How the Fracking Industry Avoids Paying Royalties to Landowners
Don Feusner ran dairy cattle on his 370-acre slice of northern Pennsylvania until he could no longer turn a profit by farming. Then, at age 60, he sold all but a few Angus and aimed for a comfortable retirement on money from drilling his land for natural gas instead.
It seemed promising. Two wells drilled on his lease hit as sweet a spot as the Marcellus shale could offer—tens of millions of cubic feet of natural gas gushed forth. Last December, he received a check for $8,506 for a month’s share of the gas.
Then one day in April, Feusner ripped open his royalty envelope to find that while his wells were still producing the same amount of gas, the gusher of cash had slowed. His eyes cascaded down the page to his monthly balance at the bottom: $1,690.
Chesapeake Energy, the company that drilled his wells, was withholding almost 90 percent of Feusner’s share of the income to cover unspecified “gathering” expenses and it wasn’t explaining why.
“They said you’re going to be a millionaire in a couple of years, but none of that has happened,” Feusner said. “I guess we’re expected to just take whatever they want to give us.”
Like every landowner who signs a lease agreement to allow a drilling company to take resources off his land, Feusner is owed a cut of what is produced, called a royalty.
In 1982, in a landmark effort to keep people from being fleeced by the oil industry, the federal government passed a law establishing that royalty payments to landowners would be no less than 12.5 percent of the oil and gas sales from their leases.
From Pennsylvania to North Dakota, a powerful argument for allowing extensive new drilling has been that royalty payments would enrich local landowners, lifting the economies of heartland and rural America. The boom was also supposed to fill the government’s coffers, since roughly 30 percent of the nation’s drilling takes place on federal land.
Over the last decade, an untold number of leases were signed, and hundreds of thousands of wells have been sunk into new energy deposits across the country.
But manipulation of costs and other data by oil companies is keeping billions of dollars in royalties out of the hands of private and government landholders, an investigation by ProPublica has found.
An analysis of lease agreements, government documents and thousands of pages of court records shows that such underpayments are widespread. Thousands of landowners like Feusner are receiving far less than they expected based on the sales value of gas or oil produced on their property. In some cases, they are being paid virtually nothing at all.
In many cases, lawyers and auditors who specialize in production accounting tell ProPublica energy companies are using complex accounting and business arrangements to skim profits off the sale of resources and increase the expenses charged to landowners.
Deducting expenses is itself controversial and debated as unfair among landowners, but it is allowable under many leases, some of which were signed without landowners fully understanding their implications.
But some companies deduct expenses for transporting and processing natural gas, even when leases contain clauses explicitly prohibiting such deductions. In other cases, according to court files and documents obtained by ProPublica, they withhold money without explanation for other, unauthorized expenses and without telling landowners that the money is being withheld.
Significant amounts of fuel are never sold at all—companies use it themselves to power equipment that processes gas, sometimes at facilities far away from the land on which it was drilled. In Oklahoma, Chesapeake deducted marketing fees from payments to a landowner—a joint owner in the well—even though the fees went to its own subsidiary, a pipeline company called Chesapeake Energy Marketing. The landowner alleged the fees had been disguised in the form of lower sales prices. A court ruled that the company was entitled to charge the fees.
Costs such as these are normally only documented in private transactions between energy companies, and are almost never detailed to landowners.
“To find out how the calculation is done, you may well have to file a lawsuit and get it through discovery,” said Owen Anderson, the Eugene Kuntz Chair in Oil, Gas & Natural Resources at the University of Oklahoma College of Law, and an expert on royalty disputes. “I’m not aware of any state that requires that level of disclosure.”
To keep royalties low, companies sometimes set up subsidiaries or limited partnerships to which they sell oil and gas at reduced prices, only to recoup the full value of the resources when their subsidiaries resell it. Royalty payments are usually based on the initial transaction.
In other cases, companies have bartered for services off the books, hiding the full value of resources from landowners. In a 2003 case in Louisiana, for example, Kerr McGee, now owned by Anadarko Petroleum, sold its oil for a fraction of its value—and paid royalties to the government on the discounted amount—in a trade arrangement for marketing services that were never accounted for on its cash flow statements. The federal government sued, and won.
The government has an arsenal of tools to combat royalty underpayment. The Department of Interior has rules governing what deductions are allowable. It also employs an auditing agency that, while far from perfect, has uncovered more than a dozen instances in which drillers were “willful” in deceiving the government on royalty payments just since 2011. A spokesman for the Department of Interior’s Office of Natural Resources Revenue says that over the last three decades, the government has recouped more than $4 billion in unpaid fees from such cases.
There are few such protective mechanisms for private landowners, though, who enter into agreements without regulatory oversight and must pay to audit or challenge energy companies out of their own pockets.
ProPublica made several attempts to contact Chesapeake Energy for this article. The company declined, via email, to answer any questions regarding royalties, and then did not respond to detailed sets of questions submitted afterward. The leading industry trade group, the American Petroleum Institute, also declined to comment on landowners’ allegations of underpayments, saying that individual companies would need to respond to specific claims.
