Sued by Chesapeake Energy for Stealing Trade Secrets, Aubrey McClendon Hires PR Giant Edelman

Cross-Posted from DeSmogBlog

Chesapeake Energy has sued its formerCEO, Aubrey McClendon, for allegedly stealing its trade secrets in the months between his resignation and the formation of his new company, American Energy Partners. To defend itself outside of the courtroom, American Energy Partners has hired Edelman, the ‘world’s largest’ and often controversial public relations firm.

Filed on February 17 at the District Court of Oklahoma County, Chesapeake’s legal complaint alleges McClendon covertly took map-based data owned by the company in the time between resigning from the company and then officially leaving the company in early 2013. Chesapeake also alleges that he then utilized that same confidential data for business and investment decisions at his new startup in deciding which land to purchase for hydraulic fracturing (“fracking”) for oil and gas.

“AEP used confidential information and trade secrets stolen by McClendon from Chesapeake as a basis for their decision to acquire certain acreage in the Utica Shale Play,” alleges the lawsuit. “Further, in acquiring this acreage…AEP interfered with Chesapeake’s business plans and its negotiations for its own acquisition of acreage in the Utica Shale play.”

Chesapeake Energy alleges that, before taking the data with him, McClendon asked a former company vice president of land, whose name is redacted in the complaint, to optimize and update the data.

McClendon also had his executive assistant print out maps for him that were until that point only stored on company computers, according to the legal complaint. Further, the complaint details, he blind carbon-copied (BCC’d) “dozens of emails” of those same maps to his personal email address for later use.

That executive assistant (whose name is redacted) now serves as McClendon’s executive assistant at American Energy Partners, according to the complaint.

The assistant is one among close to 200 employees who left Chesapeake and joined American Energy Partners, where they work just down the street from Chesapeake’s corporate headquarters.

Edelman: McClendon Media Contact

In the news lately for landing a contract worth hundreds of millions of dollars to do PR over the past several years for American Petroleum Institute (then watching that contract expire), and working with TransCanada on a controversial plan to promote the Energy East tar sands pipeline, Edelman is listed as American Energy’s media contact for the lawsuit.

At the bottom of the lawsuit website created by American Energy, the company lists Edelman’s Ryan Colaianni as its media contact. According to his LinkedIn page, Colaianni works as a senior account supervisor for Edelman.

Like the gaggle of employees and “land grab” tactics McClendon has brought with him to American Energy Partners, he also used Edelman for public relations services while he served as the controversy-laden CEO of Chesapeake Energy.

According to an October 2012 press release, Chesapeake and General Electric utilized Edelman for communications efforts surrounding their joint compressed natural gas ”CNG in a Box” initiative.

Furthermore, on her LinkedIn page Natalie (Wilson) Ilseng — an Edelman senior account executive — lists Chesapeake among her current or past clients.

Edelman also used to do PR work for the American Legislative Exchange Council (ALEC), described by its critics as a “corporate bill mill.” Chesapeake Energy in the past has sponsored an ALEC meeting.

McClendon Responds to Allegations

McClendon and his legal team, as well as American Energy Partners’ investors, have already responded to the lawsuit in a very public way. They have all issued statements declaring full innocence, on top of creating a website dedicated to the case.

“It is beyond belief that the company that I co-founded 25 years ago and where I worked tirelessly to build it into one of America’s largest and most successful oil and gas producers has now decided to add insult to injury almost two years to the day after my resignation by wrongly accusing me of misappropriating information,” McClendon declared in a press release.

“It is a sad day to see Chesapeake stoop so low as to sue its co-founder for having information that was earned, paid for and provided through my contracts with Chesapeake.”

In other words, McClendon and his legal team have shown their cards. It appears they will argue in court that everything he took with him to American Energy Partners fits within the confines of contracts signed and agreed to by both sides.

American Energy Partners has published those contracts online, including the “Summary of Agreed Terms of Post Separation Founder Services Agreement,” the “Founder Separation and Services Agreement” and the “Founder Joint Operating Services Agreement.”

“Our filings will show that any information in Mr. McClendon’s possession is rightfully his pursuant to the terms of the agreements entered into between the parties,” Matthew Taylor, an attorney at Duane Morris and McClendon’s lawyer, said in a press release. “We are 100% confident that Mr. McClendon and AELP will prevail in this dispute.”

Judge Patricia G. Parrish will preside over the case that will likely create headlines in the business and legal press for months to come.

If it goes their way, Edelman will help shape some of those headlines on behalf of American Energy Partners.

Edelman’s Colaianni did not respond to questions from DeSmogBlog at the time of publication.

Facing Felony Charges, Rick Perry Joins Board of Pipeline Company Proposing Pipeline Across Iowa

Cross-Posted by DeSmogBlog

Additional Reporting by David Goodner

Former Texas Republican Governor Rick Perry has joined the board of directors at Energy Transfer Partners, a natural gas and propane company headquartered in Dallas, Texas that has proposed to build a controversial Bakken crude oil pipeline across Iowa.

The announcement, which appeared in Energy Transfer Partners’ February 3 Form 8-K filing to the U.S. Securities and Exchange Commission (SEC), comes as Perry faces two Texas state-level felony charges for abuse of power. Perry pleaded not guilty to both charges and District Judge Bert Richardson recently ruled against dismissing Perry’s case.

“It isn’t immediately clear how much Perry will be paid for his board position,”explained the Texas Tribune. “According to regulatory filings published on the company’s website, non-employee board directors were paid $50,000 a year in 2013.”

Despite the felony charges, Perry is still strongly considering a 2016 presidential run, according to a recent article published by the Associated Press, which reported he may make a final decision on whether or not to run by May.

