Capitol Crusade: Big Oil joins forces with key governors
Soon after the BP disaster, oil and gas interests sprung into action to refurbish the industry’s image and ensure their long-term plans for expanding offshore drilling weren’t derailed.
In the face of skepticism about offshore drilling and calls to shift towards clean energy, the oil and gas industry spent unprecedented sums of money on political influence. According to OpenSecrets.org, the industry more than doubled its campaign contributions to federal candidates from the 2010 to the 2012 election cycle to more than $70 million. Oil and gas companies also dramatically expanded their independent or “outside” political spending following the U.S. Supreme Court’s 2010 Citizens United decision, from about $2.5 million in 2010 to almost $18.9 million in 2014. The industry’s spending on electing sympathetic lawmakers was complemented by more than $141 million spent on federal lobbying in 2014 alone.
Then in 2011, just over a year after the BP disaster, a new lobbying force appeared: the Outer Continental Shelf Governors Coalition, a group of coastal state governors who,according to the group’s website, “support policies that encourage an expansion of American energy, particularly U.S. offshore energy resources.”
The Governors Coalition, launched by Republican governors of Alaska, Louisiana, Mississippi and Texas, now includes, in addition to chairman Gov. McCrory, Republicans Greg Abbott of Texas, Robert Bentley of Alabama, Phil Bryant of Mississippi, Nikki Haley of South Carolina, Bobby Jindal of Louisiana and Paul LePage of Maine. Democrat Terry McAuliffe of Virginia joined shortly after his election in 2013, and Independent Bill Walker of Alaska came on board after his victory last year. Each governor’s office pays $1,000 a year, presumably taxpayer money, for membership in the Coalition.
From the beginning, the Governors Coalition has been open about its agenda: to expand offshore oil and gas drilling, both in areas where it is currently allowed in the Gulf Coast and Arctic Ocean, as well as opening up the untapped waters of the Atlantic Ocean. The position of governors is especially critical in deciding the fate of Atlantic drilling, since the Outer Continental Shelf Lands Act that guides the federal offshore leasing process gives significant weight to governors’ recommendations.
The Governors Coalition has been less open, however, about its close relationship to the oil and gas industry, which stands to reap immense profits if the elected officials are successful in promoting their pro-drilling agenda.
(Click on chart for a larger version.)
According to documents obtained by Facing South, the Governors Coalition — despite being ostensibly led by elected state officials and based in McCrory’s office — is largely managed and operated by two interrelated private outfits directly tied to the energy industry: the Consumer Energy Alliance, a 501(c)(4) “social welfare” nonprofit that under law is not required to disclose its donors, and HBW Resources, a corporate lobbying and public relations firm.
The Consumer Energy Alliance bills itself as the “voice of the energy consumer.” The dark-money group counts more than 90 energy companies and industry associations among its members, including the five so-called “oil supermajors”: BP, Chevron, ConocoPhillips, ExxonMobil and Shell. The Alliance has been a vocal advocate of fracking, the construction of the Keystone XL pipeline, and expanded offshore oil drilling. The watchdog Center for Media and Democracy calls the Alliance a “front group for the energy industry.”
Documents obtained by Facing South show the Consumer Energy Alliance has an especially close relationship with one leading figure in the oil and gas industry’s political network: HBW Resources, a lobbying and public relations firm founded in 2005 that specializes in energy development. HBW Resources’ current lobbying clients include Noble Energy, a major oil and gas exploration and production company based in Houston and a member of the Alliance; its previous clients include the American Petroleum Institute, the oil and gas industry’s leading advocacy group.
The Consumer Energy Alliance and HBW Resources are so closely intertwined that it’s difficult to tell where one group ends and the other begins:
* CEA was officially registered as a tax-exempt organization by David Holt, the “H” in HBW Resources and the firm’s managing partner, in 2008, according to an IRS letter confirming the group’s nonprofit status. Holt currently serves as CEA’s president.
* CEA’s mailing address is 2211 Norfolk St., Suite 614 in Houston — the same address as one of HBW Resources’ main offices.
* Websites for HBW Resources and CEA are hosted at the same IP address as dholtlaw.com and several other pro-drilling sites.