Anderson acknowledged that many landowners enter into contracts without understanding their implications and said it was up to them to do due diligence before signing agreements with oil and gas companies.
“The duty of the corporation is to make money for shareholders,” Anderson said. “Every penny that a corporation can save on royalties is a penny of profit for shareholders, so why shouldn’t they try to save every penny that they can on payments to royalty owners?”
Gas flows up through a well head on Feusner’s property, makes a couple of turns and passes a meter that measures its volume. Then it flows into larger pipes fed by multiple pipelines in a process the industry calls “gathering.” Together, the mixed gases might get compressed or processed to improve the gas quality for final sale, before feeding into a larger network of pipelines that extends for hundreds of miles to an end point, where the gas is sold and ultimately distributed to consumers.
Each section of pipeline is owned and managed by a different company. These companies buy the gas from Chesapeake, but have no accountability to Feusner. They operate under minimal regulatory oversight, and have sales contracts with the well operator, in this case Chesapeake, with terms that are private. Until Chesapeake sold its pipeline company last winter, the pipelines were owned by its own subsidiaries.
As in many royalty disputes, it is not clear exactly which point of sale is the one on which Feusner’s payments should be based—the last sale onto the open market or earlier changes in custody. It’s equally unclear whether the expenses being charged to Feusner are incurred before or after that point of sale, or what processes, exactly, fall under the term “gathering.” Definitions of that term vary, depending on who is asked. In an email, a spokesperson for Chesapeake declined to say how the company defines gathering.
Making matters more complicated, the rights to the gas itself are often split into shares, sometimes among as many as a half-dozen companies, and are frequently traded. Feusner originally signed a lease with a small drilling company, which sold the rights to the lease to Chesapeake. Chesapeake sold a share of its rights in the lease to a Norwegian company, Statoil, which now owns about a one-third interest in the gas produced from Feusner’s property.
Chesapeake and Statoil pay him royalties and account for expenses separately. Statoil does not deduct any expenses in calculating Feusner’s royalty payments, possibly because it has a different interpretation of what’s allowed.
“Statoil’s policy is to carefully look at each individual lease, and to take post-production deductions only where the lease and the law allow for it,” a company spokesman wrote in an email. “We take our production in kind from Chesapeake and we have no input into how they interpret the leases.”
Once the gas is produced, a host of opaque transactions influence how sales are accounted for and proceeds are allocated to everyone entitled to a slice. The chain of custody and division of shares is so complex that even the country’s best forensic accountants struggle to make sense of energy companies’ books.
Feusner’s lease does not give him the right to review Chesapeake’s contracts with its partners, or to verify the sales figures that the company reports to him. Pennsylvania—though it recently passed a law requiring that the total amount of deductions be listed on royalty statements—has no laws dictating at what point a sale price needs to be set, and what expenses are legitimate.
Concerns about royalties have begun to attract the attention of state legislators, who held a hearing on the issue in June. Some have acknowledged a need to clarify minimum royalty guarantees in the state, but so far, that hasn’t happened.
“If you have a system that is not transparent from wellhead to burner tip and you hide behind confidentiality, then you have something to hide,” Jerry Simmons, executive director of the National Association of Royalty Owners (NARO), the premier organization representing private landowners in the U.S., told ProPublica in a 2009 interview. Simmons said recently that his views had not changed, but declined to be interviewed again. “The idea that regulatory agencies don’t know the volume of gas being produced in this country is absurd.”
Because so many disputes come down to interpretations of contract language, companies often look to courts for clarification. Not many royalty cases have been argued in Pennsylvania so far, but in 2010, a landmark decision, Kilmer v. Elexco Land Services, set out that the state’s minimum royalty guarantee applied to revenues before expenses were calculated, and that, when allowed by leases, energy companies were free to charge back deductions against those royalties.
Since then, Pennsylvania landowners say, Chesapeake has been making larger deductions from their checks. (The company did not respond to questions about this.) In April, Feusner’s effective royalty rate on the gas sold by Chesapeake was less than 1 percent.
Paul Sidorek is an accountant representing some 60 northeastern Pennsylvania landowners who receive royalty income from drilling. He’s also a landowner himself—in 2009, he leased 145 acres, and that lease was eventually sold to Chesapeake. Well aware of the troubles encountered by others, Sidorek negotiated a 20 percent royalty and made sure his lease said explicitly that no expenses could be deducted from the sale of the gas produced on his property.
Yet now, Sidorek says, Chesapeake is deducting as much as 30 percent from his royalties, attributing it to “gathering” and “third party” expenses, an amount that adds up to some $40,000 a year.
“Now that the royalties are flowing, some people just count it as a blessing and say we don’t care what Chesapeake does, it’s money we wouldn’t have had before,” Sidorek said. But he’s filed a lawsuit. “I figure I could give my grandson a first-class education for what Chesapeake is deducting that they are not entitled to, so I’m taking it on.”
