Conflict of interest: State Department contractor on Keystone XL study lied about ties to TransCanada & oil industry

ERM employee tried to cover up deceit online

WASHINGTON, D.C. – The company hired by the State Department to review the environmental impact of the Keystone XL tar sands pipeline lied on its conflict of interest disclosure form about its work for pipeline builder TransCanada and other oil companies, according to research released today by Friends of the Earth and The Checks & Balances Project.

Friends of the Earth’s investigation of the business connections of Environmental Resources  Management — the London-based international consulting firm that conducted a study for the State Department claiming the pipeline will not cause significant environmental harm — uncovered an extensive dossier of publicly available documents that show:

  • On its conflict of interest disclosure forms, ERM lied to the State Department about not working with TransCanada. In fact, ERM and TransCanada have worked together at least since 2011 on another pipeline project in Alaska.
  • ERM lied again when it said it had no relationship with any business that would be affected by construction of the Keystone XL, which would carry tar sands oil from northern Alberta to refineries on the Gulf Coast. In fact, ERM’s own publicly available documents show that the firm has business with over a dozen companies with operating stakes in the Alberta tar sands.
  • In recent weeks, as calls grew louder for an investigation of the numerous conflicts of interest tainting the State Department’s handling of the Keystone proposal, an ERM employee tried to cover up his work for the Alaska Pipeline Project, a partnership between ExxonMobil and TransCanada.

“From the beginning, the State Department’s review of Keystone has been plagued by influence peddling and conflicts of interest,” said Ross Hammond, senior campaigner for Friends of the Earth. “This is more serious: If ERM lied about its relationship with TransCanada, how can Secretary Kerry, President Obama or the American people believe anything the company says about the pipeline’s environmental impact?”

Hammond said ERM’s lies call into question the entire Keystone XL environmental review process. Friends of the Earth and The Checks & Balances Project have called for an investigation by the State Department’s Inspector General into how ERM was hired given these conflicts of interest. In the wake of the new evidence that ERM lied on State Department disclosure forms, the groups are asking Secretary of State John Kerry to throw out the ERM study and not allow it to determine the Obama Administration’s decision on whether to issue a pipeline permit.

In papers filed with the State Department in June 2012, ERM certified that it had “no existing contract or working relationship with TransCanada” for at least three years. But public records show that TransCanada, ERM and an ERM subsidiary, Oasis Environmental, have worked together at least since 2011 on the Alaska pipeline project.

On its conflict of interest form, ERM also certified that it had no “direct or indirect relationship … with any business entity that could be affected in any way by the proposed work.” But ERM’s own publicly available documents show that in the period 2009-2012 the firm was working for over a dozen of the largest energy companies involved in the Canadian tar sands which stand to benefit if Keystone is built, including Exxon, Shell, Chevron, Conoco Phillips, Total and Syncrude.

More recently, on May 14 the LinkedIn profile for Mark Jennings listed him as Socioeconomic Advisor for ERM. Among his roles for the company were since 2011, “Consultant to ExxonMobil Development Company for the Alaska Pipeline Project,” for which Exxon and TransCanada are partners. But less than a month later, his LinkedIn profile made no mention of his work for ERM.

The State Department’s review of Keystone XL has been sharply criticized by the EPA and the scientific community for failing to consider the climate and other impacts of the pipeline. The Checks and Balances Project and Friends of the Earth said it is impossible for the State Department to fairly evaluate whether the pipeline is in the national interest when its environmental review was conducted by a company with deep ties to the oil industry.

“Secretary Kerry must halt this flawed review process and direct the State Department to conduct a full, unbiased review of the Keystone XL pipeline’s impact,” said Gabe Elsner, director of the Checks and Balances Project. “In addition, the State Department Inspector General should pursue a full investigation into how a contractor with clear conflicts of interest was allowed to write the U.S. government’s assessment of Keystone XL and why the State Department failed to bring those conflicts of interest to light. Finally, the State Department should determine appropriate disciplinary actions for ERM to discourage contractors from lying to the federal government in the future.”

For House Republicans, the season of oil and gas giveaways has begun

As reported by Politico’s Andrew Restuccia, Tuesday, House Republicans will spend the summer trying to breathe new life into tired ideas filled with industry giveaways. It’s no wonder given these politicians receive huge contributions from the oil and gas industry. Ironically, these “conservatives” want more mandates and quotas for oil companies while also cutting common sense protections for our air and water.

What Congress should focus its energy on – and what people in the West support – is balance between conservation and energy development. Instead of handouts to oil companies, our leaders in Washington should promote a diverse and thriving economy that supports main street businesses, farming and ranching, tourism, and outdoor recreation.