* CEA has also paid HBW Resources a substantial amount of money in contracting fees. According to CEA’s latest tax filing for 2013, of the group’s $3 million in income, $1.3 million was paid to HBW Resources for “management & professional services.”
Blurred Lines: Public vs. private
After the BP spill, the energy lobbyists at HBW Resources and the Consumer Energy Alliance sought new messengers to promote the offshore drilling agenda. They found the allies they needed in four Republican leaders from coastal states who would launch the Outer Continental Shelf Governors Coalition — a group in which the lobby firm and the dark-money nonprofit have played a central and often secretive role.
The Governors Coalition made its public debut on May 2, 2011 at the Offshore Technology Conference in Houston, one of the oil and gas industry’s largest trade shows.
The group’s original members — Bobby Jindal of Louisiana, Rick Perry of Texas, Haley Barbour of Mississippi and Sean Parnell of Alaska, all Republicans — wrote a letter to their fellow governors inviting them to join the group:
[W]e are forming the OCS Governors Coalition as a mechanism to foster an appropriate dialogue between the coastal states and the Administration and ensure that future actions are done with adequate state input.
Though the governors’ announcement letter did not mention any involvement by the Consumer Energy Alliance, the group was quick to celebrate the Coalition’s formation. Alliance President and HBW partner David Holt issued a statement that “CEA applauds the collaboration of these governors in promoting an open dialogue about the need to and realities of producing American energy offshore, not only for their individual states, but for the entire nation.”
The Consumer Energy Alliance began working with the Governors Coalition, then chaired by Alaska Gov. Parnell, the following year. According to emails obtained by Facing South, on April 23, 2012, Frank Collins — a former spokesperson for Louisiana Gov. Bobby Jindal who was then serving as policy coordinator for the state’s Coastal Protection and Restoration Authority, and who now serves as deputy chief of staff for Florida Gov. Rick Scott (R) — wrote an email to the Coalition membership, which by then had expanded to include Govs. Bentley of Alabama, Haley of South Carolina and McDonnell of Virginia.
Collins proposed “a handful of initiatives” to help the group “coordinate and communicate more effectively.” Among them:
David Holt and his volunteer team have offered to assist the Coalition to organize monthly status calls, bimonthly bulletin alerts, face-to-face meetings, and messaging opportunities, among other items. In order to start moving the ball forward, David and Natalie Joubert will be reaching out to each member state in the next few weeks to hold a status call.
Like David Holt, Joubert symbolized the blurred relationship between HBW Resources, the Consumer Energy Alliance and the Governors Coalition. At the time, Joubert was both the policy director for the Alliance and vice president for policy at HBW Resources. (She left both organizations earlier this year.) The signature line in her emails to the governors’ group identified her as being affiliated with the Alliance, but she often used an HBW Resources email address (for an example click here). According to her (now-deleted) HBW Resources bio, Joubert is a former associate at the Clinton Foundation and in 2012 served as an adviser for the Obama for America Energy and Environmental Team.
It wouldn’t be until August 2013 that the OCSGC would adopt a memorandum of understanding to formalize its relationship with the Consumer Energy Alliance, an agreement that underscored the Alliance’s central role in running the governors’ group. The document characterizes the Alliance’s role as “volunteer staff” for the Governors Coalition, which includes “[e]xecuting all day-to-day administrative, writing and research needs of the Coalition” and “[a]ssisting in the conceptualization and execution of all internal and external communication and media engagement of the Coalition.”
Yet the overlapping relationship between the three groups was largely concealed from the public. When Facing South first began looking into the Governors Coalition in 2013, its website did not mention the connection to the Consumer Energy Alliance at all; for example, see this version of the Governors Coalition’s “About” page from November 2013. In August 2014, however, the page had been edited to acknowledge that the Alliance provides the Governors Coalition with “information and administrative support.” The edit came after investigative reporter Lee Fang of The Republic Report used metadata from a letter sent by the Coalition to former U.S. Sen. Mary Landrieu (D-Louisiana) to reveal that the letter originated from HBW Resources.
