Powerful Friends and Cozy Relationships Helped Cheniere Cut Through Regulation

How They Saved Cheniere from Disaster to Dominate US LNG Exporting

Spencer Abraham, John Deutch, Vicky Bailey, Neil Bush

Five years ago, Cheniere Energy Inc. was losing tens of millions of dollars a quarter and slashing its workforce in half, as crippling debt threatened to force it into bankruptcy. Today it’s the undisputed leader in the nation’s promising new energy sector: exporting liquefied natural gas, or LNG. That remarkable turnaround followed its industry-leading decision in 2010 to reverse course and export, rather than import, natural gas.

Cheniere’s success in executing that costly and risky switch is a direct result of its ability to obtain a unique regulatory status. Federal energy regulators have awarded the company a combination of federal permits — so far withheld from all 20 competitors seeking similar treatment — that have worked like sprinkled pixie dust, attracting major customers and investors to Cheniere and giving wing to its stock. Continue reading Powerful Friends and Cozy Relationships Helped Cheniere Cut Through Regulation

Frackademia – Cornell University – A Case Study

Days after Cornell President David Skorton declared in an opinion column for Forbes magazine that fracking was a nationwide fait accompliand that Cornell was eager to partner with industry to analyze it, a Cornell undergraduate shot back with a zinger. Writing in Cornell’s student newspaper, Anna-Lisa Castle said that the president’s September 24 piece “reads as a bid for funding in exchange for results that the industry — and its high-power allies — would find favorable. Do we want to be part of the justification process for a method of natural gas extraction that threatens to poison our water, clutter our country roads and contribute hugely to climate change? And if so, what’s our price?”

David Skorton

By late summer of 2012, Skorton was feeling mounting pressure to tack back into the middle of the channel of the national debate over fracking. While Cornell was finding itself repeatedly identified with two controversial anti-fracking professors, big money – and, many would argue, common sense – was moving in another direction.

So Skorton turned to Forbes.

“We cannot put this genie back in the bottle. Fracking is already being carried out across the country,” Skorton and Cornell administrator Glenn Altschuler wrote. “With natural gas supplies plentiful for now and prices relatively low, we have time to make sound decisions about our shale gas resources. In creative partnership with government and industry, universities can help make sure we get it right.”

Skorton’s column appeared four weeks after New York Mayor Michael Bloomberg wrote his own opinion piece in The Washington Post(with fracking pioneer George Mitchell) under the headline, “Fracking is Too Important to Foul Up.” Bloomberg, who had traveled to Ithaca, N.Y. in May to deliver Cornell’s commencement address, wrote that his foundation would “support organizations that seek to work with states and industries to develop common-sense regulations.” In August, Bloomberg pledged $6 million to the Environmental Defense Fund for study on natural gas, adding to the tens of millions he’d already committed to cleaning up the nation’s dirty coal plants. And the energy industry was pouring untold millions into academia.

Glenn Altschuler

So the money was out there – but so was Cornell’s image problem.

Cornell professors Robert Howarth and Anthony Ingraffea had infuriated the oil and gas industry by arguing that the greenhouse gas effects of natural gas might be even greater than coal’s. The key, they wrote in April 2011, was methane gas leaks from the natural gas production and delivery cycle. In his Forbes article, Skorton never named Howarth or Ingraffea, but he made it clear the high-profile duo wasn’t all his school had to offer: “At Cornell, for example, researchers have reached opposite conclusions on whether natural gas from fracking would be better or worse for climate change.”

The other side of the argument was carried mainly by Lawrence Cathles, a professor of earth and atmospheric science, who wrote a 2012 rebuttal to the seminal study Howarth and Ingraffea published in 2011. The three skirmished for months, mostly over assumptions on how to calculate methane leaks.

While the industry called the Howarth-Ingraffea study “garbage science,” recent measurements at gas production sites in Colorado and Utah by scientists affiliated with the National Oceanic and Atmospheric Administration tend to support its thesis. The industry chose to rally behind Cathles, a signer of the Global Warming Petition Project, which states: “There is no convincing scientific evidence that human release of carbon dioxide, methane or other greenhouse gases is causing or will, in the foreseeable future, cause catastrophic heating of the Earth’s atmosphere and disruption of the Earth’s climate.

Asked last Oct. 19 at a gathering of environmental reporters in Texas to clarify his position on the petition, Cathles stammered: “The petition I signed said there was not … that the issue of climate change was not settled science and that there was not a risk, a serious risk, of catastrophic climate change; and I think both those of those are right.”

Cathles’ position as a Howarth-Ingraffea-denier made him an ideal candidate to serve Cornell’s move to fracking center.