Landowners, lawyers, legislators and even some energy industry groups say Chesapeake stands out for its confusing accounting and tendency to deduct the most expenses from landowners’ royalty checks in Pennsylvania.
“They’ve had a culture of doing cutthroat business,” said Jackie Root, president of Pennsylvania’s chapter of the National Association of Royalty Owners.
Chesapeake did not respond to questions on whether its approach differs from that of other companies.
Root and others report good working relationships with other companies operating wells in Pennsylvania, and say that deductions—if they occur at all—are modest. Statoil, which has an interest in a number of Chesapeake wells, does not deduct any expenses on its share of many of the same leases. In an email from a spokesperson, the company said “We always seek to deal with our lease holders in a fair manner.”
Several landowners said that not only do deductions vary between companies using the same gas “gathering” network—sales prices do as well.
On Sidorek’s royalty statements, for example, Chesapeake and Statoil disclose substantially different sales prices for the same gas moved through the same system.
“If Statoil can consistently sell the gas for $.25 more, and Chesapeake claims it’s the premier producer in the country, then why the hell can’t they get the same price Statoil does for the same gas on the same day?” Sidorek wondered.
He thinks Chesapeake was giving a discount to a pipeline company it used to own. Chesapeake did not respond to questions about the price discrepancy.
Chesapeake may be the focus of landowner ire in Pennsylvania, but across the country thousands of landowners have filed similar complaints against many oil and gas producers.
In dozens of class actions reviewed by ProPublica, landowners have alleged they cannot make sense of the expenses deducted from their payments or that companies are hiding charges
Publicly traded oil and gas companies also have disclosed settlements and judgments related to royalty disputes that, collectively, add up to billions of dollars.
In 2003, a jury found that Exxon had defrauded the state of Alabama out of royalty payments and ordered the company to pay nearly $103 million in back royalties and interest, plus $11.8 billion in punitive damages. (The punitive damages were reduced to $3.5 billion on appeal, and then eliminated by the state supreme court in 2007.)
In 2007, a jury ordered a Chesapeake subsidiary to pay $404 million, including $270 million in punitive damages, for cheating a class of leaseholders in West Virginia. In 2010, Shell was hit with a $66 million judgment, including $52 million in punitive fines, after a jury decided the company had hidden a prolific well and then intentionally misled landowners when they sought royalties. The judgment was upheld on appeal.
Since the language of individual lease agreements vary widely, and some date back nearly 100 years, many of the disagreements about deductions boil down to differing interpretations of the language in the contract.
In Pennsylvania, however, courts have set few precedents for how leases should be read and substantial hurdles stand in the way of landowners interested in bringing cases.
Pennsylvania attorneys say many of their clients’ leases do not allow landowners to audit gas companies to verify their accounting. Even landowners allowed to conduct such audits could have to shell out tens of thousands of dollars to do so.
When audits turn up discrepancies, attorneys say, many Pennsylvania leases require landowners to submit to arbitration—another exhaustive process that can cost tens of thousands of dollars. Arbitration clauses can also make it more difficult for landowners to join class action suits in which individuals can pool their resources and gain enough leverage to take on the industry.
“They basically are daring you to sue them,” said Aaron Hovan, an attorney in Tunkhannock, PA, representing landowners who have royalty concerns. “And you need to have a really good case to go through all of that, and then you could definitely lose.”
All of these hurdles have to be cleared within Pennsylvania’s four-year statute of limitations. Landowners who realize too late that they have been underpaid for years—or who inherit a lease from an ailing parent who never bothered to check their statements—are simply out of luck.
Even if a gas company were found liable for underpaying royalties in Pennsylvania, it would have little to fear. It would owe only the amount it should have paid in the first place; unlike Oklahoma and other states, Pennsylvania law does not allow for any additional interest on unpaid royalties and sets a very high bar for winning punitive penalties.
“They just wait to see who challenges them, they keep what they keep, they give up what they lose,” said Root, the NARO chapter president. “It may just be part of their business decision to do it this way.”
Visit EcoWatch’s FRACKING page for more related news on this topic.
A new briefing paper details how Dominion Energy's proposed Atlantic Coast Pipeline would involve the blasting, excavation and removal of mountaintops along 38 miles of Appalachian ridgelines as part of the construction.
The planned 600-mile interstate
pipeline will carry 1.44 billion cubic feet per day of fracked gas from West Virginia to North Carolina, cutting through forests, critical animal habitats and pristine mountains that Dominion would be required to "reduce" between 10 to 60 feet, according to the paper released Thursday by the non-profit Chesapeake Climate Action Network.
The paper cites data from the draft environmental impact statement prepared by the Federal Energy Regulatory Council (FERC) as well as information supplied to FERC by Dominion. It also compiles information from Geographic Information System (GIS) mapping software and independent reports prepared by engineers and soil scientists.
"In light of the discovery that the Atlantic Coast Pipeline will cause 10 to 60 feet of mountaintops to be removed from 38 miles of Appalachian ridges, there is nothing left to debate," said Mike Tidwell, executive director of the Chesapeake Climate Action Network.