The Energy Transfer Partners filing to the SEC describes Perry’s appointment:

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 3, 2015, James R. (Rick) Perry was appointed as a director of Energy Transfer Partners, L.L.C., the general partner of Energy Transfer Partners GP, L.P., which is the general partner of Energy Transfer Partners, L.P. (the “Partnership”). Mr. Perry served as the Governor of Texas from 2000 until 2015.
There are no arrangements or understandings with the Partnership, or any other persons, pursuant to which Mr. Perry was appointed as a director of Energy Transfer Partners, L.L.C. Mr. Perry is not currently expected to be named to any committees of the board of directors of Energy Transfer Partners, L.L.C. At this time, the Partnership is not aware of any transactions, since the beginning of the Partnership’s last fiscal year, or any currently proposed transactions, in which the Partnership was or is to be a participant involving amounts exceeding $120,000, and in which Mr. Perry had or will have a direct or indirect material interest. Consistent with other non-employee members of the Board of Directors, Mr. Perry will be eligible to receive cash compensation for his service on the Board of Directors and equity compensation under the Second Amended and Restated 2008 Long-Term Incentive Plan, as described in the Definitive Proxy Statement on Schedule 14A filed by the Partnership with the SEC on October 24, 2014.

Bakken Pipeline Connection

Energy Transfer Partners owns the proposed Dakota Access pipeline, set to carry oil obtained via hydraulic fracturing (“fracking”) from North Dakota’s Bakken Shale basin to the southern Illinois town of Patoka.

The Dakota Access pipeline proposal has faced a fierce backlash from environmentalists, farmers and other citizens living along the prospective route through Iowa. On February 2, the Bakken Pipeline Resistance Coalition introduced itself to the public, a consortium of 20 groups opposed to the pipeline.

“The Coalition is united to protect Iowa’s soil, water, communities, and the health of future generations by stopping the proposed Bakken crude oil pipeline,” reads the groups launch statement. “The controversial  project would cross 18 of Iowa’s counties as well as major rivers, including the North Raccoon River, Des Moines River, South Skunk River and Mississippi River.”

All Roads Lead to Iowa

With a large portion of the Dakota Access pipeline set to go through Iowa, the growing controversy over Dakota Access could present a game of political hot potato in the run-up to the 2016 Iowa Caucuses.

Perry recently visited Iowa and spoke at the Iowa Freedom Summit alongside numerous other contenders for the GOP presidential ticket.

Iowa Republican Governor Terry Branstad has come out in support of the Dakota Access pipeline and told the Iowa State Legislature to avoid “political interference” in the review process overseen by the IowaUtilities Board.

Perry hosted a fundraiser for Branstad in December 2013 in Houston, introducing the Iowa Governor to Texas Republican Party elite donors.

“Branstad declined to say how much money he took home from Houston, saying the contributions will eventually be made public when he files campaign finance reports,” the Des Moines Register reported about the trip. “No strings were attached to the Texas donations to his campaign, Branstad said, and he feels no obligation to endorse Perry for president in the 2016 Iowa caucuses.”

Branstad and Perry also appeared in an ad together in May 2014 in the run-up to the midterm elections, which saw Branstad win his race in landslide fashion.

Energy Transfer LNG Revolving Door

Energy Transfer Partners also owns the proposed Trunkline LNG export facility in coastal Lake Charles, Louisiana, which would ship gas obtained via fracking to the global market.

Perry is the newest addition to a long roster of powerful political officials who have passed through the government-industry revolving door and accepted a job either on a company Board or as a lobbyist for a company seeking to cash in on the fracked gas export boom. [Read our report on natural gas exports lobbying, produced by DeSmog and Republic Report: Natural Gas Exports: Washington’s Revolving Door Fuels Climate Threat]

According to lobbying disclosure forms, Adam Ingols — a lobbyist for Daryl Owen Associates and former chief of staff for the U.S. Department of Energy for President George W. Bush and special assistant for the Bush White House Office of Legislative Affairs — now lobbies for Energy Transfer Partners at the federal level.

The Texas Tribune also reported that Energy Transfer Partners is owned by Kelcy Warren, “a Dallas billionaire, [who] has been a major supporter of Perry’s political endeavors.” The Tribune reported that Warren gave $250,000 to Perry’s 2012 presidential Super PAC, Make Us Great Again, as well as “at least $20,000 for his 2010 re-election race.”

Warren is among the dozens of elite Republican Party donors who sit on the recently announced advisory board for Perry’s potential 2016 run for president, the Rick PAC Advisory Board.

At a January 28 news conference, Perry declared that the multiple felony charges against him will not impact his timetable for a potential 2016 presidential run.

Enbridge Gets Another Federal Tar Sands Crude Pipeline Permit As Senate Debates Keystone XL

Cross-Posted from DeSmogBlog

On January 16, the U.S. Army Corps of Engineers gave Enbridge a controversial Nationwide Permit 12 green-light for its proposed Line 78 pipeline, set to bring heavy tar sands diluted bitumen (“dilbit”) from Pontiac, Illinois to its Griffith, Indiana holding terminal.

The permit for the pipeline with the capacity to carry 800,000 barrels-per-day of tar sands dilbit came ten days after the introduction of S.1 — the Keystone XL Pipeline Act — currently up for debate on the U.S. Senate floor, which calls for the permitting of the northern leg of TransCanada’s Keystone XL.

Griffith is located just south of Whiting, Indiana, home of a massive refinery owned by BP. In November 2013, BP opened its Whiting Modernization Project, which retooled to refine up to 85-percent of its capacity as heavy dilbit from the tar sands, up from its initial 20-percent capacity.

Legal Challenge

In July 2014, environmental groups including the Sierra Club, National Wildlife Federation, Center for Biological Diversity and Environmental Law and Policy Center submitted a letter to the Army Corps, requesting a full National Environmental Policy Act (NEPA) review for Enbridge’s proposal.

