41 percent stake, according to the company’s March, 2011 10-Q filing. That money will go toward funding methane gas fueling stations along federal highways spanning the country.

Second, Chesapeake has purchased a $155 million, 50 percent stake in Sundrop Fuels, Inc.  Chesapeake’s CEO, Aubrey McClendon, is also the CEO of Sundrop Fuels.

While superficially a “bold new plan,” the reality is that the plan serves merely as the embodiment of the vision outlined in House Resolution 1380, the NAT GAS Act of 2011 (New Alternative Transportation to Give Americans Solutions Act of 2011), with all of the same key players still in the fold.

Through the introduction of major federal-level legislation, the foundation of the plan has already been laid and now the vision is slowly but surely becoming a reality.

NAT GAS Act Rejoinder: Written By and For Methane Gas Industry Insiders

The NAT GAS Act currently has 183 co-sponsors representing both major political parties and calls for the creation of a new national liquefied and compressed methane gas infrastructure, while offering tax credits  – also known as corporate welfare – to both methane gas fueling stations, and owners of vehicles that utilize methane gas, through 2016. 

The most important parallel between the bill and the Chesapeake announcement is the fact that the money Chesapeake poured into Clean Energy Fuels (CEF) will go toward the building of fueling stations along national highways for trucks, and under the dictates of the bill, the larger the vehicle, the more tax credits it receives.

This is a prime example of industry in cahoots with government for personal gain to a few,” says Maura Stephens, a co-founder of the Coalition to Protect New York, which is currently fighting for a statewide ban on fracking. “By crafting this ‘NAT GAS’ Act –- also known as the ‘Pickens Plan,’ Pickens and his allies are manufacturing a ‘need’ where there was none. They stand to gain billions at a time when the dangers to water, air, soil, food supplies, and people’s health of ‘fracking’ for ‘natural’ gas are being exposed daily. It would be imprudent, at best, to push for such a practice to become even more widespread. But Pickens seems to have Congress wrapped around his little finger and the media don’t question him.”

Though publicly unveiled in April, the bill still sits in various Congressional Committees and has been stalled since April 6, according to the Library of Congress’ website. This makes Chesapeake’s announcement even more timely and crucial, particularly since Pickens, McClendon, and the entities with which both men are affiliated, served as key behind-the-scenes lobbyists (and likely bill writers), as well as public spokespeople, for the NAT GAS Act.

As written on PRWatch back in April:

The first…entities to break the story (about the NAT GAS ACT) are all, as will be seen, in some way, shape and form, well-connected to Pickens:…Natural Gas Vehicles for America (NGVA),…the American Natural Gas Alliance (ANGA),…[and] Clean Energy Fuels (CEF). All…originally broke the story before the bill was publicly available.

ANGA [is an industry lobbying firm that] consists of all of methane’s key players, including Cabot Oil and Gas, Chesapeake Energy, Seneca Resources, and EQT, among others…

NGVA, on the other hand, is called a “peer group partner” of the so-called “American Clean Skies Foundation.” NGVA has a programming agreement through the Foundation’s public relations channel, Clean Skies TV Network, and the Foundation is funded by…McClendon…

CEF is another “peer group partner” of the American Clean Skies Foundation that has a programming agreement with Clean Skies TV Network…The President and CEO of CEF, Andrew J. Littlefair, according to his biography on their website, is also the President of NGVA (He is now Immediate Past Chair, according to the NGVA website). According to that same biography, he formerly served as President of Pickens Fuel Corporation (which was formerly Mesa Petroleum). A glance at the American Clean Skies Foundation webpage shows that he also sits on the Board of Directors with McClendon.

Pickens Fuel Corporation is the predecessor of CEF, which Littlefair co-founded in 1997 with Pickens. It was reincorporated as CEF in 2001. CEF dedicated its first Liquefied Natural Gas plant to Pickens in May 2006, according to its website. The plant is called the “Pickens Plant.”…

An e-mail exchange with the Editorial Director of School Transporation News (STN) and the author of STN’s article on the House’ introduction of the NAT GAS Act, John Gray, confirms that he had not yet seen a copy of the legislation when he wrote his article, but was first flagged about it via a direct contact from a representative from the NGVA. Gray predicts that NGVA “were likely key authors of the legislation. My hunch is that they helped write it. Standard procedure in DC. They are a lobby.”