Today, the website of the Outer Continental Shelf Governors Coalition — which is hosted at the same IP address as the Consumer Energy Alliance and HBW Resources — still does not disclose the Consumer Energy Alliance’s close relationship with HBW Resources. Nor does the Alliance’s “About” page disclose its relationship with the energy lobbying firm.
However, emails and other documents obtained by Facing South reveal the full extent to which the Governors Coalition has been largely run and driven by the oil and gas industry representatives at the Consumer Energy Alliance and HBW Resources. Among the initiatives the two outfits have spearheaded for the Governors Coalition:
* Drafting newspaper op-eds. Collins’ April 23, 2012 email to the Governors Coalition noted that “volunteer staff” — that is, the Alliance/HBW Resources — was “drafting op-ed for OCSGC use.” A week later, an op-ed titled “Virginia Could Be an Energy Power — If Washington Would Let It” ran in the Wall Street Journal under Gov. McDonnell’s signature, calling for Atlantic drilling as the Obama administration was in the process of finalizing its offshore leasing plan for the 2012-2017 period.
* Drafting lobbying letters. In July 2012, Joubert sent Governors Coalition members a draft of a letter urging President Obama to “advance the dialogue between federal and state officials,” asking them to review it and send edits “our way.” And as previously noted, The Republic Report used metadata from another letter sent by the Coalition to former U.S. Sen. Landrieu of Louisiana promoting expanded drilling to show the letter’s original author was “NJoubert” of HBW Resources.
* Connecting the governors to oil and gas industry insiders. For example, the Alliance/HBW Resources organized what it called a “closed-door session” for the governors with “industry leaders” at the Offshore Technology Conference in Houston in May 2013. When the Governors Coalition convened again that October in Biloxi, Mississippi at the Beau Rivage Resort and Casino, the Alliance/HBW Resources organized an “Industry Roundtable Luncheon” that was also closed to the press; among those who attended were representatives of Shell, ExxonMobil and Chevron.
Prior to the October meeting, Joubert sent Coalition members what she called “Industry Briefing Read-Aheads” from Shell and ExxonMobil making the case for expanded drilling. In the documents obtained by Facing South, there is no evidence that the Governors Coalition solicited or received information for their meetings from environmentalists or scientists concerned about the impacts of offshore drilling.
* Connecting governors with energy industry donors. Following the “closed-door session” with “industry leaders” at the May 2013 conference in Houston, Governors Coalition members headed to a fundraiser for Gov. Haley at the upscale Hotel ZaZa in the city’s Museum District. That same day, Haley’s campaign reported receiving a contribution of $2,319.22 from HBW Resources, listed as a “fundraising expense.”
The following day Haley’s campaign registered contributions of $2,500 each from HBW Resources partners Holt and Michael Whatley and $1,000 from Paul Looney, HBW vice president for strategic development who specializes in working with state regulators on permitting and exporting of petroleum products.
Haley also reported a contribution of $2,500 from Richmond “Richie” Miller, president of Spectrum Geo, a Houston-based company that conducts seismic testing for oil and gas reserves. He was among those who attended the industry roundtable earlier that day. Spectrum Geo later filed applications with both the state of South Carolina and the Bureau of Ocean Energy Management to move ahead with seismic testing for oil and gas reserves in federal waters off the South Carolina coast. Scientists have expressed concerns that the practice, which involves using underwater air blasts nearly as loud as conventional explosives, is harmful to marine life.
Earlier this month, Spectrum Geo and another seismic testing company, GX Technology,received approval from the McCrory administration to conduct testing off North Carolina’s coast.
Facing South contacted McCrory’s office to discuss the relationship between the Governors Coalition, the Consumer Energy Alliance and HBW Resources, but Communications Director Josh Ellis declined to comment on that specifically.
“Gov. McCrory is proud to chair this bipartisan group of governors working to find environmentally sound solutions for energy exploration,” Ellis said in an email.
‘Speaking for the oil industry’
In its push to open Atlantic waters for oil and gas drilling, the Outer Continental Shelf Governors Coalition, along with the Consumer Energy Alliance and HBW Resources, have focused their lobbying efforts on the U.S. Interior Department, which houses the Bureau of Ocean Energy Management, the agency that oversees offshore leasing.