As with TransCanada’s Keystone XL southern legEnbridge’s Flanagan South andEnbridge’s Alberta Clipper expansion, Enbridge dodged a more democratic and transparent NEPA review from the U.S. Environmental Protection Agency and other executive agencies.

“Once again, the Corps has improperly segmented its approval of an Enbridge tar sands pipeline so as to avoid evaluating the project’s true environmental impacts or the impacts of the ongoing expansion of the Enbridge system,” Doug Hayes, staff attorney for the Sierra Club, told DeSmogBlog.

TransCanada Energy East Clone

Just as DeSmogBlog has called Enbridge’s north-to-south dilbit pipeline network a “Keystone XL Clone,” Enbridge has quietly proposed and is currently permitting into existence a clone of TransCanada‘s controversial Energy East dilbit pipeline.

According to the map of Line 78 on Enbridge’s website, the pipeline will connect with Line 6B in Griffith. Line 6B is infamous for the biggest dilbit pipeline spill inU.S. history. Taking place in Kalamazoo, Michigan, environmental activists and advocates now refer to the 1 million+ barrel spill as the “dilbit disaster.”

Line 6B will then connect with Enbridge’s proposed Line 9 Reversal project (also known as the Eastern Canadian Refinery Access Initiative), which will bring tar sands dilbit to Canada’s east coast — like Energy East — for potential export.

Declaration of Money

Sierra Club, National Wildlife Federation and the Center for Biological Diversity, 350 Minnesota, Honor the Earth, Indigenous Environmental Network and others also sued the U.S. State Department on November 12 in an ongoing lawsuit for what they say was a violation of NEPA with regards to the State Department’s covert approval of the Alberta Clipper expansion project.

Enbridge requested to enter the case as an intervenor and the magistrate judge for the case recently accepted the request. Enbridge and the State Department have until January 30 to respond to the initial legal complaint.

As perhaps a foreshadowing of things to come, Robert Kratsch — a manager of design and construction for Enbridge and the lead point of contact for the Alberta Clipper expansion proposal — submitted a crucial legal memo in support of Enbridge’s intervention on December 5.

In so doing, Kratsch echoed the judge’s ruling in the NEPA lawsuit filed by environmental groups against the Army Corps of Engineers as it pertains to Keystone XL South.

After spending nine paragraphs explaining what the pipeline is and does, Kratsch delivered his knock-out blow, stating that nullifying the Alberta Clipper expansion project would put a damper on the company’s potential corporate profits.

Judge Ketanji Brown Jackson, an Obama appointee, agreed with this line of argument by TransCanada for Keystone XL South. Will Judge Michael J. Davis, a Bill Clinton appointee and designated judge for the Alberta Clipper expansion legal dispute, do the same?

With the Alberta Clipper expansion pipeline legal dispute ongoing and a legal challenge to Line 78 highly possible, one thing remains certain: if the past serves as prologue, corporate profits earned and potential loses will serve as the centerpiece for Enbridge’s legal argument going forward.

And as a recent article written by Boston College Law School professor Kent Greenfield (author of the book ”The Failure of Corporate Law: Fundamental Flaws and Progressive Possibilities”) explains, these dynamics have played out for almost a century.

“The eventual decision was, and still stands for, an iconic statement that corporations have no obligations beyond the bottom line,” Greenfield wrote in pointing to the landmark 1919 Dodge v. Ford Motor Co. decision handed down by the Michigan Supreme Court. “Courts, then and now…did not, and still do not, typically overturn the considered decisions of corporate managers.”

Federal Court Order: Explosive DOT-111 “Bomb Train” Oil Tank Cars Can Continue to Roll


Cross-Posted from DeSmogBlog

A U.S. federal court has ordered a halt in proceedings until May in a case centering around oil-by-rail tankers pitting the Sierra Club and ForestEthics against the U.S. Department of Transportation (DOT). As a result, potentially explosive DOT-111 oil tank cars, dubbed “bomb trains” by activists, can continue to roll through towns and cities across the U.S.indefinitely.

“The briefing schedule previously established by the court is vacated,” wrote Chris Goelz, a mediator for the U.S. Court of Appeals for the Ninth Circuit. “This appeal is stayed until May 12, 2015, or pending publication in the Federal Register of the final tank car standards and phase out of DOT-111 tank cars, whichever occurs first.”

Filing its initial petition for review on December 2, the Sierra Club/ForestEthics lawsuit had barely gotten off the ground before being delayed.

That initial petition called for a judicial review of the DOT’s denial of a July 15, 2014 Petition to Issue an Emergency Order Prohibiting the Shipment of Bakken Crude Oil in Unsafe Tank Cars written by EarthJustice on behalf of the two groups. On November 7, DOT denied Earthjustice’s petition, leading the groups to file the lawsuit.

Initially, DOT told the public it would release its draft updated oil-by-rail regulations by March 31, but now will wait until May 12 to do so. As reported by The Journal News, the delay came in the aftermath of pressure from Big Oil and Big Rail.

“In a joint filing, the Association of American Railroads (AAR) and the American Petroleum Institute (API) contend the tank car industry doesn’t have the capacity to retrofit the estimated 143,000 tank cars that would need to be modernized to meet the new specifications,” wrote The Journal News. “Nor can manufacturers build new tank cars fast enough, they say.”

The “bomb trains” carrying volatile crude oil obtained via hydraulic fracturing (“fracking”) from the Bakken Shale, then, will continue to roll unimpeded for the foreseeable future. They will do so in the same DOT-111 rail cars that put the fracked oil-by-rail safety issue on the map to begin with — the July 2013 deadly explosion in Lac-Mégantic, Quebec.

And as DeSmogBlog has reported, industry promises to phase-out DOT-111s on a voluntary basis have rung hollow.

“The courts and the administration are dragging their feet on common sense safety steps that will take the most dangerous oil tanker cars off the tracks, slow down these trains, and help emergency responders prepare for accidents,” Eddie Scher, communications director for ForestEthics, told DeSmogBlog.

