Q&A: ALEC’s new tactics to weaken renewable laws

This Q&A originally appeared in Midwest Energy News. 

By 

ALEC40Though bills meant to revoke or undercut renewable standards in numerous states failed last session, clean energy advocates say the model Market Power Renewables Act and the Renewable Energy Credit Act proposed by ALEC’s energy task force during the conference pose a fresh threat.

The Market Power Renewables Act argues for a “voluntary market” that would allow people to invest in renewable energy if they choose without instituting mandates, and it claims that such an approach could lead to more renewable energy development overall.

The Renewable Energy Credit Act would expand the types of energy that would count toward credits. It would also remove caps on the proportion of an RPS that can be met through credits – a provision now enshrined in many states’ laws. And it would also allow the renewable standard’s full term – for example through 2025 – to be met in advance by bulk purchases of credits to meet future requirements.

The ALEC conference also included presentations by the American Petroleum Institute on local hydraulic fracturing bans; offshore energy as “good sense and good cents”; nuclear energy’s role in baseload electricity production; and the U.S. EPA’s “assault on state sovereignty,” hosted by a representative of the Competitive Enterprise Institute.

Gabriel Elsner, director of the pro-clean energy watchdog Checks and Balances Project, was among the advocates banned from ALEC’s meeting in Oklahoma City in May. Elsner was in Chicago for the recent conference, in an effort to learn more about state legislators’ and corporate executives’ ties with ALEC. The Checks and Balances Project also collaborated with the Center for Media and Democracy and Greenpeace to publicize ALEC’s confidential agenda and proposed model bills.

Midwest Energy News spoke with Elsner during his visit.

Midwest Energy News: Given that ALEC was unable to pass its bills last year, how serious a threat do these model bills pose to RPS standards and to renewable energy development as a whole?

Elsner: ALEC completely failed in 2013 to weaken or eliminate RPS laws. We’ve seen that because there’s bipartisan support for clean energy. Businesses and communities are seeing local economic development and job creation because of these laws.

ALEC’s new model legislation is a stealth attack on RPS’s. They are framed in a way that makes them seem pro-clean energy, but would open up RPS’s to allow sources of electricity – from large hydropower to landfill gas — to be included in state laws that are supposed to incentivize clean energy sources like wind, solar and geothermal. The net effect would be reduced incentives for local, clean energy development in states that adopted this new bill.

ALEC’s proposed “Market-Power Renewables Act” doesn’t mention hydropower or landfill gas – how do you figure it would allow such energy to be counted toward RPS compliance?

This bill as written would open up the market to the different registries that regulate renewable energy credits. For example, in Kansas, your renewable energy credits are regulated by a different entity than in California. But if Kansas passes this law, they could buy RECs from hydropower plants in California or Oregon to fulfill the entire RPS.

That’s already allowed in some states, how would this law be different?

I looked at the regional registries for RECs listed in the model bill. REC registries define renewable energy differently – some include hydropower plants as large as hundreds of megawatts. Others include landfills gas and biomass projects.

ALEC’s new model bills would create a lowest common denominator that would weaken the traditional RPS’s by allowing out-of-state RECs to fulfill the entire RPS. If building a wind turbine in Kansas cost a dollar and five cents but you could go out and buy an REC for a dollar from a hydropower plant in Maine, the utilities would go out and buy a credit and not build the local clean energy project. It would eliminate the economic benefit and jobs in the state.

Palmer-House-Phillip-CantorWhat exactly is an ALEC model bill and where does it go from here?

The bills were discussed by the ALEC Energy, Environment and Agriculture Task Force on Friday and voted on by a combination of corporate representatives like AEP and Exxon Mobil and legislators who sit on the task force. Once it passes the task force, a bill goes to the executive board of ALEC. [If the board approves,] it becomes a model bill and is sent out to ALEC legislators across the country.

Who are ALEC legislators?

