Why Did the McAuliffe Administration Hire Dr. Michael Karmis?

Why Did the McAuliffe Administration Hire Michael E. Karmis?Earlier this year, the Virginia legislature passed a bill that requires the McAuliffe Administration to evaluate the costs and benefits to the state of complying with the U.S. Environmental Protection Agency’s Clean Power Plan. That plan would require Virginia to reduce carbon emissions by 37.5% by 2030 from 2012 levels. Carbon pollution from such sources as coal-burning power plants are fueling climate change and resulting sea level rise in areas such as southeastern Virginia.

The Administration tasked its Department of Mines, Minerals and Energy (DMME) to produce the analysis. DMME hired Michael E. Karmis, PhD.

Professor Karmis is a curious choice. He is considered the state’s leading academic expert in coal, with an international reputation. He is the director of Virginia Tech’s Virginia Center for Coal and Energy Research, and founder of the Appalachian Research Initiative for the Environment Sciences, whose partners include leading lights of the coal industry: Alpha Natural Resources, Arch Coal, Cliffs Natural Resources, MEPCO, Natural Resource Partners, Patriot Coal Corporation, and TECO. Karmis is also a director of The Alpha Foundation for the Improvement of Mine Safety and Health, Inc. based in Bristol, Virginia. He is an active consultant to the mining industry. Karmis is the go-to man if you want to know just about anything related to coal in the Commonwealth.   

But is Michael Karmis the man to conduct an impartial analysis of the costs and benefits of complying with the EPA plan? Especially considering that the EPA plan calls for sharply reducing carbon pollution from existing coal-fired plants that generate electricity? Were other less invested in the fossil fuel industry even considered?

Does Karmis have a conflict of interest? 

Checks and Balances Project Virginia FOIA

Click on this image to see the FOIA

To learn more about Professor Karmis’ contract to produce the analysis, I filed, on behalf of the Checks and Balances Project, a Virginia Freedom of Information Act (FOIA) request with DMME. I requested copies of any and all records, including meetings, emails, and phone logs, related to the contract and a host of Virginia officials.

With sea levels rising faster in southeast Virginia than in any other area along the East Coast, Virginia deserves an unbiasded look at the costs and even greater benefits of meeting the EPA’s standards. Unfortunately, an independent assessment from someone who makes his living as a “clean coal” expert is questionable.

Hopefully, the FOIA I filed yesterday will shed some light.

 

Scott Peterson

Executive Director, The Checks and Balances Project

 

The Hanger Rule: How many times can one plug pro-industry talking points?

Isaac Newton taught us that for every action there is an equal or opposite reaction, and in John Hanger’s case that means answering in pro-industry talking points anytime something bad is said about the gas industry. We call it  ‘The Hanger Rule.’

Hanger is the former head of Pennsylvania’s Department of Environmental Protection and now works in Harrisburg as a lawyer with Eckert Seamans law firm as an advisor on energy and environmental issues. While he is mostly out of public life, Hanger emerges with blog posts within hours of almost any negative report about hydraulic fracturing that hits the mainstream media.

In February, Hanger responded to Ian Urbina’s piece in The New York Times that identified concerns about lax regulation of hydraulic fracturing in Pennsylvania with a series of posts to his blog, These concerns included such facts as: The Pennsylvania waste treatment facilities were ill- equipped to remove radioactive material from fracking wastewater before it was discharged into rivers and waterways throughout the Keystone State. This rapid reaction led Checks and Balances Project Director, Andrew Schenkel, to pay a visit to Hanger’s Harrisburg office to gain a better understanding of his perspective.

Hanger is a proud man who touts the numerous regulations he helped to impose on the gas industry while in office. It was perhaps natural that a man who dedicated so much of his life to improving regulations in Pennsylvania may be a bit defensive about allegations that his work was ineffective or simply did not go far enough. However, what was perhaps most striking was Hanger’s tone throughout the interview. He wasn’t combative. He wasn’t defensive. Instead, he maintained a friendly nature while talking in sound bites. Almost all of his answers mimicked the familiar rhetoric of the gas industry. In fact, Hanger touched upon almost 30 industry talking points.

As you can see in the video, Hanger uses key gas industry messaging, that gas is a cleaner alternative to oil and coal, 15 times.

Hanger’s comments are in line with the words of energy tycoons T. Boone Pickens and Aubrey McClendon of Chesapeake Energy.

-“Natural gas is about 30 percent cleaner than petroleum and produces no particulate emissions.” -Pickens

-“Natural gas has already achieved significant market share gains in the electrical generation market at the expense of coal largely on the basis of price, but also because of environmental issues.” –McClendon

Weeks after the first Urbina story, Hanger reemerged during the release of a new study that suggested that gas may not be a cleaner alternative to coal. The study, which was conducted by scientists at Cornell University, simply suggested that more research should be devoted to finding out if gas is as clean as many in the industry suggests. Following the release of that study, the gas industry embarked on a campaign to discredit the study’s authors including lead scientist Robert Howarth. A Google search of Howarth’s name generates a top search result as a link (paid for by the America’s Natural Gas Alliance [ANGA]), which casts doubt on his study. The link takes readers to quotes from John Hanger who says, “Professor Howarth does want the result to which he gets. He is a committed opponent of gas drilling and fracking, a position to which he is entitled in this free country.”