“We filed our lawsuit because the DOT is not moving fast enough on safety. This court’s decision ignored the imminent threat to the 25 million Americans who live in the blast zone and the communities around the nation that don’t have the luxury of waiting for DOT and the rail and oil industry lobbyists to finish their rule.”

Heather Zichal, Former Top Obama Energy Aide, Named Fellow at Industry-Funded Atlantic Council

Cross-Posted from DeSmogBlog

Heather Zichal, former top climate and energy aide to President Barack Obama his top aide in crafting his 2008 presidential campaign energy platform, has joined the industry-funded Atlantic Council as a fellow at its Global Energy Center.

As revealed in multiple articles by DeSmogBlog, Zichal also sits on the Board of Directors of Cheniere, the first company to receive a permit from the Obama Administration to export gas obtained via the controversial hydraulic fracturing (“fracking”) process in 2012. Cheniere is one among dozens of the corporate donors to Atlantic Council.

Other oil and gas industry donors to the Atlantic Council include Chevron,ExxonMobilBP and many more.

“At the Atlantic Council, Zichal will focus on tomorrow’s energy challenges through global energy security, the responsible development of energy resources, and strategic foresight,” according to a press release announcing the hire.

On January 27, Zichal will moderate an Atlantic Council panel in Washington, DCtitled, “‘The Road to Paris’ Climate Series: Assessing US and Chinese National Plans and Their Potential Impacts on a Paris Agreement.”

Not Just Heather Zichal

Zichal follows in the footsteps of other former Obama Administration officials who have passed through the revolving door and now work for the Atlantic Council on energy issues.

They include:

-David Goldwyn, a former head of the U.S. State Department’s Bureau of Energy Resources under former U.S. Secretary of State and 2016 Democratic Party presidential nominee Hillary Clinton. Goldwyn also headed up and help found the State Department’s Global Shale Gas Initiative.

Among the many other hats he wears, Goldwyn serves as a non-resident senior fellow at the Atlantic Council’s Adrienne Arsht Latin America Center and as the chair of the Atlantic Council’s Energy Advisory Group.

“In that position, Goldwyn will spearhead the transformation of the Council’s energy program, providing strategic advice on the focus and direction of the program, and take a leading role in recruitment of the program’s director and experts,” explained a press release announcing Goldwyn’s ascendancy to a chairmanship. “The Energy Advisory Group will serve as a policy advisory board for energy issues across the Atlantic Council.”

Goldwyn has been an influential voice in support of the reforms opening up Mexico to international oil and gas corporations, authoring two reports on the subject for the Atlantic Council.

-Carlos Pascual, a former head of the U.S. State Department’s Bureau of Energy Resources under both Hillary Clinton and current U.S. Secretary of State John Kerry in the aftermath of Goldwyn’s time at the helm. Pascual serves on the Board of Directors for the Atlantic Council.

-Cynthia Quarterman, former administrator of the Pipeline and Hazardous Materials Safety Administration (PHMSA) under the Obama Administration.

Before heading up PHMSA, Quarterman worked as an attorney at the corporate law firm Steptoe & Johnson, “where she represented producers and pipeline companies in matters before the Department of the Interior, the Federal Energy Regulatory Commission, and the Department of Transportation,” according to the Atlantic Council.

Neither the Atlantic Council nor Heather Zichal responded to an email query from DeSmogBlog.

Center for Public Integrity Reveals How PR Firms Manufacture Consent for Oil, Big Business

Cross-Posted from DeSmogBlog

The Center for Public Integrity has broken new ground by publishing a months-long investigation into the public relations and influence-peddling spending conducted by Big Business trade associations between 2008-2012.

That investigation highlights spending for trade associations ranging from theAmerican Petroleum InstituteNational Mining AssociationEdison Electric InstituteAmerica’s Natural Gas Association and many others not in the oil, gas and coal industry. The energy industrial complex, though, by far spent the most on public relations according to the Center.

API by far spent the most money on public relations according to the Center’s analysis, which explained its research methodology as a side-bar to the story.

The methodology involved digging into Internal Revenue Service 990 forms, which list the top five contractors paid by trade associations, as long as the payments total more than $100,000. The Center explained that because some trade associations often leave descriptions vague in terms of what the money went toward, it made tracking the data all the more difficult.

“[T]rade groups often vaguely describe the services their top contractors provide as ‘professional fees’ or ‘consulting,’” they wrote. “Because many firms offer a wide range of services, it’s often unclear exactly what kind of work was done on the industry associations’ behalf.”

Public Relations Over Lobbying

The Center’s investigation focuses in particular on the fact that public relations efforts now trump lobbying efforts in terms of at-large spending for major trade associations.

Why more spending on PR and advertising and less on lobbying? Because “manufacturing consent” of the public, to use the namesake of the 1988 book by scholar Noam Chomsky, matters and it works. Steve Barrett, editor-in-chief of the PR industry trade publication PR Week, agrees.

“They certainly want to influence the general public,” Barrett told the Center, “because the general public will then influence the politicians, the lawmakers or the regulators in that particular industry.”

The investigation comes just two months after DeSmogBlog and Republic Report jointly released the first installment of an ongoing investigation exposing the government-industry revolving door and influence-peddling peddling machine going to bat on behalf of fracked gas exports.

Edelman Takes the Cake

According to the Center’s investigation, Edelman has gobbled up lucrative trade association contracts more than anyone else in terms of dollar amounts. This is something Kert Davies, head of the Climate Investigations Center and former head of research at Greenpeace USA, pointed out in an article explaining the importance of the Center’s work.

“The Edelman – API relationship accounted for over a quarter of all spending compiled by CPI and Edelman received a grand total of $347 million (2008-2012) from all its various trade association contracts,” wrote Davies.