ALEC doesn’t publish a list of which legislators are members. The Center for Media and Democracy has compiled a list at ALECExposed.org. Right now, we know that about 25 percent of all state legislators are members of ALEC. Legislators who attacked RPS’s last year were in Chicago for the conference.

At the conference ALEC also discussed a model resolution supporting grid modernization. This would appear to put ALEC on the same page as clean energy groups. Is their support really a way to introduce curbs on improving the grid or promoting renewables on the grid?

It would be great if utilities were for grid modernization because it could lead to more clean energy development, smart meters, net metering. But more likely is that members of the ALEC energy task force are supporting grid modernization to maximize the benefits to the utilities at the expense of ordinary consumers.

It’s also a model resolution – not model legislation – so it lacks any details on what pieces of grid modernization they would actually support. The model resolution supports cost recovery by utilities, but would they support the increased use of smart meters and net metering?

If model bills don’t benefit the utilities and other fossil fuel interests funding ALEC, it’s probably not going to pass the task force.

ALEC calls for the possibility of buying renewable energy credits from businesses and private citizens. Might this in a sense further the goal of distributed energy and create incentives for people or businesses to generate their own renewable energy?

In theory this could lead to increased use of clean energy by opening up a voluntary market for RECs. But it’s more likely that opening the RPS to large existing hydro and other sources of electricity would water down the market and undermine in-state clean energy development.

It’s important to point out that RPS’s are already driving clean energy investment. In Kansas alone, it resulted in $3 billion of private sector investment in clean energy last year. These policies are working – if the members of ALEC really want to support clean energy they should work to increase the RPS standards.

The ALEC energy task force also passed a resolution to oppose a carbon tax. How much political significance does this have, especially given that ALEC works on the state level, and a carbon tax would be federal?

[The resolution] is a problem because it is a message to our national representatives in Congress. If state legislatures start passing resolutions against a carbon tax, it would send a strong message to people in Washington, D.C. that a carbon tax is not politically feasible.

What do groups hope to accomplish by publicizing ALEC’s agenda and model bills?

Transparency is always a good thing. ALEC for far too long has operated behind closed doors – lobbying our state legislators on behalf of their corporate members. The Checks and Balances Project is trying to bring accountability to that process by showing the public that major fossil fuel interests are working to impact our energy policy through ALEC.

Have these efforts had an impact already, such as with the failure of the bills in the past year?

I think that they have certainly mobilized people who are in favor of clean energy. ALEC’s attacks on clean energy mobilized businesses and other allies to defend these important policies. I think these attacks on something as popular as clean energy is also having an impact on ALEC itself, with many corporations deciding to leave ALEC because of the controversy surrounding the organization.

In regards to ALEC’s energy work, it’s no surprise that they are launching the next attack on clean energy policies. ALEC is a front group representing major fossil fuel interests, that see the growth of the clean energy industry as a long-term competitive threat.

Fossil Fuel Interests Continue Attacks on Clean Energy Policies

This response was originally posted at National Journal’s Energy Insiders blog, which asked energy experts this week, “How Bright Is Renewable Energy’s Future?”

The outlook for clean energy remains strong because smart investments like state Renewable Portfolio Standards (RPS) are combining with technological innovation to produce tremendous growth for the industry and tens of thousands of good-paying American jobs. These policies have successfully stood up to forceful attacks from entrenched fossil fuel interests in more than a dozen states in the past year. Washington should take note that the public supports and wants more energy from renewable sources.

At the state level, fossil fuel interests have worked through the American Legislative Exchange Council (ALEC) to weaken or eliminate RPS, because the clean energy industry poses a competitive threat to their market share. State renewable energy standards are projected to add enough new renewable power capacity by 2025 to power 47 million homes.