Following ANGA’s ad campaign, the Checks and Balances Project caught up with the Howarth. The scientist had no problem explaining that his conclusion, that more data is needed to find out if gas is on par with coal in terms of emissions, was not out of line. What was out of line, according to Howarth, was the lengths to which pro-gas advocates had gone to ruin his reputation. “It used to be that if you Googled my name… my boring lab site at Cornell University was the top pick up. Now there’s an ad from the gas industry, which has a critique of why my science is wrong. They are trying hard to push back,” said Howarth.

The latest news about gas broke in late June when Urbina filed another report for the Times that quotes an industry insider saying that rhetoric about the supply of gas is comparable to a “Ponzi scheme.” Since this story focused more on economic concerns rather than environmental ones it seemed unlikely Hanger would weigh in. But he did. “Would anyone imagine more sensationalistic narratives than radiation, Ponzi, and Enron?” asked Hanger. He continued, “Consistent with this reporter’s method, today’s article uses often anonymous statements to paint a sensational narrative and leaves out or underplays critical information that is inconvenient to establishing the credibility of the dominant anti-gas narrative.”

These comments led the Checks and Balances Project to go back and review its interview with Hanger from earlier this year. The point was to see if Hanger had weighed in on the economics of drilling for gas in Pennsylvania. It turns out Hanger did – using pro-industry talking points 13 times throughout the conversation.

Once again Hanger sounds a lot like McClendon, except with no soft background music as you can observe in this video.

-“CNG costs about 40& less than gasoline. Natural gas is abundant, American shale basins contain an ocean of natural gas”

During the initial interview, Hanger was asked if he was currently working for the gas industry or if Eckert Seamans was planning to assign Hanger any gas industry clients. At the time Hanger said he had no gas clients but added he wouldn’t rule out working for them. While the industry is not currently paying Hanger, what you hear in his interviews  certainly sounds like he is.

Rhetoric vs. Reality: A closer look at WEA’s top 10

This week, Western Energy Alliance (WEA) released what it claims are the, “Top 10 ways the federal government is preventing onshore oil and natural gas production.” The Checks and Balances Project decided to take a closer look WEA’s list and make sense of the lies put out by the oil and gas industry:

Rhetoric

Reality

Permit Approvals: Whether a small project under fifty wells or a large one with thousands, the Department of the Interior (DOI) is simply not approving oil and natural gas projects. Environmental analysis and project approval must occur before companies can even apply for drilling permits. Normally, this process can take over seven years, but companies are currently experiencing indefinite delays. Loaded-phrasing aside, WEA fails to address the reason behind the DOI’s measured approvals pace. Could it be the lack of personnel tasked to addressing each new request? If so, then the GOP must answer to why it denies the Interior’s attempt to add more jobs and improve project approval efficiency.Do the GOP and WEA prefer the DOI put Americans at risk of another Gulf-like tragedy due to quick, un-vetted processing?
EPA Overreach: Recent EPA expansion imposes excessive, redundant regulatory burdens on oil and natural gas production and introduces high levels of uncertainty. EPA has directly prevented project approvals in the West. EPA overreach is having a chilling effect on energy production, diverting precious time and resources away from energy development and into non‐productive regulatory activities. How can the EPA be overreaching when there are countless complaints about the Halliburton loophole, which eliminated its ability to regulate fracking? There isn’t even mandated baseline testing, which is the only real way for the EPA, or the public, to know if damage is being done.The only “chilling effect” is the amount of drillable land already made available to corporations. The same corporations that may be causing earthquakes in Arkansas and refuse to disclose the chemicals used in toxic fracking fluid.
Permitting: Companies are not getting permits to drill in a timely fashion. The Bureau of Land Management (BLM) conservatively estimates a 206-day average processing time for permits. Depending on the field office, permits can take over 500 days. Companies cannot start to produce without a permit. On March 16, the BLM stated it plans to approve 7,200 permits in 2011 (an increase of over 40 per cent from 2010). And let’s not forget all the approved wells that go unused. BLM granted 4,090 drilling permits in 2010 to oil and gas corporations but they only used 1,480. It seems like good business practice would implore corporations to get production going on those available wells.
Reduced Leasing: Often producers conduct exploratory work on leases and determine that near‐by areas have the right geology for energy production. DOI frequently defers and delays these offset leases needed to develop the existing leasehold. New policies in 2010 added three additional layers of analysis and regulation, on top of the existing five. These bureaucratic delays have led to anemic lease sales, cancelled sales, and indefinite deferrals. Delays in obtaining offset leases prevent production on existing leaseholds. What WEA conveniently fails to mention is that the Salazar policies are clearing the deck for future leasing. Better planning up front is key to avoiding conflicts during the leasing and permitting process. Plus, the General Accounting Office found that in the past administration there was no scientific review of drilling decisions because in some instances industry was playing a “shell game” with the regulatory process. Think rules don’t matter? The Denver Post reported that over a two-and-a-half year time period in Colorado, there were nearly 1,000 spills from drilling, “totaling 5.2 million gallons of drilling liquids and oil.”
Unissued Leases: DOI continues to hold millions of dollars in unissued leases, despite statutory requirements to issue leases within sixty days of receipt of payment from successful bidders. Unissued leases can hold up production on adjacent existing leasehold. Not only has the BLM stated it will hold 33 lease sales before the end of the year, corporations already control 41 million acres of public land. Only 12 million acres are currently in production, leaving 71 percent untapped. But the real game in town is drilling permits where oil and gas corporations already have a green light to drill, but haven’t made any moves towards development. In FY2010, the BLM issued over 4,090 permits to the industry, but it failed to develop the majority of that land and started only 1,480 new wells. If industry cared about our energy prices, why are they stockpiling public land drilling permits?
Stipulations: DOI has cleared much of the backlog of unissued leases in Wyoming, but in many cases has added more restrictions that were not specified at the time of sale. These new restrictions, such as even preventing development from the surface, reduce the value of leases and may render them uneconomic to develop. Much of the prevention of development is, at least partly, based on testimony obtained from everyday citizens who at public comment sessions stated concerns about drilling in their backyards. To date, Bridger-Teton National Forest officials have received 40,000 comments in response to the drilling proposal. Is WEA suggesting the government should ignore American families? The situation sounds eerily similar to what was happening during the time of King George III.
Withdrawal of Leases: One of the first things Secretary Salazar did after taking office was to withdraw 77 leases in Utah. That has been followed by the intent to cancel existing leases in the Wyoming Range, after the government had already completed the leasing contracts. Existing, adjacent leases are affected. Concerns over the Wyoming Range have been raised by residents, two Governors (Freudenthal, Dem. and Mead, Rep.) and the late Sen. Craig Thomas (R-Wyo.) who was consistently voted the most conservative senator in the U.S. Now, with Thomas gone and the natural gas and oil lobby overwhelmingly funding Sen. Barrasso, corporations are gaining some traction for opening the range to drilling.As for Utah, Salazar’s decision saved 130,000 acres near pristine areas such as Nine Mile Canyon, Arches National Park and Dinosaur National Monument. The state’s oil and gas industry remains among the country’s top producers despite losing those leases. In 2010, Utah’s oil and gas production accounted for $4.7 billion in revenue and over 24,000 jobs. Moreover, Bill Barrett Corporation and environmentalists were able to come to the table and agree on a compromise that protected important ecological and archaeological resources while allowing responsible development to move forward in the Nine Mile Canyon area. The simple truth is that there is a way to responsibly develop resources while protecting the environment and public health.
Wild Lands: New policies for wild lands mean that DOI can unilaterally determine that an area is suitable for wilderness protection, and delay for years any development while they reinventory the lands and update land use plans. In the meantime, DOI treats these areas as de facto wilderness, despite lacking legal authority, which prevents production on many existing leases. Americans deserve better than WEA’s spin on Wild Lands. BLM Director Bob Abbey testified that Wild Lands would not affect the development of existing leases and would be incorporated as part of their normal planning process moving forward. BLM lands are multi-use lands and they include managing some lands for the preservation of America’s $730 billion outdoor recreation industry and the hundreds of thousands of jobs and billions of dollars in local tax revenue it brings. No wonder more than 200 local officials and dozens of local outfitters support the policy. And Sec. Salazar has managed to put forth a balanced conservation policy while also overseeing a 40 percent increase in the number of green light drilling permits on BLM lands in 2011.
Climate Change Challenge: Environmental lawsuits have caused DOI to delay leases in Montana while additional environmental analysis and climate change study is done. Rather than settling these lawsuits as in the past, DOI should stand by its analysis that showed no significant impact to climate change from leasing in Montana. The Montana legislature already tried and failed to outlaw the use of Climate Change as a mitigating policy for any policy.In a bit of contradictory language, WEA says that it wants lengthy lawsuits “rather than settling these lawsuits as in the past.” This is just another example of the industry, making billions of dollars in profits, wanting policy both ways so it can sit on assets (land leased and permitted for drilling).
Ad Hoc Requirements: BLM field offices are arbitrarily adding new requirements to permits, and requiring producers to conduct new and redundant analysis without a basis in law. These arbitrary delays in the field are another means of “death by a thousand cuts” that prevent energy production, job creation, and economic development. Is the industry really in such dire straits; do they need a bailout? In January, ExxonMobil reported record profits to the tune of $9.3 billion for just the the fourth quarter. ConocoPhillips also reported an increase in revenue demonstrating an industry-wide profit trend for the end of 2010.And according to the BLM, the gas and oil industry generated over 5,400 jobs in Montana, 24,000 in Utah and 93,000 in Wyoming.