“The CPI report’s revelations are striking, even for jaded climate/clean energy advocates. We knew Edelman was getting a lot of oil money from API and from various oil companies like Exxon and TransCanada, but its really a LOT of money, ranging from $33 to $75 million per year from American Petroleum Institute alone since 2008. Again, adding 2013 to the CPI compiled data, API has paid Edelman over $360 Million (2008-2013).”

Davies also unpacked far more about the history of the relationship between Edelman and API, also noting the crucial role played by mega-firm FleishmanHillard.

Center for Public Integrity’s long-form investigation digs into far more than just the energy industry influence-peddling machine and is worth reading in full.

Did My Coverage of Coal Baron Bob Murray v. Fracker Aubrey McClendon Lawsuit Lead To Sealing of Court Records?

Cross-Posted from DeSmogBlog

On December 12, Magistrate Judge Mark R. Abel issued an order for the U.S.District Court for the Southern District of Ohio to place five sets of court records under seal for the ongoing case pitting coal baron Robert E. Murray against Aubrey McClendon, one of the godfathers of the hydraulic fracturing (“fracking”) boom.

DeSmogBlog published parts of two sets of the five sets of documents ordered under seal by Abel in an October 2014 article about the Murray v. McClendon case. The documents we published revealed a lease for McClendon’s new venture — American Energy Partners — for the first time.

Bob Murray, owner of American Energy Corporation Century Mine in Ohio, sued Aubrey McClendon for allegedly infringing upon his company’s copyright in August 2013. He claimed McClendon commandeered the “American Energy” brand.

Both sides have now gone back-and-forth over discovery related issues for months. The dispute has shaken loose many newsworthy documents revealing much about McClendon’s new company in particular.

This includes the American Energy Partners lease; a local newspaper advertisement pushing readers to apply for an American Energy Partners job; heavily redacted depositions of officials representing both companies; a redacted document revealing some of the companies to which McClendon’s new venture sells the gas it produces; and more.

The rationale of Judge Abel’s decision to seal the court documents goes unexplained in his order.

DeSmogBlog reached out to Judge Abel for comment and received the following response:

It is my practice to let my filed orders speak for themselves. I recognize that the December 12, 2014 order (doc. 90) is cryptic. There is a protective order in this case that permits the parties to designate proprietary business information as highly confidential. When that information is presented to the court in a brief, the protective order requires the party filing the brief to request that the court order that the brief be sealed. When a sealed brief is filed, my practice is to require the party to file a redacted version of the brief that lets the public read the arguments the party is making to the court but does not include the information designated highly confidential. (The protective order provides that a party or member of that public has the right to challenge a highly confidential designation.)

On December 12, 2014, counsel for all parties called me and jointly requested that I order the briefs identified in the motion sealed. No briefs were or will be filed. The attorneys called on the telephone. It is my practice to listen to the litigators’ arguments on the phone, then reduce any ruling I have made to writing after the call. I do not record the telephone conversations.

DeSmogBlog mentioned the protective order referred to by Judge Abel in our initial article on the Murray v. McClendon case. Counsel for both parties in the case did not respond to a request for comment.

Sealed Documents Detailed

DeSmogBlog has followed this case closely since Murray filed his initial complaint in August 2013, regularly checking the docket and saving copies of the court documents along the way.

Thus, we possess most of the court documents now under seal via Abel’s order, with some already published in the initial Murray v. McClendon DeSmogBlog article and others now published here for posterity.

“If a sealed document is the type which the press and public have historically had access to, then that weighs in favor of finding a First Amendment right of access. With that in mind, it should be pretty obvious that the press and public have historically had access to records which were, well, already public,” Kel McClanahan, executive director of National Security Counselors, told DeSmogBlog.

“While there’s definitely no ‘cat out of the bag’ rule that says once something is filed publicly, it can never be sealed, there should be a higher standard for sealing something that was previously public,” McClanahan said.

Besides the American Energy Partners jobs advertisement published in the first DeSmogBlog piece, Abel also ordered a Murray memorandum in opposition to McClendon’s motion for a protective order to be placed under seal that was also published in the article. In that memo, Murray’s legal team argued that the protective order would have prohibited it from undergoing a more robust discovery process.

Abel also ordered the Affidavit of Heather Santini, a receptionist at American Energy Corporation, sealed. DeSmogBlog mentioned the document in its initial article on this case.

Both the memorandum in opposition to McClendon’s motion for a protective order and the Heather Santini affidavit make the argument that McClendon’s “American Energy” name choice has caused “potential and actual confusion” among customers and prospective customers, the standard which Murray Energy’s legal team says equals grounds for copyright infringement.

Other documents in DeSmogBlog’s possession, but not published in the initial article, include:

-the Declaration of Vladimir P. Belo, a member of Murray’s legal counsel for the case;

-a Discovery Dispute Conference Order issued by Abel;

-a Murray motion to extend discovery deadlines;

-another American Energy Partners jobs sales pitch;

-a recent McClendon line-by-line discovery response;

-emails exchanged in November between both parties’ legal counsels on discovery issues

-and an index to exhibits filed as part of a discovery dispute

Further, two batches of discovery-related contestation material — over 300 pages in total — are now under seal but published here.

Seal Order Legal?

A 2010 article published by the Federal Judicial Center — the education and research wing of the U.S. federal courts — titled ”Sealing Court Records and Proceedings: A Pocket Guide,” discusses both the legality and principles involved in the decision to seal court records in federal cases.

“Essential to the rule of law is the public performance of the judicial function,”the paper says. “The public resolution of court cases and controversies affords accountability, fosters public confidence, and provides notice of the legal consequences of behaviors and choices.”

Citing the landmark Nixon v. Warner Communications, Inc. U.S. Supreme Court case, the paper further explains that in U.S. federal courts there is an assumption of right to access court records.