So, it’s no surprise that fossil fuel interests like American Electric Power, Peabody Coal, ExxonMobil and others are working to rollback renewable energy laws. These corporations that sell electricity produced from coal and natural gas are in direct competition with electricity generated from clean energy sources. This year, ALEC members and fossil fuel-funded front groups worked to rollback RPS laws in at least 13 states. But, a bipartisan coalition of business leaders, farmers and clean energy advocates stopped them in their tracks. Of all the bills proposed by ALEC members to weaken or eliminate RPS, 0 out of 13 passed, including in key target states like Kansas, Missouri and North Carolina.

Despite failing completely in 2013, ALEC’s energy task force met last week to propose new model bills that would effectively gut RPS laws by allowing large, existing hydro and landfill gas and other electricity sources from out-of-state to count towards the Renewable Portfolio Standards. The Market-Power Renewables Act and the Renewable Energy Credit Act would let utilities meet the clean energy standards by purchasing credits from out-of-state companies instead of generating or buying their own clean energy. In effect, the new model bills would eliminate incentives for in-state clean energy investment that are creating jobs and economic opportunities. Since their inception 10 years ago, RPS laws have leveraged over $100 billion in private sector investment in clean energy in 29 states.

ALEC and fossil fuel-front groups are lobbying our state representatives and spreading disinformation behind closed doors to attack pro-clean energy laws. With energy policy mostly stalled at the federal level, fossil fuel-funded attacks on the state level will continue and likely ramp up in the future, posing a major threat to the clean energy industry and the policies that support its growth.

Conflict of interest: State Department contractor on Keystone XL study lied about ties to TransCanada & oil industry

ERM employee tried to cover up deceit online

WASHINGTON, D.C. – The company hired by the State Department to review the environmental impact of the Keystone XL tar sands pipeline lied on its conflict of interest disclosure form about its work for pipeline builder TransCanada and other oil companies, according to research released today by Friends of the Earth and The Checks & Balances Project.

Friends of the Earth’s investigation of the business connections of Environmental Resources  Management — the London-based international consulting firm that conducted a study for the State Department claiming the pipeline will not cause significant environmental harm — uncovered an extensive dossier of publicly available documents that show:

  • On its conflict of interest disclosure forms, ERM lied to the State Department about not working with TransCanada. In fact, ERM and TransCanada have worked together at least since 2011 on another pipeline project in Alaska.
  • ERM lied again when it said it had no relationship with any business that would be affected by construction of the Keystone XL, which would carry tar sands oil from northern Alberta to refineries on the Gulf Coast. In fact, ERM’s own publicly available documents show that the firm has business with over a dozen companies with operating stakes in the Alberta tar sands.
  • In recent weeks, as calls grew louder for an investigation of the numerous conflicts of interest tainting the State Department’s handling of the Keystone proposal, an ERM employee tried to cover up his work for the Alaska Pipeline Project, a partnership between ExxonMobil and TransCanada.

“From the beginning, the State Department’s review of Keystone has been plagued by influence peddling and conflicts of interest,” said Ross Hammond, senior campaigner for Friends of the Earth. “This is more serious: If ERM lied about its relationship with TransCanada, how can Secretary Kerry, President Obama or the American people believe anything the company says about the pipeline’s environmental impact?”

Hammond said ERM’s lies call into question the entire Keystone XL environmental review process. Friends of the Earth and The Checks & Balances Project have called for an investigation by the State Department’s Inspector General into how ERM was hired given these conflicts of interest. In the wake of the new evidence that ERM lied on State Department disclosure forms, the groups are asking Secretary of State John Kerry to throw out the ERM study and not allow it to determine the Obama Administration’s decision on whether to issue a pipeline permit.

In papers filed with the State Department in June 2012, ERM certified that it had “no existing contract or working relationship with TransCanada” for at least three years. But public records show that TransCanada, ERM and an ERM subsidiary, Oasis Environmental, have worked together at least since 2011 on the Alaska pipeline project.