Cornell University

So in late October, the Cornell Institute for Public Affairs, or CIPA, picked Cathles as a panelist for a New York City fracking forum it scheduled for Nov. 2. The promotional flyer aimed at the invited group of grad students, alumni and others, said:

“This panel will seek to debunk the misinformation surrounding this highly charged and politicized issue by presenting a thoughtful and reasoned discussion on the key business, science and policy aspects of hydraulic fracturing and to highlight possible productive solutions for business, communities and government.”

The other panelists were Nancy Schmitt, president of Taum Sauk Investments LLC, Nick Schoonover, chairman of the Tioga County Landowners Group, and Kate Sinding, an attorney for the Natural Resources Defense Council. Local politicians in Ithaca and surrounding Tompkins County caught wind of the panel and expressed alarm that it would feature three ardent fracking advocates and one attorney from a moderately anti-fracking NGO.

Schoonover represents landowners with gas leases, and he has characterized opponents of drilling as obstructionists and extremists.

Cathles and Schmitt appear regularly on the industry-funded website Energy-in-Depth, which serves as a vehicle for attacking figures who question the pro-fracking gospel. Howarth and Ingraffea are repeated targets.

Schmitt had written a 2011 column in an energy trade magazine warning of the dangerous and growing power of anti-frackers. In 2012 she wrote for EID: “The desperate search for a smoking gun to shut down shale development has reached a new level of lunacy. As if the combined fears of rural industrialization, rampant air and water pollution, and exposure to cancer causing chemicals were not enough, now it is earthquakes!”

Barbara Lifton, Ithaca’s representative in the State Assembly, and Martha Robertson, chair of the Tompkins County Legislature, voiced concerns to Thomas J. O’Toole, executive director of CIPA, about the panel’s apparent lack of balance. Skorton was copied on much of the email correspondence.

On Oct. 24, O’Toole announced in an email copied to Skorton, Lifton, Robertson and others that he’d canceled the panel. At that point, Hurricane Sandy was building power in the Caribbean. By Oct. 26 it had reached Bermuda, and by Oct. 30 it was ravaging New York City.

The following day, Nov. 1, Bloomberg Business magazine published an iconic red cover that screamed: “It’s Global Warming, Stupid.” Bloomberg himself wrote an editorial that day endorsing Barack Obama for re-election as president, citing global warming as the reason he was passing on Republican candidate Mitt Romney.

The Cornell panel – featuring climate change denier Cathles – was to have been held the following day, Nov. 2. The weather no doubt would have forced postponement if it hadn’t already been nixed for other reasons.

O’Toole of CIPA explained in a Dec. 7 email to DCBureau that the panel had been selected by “a working group of staff, faculty, and graduate students.” He said CIPA needed more time to develop a comprehensive agenda for airing multiple views on fracking.

Commenting on the flyer for cancelled Nov. 2 event, he said: “The use of the term ‘debunking’ was, in hindsight, unfortunate, because it activated the emotions of those who were interested in this issue (on both ‘sides’). As I understand it, the term was meant to indicate that we were seeking to deflate the highly-politicized rhetoric on the issue (from those in favor and those opposed to hydraulic fracturing).”

Pro-Industry Interests Dominate N.C. Commission Writing Hydraulic Fracturing Regulations

Shale Gas, North Carolina

Two of 15 members of a panel set up to write the regulations for hydraulic fracturing in North Carolina have potential conflicts of interest, according to disclosure forms and land records. Both members were assigned to seats that were supposed to go to environmentalists. And the chairman of the state Mining and Energy Commission says he intends to move swiftly to draft regulations and likens the risks of hydraulic fracturing, also known as fracking, to the chances of getting hit in the head with a meteorite.

All of this has environmentalists wondering how impartial the panel will be.

“We were well aware that most of these appointees…were folks that were pro-fracking,” Hope Taylor, executive director of Clean Water for North Carolina says. “Many of them have been overtly, outspokenly pro-drilling.” Continue reading Pro-Industry Interests Dominate N.C. Commission Writing Hydraulic Fracturing Regulations

N.Y. Gov. Andrew Cuomo Sidesteps Natural Gas Hydrofracking Controversies

ALBANY, N.Y. — Ignoring taunts from anti-hydrofracking protestors marching outside, New York Gov. Andrew Cuomo delivered a nearly hour-long State of the State address to lawmakers Jan. 4 without mentioning the hot-button gas drilling technique.

In his speech, the governor skipped over a section of his prepared remarks that had promised to deliver in 2012 both the state’s final rules for new gas well permits and recommendations from his own gas drilling advisory panel.

Asked about the omission, Cuomo spokesman Matt Wing said of his boss’ hydrofracking policy: “We are still waiting for the facts … We base everything on facts.”

Continue reading N.Y. Gov. Andrew Cuomo Sidesteps Natural Gas Hydrofracking Controversies