GOP House leadership has already said it will move the same failed giveaways it tried to push through last year, and the year before that. The problem they’re already running into is that they’ve already tried – and failed – to dupe Americans into thinking these handouts are anything else. Even a Republican energy adviser quoted in Restuccia’s story said, “It’s probably going to look a lot like it’s looked in the last four or five years.”

Westerners want more out of their elected officials than repeated political plays and messaging bills for the oil and gas industry. They want a real balance between protecting the public lands that support and attract high-wage businesses and using them to produce American-made energy.

Here’s a quick preview of the rhetoric we can expect to hear from House Republicans this summer, and the facts they will ignore:

The economy

numbers_graphicShot: Failure to open more federal lands to drilling will hurt job creation and economic growth in Western communities.

Chaser: Western states have grown out of the boom and bust cycle that comes with relying solely on energy development. Protecting as much public land as we lease will further build out the outdoor recreation industry, which already accounts for $64 billion in annual spending, 6 million jobs and nearly $80 billion in local, state and federal taxes.

Price at the pump

Shot: These bills are an important step toward bringing down gasoline prices.

Chaser: In 2012, an Associated Press study showed that oil production has no effect on gas prices. Meanwhile, a Goldman Sachs analysis found that Wall Street speculation was adding more than $23 to the price of crude, or as much as $0.56 per gallon at the pump.

Drilling on private lands

Shot: Increased pressure to develop on private lands is just one result of the slowdown of public lands energy development by this administration .

Chaser: The latest oil boom in the lower 48 states is due largely to an unconventional resource known as “shale oil,” (oil trapped within shale rock). The vast majority of both “shale oil” and “shale gas” (natural gas trapped within shale rock) is found under private, not public, lands. The location of these resources – not safeguards to protect air quality and water supplies – explain the shift in drilling from public to private lands.
shale_locationAdam Sieminski, U.S. House, Subcommittee on Energy and Power Committee on Energy and Commerce, 2 August 2012

Permitting delays

Shot: Regulatory hurdles, long delays, and policies that keep federal lands under lock-and-key have become all too common.

Chaser: Industry is responsible for the majority of permitting delays. Last year, BLM announced it is moving to an online permitting system that will hopefully help companies cut down the time it takes them to properly file permit applications.
permit_timingBLM Table of Average Application for Permit to Drill (APD) Approval Timeframes: FY2005 – FY2012


Shot: The Obama administration is playing fast and loose with drilling permit pledges.

Chaser: Industry does not use the drilling permits that have already been issued for oil and gas development. In fact, there are nearly 7,000 unused drilling permits that industry could develop on federal public lands.
unused_permitsBLM Approve Permits – Not Drilled table

Idle lands

Shot: President Obama and his Administration have actively blocked, hindered and delayed American energy production.

Chaser: According to the Department of Interior’s Oil and Gas Lease Utilization, Onshore and Offshore report, issued May 2012, “As of March 31, 2012, approximately 56 percent (20.8 million acres) of total onshore acres under lease on public lands in the Lower 48 States were conducting neither production nor exploration activities.
leased_productionDOI Oil and Gas Lease Utilization Report

The facts are not on House Republicans’ side, and neither is public opinion. A recent poll shows 9 out of 10 Westerners agree that national parks, forests, monuments and wildlife areas are an essential part of the economy. Seventy-four percent believe they help attract high quality employers and good jobs to western states.

It’s time we put conserving our treasured public lands back on equal ground with leasing them for oil and gas drilling. If oil- and gas-funded politicians continue to try and resurrect these industry giveaways, they’re just showing where their priorities lie – with the companies that fund them rather than the people they represent.

Analysis: Colorado BLM failing to enact Obama energy reforms – creating red tape, uncertainty

A stunning new analysis shows striking inefficiencies at work in Colorado that should infuriate anyone looking for a smarter approach to federal oil and gas leasing – including both conservationists and energy companies.

In Colorado, leases sold by the Bureau of Land Management (BLM) have attracted nearly three times the number of costly, time-consuming lawsuits (known as protests) than we’ve seen in the rest of the Rockies. Our new analysis found that 76 percent of leases in Colorado were protested, as opposed to 27 percent in surrounding states, on average.

The analysis is based on BLM data recently released for the first time regarding the number of protests in each state filed by citizens and stakeholders on tracts of lands (known as parcels) available for oil and gas leasing. Protests are one of the key measurements for how controversial a particular decision to lease land for oil and gas development.

WEP Rocky Mountain Map

The reason for this massive discrepancy is clear:

Helen Hankins, the BLM’s top bureaucrat in Colorado, has failed to implement President Obama’s common-sense leasing reforms – designed to streamline the leasing process and reduce conflict dramatically by requiring research and analysis be completed prior to leasing.