In early 2013, when President Obama initially nominated Sally Jewell to replace Ken Salazar as Interior secretary, coalition members Haley of South Carolina, McCrory of North Carolina and McDonnell of Virginia wrote to Jewell congratulating her on the nomination and asking her to support Atlantic drilling. The following month, Jewell — a former CEO and president of outdoor retailer REI and a former Mobil Oil engineer — responded on personal letterhead that she appreciated hearing their concerns but as a nominee was “not yet in a position to be involved in policy matters before the agency.”
But the Governors Coalition didn’t give up. Instead, it sent a list of questions to U.S. Sens. Ron Wyden (D-Oregon) and Lisa Murkowski (R-Alaska), then the chair and ranking member respectively of the Committee on Energy and Natural Resources, to ask Jewell at her nomination hearings. “Fortunately, Senator Murkowski did include all of the proposed questions,” Natalie Joubert enthused in an email to Governors Coalition members.
After Jewell was confirmed, three members of the Governors Coalition — Bentley of Alabama, Bryant of Mississippi, and McCrory, who had become the group’s chair following Alaska Gov. Parnell’s defeat — traveled to Washington in February 2014 to meet with her in person to further press the case for Atlantic drilling. “As chair of the OCS Governors Coalition, I am encouraged with the opportunity to meet with Secretary Jewell and better advance the Coalition’s common mission of greater federal-state communication,” McCrorysaid at the time.
Five months later, the Interior Department announced plans to open the Atlantic to seismic testing for oil and gas reserves, the first step toward offshore drilling. Six months after that, in January 2015, it released a drilling lease plan for 2017-2022 that included the Atlantic outside of a 50-mile protective coastal buffer zone. The plan excluded parts of the Arctic and Eastern Gulf of Mexico near Florida, where Gov. Scott and other elected leaders have long opposed offshore drilling as a threat to the Sunshine State’s $67 billion annual tourism industry.
In a statement on behalf of the Governors Coalition, McCrory thanked Jewell “for taking a step in the right direction” by considering Atlantic drilling — but he criticized the proposal for allowing “many other resource-rich areas [to] remain under lock and key by the Obama administration.” McCrory continued that line of attack in testimony he gave earlier this month before a U.S. House subcommittee (in photo), where he criticized the 50-mile buffer zone for “unnecessarily put[ting] much of North Carolina’s most accessible and undiscovered resources, frankly, under lock and key.” He also called on BOEM to offer more than one drilling lease in the Atlantic, as it proposed.
In his statements, McCrory did not mention the considerable public opposition to Atlantic drilling in his own state — including unprecedented crowds that turned out for BOEM hearings earlier this year in Wilmington and Kill Devil Hills, or the resolutions opposing seismic testing and/or offshore drilling passed by more than a dozen North Carolina coastal communities as well as local chambers of commerce, tourism boards, and fishing industry associations.
The Southern Environmental Law Center, a nonprofit law firm opposed to Atlantic drilling, pointed to the disconnect between the governor’s statements and the outpouring of public opposition, issuing a statement blasting McCrory for “speaking for the oil industry.”
(Additional research and reporting by Chris Kromm. Map from BOEM. Image of McCrory is a still from a webcast of the House Subcommittee on Energy and Mineral Resources’ April 15 hearing. This story was produced in part with support from the Fund for Investigative Journalism.)
Next: Gov. M
ENC Residents Weigh In On Proposed Seismic Testing
This week, Governor Pat McCrory expressed before Congress his support for environmentally safe and responsible offshore energy exploration. He testified on President Obama’s Offshore Energy Plan that would open areas off the North Carolina coast to oil and gas drilling by the year 2022. Before development can take place, seismic surveys will determine tracts of land that are conducive for offshore drilling. Deputy Director for the Bureau of Ocean Energy Management Walter Cruickshank says the surveys will update information that’s four decades old.
“There were seismic surveys that were taken back in the 1970’s and early 1980’s. That was using older technology that couldn’t see as far underneath the seabed as current technology.”
The technique used today employs seismic air cannons that shoot a pulse of air into the water in search of oil and gas deposits deep in the ocean floor. Cruickshank explains the technique.