On its conflict of interest form, ERM also certified that it had no “direct or indirect relationship … with any business entity that could be affected in any way by the proposed work.” But ERM’s own publicly available documents show that in the period 2009-2012 the firm was working for over a dozen of the largest energy companies involved in the Canadian tar sands which stand to benefit if Keystone is built, including Exxon, Shell, Chevron, Conoco Phillips, Total and Syncrude.

More recently, on May 14 the LinkedIn profile for Mark Jennings listed him as Socioeconomic Advisor for ERM. Among his roles for the company were since 2011, “Consultant to ExxonMobil Development Company for the Alaska Pipeline Project,” for which Exxon and TransCanada are partners. But less than a month later, his LinkedIn profile made no mention of his work for ERM.

The State Department’s review of Keystone XL has been sharply criticized by the EPA and the scientific community for failing to consider the climate and other impacts of the pipeline. The Checks and Balances Project and Friends of the Earth said it is impossible for the State Department to fairly evaluate whether the pipeline is in the national interest when its environmental review was conducted by a company with deep ties to the oil industry.

“Secretary Kerry must halt this flawed review process and direct the State Department to conduct a full, unbiased review of the Keystone XL pipeline’s impact,” said Gabe Elsner, director of the Checks and Balances Project. “In addition, the State Department Inspector General should pursue a full investigation into how a contractor with clear conflicts of interest was allowed to write the U.S. government’s assessment of Keystone XL and why the State Department failed to bring those conflicts of interest to light. Finally, the State Department should determine appropriate disciplinary actions for ERM to discourage contractors from lying to the federal government in the future.”

State Department Inspector General Probing Keystone XL Contractor’s Conflicts of Interest

In yet another investigation into the Obama Administration’s activities, the State Department Inspector General is probing the conflicts of interest surrounding the contractor that performed the Keystone XL review,.

ERMProposalThe American public was supposed to get an honest look at the impacts of the Keystone XL pipeline. Instead, Environmental Resources Management (ERM), a fossil fuel contractor, hid its ties from the State Department so they could green light the project on behalf of its oil company clients.

Hiring an oil company contractor to review an oil pipeline that its clients have a financial interest in should be illegal – and it is. The Federal Government has strict laws to avoid conflicts of interest and prevent the hiring of contractors who cannot provide unbiased services.

Unredacted documents from the contractor’s proposal (revealed by Mother Jones) show that the company had worked for TransCanada, ExxonMobil and other fossil fuel companies that have a stake in the Canadian Tar Sands.

But, ERM misled the State Department at least twice in its proposal (see C&BP’s original post on ERM’s conflicts of interest)– which may have led to its selection by the State Department to review the Keystone XL pipeline.

OCI Question 6

First, ERM answered “No” to the question “Within the past three years, have you (or your organization) had a direct or indirect relationship (financial, organizational, contractual or otherwise) with any business entity that could be affected in any way by the proposed work?“ ERM appears to have added to the Yes/No questionnaire that, “ERM has no existing contract or working relationship with TransCanada.” Regardless of the addendum, the oil company contractor misled the State Department by checking “No” to the specific question above. Despite the fact that unredacted documents show that ERM worked for TransCanada and other fossil fuel companies with a stake in Keystone XL pipeline in the three years prior to its proposal.

Second, ERM claimed it was not an energy interest. The State Department question defines an energy interest in part as any company or person engaged in research related to energy development. Yet, ERM has worked for all of the top five oil companies and dozens of other fossil fuel companies. In other words, ERM is clearly an energy interest.

How can we trust ERM to perform an honest review of the Keystone XL pipeline, if it can’t answer a yes/no question honestly?

These misleading statements should have been flagged by the State Department and the contractor should not have been able to perform the review because of these seeming conflicts of interest.