"Dominion's pipeline will cause irrevocable harm to the region's environmental resources. With Clean Water Act certifications pending in both Virginia and West Virginia, we call on Virginia Governor Terry McAuliffe and West Virginia Governor Jim Justice to reject this destructive pipeline."
Dominion, headquartered in Richmond, Virginia, is one of the nation's largest producers and transporters of energy. The developer promises that the Atlantic Coast Pipeline will have "minimal environmental impact" and that "best-in-class restoration and mitigation techniques will be used to protect native species, preserve wetland and water resources, control erosion and minimize emissions." Duke Energy, Piedmont Natural Gas and Southern Company Gas also have a stake in the project.
Environmentalists and other opponents argue that the pipeline will have adverse effects on sensitive habitats, reduce property values and introduce dangerous precedents for the seizure of private property through eminent domain.
Joyce Burton, a board member of Friends of Nelson County, expressed fears that Dominion's plan to build the pipeline on steep and landslide-prone Appalachian slopes could be catastrophic.
"Many of the slopes along the right of way are significantly steeper than a black diamond ski slope," Burton said.
"Both FERC and Dominion concede that constructing pipelines on these steep slopes can increase the potential for landslides, yet they still have not demonstrated how they propose to protect us from this risk. With all of this, it is clear that this pipeline is a recipe for disaster."
Opponents of the pipeline are demanding more transparency from the company.
Ben Luckett, a staff attorney at Appalachian Mountain Advocates, said it was "astounding" that FERC has not required Dominion to produce a plan for dealing with the millions of cubic yards of excess rock and soil that will result from cutting down the 38 miles of ridgetop for the pipeline.
"We know from experience with mountaintop removal coal mining that the disposal of this material has devastating impacts on the headwater streams that are the lifeblood our rivers and lakes," Luckett added.
"FERC and Dominion's complete failure to address this issue creates a significant risk that the excess material will ultimately end up in our waterways, smothering aquatic life and otherwise degrading water quality. Without an in-depth analysis of exactly how much spoil will be created and how it can be safely disposed of, the states cannot possibly certify that this pipeline project will comply with the Clean Water Act."
Dan Shaffer, a spatial analyst with the Dominion Pipeline Monitoring Coalition, said there are too many risks involved with the project.
"Even with Dominion's refusal to provide the public with adequate information, the situation is clear: The proposed construction plan will have massive impacts to scenic vistas, terrestrial and aquatic habitats, and potentially to worker and resident safety," Shaffer said.
"There is no way around it. It's a bad route, a bad plan and should never have been seriously considered."
Here are some of the new paper's key findings:
• Approximately 38 miles of mountains in West Virginia and Virginia will see 10 feet or more of their ridgetops removed in order to build the Atlantic Coast Pipeline.
• This figure includes 19 miles in West Virginia and 19 miles in Virginia.
• The majority of these mountains would be flattened by 10 to 20 feet, with some places along the route requiring the removal of 60 feet or more of ridgetop.
• Building the ACP on top of these mountains will result in a tremendous quantity of excess material, known to those familiar with mountaintop removal as "overburden."
• Dominion would likely need to dispose of 2.47 million cubic yards of overburden, from just these 38 miles alone.
• Standard-size, fully loaded dump trucks would need to take at least 247,000 trips to haul this material away from the construction site.
The new EO will direct U.S. Interior Sec. Ryan Zinke to review the current offshore drilling plans, which limits most drilling to parts of the Gulf of Mexico and Alaska's Cook Inlet, and reexamine opening parts of the Atlantic and Arctic oceans to drilling. The EO will also roll back President Obama's permanent ban on drilling in the Arctic, issued in the last full month of his presidency. Zinke cautioned reporters that implementation of the EO will be "a multi-year effort," and several groups have pledged lawsuits to further slow down the process.
"Interior Sec. Ryan Zinke is dead wrong," said Greenpeace USA senior climate and energy campaigner Diana Best.
"Renewable energy already has us on the right track to energy independence, and opening new areas to offshore oil and gas drilling will lock us into decades of harmful pollution, devastating spills like the Deepwater Horizon tragedy and a fossil fuel economy with no future. Scientific consensus is that the vast majority of known fossil fuel reserves—including the oil and gas off U.S. coasts—must remain undeveloped if we are to avoid the worst effects of climate change."
Best added that Trump's latest executive order does not have popular support, and instead caters to "Trump's inner circle of desperate fossil fuel executives."
"Holing up at Mar-a-lago may protect Trump from an oil spill," she said, "but it will not protect him and his cabinet of one percenters from the millions of people in this country—from California to North Carolina—who will resist his disastrous policies."
Waterkeeper Alliance Executive Director Marc Yaggi agrees. "This attempt to greatly expand offshore drilling into the Arctic and Atlantic is a blatant prioritization of fossil fuel profits over the health of our climate and coastal communities," he said. "President Trump is ignoring the cries of citizens who have said offshore drilling poses too great a threat to their economies and ways of life."