“Those are conducted by using compressed air guns if you will that are towed behind ships. These are cylinders filled with compressed air and when that air is released, they create a sound wave. And the sound wave will penetrate the seabed and reflect off the layers of rock beneath the seabed. The seismic vessels are towing hydrophones that will listen for those reflected sound waves and use the data from those sound waves to map the subsurface
Seismic testing is drawing criticism from environmentalists and conservationist concerned the blasts, comparable to the volume of exploding dynamite and occurring every 10 to 15 seconds, can negatively impact wildlife. While little information is known on how seismic surveys affect fish species, Associate Professor at the Duke Marine Lab in Beaufort Douglas Nowacek maintains that marine mammals are affected.
“We do know from several studies that what we see in some of the toothed whales, some of the eco-locaters, so the sperm whales, the pilot whales, sperm whales for sure from some experiments in the Gulf of Mexico, they reduce their feeding rate when exposed to seismic surveys.”
Nowachek was among more than 75 people who attended a public hearing on seismic testing April 9th held by the North Carolina Department of Environment and Natural Resources. The meeting at the Crystal Coast Civic Center in Morehead City gave residents a chance to voice their concerns or share their support. Gary Terry is from Ahoskie.
“It’s a very important issue, energy is a very important issue, you know it would be nice if windmills and solar cells would power our world 24/7, but they won’t do it. Until we find something better, I’m 100 percent in favor of using fossil fuels and developing them using clean coal technology, every source of power we can get to make power cheaper.”
The majority of people who spoke at the hearing were firmly against seismic testing, including Conservation Chair of the Sierra Club Croatan Group Penny Hooper.
“I’m an active environmentalist, I’ve lived in this area for 40 years and my husband is a commercial fisherman and I am very much opposed to anything that would hurt the marine environment from the point of view of how we make our living, and from the point of view of creation care.”
According to the Bureau of Ocean Energy Management, the mid and south Atlantic Outer Continental Shelf region holds more than 4 billion barrels of oil and 37 and a half trillion cubic feet of natural gas. Gov. Pat McCrory said this week before a subcommittee that he wants two leases early in the cycle to encourage energy-related infrastructure. In order to accomplish this goal, seismic testing must get underway. The Department of Environment and Natural Resources has received consistency review submissions from four companies who want to conduct those seismic surveys off our coast. They are Spectrum Geo Inc., GX Technology, CGG Services and TGS, all Texas based businesses.
There are over 200 companies in the United States that conduct geological and geophysical activities. Many of them belong to the International Association of Geophysical Contractors, including the four companies that want to explore North Carolina’s offshore resources. Vice President of Government and Legal Affairs with IAGC Nikki Martin.
“The same technology, those 2-D surveys which are being proposed, have occurred in the Atlantic OCS for other uses, such as research; whether they’re carried out by National Science Foundation or USGS, they use the exact same technology but for different purposes.”
Martin says after more than four decades of seismic surveys all over the world, their member companies indicate that the risk of direct physical injury to marine mammals is extremely low.
“And most importantly, there’s no scientific evidence demonstrating biologically significant or negative impacts on marine life populations. The impact to the population level is what is most important and what we’re focused on.”
While populations may not be affected by seismic surveys, Associate Professor at the Duke Marine Lab in Beaufort Douglas Nowacek says they have other measurable effects on some species.
“I participated in some studies in the early 2000’s that looked specifically at sperm whales and that’s when we found that reduction in foraging rate, it was a short term response. But what we are getting better at is taking those short responses that we can measure really well and extrapolating those out to what it means to the population.”
It’s not known how pilot whales, beaked whales, and large fish species respond to seismic testing. Nowacek is worried about a particular area located 45 miles off the coast of Cape Hatteras known as the “Manteo Prospect.” He says the 30 mile long and 3 to 5 miles wide reef structure is likely the highest biodiversity spot in the western North Atlantic.
“We work out there quite a lot, we might see ten different species of whales and dolphins, we might see six to eight species of large fish from mahi mahi to wahoo to tuna, several different species of tuna, sharks turtles, rays. So it’s a serious hotspot.”