A recent report from the Center for American Progress pointed out that:

Those reforms called for a better balance between developing oil and gas resources and the protection of other public lands resources, including nearby parks and refuges, wildlife, and historic and archaeological sites. “There is no presumed preference for oil and gas development over other uses,” states the reform document.

In other words, the reforms were meant to drive our local economies with a real balance between protecting public lands to support and attract high-wage businesses to the West, and using them to produce American-made energy – which together support 100,000s of jobs.

In states like Utah and New Mexico – where the BLM offices are implementing the reforms – protests are down, and energy is being produced. That approach is working for industry and conservation interests – and most importantly our communities and our families.

But in Colorado, Hankins has turned the President’s balanced reforms into a broken promise for our communities. Instead of helping oil and gas companies responsibly develop oil and gas resources in the right places, while protecting those lands that drive the economy and attract new business, Hankins continues to rely on decades-old plans and analyses – proposing to allow oil and gas drilling near places like Mesa Verde National Park, and Dinosaur National Monument.

By miring all sides in expensive red tape, Hankins has failed Westerners who are doing everything they can to get back to work and support their families. They expect their government to champion the Western way of life, including use of public lands in a balanced way to support sustainable economic growth.

The Obama administration must correct this failure by taking action to follow the directives in the 2010 leasing reforms now.

Group’s new oil shale report contains wildly inaccurate claims

The Institute for Energy Research (IER), recently posted a blog about oil shale that doesn’t have its facts straight.

The IER blog falsely claims that the federal government put oil shale resources ‘under lock and key’. Oil shale companies have been awarded billions in taxpayer-funded subsidies and received research, development, and demonstration (RD&D) leases on publicly owned lands that don’t require the payment of bonuses, rents, or royalties.

Despite more than a century of failed oil shale projects and billions of dollars risked, taxpayers are still subsidizing oil shale research and development. Currently, there are seven such RD&D leases being pursued in Colorado and Utah.  The companies include: Shell, American Shale Oil (AMSO), Enefit, ExxonMobil, and Natural Soda Holdings.

Chevron also had an RD&D holding, but abandoned it last February in order to focus on viable energy sources – hardly the first oil shale experiment to go bust. On Black Sunday, Exxon closed its Colony oil shale project, which put more than 2,000 out of work and devastated the economy of Colorado’s western slope for years.


Arial photo of a pile of oil shale ‘ash’ in Estonia. Source: EcoCrete Project.

In their blog, IER also highlights Estonia, considered the world leader in oil shale, as the prime example of successful oil shale development – but that’s not factual either. Oil shale isn’t economically viable in Estonia, has caused significant water, air and land pollution, and is highly controversial.

The head of Estonia’s biggest oil shale company, Eestia Energia – known as Enefit in the U.S. – has admitted that oil shale is not profitable without large taxpayer subsidies. Underscoring this point was Moody’s recent move downgrading Enefit’s credit rating to negative, over concerns that they can’t make oil shale profitable.

In addition, oil shale is a dirty, polluting fossil fuel that’s responsible for 80 percent of all of Estonia’s pollution.  Enefit’s track record includes contaminated groundwater, creating 600-foot high mountains of oil shale waste that spontaneously ignite, and causing the emission of “lots of carbon dioxide.”

IER’s blog also boasts that there are huge oil shale deposits in the U.S. But these projections are irrelevant because oil shale isn’t a viable energy source and fails the basic economic test. In other words, the return on oil shale doesn’t outweigh the investment. The amount of energy and water that it takes to superheat, mine and process oil shale – which is actually fossilized algae – is more than the energy that oil shale provides. If you need more evidence just look to the billion dollar oil and gas industry, which has almost limitless resources, and has 100 plus years of failed oil shale experiments to show for their efforts.

The IER can spin oil shale all day, but it won’t change the cold hard fact that oil shale isn’t ready for prime time.

Former park rangers launch group to protect America’s national parks from irresponsible oil & gas drilling

Former park rangers have launched a new group, Park Rangers for Our Lands, to provide solutions to irresponsible plans to drill near America’s national parks.

The former park rangers are advocating for a balance between energy development and conservation, just at a time when Colorado Bureau of Land Management (BLM) Director Helen Hankins has tried to push forward widely-criticized plans to drill next to Dinosaur National Monument and near Mesa Verde National Park. These are two areas of primary concern for the group.

According to Richard Ellis, who spearheaded the formation of Park Rangers for Our Lands:

“Our parks are under siege. Oil and gas drilling is encroaching our public lands from all sides…We need the BLM to work with its neighbors at the National Park Service and come up with common sense ways to protect the parks, the air quality in the region, and keep the West a beautiful place to visit.”