ERMLetterBecause of the issues above, Checks & Balances Project (C&BP) and 11 environmental, faith-based and public interest organizations sent a letter  [.PDF] on April 8, 2013, calling on Secretary of State John Kerry and the State Department Deputy Inspector General Harold Geisel to investigate two things: first, whether ERM hid conflicts of interest which might have excluded it from performing the Keystone XL environmental assessment and second, how State Department officials failed to flag inconsistencies in ERM’s proposal.

A few weeks later, C&BP received a voicemail from a Special Agent at the State Department’s Office of Inspector General (OIG):

Hello Mr. Elsner, my name is Special Agent Pedro Colon from the State Department’s Office of Inspector General.  I’m calling to inform you that we have received your request and are reviewing the matter.  If you have any questions please contact me at 703-284-2688.

On May 7, 2013, I called Special Agent Colon but he was unable to speak at the time. I followed up the next day and spoke with the Special Agent via phone regarding the request for an investigation. I asked a few basic questions about the status of the complaint and asked specifically if C&BP would be informed should the complaint be fully investigated by the Office of Inspector General (OIG). Special Agent Colon informed me that he could not speak to any of the questions and referred us to other staff in the OIG.

On May 9, 2013, I received an email from the OIG General Counsel saying, “that the complaint was being processed per the OIG hotline procedures and is under review.” (See the entire email correspondence here [.PDF])

I then asked the OIG General Counsel the same question he asked Mr. Colon:

If the hotline is moved out of the review process and onto the next step (an investigation?), will I be notified?

The OIG  replied via email saying that the OIG Office of Investigations will not comment if it is engaged in an investigation.

The correspondence between C&BP and the OIG indicates that there is a probe into the Keystone XL review conflicts of interest.

The public was supposed to get an honest look at the impacts of the Keystone XL pipeline. Instead, ERM, an oil company contractor, misled the State Department, in what appears to be an attempt to green light the project on behalf of oil industry clients.

The American Public needs a full investigation into the conflicts of interest and misleading statements of the Keystone XL review contractor, Environmental Resources Management.

Secretary Kerry needs to stop the Keystone XL process until the Inspector General completes a full investigation of these conflicts of interest and the State Department has an unbiased review of Keystone XL’s impact.

ALEC’s Most Wanted: Exposing a front group for fossil fuel interests (and other corporations)

ALEC Most WantedThe Center for Media and Democracy’s (CMD) Brendan Fischer and Nick Surgey uncovered an internal document from the American Legislative Exchange Council (ALEC) at the controversial organization’s meeting last week in Oklahoma City. The document entitled “OKC anti-ALEC photos” featured the headshots of eight reporters and public interest advocates that have written about ALEC or been critical of ALEC’s activities (as a front group working on behalf of its corporate membership).

CMD’s Surgey attempted to attend the keynote address by Oklahoma Governor Mary Fallin, which was billed as open to the press. After registering for press credentials at the ALEC registration desk, Mr. Surgey ascended the escalator towards the keynote speech, but was confronted by ALEC staff members and then approached by a uniformed Oklahoma City police officer.

Mr. Fischer and Surgey recount the exchange in which Surgey had his credentials revoked and was ejected from the ALEC meeting.  From PR Watch:

“I need those credentials,” the officer said.

“I registered,” Surgey replied.

“No, you didn’t,” said a female ALEC staffer, who was accompanying the officer.

“I did, downstairs,” he said.

“It was… you shouldn’t have been able to.”

The reason Surgey shouldn’t have been allowed to register, according to the ALEC staffer: “Because we know who you are.

Surgey asked the ALEC staffer for her name as she asserted that he had to leave:

Can I ask your name?” Surgey asked the ALEC staffer who challenged his press credentials.

“Erm, why?” she replied.

“Is there any reason you wouldn’t want to tell me your name?”

“Yeah, because I know who you are,” she said.

The staffer — whose organization had developed talking points claiming to support the First Amendment, which protects a free and vibrant press — added: “Because you’re going to write an article about it.”