The area was observed in 1999 as a potential site for offshore oil resources. Now, some 15 years later, Nowacek says there’s been renewed interest in the area, with all of the current permit applications for seismic testing overlaping in this sensitive area.
“How much noise would you withstand before you actually got up and moved? You’d probably do something about it before then, but the point is that’s your home and I think we need to talk about what we know and what we don’t know about those species.”
According to Vice President of Government and Legal Affairs with IAGC Nikki Martin, the seismic surveying industry employs a number of mitigation measures to lessen any potential risks to marine life, including breeding and foraging areas. That includes endangered North Atlantic Right Whale Critical Habitat.
“There’s also what’s called seasonal management area. And that’s basically a 20 nautical mile area running from the coastline that is off limits to seismic survey from November to April. And beyond that, there’s also what’s called Dynamic Management Areas. If a group of North Atlantic right whales or even one North Atlantic right whale is spotted, NOAA Fisheries has the discretion to call survey activity out of that area.”
Even with these mitigation measures in place, many residents in eastern North Carolina aren’t comfortable with the idea of seismic surveys. But for Beaufort resident Joe Canosa, it’s what could come as a result of the surveys that he finds objectionable.
“I don’t want to see oil spills, which are inevitable. I’m an offshore fisherman and I don’t really want to have that going on out there.”
Conservation Chair of the Sierra Club Croatan Group Penny Hooper agrees.
“We really should just leave oil in the ground. And not remove any of the carbon that’s already stored so nicely underwater whether it be oil or gas, and instead we should focus in this state on alternative energy sources like offshore wind or solar.”
It’s not just individuals who are opposed to tapping into the oil and gas resources off our coast. More than 20 communities in the Carolina’s have made their stance against offshore drilling, including Emerald Isle which announced their opposition his week.
With both President Barack Obama and Gov. Pat McCrory supporting the exploration of oil and gas resources off the coast of North Carolina, it’s likely a matter of time before we’ll see seismic testing here. Still, the North Carolina Department of Environment and Natural Resources is accepting comments from the public on the consistency review submissions for offshore seismic survey activities. For more information, go to publicradioeast.org. I’m Jared Brumbaugh.
SEISMIC SURVEYS FOR OIL
Center for Biological Diversity
The Obama administration’s 2014 decision to open up offshore oil and natural gas exploration in the Atlantic Ocean creates not only long-term risks from climate change and oil spills, but also more immediate threats to ocean life. The plan allows seismic testing that the federal government admits could kill or injure 138,000 dolphins and whales, including nine endangered North Atlantic right whales, whose calving grounds are on the southern edge of the proposed zone. In total, a Department of the Interior report on the seismic program acknowledges, the plan would cause 13.5 million instances of harm to marine mammals.
Seismic exploration surveys use arrays of high-powered airguns to search for oil and generate the loudest human sounds in the ocean, short of those made by explosives. The blasts — which can reach more than 250 decibels and be heard for miles — can also cause hearing loss in marine mammals, disturb essential behaviors such as feeding and breeding, mask communications between individual whales and dolphins, and reduce catch rates of commercial fish.
Seismic testing involves blasting the seafloor with airguns (a kind of powerful horn) every 10 seconds and measuring the echoes with long tubes to map offshore oil and gas reserves. While a Bureau of Ocean Energy Management factsheet describes the technology as “state-of-the-art computer mapping systems,” seismic testing is actually a blunt-force weapon introduced in the 1920s that was augmented by computer analysis starting in the 1950s.
Expanding offshore drilling into the Atlantic creates a higher risk for oil spills, more polluted beaches and waters, more industrial equipment, and fewer pristine places for wildlife and people. Extracting and burning the 4.72 billion barrels of oil and 37.51 trillion cubic feet of natural gas that the federal government estimates is under the Atlantic would also significantly worsen the climate crisis. So there’s no good reason to be subjecting ocean life to these deadly seismic blasts.
The Center has been working hard to save marine mammals from deadly and disturbing seismic surveys since the early 2000s, and we’re still at it. Learn more about seismic testing in other regions, like the Gulf of Mexico, as well as other forms of ocean noise now.