Director Hankins has come under fire, numerous times, for her oil and gas leasing plans next to Dinosaur Monument’s visitor center, near Mesa Verde National Park, perilously close to Denver’s drinking water supplies, and in the agricultural heart of North Fork Valley.

Unfortunately, this hasn’t stopped Dir. Hankins from continuing to push to open these areas for oil and gas drilling (see graphic) – despite the risks to our water, public health, farms and economies. It’s time for Director Hankins to adopt a common sense approach to oil and gas leasing that includes up to date analysis, implementing national BLM reforms – to cut down on Colorado’s highest in the region lease protests– and taking into effect the concerns of local businesses, landowners and the National Parks Service.

Industry presentation on energy development misses a few facts

Yesterday, we attended an industry webinar about the future of Bureau of Land Management (BLM) energy development on publicly owned lands – Master Leasing Plans (MLPs). The intent of MLPs is to reform BLM oil & gas leasing in order to ensure smart energy development by reducing red tape for industry and proactively protecting the mountains, forests and waterways critical to western economies and communities.

The presenting lawyers were from law firm Beatty and Wozniak, P.C., whose CEO has been appointed to the serve on at least three oil & gas company boards (Storm Cat Energy, MarkWest Hydrocarbon and Denbury Resources). So, it wasn’t too surprising that the presenters’ comments about MLPs weren’t too favorable. After all, the oil and gas industry has made no secret of wanting a blank check for drilling on our publicly owned lands. But, the presenting attorneys made two glaring inaccuracies that are worth addressing:

  1. All oil and gas leases on public lands since 2008 have been protested. FALSE

There is so much evidence to the contrary, we could be here all day. We’ll keep it simple and just point to recent testimony from former Interior Sec. Salazar on how just 18 percent of all leases offered were protested in 2012:

“Onshore oil and gas leasing reforms put in place in 2010 resulted in fewer protests; less than 18 percent of 2,064 parcels offered in fiscal year 2012 were protested, the lowest since fiscal year 2003, reducing costs and speeding development.”

  1. BLM doesn’t have the legal authority to carry out MLPs because they aren’t in Mineral Leasing Act. FALSE

The implication here seems to be that since MLPs weren’t explicitly written into statute then BLM doesn’t have the authority to implement them. This line of reasoning doesn’t hold water as all regulating agencies, including BLM, develop specific rules for legislation passed by Congress which enable them carry out the law.  BLM even has a link to the laws that apply to BLM-managed lands and the corresponding rules and regulations.

Let’s hope that next time our industry friends don’t let their oil and gas connections skew the facts.

Oil and Gas Real Estate Agent Helen Hankins at it Again in Thompson Divide

Today, the Colorado Bureau of Land Management State Director Helen Hankins’ office announced it will extend the life of about two dozen oil and gas leases acquired by SG Interests and Ursa Resources Group in Colorado’s Thompson Divide area. These leases were set to expire this year because leaseholders had failed to conduct any meaningful development in 10 years. Dir. Hankins’ move runs contrary to stated goals by the Obama administration that oil and gas companies develop leases or that land be returned to the public. SG Interests and Ursa did not have to pay for the lease extension and continue to hold the leases for speculative purposes.

Ellynne Bannon, The Checks and Balances Project western energy lands program manager released the following statement:

“Once again, Colorado BLM Director Hankins is showing what a great real estate agent she is for oil and gas companies She’s ignoring the will of the communities around Thompson Divide and putting drinking water, farming and ranching businesses at risk in order to provide another freebie to oil and gas companies. Hankins’ actions represent exactly what she shouldn’t do as a steward of the public’s land and water.”

Background facts:

  • Director Hankins has a long track record of ignoring public concerns and putting communities at risk. Earlier this year, Hankins proposed drilling right next to Mesa Verde National Park and Dinosaur National Monument – including parcels next to a visitor center and park entrances. Hankins also re-offered highly controversial drilling leases in the midst of Denver Metro’s drinking water supplies and the agricultural North Fork Valley.
  • Director Hankins’ actions are out of step with President Obama and the Department of Interior’s policy on leases not in production – which is essentially “use it or lose it.” Currently, 21 million of the total 37 million acres in federal BLM lands leased for oil and gas drilling are not in production or exploration. The oil and gas industry also holds 7,000 idle drilling permits on federal lands.
  • A 2012 analysis found that that hunting, fishing, grazing, and recreation activities in the Thompson Divide support nearly 300 jobs and $30 million a year in economic value. Yet, Dir. Hankins seems intent on jeopardizing these jobs and revenue stream by extending controversial leases in the Divide, where a large local constituency relies upon recreation, ranching and hunting – and clean water and air – for their livelihoods.