Gas Industry Spending: Or, How to Win the Race to the Bottom

Over the last few years, television commercials extolling the virtues of hydrofracking while conveniently papering over the degradation it causes have become pretty common fare in Pennsyslvania and western New York.  The imagery is predictable — gorgeous meadows and untarnished countryside, attractive young couples, both happily employed by the same benevolent Oil & Gas company (focus groups loved the man who looks like the lead singer for Megadeath with a haircut) — you get the picture.  The message conveyed by this young couple has become a mantra in the industry:  drilling is good for their family, good for the surrounding community, good for the environment, good for the economy, good for Americans.  The industry’s strategy is apparently to repeat this rosy view of hydrofracking until the public forgets all of the problems it can cause, like toxic air pollution, groundwater contamination, and billions of gallons of hazardous wastewater.

Gas industry spending on advertising and lobbying is running high in New York.  The New York Times reports that Chesapeake Energy has spent $1.6 million in NY in the past three years.  In the three years prior, before the regulatory process for drilling in New York ramped up, the company spent only $40,000. At this juncture, the New York State Department of Environmental Conservation (DEC) is deciding how to regulate high-volume hydrofracking before it issues its first permit.  Accordingly, Chesapeake has hired 11 lobbyists (come to Albany and I’ll introduce you to them), and 3 private companies to spread the good news about fracking.  Since 2010, the gas industry and its allies have contributed $430,000 to candidates and political parties in New York and of this, $106,000 went to Gov. Cuomo.

That’s just political contributions. The Times puts the total amount of money for all expenditures by the industry and its allies at $3.2 million since the beginning of 2010. That’s compared to environmentalists’ spending of $725,000. The disparity is magnified than these numbers would suggest when you consider that most environmental groups work on a slew of issues in Albany, so their outlay is spread thin across many campaigns.  The gas gang, on the other hand, has used its money to create white-hot concentration on one thing – getting permits from the DEC to drill for gas in the Marcellus Shale.

It’s not a newsflash that the oil and gas industry has major political muscle anywhere on the globe.  This industry won a critical exemption from the Safe Water Drinking Act in the Bush ‘43 years (just one in a long history of regulatory and tax advantages gained by the industry – from the ‘40s, they got to write-off taxes paid to foreign governments, then not pay the IRS. They also overthrew the democratically-elected government of Iran in 1953, ushering in the Shah, and generally making a fairly famous mess of it there but I digress).  Under Bush the Younger, Congress passed the 2005 Energy Policy Act which (thanks to V.P. Cheney, former chief executive of Halliburton) contains what has become known as the “Halliburton Loophole,” which exempts hydraulic fracturing from the Safe Drinking Water Act.  The Safe Drinking Water Act applies to “underground injections,” which is the very definition of hydraulic fracturing.  And yet somehow fracking is exempt.  That is par for the course for the industry:  by and large, they get what they want, even if it means flagrant loopholes and a tilted playing field. 

Last spring, Common Cause, in its report Deep Drilling, Deep Pockets, says that Chesapeake spent $1.1 million in 2010 alone on advertising and lobbying in New York State (with $870,000 spent on advertising).  One goal of the ads is to soften resistance to the coming of hydrofracking to New York’s southern tier, using pleasant landscape images as surrogates for actual scenes of heavy industrial development.  The industry often shrewdly uses substitutes, third-party validators and front groups to make their case.  In Dimock, Pennsylvania, Cabot Oil & Gas contaminated an aquifer due to shoddy drilling practices, and then convinced members of the town to form the group “Enough Already” to protest against building a water pipeline to bring in freshwater to the affected families.  As if contaminating groundwater is just fine—but providing clean water for affected families is a nuisance.

In New York, the industry’s use of third-party proxies in particular lobbying efforts have been utilized to defeat a bill in the NYS legislature which would have created a moratorium on fracking from the summer of ’10 to the summer of ’11.  In Albany, the Business Council of New York State and the state chapter of the National Federation of Independent Businesses were busy in the halls of the Legislative Office Building (LOB) bashing the moratorium. Better for business groups, especially independent ones, to make the case for fracking. This fall another organization, Clean Growth Now, jump-started a campaign for “responsible gas drilling.”  The spokesman Michael Elmendorf, a long-time Pataki functionary (who also got in on the gas action oddly around the same time), got so caught up in his fracking mojo that he slammed enviro opposition to fracking as including an “occasional dose of hysteria.”  CGN calls itself a grass roots effort and claims to be a moderate voice between the gas industry and environmentalists.  Elmendorf’s rhetoric suggests he has forgotten they billed themselves as a “middle way.”  We should probably not be surprised that the group includes no environmentalists.  CGN members include the Business Council of New York State and the National Federation of Independent Businesses (the same groups lobbying against the moratorium).  