Less than 10 minutes after registering as press, Surgey had his credentials revoked and was ejected from the ALEC meeting by a police officer. As he was escorted away, the ALEC staffer repeated: “We know exactly who you are.”

As Director of the Checks & Balances Project, I was one of the eight people featured on the “ALEC Most Wanted” document alongside other reporters and public interest advocates who have criticized ALEC’s efforts to influence state legislators on behalf of special interests.  Fischer and Surgey write:

The page featured pictures and names of eight people, four of whom work with CMD, including Surgey, CMD’s general counsel Brendan Fischer and its Executive Director Lisa Graves, as well as CMD contributor Beau Hodai.

It is not known whether the photo array of people who have reported on or criticized ALEC was distributed to ALEC members or shared with Oklahoma City law enforcement.

Other targets on the document included The Nation‘s Lee Fang, who has written articles critical of ALEC, and Sabrina Stevens, an education activist who spoke out in an ALEC task force meeting last November. Also featured were Calvin Sloan of People for the American Way and Gabe Elsner of Checks and Balances Project, both of whom are ALEC detractors.

The name of ALEC Events Director Sarah McManamon was in the top corner, indicating the document was printed from her Google account.

ALEC's_Most_Wanted OriginalAs Fischer and Surgey point out, ALEC claims to support the freedom of the press. But in practice, the organization seems reluctant to provide transparency and access required for a free press to be functional.   Instead, “ALEC assembled a dossier of disfavored reporters and activists,” and “kicked reporters out of its conference who might write unfavorable stories…”

ALEC’s sensitivity to transparency shows that the accountability work by C&BP, CMD, People for the American Way and others is working. A free society can’t work unless there is some check on the concentration of power. Now, more than ever, society needs more of the most powerful check on concentrations of power – public scrutiny. Most recently, C&BP has worked to expose ALEC’s efforts to eliminate clean energy laws in states across the country and bring to light that these attacks are being driven by powerful special interests.

ALEC exemplifies how fossil fuel corporations and other special interests have an oversized influence in our public process. And, C&BP is proud to be part of the effort to expose ALEC, fossil fuel-funded front groups and other fossil fuel interests using their power and resources to attack clean energy policies — even if it lands us on ALEC’s Most Wanted list.

C&BP Calls for State Dept. Investigation into Keystone XL Consultant’s Conflicts of Interest

ERMLetter

Letter to Secretary of State John Kerry and State Dept. Deputy Inspector General Harold Geisel

Yesterday, Checks & Balances Project and 11 environmental, faith-based and public interest organizations called on Secretary of State John Kerry and the State Department Deputy Inspector General Harold Geisel to investigate whether Environmental Resources Management (ERM) hid conflicts of interest which might have excluded it from performing the Keystone XL environmental assessment and how State Department officials failed to flag inconsistencies in ERM’s proposal. Tom Zeller, Senior Writer at The Huffington Post, wrote an article highlighting the letter callings for an investigation.

Early last month, the State Department released a 2,000 page environmental impact study for the Keystone XL pipeline claiming that the pipeline would not have major impact on the environment. But, Environmental Resources Management (ERM), the consulting firm hired to perform the “draft supplemental environmental impact statement (SEIS),” has ties to fossil fuel companies with major stakes in the Alberta Tar Sands. This conflict of interest was not accurately disclosed  in ERM’s answers on a State Department questionnaire. Checks & Balances Project considers ERM’s responses in its proposal to be intentionally misleading statements.

Unredacted Documents Uncover Conflicts of Interest
Last week, Mother Jones released unredacted versions of the ERM proposal, showing that three experts “had done consulting work for TransCanada and other oil companies with a stake in the Keystone’s approval.”

The unredacted biographies show that ERM’s employees have an existing relationship with ExxonMobil and worked for TransCanada within the last three years among other companies involved in the Canadian tar sands.