For a deeper dive:
A total of 41 humpback whales died in the waters off Maine to North Carolina since January 2016, including 15 that washed up dead this year. That's about three times more than the region's annual average of just 14 humpback deaths.
"The increased numbers of mortalities have triggered the declaration of an unusual mortality event, or UME, for humpback whales along the Atlantic Coast," said Mendy Garron, stranding coordinator at the NOAA Fisheries Greater Atlantic Region, on Thursday.
A UME is issued whenever there is an "unexpected, involves a significant dieoff of any marine mammal population, and demands immediate response," she added.
So far, NOAA has examined 20 of the whales that died last year and determined that 10 of the mammals "had evidence of blunt force trauma or pre-mortem propeller wounds" likely from marine vessels, the agency said.
The whales may be moving around in search of prey, exposing themselves to shipping traffic, researchers suggested.
"It's probably linked to resources," Greg Silber, the large-whale recovery coordinator for NOAA fisheries, told reporters. "Humpback whales follow where the prey is."
The other half of the whales that were examined had no obvious signs of what caused their demise.
"Whales tested to date have had no evidence of infectious disease," Garron said.
The scientists stressed that they are unsure about what is causing the spike in humpback deaths.
"The answer is really unknown," Silber said.
By Dave Anderson
Perry's remarks came during an on-stage interview at the 2017 Bloomberg New Energy Finance Summit.
During an on-stage interview, Perry was asked if the administration would interfere with state policies requiring utilities to get power from renewable sources. Such a move would potentially destroy efforts by California, New York and other states to fight climate change by encouraging the growth of clean power.
Perry didn't rule it out, saying the reliability of the grid was a matter of national security.
"That's a conversation that will occur over the next few years," Perry said. "There may be issues that are so important that the federal government can intervene."
And according to Time's Justin Worland:
During a question and answer period, Perry also suggested that increased reliance on renewable energy sources like wind and solar might make the grid unreliable given they only work when the sun is shining and the wind is blowing, creating national security concerns. The Trump administration might try to preempt state and local governments that use policy to encourage clean energy to address those concerns, Perry said.
"There's a discussion, some of it very classified that will be occurring as we go further," Perry said. "The conversation needs to happen so the local governors and legislators, mayors and city council understand what's at stake here in making sure that our energy security is substantial."
Saqib Rahim of E&E News provided a slightly different quote from Perry:
"There's a conversation, there's a discussion, some of it obviously very classified, that will be occurring as we go forward, to make sure that we have the decisions made by Congress, in a lot of these cases, to protect the security interests of America," he said at BNEF's The Future of Energy Summit, "and that states and local entities do in fact get preempted with some of those decisions."
Perry's remarks re-sparked earlier concerns that the Trump administration could seek to preempt renewable energy standard policies that are now in place in 29 states, as well as renewable energy goals adopted by another nine states. The growing number of local communities that have committed to transitioning to 100 percent renewable energy could also come under fire from the Trump administration.
Renewable Energy Is Reliable and Makes America Safer—Just Ask the Department of Energy
Rick Perry is also facing scrutiny for ordering a study examining "electricity markets and reliability" that was tasked to his Chief of Staff Brian McCormack, who previously played a central role in attacks against rooftop solar for the Edison Electric Institute. Also named to lead work on the study is political appointee Travis Fisher. Fisher previously worked for the Institute for Energy Research (IER) and American Energy Alliance (AEA), which have received ample funding from the Koch brothers and coal industry. IER and AEA have long sought to undermine renewable energy standards in states like North Carolina, a national leader in solar energy.
Christian Roselund of PV Magazine responded to Perry's study order by pointing out that the National Renewable Energy Laboratory (NREL)—one of the Dept. of Energy's 17 National Laboratories—has already written studies that show we can rely on renewable energy to provide much more of our electricity than it does today. In fact, one 2012 NREL study found that we could get 80 percent of our electricity from renewable sources by 2050 using existing technologies. Other studies by states and grid operators confirm that renewable energy is reliable.
Another NREL study documented the significant health and environmental benefits generated by the state renewable energy standards that the Trump administration could try to preempt. In short, these policies make Americans safer by reducing harmful pollution emitted when we burn fossil fuels—especially coal—to produce electricity.
Other reports by clean energy experts have documented the economic security benefits of these state renewable energy standards, which have supported the growth of jobs in the booming solar and wind power industries.
Real world experience also shows that renewable energy is working just fine. Texas, the state where Rick Perry was governor, actually leads the nation in wind energy generation. In fact, nearly a quarter of the electricity generated in Texas during the first quarter of 2017 came from wind.
Ask the Department of Defense, Too
The Dept. of Defense does not appear to share the Trump administration's concerns about renewable energy. In fact, the military has made significant investments in renewable energy in order to enhance national security—an investment that continues with Trump in the White House. The U.S. Navy just recently refuted misleading claims that a new wind farm could interfere with a radar system made by some Republican lawmakers in North Carolina who wrote a letter to the Trump administration.