The big cahuna front group and main drilling organization in Pennsylvania is the Marcellus Shale Coalition. MSC has recently made a few feints across the border into New York and since fracking in PA has evolved more dramatically than in NY, it makes sense to see what the industry may have in store for us. The semiotics of the name suggests that this is at least a partly diverse entity with real people in it—if not, then why not just name yourself the Gas Industry Coalition to Drill in the Marcellus Shale? Which, with virtually no investigation, one finds is the case – MSC sports the usual suspects like Chesapeake, Consol Energy (“our future is the Marcellus Shale”), XTO (aka Exxon), Williams Companies (a big New York lobbying spender), Cabot Oil and Gas (talk about messes), Hess and many, many more.

In the summer of ’10, MSC hired Tom Ridge, former Governor of Pennsylvania and Czar of Bush 43’s Homeland Security Administration (who he later trashed). For a little more than a year (and $900,000) Ridge, who didn’t lobby for the gas industry (except when he did) worked the local and national media putting a respected, familiar face on an industrial process which had launched an international movement in its opposition.  He scored a multitude of press clips, hours of TV and internet face time and beaucoup bucks to push for light regulation of hydrofracking and extra-lite taxing of fracked gas revenues.  In his interview with Steve Colbert, he repeated the industry lie that no instances of contamination have been linked to fracking.  Indeed, Ridge dismisses many of the concerns about the environmental and public health impact of Marcellus shale drilling as “phony hysteria.”  But Tom Ridge is a piker compared to another Tom, the current PA Governor, Corbett.

In PA, the gas industry spent $3.5 million in lobbying and ads in 2010.  MSC spent $1.1 million, Chesapeake nearly $400,000.  Corbett over several years received $1.6 million while all candidates and parties in the state got $6 million from 2001 to 2010. These numbers may wind up as guestimates—Corbett, because of the budget crunch, ordered his Department of State to stop entering contribution reports filed by paper, so only the electronic donations are counted.

On any level, the current Gov. Tom is a good investment for the gas industry. Corbett’s main legislation regarding fracking would impose a 1% severance tax on gas revenues and drastically restrain local communities from regulating fracking through traditional zoning powers (the issue of home rule over fracking is currently being litigated in New York).  This bill continues to make its way through the PA legislature which is still in session at year’s end.  Consol Energy (a member of MSC) supports this bill so much that it paid for a Super Bowl junket for PA Senate President Pro Tempore Scarnati and another state senator.  Both support Corbett’s industry-friendly bill.

So we can expect even larger campaign expenditures, more ads, more Bush-era apparatchiks as the fracking fight escalates in New York.  It may be even more exciting than that as the industry, ever-innovative, searches for the game changer.  That may be the use of “psy-ops,” or psychological warfare —a counter-insurgency military tactic —which the industry has employed to disarm local opposition to fracking.  At an industry convention in Houston last month, Matt Pitzarella of Range Resources (MSC member) told the gas troops that “we have several psy ops folks working for us… very much has that understanding of psy-ops in the Army and Mideast been helpful in Pennsylvania.” Not to be outdone, at the same event, Matt Carmichael of Anadarko (MSC member) suggested that his oil/gas colleagues “download the US Army slash Marine Corps Counterinsurgency manual because we’re dealing with an insurgency.”

Not to worry. Chris Tucker of Energy in Depth told CNBC “it’s a joke.” No doubt. Energy in Depth knows that Anadarko meant because EID is a coalition led by the Independent Petroleum Association of America.  On that worthy board are Conoco/Phillips, Marathon Oil, CNX Gas, Chesapeake, and the psy-ops farm Anadarko. 

More than ever, now is the time for us to follow the prodigious amounts of money flowing into Albany from the Oil & Gas industry.  The New York legislature is entertaining a bill that would require the uniform treatment of hazardous waste.  This would close a loophole in federal and state law which exempts the Oil & Gas industry from the same waste disposal regulations that apply to every other industry, despite the fact that fracking waste is contaminated with known carcinogens from the chemical additives as well as high concentrations of sodium, chloride, bromide, and other inorganic constituents, such as arsenic, barium, other heavy metals, total dissolved solids (TDS), and naturally occurring radioactive material (“NORM”), that significantly exceed safe drinking-water standards.  Assuming one so-called “frack job” occurs in the entire life of every well in the state, hydraulic fracturing operations would ultimately generate between 18 and 71 billion gallons of wastewater over the next thirty years.  If each well is “fracked” twice over its thirty-year life, we will see between 36 and 142 billion gallons of hydraulic fracturing wastewater generated in New York.  This bill passed the Assembly and was introduced in the Senate last legislative session.  We are hoping for the reintroduction and immediate passage of this bill in order to handle the billions of gallons of hazardous wastewater that fracking New York would generate.

How much does it cost to scuttle a good law?  That’s something else we’ll learn next session. 

This blog was co-authored by Legal Fellow John Wood

About the Authors

Rich Schrader

New York Political Director, NY Regional, Healthy People & Thriving Communities Program

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