“It is clear that the courts of this country recognize a general right to inspect and copy public records and documents, including judicial records and documents,” reads the ruling in that case.

In a related case, Associated Press v. U.S. District Court for the Central District of California, the U.S. Court of Appeals for the Ninth Circuit came to a similar conclusion about access to pretrial motion documents for civil cases akin to Murray v. McClendon.

“There is no reason to distinguish between pretrial proceedings and the documents filed in regard to them,” reads the opinion for that case. “We thus find that the public and press have a first amendment right of access to pretrial documents in general.”

Star Chamber Specter

Reporters Committee for Freedom of the Press also explains that — unlike what Judge Abel did for this case — judges must at least offer the public a legal rationale for sealing documents.

“Where the First Amendment protects the right of access to court documents, judges must, before restricting public access to a case, articulate specific, on-the-record findings demonstrating that sealing is necessary to serve a compelling government interest and that the sealing order is narrowly tailored to serve that interest,” they wrote.

Which begs the question: did the off-the-record phone conversations meet that legal and public interest barrier?

“Even though judges are supposed to take all things into account to avoid situations where both parties agree to do something that is still not in the public interest, many judges often resist denying something that both the parties agree on,” said McClanahan.

“Litigation is an adversarial system, and if the parties are in agreement, often judges will go along with it in the interest of efficiency. Judges value their time and energy as much as the rest of us.”

McClanahan further pointed out the slippery slope of sealing documents, which raises the specter of tipping the balance of the U.S. court system in an undemocratic direction.

“In the end, the strong presumption in favor of open court records is not about the dispute or even the parties, it is about the process. Americans have to have confidence in the integrity of the judicial process as a whole, and any deviation from that raises the specter of a Star Chamber,” he said. “It is for that reason that parties who wish to seal court records are supposed to have a much harder time of it than those who advocate transparency.”

Not Just Public Lands: Defense Bill Also Incentivizes Fracked Gas Vehicles

Cross-Posted from DeSmogBlog   

DeSmogBlog recently revealed how Big Oil’s lobbyists snuck expedited permitting for hydraulic fracturing (“fracking”) on public lands into the National Defense Authorization Act (NDAA) of 2015, which passed in the U.S.House and Senate and now awaits President Barack Obama’s signature.

A follow-up probe reveals that the public lands giveaway was not the only sweetheart deal the industry got out of the pork barrel bill. The NDAA also included a provision that opened the floodgates for natural gas vehicles (NGVs) in the U.S.—cars that would largely be fueled by gas obtained via fracking.

The section of the bill is titled, “Alternative Fuel Automobiles.” The “fuel described in subparagraph (E)” refers to natural gas, found within Title 49 of the United States Code‘s section 32901.

It means, as with electric vehicles, natural gas automobile manufacturers will now also receive financial credits under the new Corporate Average Fuel Economy standards introduced by President Obama in May 2009.

Introduced by Climate Denier Inhofe

The provision was initially introduced in February by U.S. Sen. James Inhofe (R-OK), a climate science denier, as the Alternative Fuel Vehicle Development Act.

Inhofe called it a “bill that would incentivize the production and purchase of…natural gas vehicles (NGVs)” in a press release announcing its introduction.

“The booming natural gas industry in America is delivering a cheap, domestic energy source for our homes and businesses, but this fuel source is being underutilized in our vehicles,” said Inhofe. “I have introduced the Alternative Fuel Vehicle Development Act to help the rest of the nation tap into the benefits of using natural gas in vehicles.”

Though introduced at the beginning of the year, the bill did not advance and had only one co-sponsor: U.S. Sen. Carl Levin (D-MI), the soon-to-be-retired co-sponsor of the NDAA of 2015. Levin cited President Obama’s support of natural gas as a “bridge fuel” in introducing the bill on the Senate floor.

“The President outlined in his State of the Union his goal to achieve energy independence through the use of alternative fuels,” said Levin in his floor statement. “He specifically mentioned natural gas as the bridge fuel that can grow our economy, create jobs for the middle class, and reduce carbon pollution. I am pleased to introduce legislation today that takes a step toward meeting that goal.”

On the day of the NDAA’s passage, Inhofe and Levin issued a follow-up press release on Section 318.

“Enactment of this bipartisan provision moves natural gas one step closer towards becoming a mainstream fuel for our everyday cars,” Inhofe declared. “Natural gas is an underutilized clean and abundant domestic energy resource for U.S. transportation in part due to outdated regulations. I am proud to have worked with Sen. Carl Levin to cut the red tape and help present Americans with another alternative to affordable, clean energy for their vehicles.”

Industry Lobbies, Then Cheerleads

Following the tried and true pattern, Big Oil — alongside the auto industry — first lobbied for the bill it likely wrote. Then once it passed, it praised it.

“Sen. Inhofe continues to be a champion for the NGV industry by introducing legislation that will encourage both automakers and vehicle purchasers to put more NGVs on American roads,” Richard Kolodziej, president of NGVAmerica said in a March press release after the initial introduction of the stand-alone bill.

Alongside the auto industry and other companies, America’s Natural Gas Alliance (ANGA) lobbied in quarter onetwo and three for the bill’s passage, according to lobbying disclosure forms reviewed by DeSmogBlog.

ANGA’s lobbying team for the NGVs issue embodies the government-industry revolving door.

It included Amy Farrell, former deputy assistant administrator for the George W. Bush Administration’s Environmental Protection Agency (EPA) and the associate director for environment & regulations for the Bush White House Council on Environmental Quality (CEQ)Frank Macchiarola, former Republican minority staff director for the US Senate Committee on Energy and Natural Resources, also lobbied for the cause.

On the Democratic side, ANGA was flanked by its CEO Marty Durbin, nephew of U.S. Sen. Dick Durbin (D-IL) and a former lobbyist for the American Petroleum Institute. Prior to becoming a lobbyist, Durbin worked as a congressional staffer.