In addition to the information gathered in April, Chesapeake is also listed as a member company on the NGVA website, and its Senior Vice President, Tom Price, sits on the Board of Directors of the NGVA and the Clean Skies Foundation.

Furthermore, Pickens was the original head of NGVA, which formerly publicly went by the name Natural Gas Vehicle Coalition, the name it still registers under for lobbying purposes, according to the Center for Responsive Politics’ Open Secrets lobbying database.

Pickens and Littlefair are also both on the Board of Directors of the T. Boone Pickens Foundation.

Pickens, McClendon, Littlefair, the Self-Enriching Trifecta, Make the “Declaration of Independence” Media Rounds – Legislative Push Next?

NAT GAS Act Profiteers

Unsurprisingly, these same intertwined key players have again made the media rounds for the “Declaration of Independence” announcement, which would fatten their wallets at the expense of the environment. 

On the day of the announcement, for example, Pickens made appearances on MSNBC’sMorning Joe with Joe Scarborough and on Bloomberg TV, McClendon and Chesapeake sponsored an “Energy Breakfast Briefing” that was co-hosted by Politico, and also was a guest on CNBC and Bloomberg TV, and Littlefair was also a guest on CNBC’s Mad Money with Jim Cramer.

With the vital public relations, legislative, economic, and physical groundwork now in place, the next thing to ponder is when the next step in the legislative push will occur on Capitol Hill.

A phone interview with a staff member of the bill’s sponsor, U.S. Rep. John Sullivan (R-Oklahoma), suggested that it could come sometime this fall, perhaps after the summer recess, as debt ceiling talks have stalled other items on the legislative agenda. A phone conversation with the head lobbyist for NGVA, Paul Kerkhoven, confirmed this plan.

All signs, then, point to sooner, rather than later.

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Sounds to me like Chesapeake has a sensable and doable plan there.

Good for them..

About time sombody started tackling the real problems.

The idea of gasing up your car along the highway with natural gas will not fly. No one feels safe driving in a vehicle with a compressed gas tank under their seat. When those bad boys explode in a car wreck, they take out everything in a 100 meter radius. These have already been tested years ago with city taxi companies, passengers do not feel safe riding a bomb.

I’ve also had a close friend tell me that. Do you have any links as evidence? I’d love to look into that further.

Natural gas has an octane rating of about 130. The higher the rating the less volitile it becomes. Your fears are not warranted. Death by fire is the second most feared by all and I understand how scary compressed gas appears. If you thought about your gas tank in your car right now you would be afraid..BOOM!!!!

on the subject of safety, natural gas vehicles can actually be safer than gasoline. After a crash you aren’t sitting in a pool of fuel, any puncture in the tank would result in the fuel rapidly dissipating into the atmosphere. They are specifically designed to leak and not explode. The tank cannot detonate, as you may be picturing, because there is no oxygen source within the tank.

In countries like India, Pakistan, Brazil, and lots of others use lots of CNG vehicles. Many buses in US cities are already CNG because of lower fuel cost and polution.

When people start driving by highway signs with $4 gasoline, $4.50 diesel, and $1.60 natural gas (for 1 gallon equivelent), perhaps these types of vehicles will catch on.

As far as calling it natural gas vs methane: in many places there are “natural gas liquids”, particularly ethane, that are present in the gas. This is what people mean when they say “wet gas” vs “dry gas”, which would be methane only. So strictly speaking it wouldn’t necessarily be accurate to call it methane in many cases.

Oh but surly you don’t think that the price of natural gas will simply clobber gasoline. Perhaps at first it might. But I know enough about business to know that the prices will be quite comparable per BTU when the market has settled. It will be roughly the same price per BTU. The price of natural gas will be allowed to rise close to gasoline and gasoline will be allowed to fall close to the price of natural gas. The difference will be attributable to public perception and demand. All in all, I still believe this will spell the end of the electric car. AGAIN. Cheers

Your probally right, NG will no doubt be profitable for the industry which means expensive for us. However; the money will not go to the middle east. The electric car will not fade away because of NG. Hopefully NG and Petrol will fade away because of battery/hydrogen technology. Cheers back to you