Climate Change Is a Real Threat to Energy and National Security
In 2015, the Dept. of Energy released a report that documented the threat climate change poses to energy security—and by extension national security—in every region of the U.S.
Trump's efforts to rollback limits on carbon dioxide pollution from power plants and his embrace of the so-called "clean coal" put the nation's energy and national security at further risk from climate change. Preempting state and local support for renewables would only increase those risks.
Rick Perry Could Support Renewable Energy by Working for a Smart Grid
Greentech Media reported that Perry made only "sparse" mention of renewable energy at the Bloomberg New Energy Finance Summit, but did say he wants to "help renewable energy make its way to the grid … "
Preempting local and state support for renewable energy would only ensure that less renewable energy makes its way to the grid. Perry could instead take positive steps to support integration of renewable energy by working to build a smart grid, the topic of a Dept. of Energy website. He could also support the energy storage revolution that is now underway, thanks in part to earlier investments by the Dept. of Energy.
Unfortunately, the Trump administration's energy policy seems to more squarely align with fossil fuel and utility interests who seek to undermine state and local support for renewable energy.
The Trump Team Is Full of Opponents of State and Local Support for Renewable Energy
Travis Fisher is not the only political pick by the Trump administration that comes with a history of attacking state and local policies that have fueled the growth of renewable energy to benefit funders in the fossil fuel or utility industry.
Trump tapped Thomas Pyle, also of the Institute for Energy Research (IER) and American Energy Alliance (AEA), to run his Dept. of Energy transition team. IER and AEA have targeted state renewable energy standard policies with misleading attacks for years. During the 2016 election, Trump responded to an AEA questionnaire with pledges to "review" key U.S. clean energy and climate change policies, including the U.S. Environmental Protection Agency's Clean Power Plan and science-based endangerment finding for greenhouse gas emissions. Trump has already fulfilled part of that pledge by beginning the process of rolling back the Clean Power Plan.
Trump similarly chose climate denier Myron Ebell of the Competitive Enterprise Institute to lead his Environmental Protection Agency transition team. Like Fisher and Pyle, Ebell has attacked renewable energy standards in states like Ohio. Greentech Media recently took a rather revealing look at the backgrounds of some other members of Trump's energy beachhead team.
No Uncertainty About State and Local Support for Renewable Energy
At this point, it remains unclear how exactly the Trump administration would use the pretense of reliability concerns to preempt state and local support for renewable energy. If it does seek to preempt state and local control, it will certainly face significant opposition from states and local communities—including those led by Republicans—that are already leading the way on renewable energy.
The ruling against Exxon in a suit brought by Environment Texas and the Sierra Club found that the oil giant failed to update emissions-reductions technology at its Baytown, Texas refining and chemical plant.
In their suit, the groups alleged the plant illegally released more than 10 million pounds of pollutants between 2005 and 2013, while Exxon gained more than $14 million in economic benefits.
"Today's decision sends a resounding message that it will not pay to pollute Texas," Neil Carman, clean air program director for the Sierra Club's Lone Star Chapter, said in a statement. "We will not stand idly by when polluters put our health and safety at risk."
For a deeper dive:
Ahead of the People's Climate March, Senators Jeff Merkley, Bernie Sanders and Ed Markey stood beside movement leaders to introduce legislation that will completely phase out fossil fuel use by 2050. The "100 by '50 Act" outlines a bold plan to support workers and to prioritize low-income communities while replacing oil, coal and gas with clean energy sources like wind and solar.
"100 is an important number," said 350.org co-founder Bill McKibben. "Instead of making changes around the margins, this bill would finally commit America to the wholesale energy transformation that technology has made possible and affordable, and that an eroding climate makes utterly essential. This bill won't pass Congress immediately—the fossil fuel industry will see to that—but it will change the debate in fundamental ways."
The "100 by '50 Act" would put a halt to new fossil fuel infrastructure projects like Keystone XL and the Dakota Access pipeline, and fracked gas pipelines facing opposition from tribes and landowners. Instead of new fossil fuel infrastructure, the bill invests hundreds of billions of dollars per year in clean energy—enough to create four million jobs. These large-scale clean energy investments prioritize black, brown and low-income communities on the frontlines of the climate crisis.
"While fossil fuel billionaires supporting Trump's administration put profits before people, we now have a legislative roadmap to phase out this dirty industry once and for all," said 350.org Executive Director May Boeve. "This bill deploys clean energy in communities that need it most and keeps fossil fuels in the ground. From Standing Rock to the Peoples Climate March, movement leaders have been calling for these solutions for years. This bill is proof that organizing works, and it's the beginning of an important conversation."
The issues covered by the bill reflect the demands of the climate movement, from Standing Rock to the fossil fuel divestment campaign, to the fight to keep fossil fuels in the ground. The content stands in bright contrast to Trump's vision of a more polluted America where fossil fuel billionaires profit at the public's expense. While this precedent setting bill is unlikely to pass during the Trump administration, similar bills are being considered at the state and local level in California, Massachusetts, New York and elsewhere across the country.