Upon the NDAA of 2015’s passage, ANGA praised both fracking-related provisions, expedited permitting for fracking on U.S. public lands and natural gas vehicles, in a press release. Inhofe included ANGA’s natural gas vehicles provision statement in his press release, as well.

“This bill also promotes the tangible benefits that natural gas vehicles offer in increasing the use of an abundant and affordable American resource,” declared Macchiarola in ANGA’s release. “This provision helps pave the way for the deployment of cleaner, more efficient vehicles on our highways and allows our nation to enjoy the environmental and economic advantages natural gas offers.”

President Obama has declared strong support for NGVs in the past.

Locking in Fracking

The two provisions buried within the 1,600-plus page NDAA of 2015 serve as the last laugh for Big Oil in the U.S. as 2014 winds down.

With three liquefied natural gas (LNG) export terminals approved this year —fueled by the same revolving door exemplified by the NGVs provision — and the floodgates now opened for expedited fracking permitting on public lands, Big Oil has locked in U.S. fracking infrastructure for years to come.

Or at least until the shale runs dry, with public lands now offering a new major lifeline.

As it stands, California and New York are the last major obstacles resisting the U.S. fracking rush. But there exists no state in the union — with the combination of pipelines, petrochemical plants, manufacturing facilities and now more NGV infrastructure — that remains untouched by the fracking revolution.

Revealed: How Big Oil Got Expedited Permitting for Fracking on Public Lands Into the Defense Bill

Cross-Posted from DeSmogBlog

The U.S. Senate has voted 89-11 to approve the Defense Authorization Act of 2015, following the December 4 U.S. House of Representatives’ 300-119 up-vote and now awaits President Barack Obama’s signature.

The 1,648-page piece of pork barrel legislation contains a provision — among other controversial measures — to streamline permitting for hydraulic fracturing (“fracking”) on U.S. public lands overseen by the Bureau of Land Management (BLM), a unit of the U.S. Department of Interior.

Buried on page 2,179 of the bill as Section 3021 and subtitled “Bureau of Land Management Permit Processing,” the bill’s passage has won praise from both the American Petroleum Institute (API) and the Independent Petroleum Association of America (IPAA) and comes on the heels of countries from around the world coming to a preliminary deal at the United Nations climate summit in Lima, Peru, to cap greenhouse gas emissions.

We applaud the Senate…and are hopeful the president signs this measure in a timely fashion,” said Dan Naatz, IPAA lobbyist and former congressional staffer, in a press release

Alluding to the bottoming out of the global price of oil, Naatz further stated, “In these uncertain times of price volatility, it’s encouraging for America’s job creators to have regulatory certainty through a streamlined permitting process.”

Streamlined permitting means faster turn-around times for the industry’s application process to drill on public lands, bringing with it all of the air, groundwater and climate change issues that encompass the shale production process. 

At the bottom of the same press release, IPAA boasted of its ability to get the legislative proposal introduced initially by U.S. Sen. Tom Udall (D-NM) as the BLM Permit Processing Improvement Act of 2014 after holding an “educational meeting” with Udall’s staffers. Endorsed by some major U.S. environmental groups, Udall took more than $191,000 from the oil and gas industry during his successful 2014 re-election campaign.

IPAA’s publicly admitted influence-peddling efforts are but the tip of the iceberg for how Big Oil managed to stuff expedited permitting for fracking on U.S. public lands into the National Defense Authorization Act of 2015.

IPAA, API Lobbying Blitz

According to Open Secrets, IPAA, API, ExxonMobilAmerica’s Natural Gas Alliance (ANGA), ConocoPhillips and private equity firm KKR — employer of former head of the CIA David Petraeus — all deployed lobbyists to ensure passage of the BLM Permit Processing Improvement Act, now Section 3021 in the NDAA of 2015.

In quarter two and three, KKR deployed Akin Gump’s Ryan Thompson, chief-of-staff for climate change denier U.S. Sen. James Inhofe (R-OK) between 2002-2010, to lobby for the bill. A self-described mini oil and gas company,” the New York City-headquartered KKR owns numerous oil and gas assets in North Dakota’s Bakken Shale basin.

Warren Buffett‘s Berkshire Hathaway Energy, formerly known as MidAmerican Energy Holdings Company and owned by his holding company Berkshire Hathaway, also lobbied for the bill. Burlington Northern Santa Fe (BNSF), owned by Berkshire Hathaway, is a major carrier of Bakken crude-by-rail.

Pilot Project Lifts Off

One of the original Senate-side co-sponsors of the BLM Permit Processing Improvement Act was U.S. Sen. John Hoeven (R-ND), who has also also served as a ringleader of other efforts to expedite permitting for fracking on public lands. First elected to the Senate in 2010, before which he was the Governor of North Dakota, the oil and gas industry has given Hoeven close to $325,000 in contributions since his preliminary Senate run.

In 2013, a bill he sponsored — the BLM Streamlining Act — passed by Congress with only one dissenting vote between both chambers combined. It was signed into law by President Obama on the day after Christmas.

That Streamlining Act created a pilot project for expedited permitting of fracking on public lands in the Bakken Shale. It was lobbied for by ExxonMobil, KKR, Marathon Oil, Chesapeake Energy and IPAA, among others. 

By comparison, the BLM Permit Processing Improvement Act of 2014 and now its equivalent Section 3021 in the National Defense Authorization Act of 2015, expedites permitting of fracking on all public lands.

Hoeven had previously attempted to pass a bill to streamline fracking permitting on BLM public lands and “recognize the primacy of States,” calling it the Empower States Act of 2013. That bill was lobbied for by both ExxonMobil and API.

White House Help: Heather Zichal

The Obama White House has also long shown interest in the expedited permitting approach for fracking, portending a likely looming sign-off on the bill.