Here’s more from Mother Jones’ Andy Kroll:

“ERM’s second-in-command on the Keystone report, Andrew Bielakowski, had worked on three previous pipeline projects for TransCanada over seven years as an outside consultant. He also consulted on projects for ExxonMobil, BP, and ConocoPhillips, three of the Big Five oil companies that could benefit from the Keystone XL project and increased extraction of heavy crude oil taken from the Canadian tar sands.

Another ERM employee who contributed to State’s Keystone report — and whose prior work history was also redacted — previously worked for Shell Oil; a third worked as a consultant for Koch Gateway Pipeline Company, a subsidiary of Koch Industries. Shell and Koch have a significant financial interest in the construction of the Keystone XL pipeline. ERM itself has worked for Chevron, which has invested in Canadian tar-sands extraction, according to its website.”

When asked about who at the State Department decided to redact ERM’s biographies, a State Department spokesperson said “ERM proposed redactions of some information in the administrative documents that they considered business confidential.” Disclosing past clients may be business confidential information, but from what the biographies show, ERM may have recommended the redactions to hide conflicts of interest from public disclosure.

Problem with ERM Answers on Conflict of Interest Questionnaire 

ERMProposal

ERM’s Proposal to the State Department

The biographies on ERM’s proposal show that the company has had direct relationships with multiple business entities that could be affected by the proposed work in the past three years.

In the “Organizational Conflict of Interest Questionnaire,” the State Department asks (page 42), “Within the past three years, have you (or your organization) had a direct or indirect relationship (financial, organizational, contractual or otherwise) with any business entity that could be affected in any way by the proposed work?“ ERM’s Project Manager, Steve Koster, checked “No” but appears to have added to the Yes/No questionnaire that, “ERM has no existing contract or working relationship with TransCanada.”

Regardless of the addendum Koster added, he still submitted an incomplete statement when checking “No” to the specific question above. Simply put, the information provided by Mr. Koster was an incomplete statement if one simply reviews the biographies of ERM’s employees for the project.

The State Department Contracting Officer should have flagged this inconsistency when reviewing the staff biographies.  ERM’s answers did not properly reveal in the Yes/No questionnaire that ERM did have a current “direct relationship” with a business enetity that could be affected by the proposed work and a relationship in the past three years with TransCanada, the company building the pipeline.

Koster’s incomplete statement on direct business relationships is not the only odd statement in ERM’s proposal. ERM also answered “No” to the question, “Are you (or your organization) an ‘energy concern?’” which the State Department defines (in part) as: “Any person — (1) significantly engaged in the business of conducting research…related to an activity described in paragraphs (i) through (v).” Paragraph (i) states: “Any person significantly engaged in the business of developing, extracting, producing, refining, transporting by pipeline, converting into synthetic fuel, distributing, or selling minerals for use as an energy source…” ERM as a research firm working for fossil fuel companies is, unequivocally, an energy interest.

So the question must be asked: If ERM is unable to accurately fill out a simple questionnaire regarding conflicts of interest, how can we trust the company to perform an unbiased environmental assessment of a 1,179 mile-long pipeline cutting through the American heartland? And, why did the State Department’s Contracting Officer not flag the inconsistencies in ERM’s Conflict of Interest Questionnaire when reviewing the proposals?

Intentions of State Department and ERM in Question

The Federal Government has strict ethics rules to prevent Organizational Conflicts of Interest (OCIs) from impacting the impartiality of government contracts and to prevent hiring contractors who cannot provide independent and unbiased services to the government.

According to a white paper from the Congressional Research Service, before the State Department could choose ERM as the contractor, the “Contracting Officer” had to make an “affirmative determination of responsibility.” All government contractors (including ERM) must be deemed responsible, in part by meeting strict ethics guidelines, known as “collateral requirements.”