At a press conference held by Senators Merkley and Sanders, speakers included representatives from climate and environmental justice groups, progressive organizations and more. A crowd of supporters carried banners and signs reading "100% Clean Energy For All," and, "Keep Fossil Fuels In The Ground." The event was part of an ongoing week of action leading up to the People's Climate March on April 29, when thousands of people are converging in DC and around the country to march for jobs, justice and the climate.
By Kelly Levin
Thousands of people are expected to attend the People's Climate Movement march in Washington, DC and sister cities around the world this coming weekend. They are marching because actions taken to date by governments and others are not commensurate with the scale of climate impacts—both those already borne and those projected in the years to come.
It's a good moment to reflect on the facts. What do we know about global climate change and what impacts can we expect in the future? The following graphics speak volumes.
1. What is Climate Change?
Climate change is a long-term change in Earth's weather patterns or average climate, including temperature and precipitation. While the climate has changed in the past, we are now seeing it change at an unprecedented rate. As a result of the build-up of heat-trapping greenhouse gases in the atmosphere—due to our burning of fossil fuels, cutting down trees and other activities—global average temperature is now changing at a faster rate than at least over the past 1,000 years.
2. What's Causing Climate Change?
When models only include natural drivers of climate change, such as natural variability and volcanic eruptions, they cannot reproduce the recent increase in temperature. Only when models include the increase in greenhouse gas emissions due to human activities can they replicate the observed changes.
U.S. Enviromental Protection Agency, adapted from Huber and Knutti, 2012
3. How Have Global Emissions Changed?
Emissions have been climbing since the Industrial Revolution, but the rate of annual emissions increase during the first 10 years of this century was almost double the rate between 1970 and 2000.
Global Carbon Project
Emissions from fossil fuels and industry have seen a staggering increase in recent years—63 percent since 1990.
4. Who Are the Biggest Emitters?
From 1850 to 2011, the five major emitters—the U.S., European Union, China, Russian Federation and Japan— together contributed two-thirds of the world's CO2 emissions.
Now, China has emerged as the top emitter and China, the EU and the U.S. are the world's top three emitters. Together they emit more than half of total global greenhouse gases. In contrast, the 100 smallest-emitting countries collectively add up to only 3.5 percent of global emissions. Almost three-quarters of global emissions come from only 10 countries.
5. How Much Should We Limit Global Warming?
The Paris agreement on climate change sets a target for countries to collectively limit global temperature rise to 2 degrees C (3.6 degrees F), with a goal of sticking to 1.5 degrees C (2.7 degrees F) in order to prevent some of the worst effects of climate change. The amount of carbon emissions we can emit while still having a likely chance of limiting warming to 2 degrees is known as the "carbon budget." As of 2011, the world had already blown through nearly two-thirds of the carbon budget and is on track to exceed it by 2033 if emissions continue unabated.
6. Where is the Temperature Headed?
In the absence of countries' recent emissions-reduction commitments, known as intended nationally determined contributions or INDCs, we would see 4-5 degrees C of warming. Even if these INDCs are fully implemented, the average global temperature is still on track to increase 2.7-3.7 degrees C by 2100, according to a range of studies. That's far short of the global goal to limit warming to 1.5- 2 degrees C.
7. What Have Been Some of the Impacts of Climate Change to Date?
The impacts of climate change are already occurring and occurring everywhere. For example, climate change has already led to: more negative than positive impacts to crops, such as wheat and maize; coral bleaching and species range shifts; more frequent heat waves; coastal flooding; increased tree die-off in various regions; and a significant loss of ice mass in places like Greenland and Antarctica.
For example, as a result of ice melting on land, such as from glaciers and ice sheets, as well as thermal expansion of the ocean, we have seen sea level rise 3.4 millimeters per year from 1993-2015, which puts coastal communities at risk of flooding and infrastructure damage.
8. What Impacts Do We Expect in the Future?
The impacts we see in the future will be determined by our emissions pathway and resultant level of temperature increase. The warmer it gets, the greater the impacts—and the lower our ability to adapt.
9. Are There Signs of Progress?
Recently, we've seen signs of "decoupling." According to the International Energy Agency, energy-related carbon dioxide emissions stayed flat for three years in a row even as the global economy grew. This flattening of emissions was due to the growth of renewable power generation, fuel switching from coal to natural gas and energy efficiency gains, among other changes.
This decoupling can also be seen at the country level in 21 nations from 2000-2014. Whether these are indicative of long-term shifts remains to be seen. We will need to see a deep decline if we are to limit dangerous climate change and even with existing emissions-reduction commitments, global emissions are not expected to decline until at least after 2030.
20. Are We Investing in Solutions?
Global investments in renewable energy have been growing in recent years to an all-time high of $285.9 billion in 2015, a 5 percent rise compared to the previous year. In 2015, renewable energy (excluding large hydro) made up the bulk (54.6 percent) of new installed generating capacity for the first time.
REN21 Renewables 2016 Global Status Report
That being said, we need to shift away from fossil fuels much more quickly if we are to have a fighting chance of limiting warming to 1.5-2 degrees C.