Beyond signing the BLM Streamlining Act into law on December 26, 2013, President Obama also authorized Executive Orders in March 2012 and May 2013 calling on streamlined permitting of all energy infrastructure projects.

During her time as Obama White House top energy and climate aide, Heather Zichal — now on the Board of Directors for fracked gas exporting company Cheniere — oversaw the signing of an April 2012 Executive Order mandating creation of an interagency working group to streamline regulatory oversight for fracking in the U.S. 

Zichal also laid the groundwork for lack of transparency on injection of fracking chemicals into the ground on U.S. public lands, bringing the American Legislative Exchange Council (ALEC) approach for chemical transparency to the BLM. Before inserting the provision into the BLM draft rules currently being finalized, Zichal “huddled” with the industry numerous times.

“Zichal met more than 20 times in 2012 with industry groups and company executives lobbying on the proposed rule,” reported EnergyWire. “Among them were the American Petroleum Institute (API) and the Independent Petroleum Association of America (IPAA), along with BP America Inc., Devon Energy Corp. and Exxon Mobil Corp.”

Protect Our Public Lands Act

Despite obvious extreme odds stacked against them, two members of the U.S. House Progressive Caucus — with the support of Food and Water Watch and several other progressive groups — have introduced a bill to ban fracking on U.S. public lands.

Sponsored by U.S. Rep. Mark Pocan (D-WI) and U.S. Rep. Jan Schakowsky (D-IL), the two-page Protect Our Public Lands Act “prohibit[s] the lessee from conducting any activity under the lease for the purpose of hydraulic fracturing.”

“We owe it to our children and grandchildren, and their children and grandchildren, to ensure the protection of public lands,” said Schakowsky of her support for the legislation. “This bill  in banning fracking on those lands  helps us follow through on that important promise.”

But only one thing can really receive a promise in this case: public interest groups are in a David vs. Goliath fight. And Goliath, clearly, is well-organized and well-mobilized on the issue as 2014 comes to a close.

Obama Signals Keystone XL “No” on Colbert Report As Enbridge “KXL Clone” He Permitted Opens

Cross-Posted from DeSmogBlog

In his December 8 “Colbert Report” appearance, President Barack Obama gave his strongest signal yet that he may reject a presidential permit authorizing the Alberta to Cushing, Oklahoma northern leg of TransCanada‘s Keystone XL tar sands pipeline. 

Yet just a week earlier, and little noticed by comparison, the pipeline giant Enbridge made an announcement that could take the sails out of some of the excitement displayed by Obama’s “Colbert Report” remarks on Keystone XL North. That is, Enbridge’s “Keystone XL Clone” is now officially open for business.

“Keystone XL Clone,” as first coined here on DeSmogBlog, consists of three parts: the U.S.-Canada border-crossing Alberta Clipper pipeline; the Flanagan, Illinois to Cushing Flanagan South pipeline; and the Cushing to Freeport, Texas Seaway Twin pipeline.

Enbridge announced that Flanagan South and its Seaway Twin connection are now pumping tar sands crude through to the Gulf of Mexico, meaning game on for tar sands to flow from Alberta to the Gulf through Enbridge’s pipeline system.

Alberta Clipper, now rebranded Line 67, was authorized by Hillary Clinton on behalf of the Obama State Department in August 2009 and got a quasi-official permit to expand its capacity by the State Department over the summer. That permit is now being contested in federal court by environmental groups.

Flanagan South, meanwhile, exists due to a legally contentious array of close to 2,000 Nationwide Permit 12 permits handed out by the U.S. Army Corps of Engineers, which — as with Alberta Clipper expansion — has helped Enbridge usurp the more democratic and transparent National Environmental Policy Act (NEPA) review process.

Geithner, Exxon Stand to Gain

Key actors within the oil industry have already indicated the opening of the floodgates is a game changer, enabling hundreds of thousands more barrels per day of tar sands dilbit to flow straight to the Gulf via Enbridge’s system.

Tar sands producer MEG Energy, for example, will send up to 100,000 barrels of heavy crude per day through “Keystone XL Clone.” MEG’s largest private equity owner is Warburg Pincus, whose current president is Timothy Geithner, former Secretary of the Treasury under President Obama.

And a recent story published by Bloomberg noted that ExxonMobil subsidiary  Imperial Oil — owner of the Kearl Oil Sands project — will ship some of its tar sands product through Flanagan South.

Adding to Climate Change Problem

On “The Colbert Report,” Obama cited the myriad problems of Keystone XL North — not noting he has already approved Keystone XL South via Executive Order — and then juxtaposed that with what he deems its few benefits. 

“We’ve got to make sure that it’s not adding to the problem of carbon and climate change. We have to examine that, and we have to weigh that against the amount of jobs that it’s actually going to create, which aren’t a lot,” Obama remarked. “Essentially, this is Canadian oil passing through the United States to be sold on the world market. It’s not going to push down gas prices here in the United States. It’s good for Canada.”

Then Obama closed with a note about the climate impact, offering words just as true for TransCanada’s Keystone Pipeline System as they are for Enbridge’s “Keystone XL Clone,” otherwise known as the Western Gulf Coast Access Initiative in the company’s business nomenclature.

“These young people are going to have to live in a world where we already know temperatures are going up,” said Obama. “We’ve got to measure [the pipeline’s benefit] against whether or not it’s going to contribute to an overall warming of the planet — which could be disastrous.”

Climate change makes no exceptions for tar sands pipelines owned by Enbridge versus those owned by TransCanada. After all, at the end of the day, climate change driven by fossil fuel emissions is really just a terrifying mathematical equation, and carbon is carbon.

Whether it’s called Keystone or Enbridge or something else, a tar sands export pipeline by any name is a fuse to a carbon bomb the world cannot afford.