Marching for Action
Let's hope that as people take to the streets, it will wake leaders up to the scale of the climate change challenge and the task ahead. Avoiding the most dangerous of climate change impacts—which necessitates phasing out emissions in the second half of the century—will require sustained action well beyond this weekend's activities.
Anadarko Petroleum Corporation is temporarily closing all its vertical wells across northeast Colorado following a massive house explosion and fire in the town of Firestone last week that killed two people.
The Woodlands, Texas-based oil and gas giant said in press release it was shutting more than 3,000 producing vertical wells, which produce about 13,000 barrels of oil per day, "in an abundance of caution."
Mark Martinez and his brother-in-law Joseph William Irwin III, both 42, were killed in the April 17 explosion. Mark's wife, Erin Martinez, was injured as well her 11-year-old son. A GoFundMe page is currently raising funds for the family.
In its statement, Anadarko acknowledged that the blast occurred approximately 200 feet from the family's recently built two-story home on Twilight Ave., where the company operates an older vertical well drilled by a previous operator.
The tragedy has sparked concerns from local anti-fracking activists over the risks of oil and gas production in Colorado and are calling for a statewide emergency moratorium as officials and regulators investigate the cause of the explosion.
The Frederick-Firestone Fire Protection District and the Colorado Oil and Gas Conservation Commission (COGCC) are involved with the investigation.
"While the well in the vicinity is one aspect of the investigation, this is a complex investigation and the origin and cause of the fire have not been determined," Frederick-Firestone Fire Protection District Chief Theodore Poszywak said.
The Colorado Independent reported on the possible link between the Anadarko-operated gas well and the Firestone house explosion:
A source has told The Independent that personnel and trucks bearing Anadarko's logo responded soon after the explosion, and that company personnel at and near the scene over the following days came in unmarked vehicles and clothes. They were apparently paying special attention to a feeder line that may have been severed near the home.
News stories after the explosion reported that Irwin, a master plumber, was helping Mark Martinez install a hot water heater, apparently at or near the time of the explosion. The insinuation was that their work may have led to their deaths.
But that narrative sounded immediately curious to those who knew Irwin and his work, and became less plausible when Colorado's Public Utilities Commission passed the investigation on to the COGCC, which regulates the oil and gas industry.
Anadarko spokesman John Christiansen would not respond to the Independent's report or questions about the company's possible involvement.
Anadarko is one of the world's largest private oil and natural gas exploration and production companies and the largest oil and gas producer in Colorado. The state is the seventh-largest oil and gas producing state in the country.
"Our teams will remain actively engaged with residents in the Firestone community," said Brad Holly, Anadarko senior vice president of U.S. Onshore Exploration and Production.
"Colorado residents must feel safe in their own homes, and I want to be clear that we are committed to understanding all that we can about this tragedy as we work with each investigating agency until causes can be determined."
In response to the incident, Boulder, Colorado-based climate change activist Xiuhtezcatl Martinez is calling for immediate halt on drilling activity.
"Our thoughts and best wishes go to Martinez and Irwin families, no one should have to lose a family member before their time," Martinez, who is the youth director of Earth Guardians, told EcoWatch. "We must fight to make sure that Anadarko is held accountable, if its shown their reckless behavior played a part in their deaths, so we can ensure this is the last time a tragedy like this occurs."
"Unfortunately this is likely the result of a state that has completely failed to protect it's citizens from the impacts of fracking," Martinez added. "Based on the explosive danger coming from this industry and the proximity to homes, schools and hospitals we are calling for a statewide emergency moratorium, until it can be demonstrated that fracking can be done safely."
In March, the Colorado Court of Appeals sided with Martinez and other youth plaintiffs that the Oil and Gas Conservation Act required it to strike a balance between the regulation of oil and gas operations and protecting public health, the environment and wildlife resources.
Martinez said that the appellate court's decision "clearly states that health and safety must be prioritized with regards to oil and gas industry in the state."
"Based on that decision and [the Firestone house explosion] it's clear that all drilling activity should be halted immediately and the danger of fracking should be investigated in full," Martinez said.
A source pointed out to EcoWatch that "Fractivist" Shane Davis, a biologist who started the fracking resistance in Colorado several years ago, happened to live in Firestone and "literally moved out of the town for this very reason."
Incidentally, Davis detailed in a January blog post about the dangers of living nearby drilling operations.
One landowner's decision to lease their minerals to the fracking industry "can place hundreds, if not thousands, of innocent people at risk from the dangers of the fracking industry's toxic air, groundwater contamination, fugitive emissions, failed equipment, human error, and even a blowout which is the most dangerous to communities that are close by," Davis wrote on Fractivist.org.
Anadarko said the wells will remain shut in until the company's field personnel can conduct additional inspections and testing of the associated equipment, such as facilities and underground lines associated with each wellhead. The wells will not be restarted until each has undergone and passed these additional inspections. Anadarko currently anticipates the process will take two to four weeks.