According to current collateral requirements, contractors must be found “nonresponsible” when there are unavoidable and unmitigated OCIs. Checks & Balances Project believes that the Contracting Officer should have deemed ERM “nonresponsible” because the company serves as a contractor for major fossil fuel companies that have a stake in the Keystone XL pipeline. If ERM were “nonresponsible”, the company would have been ineligible to perform the environmental impact review of the Keystone XL pipeline.

These potential material incomplete statements on a Federal Government proposal calls into question the integrity of ERM and threatens millions in government contracts.

If ERM were determined to be “nonresponsible” or “excluded” because of these incomplete statements, it could jeopardize ERM’s ability to perform any work for the Federal Government. Again, according to the Congressional Research Service:

“Decisions to exclude are made by agency heads or their designees (above the contracting officer’s level) based upon evidence that contractors have committed certain integrity offenses, including any “offenses indicating a lack of business integrity or honesty that seriously affect the present responsibility of a contractor.””

Certainly these incomplete statements call into question both the independence of ERM and the judgement of the Contracting Officer in making the “affirmative determination of responsibility.” This proposal process should be investigated by the State Department Inspector General to determine if ERM’s statements are cause for exclusion.

Groups Calling for Inspector General Investigation

We believe ERM used multiple material incomplete statements and had clear conflicts of interest as shown in the unredacted documents. So, why was ERM hired by the State Department?

Checks & Balances Project asked a State Department spokesperson about the conflicts of interest and the spokesperson said: “Based on a thorough consideration of all of the information presented, including the work histories of team members, the Department concluded that ERM has no financial or other interest in the outcome of the project that would constitute a conflict of interest.” Perhaps the State Department’s Contracting Offier made the decision to hire ERM because of the company’s incomplete statements on the conflict of interest questionnaire.

Harold Geisel, Deputy Inspector General, U.S. State Department

Checks & Balances Project along with 11 other groups (Better Future Project, Center for Biological Diversity, Chesapeake Climate Action Network, DeSmogBlog, Forecast the Facts, Friends of the Earth, Greenpeace, NC WARN, Oil Change International, Public Citizen’s Energy Program and Unitarian Universalist Ministry for Earth) sent a letter to Secretary of State John Kerry and the State Department Deputy Inspector General Harold Geisel calling for an investigation into the matter. These incomplete statements and the determination by the Contracting Officer that ERM did not have any conflicts of interest, despite clear evidence to the contrary, are grounds for further investigation.

Keystone XL Environmental Impact Consultant’s Cozy Relationships with Fossil Fuel Interests

ERMFossilRelationshipsBlogEnvironmental Resources Management (ERM), the consulting firm hired to perform the supplemental environmental analysis of the Keystone XL pipeline works for and has worked for fossil fuel companies with a stake in the Canadian Tar Sands. Mother Jones’ Andy Kroll exposed the conflicts of interest in an exclusive story, which included unredacted documents that show the recent work history of ERM’s consultants.

It’s no surprise that ERM painted a rosy picture of Keystone XL’s environmental impact. Their business depends on it. ERM’s major clients in the fossil fuel industry would steer clear of an environmental consulting company that determines fossil fuel projects are not environmentally responsible. ERM claimed in the report that the Keystone
XL pipeline would not lead to an increase in greenhouse gas emissions or significantly impact the environment along its route.

Last week, Steve Horn from DeSmogBlog documented major problems with another pipeline (the 1,300 mile-long Baku–Tbilisi–Ceyhan (BTC)) determined by an ERM environmental assessment to be “environmentally and socio-economically sound.” Horn wrote, “An Aug. 2008 Wikileaks cable discusses a BTC explosion in a mountainous area of eastern Turkey …which spewed 70,000 barrels of oil into the surrounding area.” The BTC
pipeline caused enormous environmental damage and failed to live up to the jobs hype created by the project developers, which included BP, State Oil Company of Azerbaijan (SOCAR), Chevron, ConocoPhillips, Eni and Total.

Horn goes on to quote Mik Minio-Paluello, co-author of The Oil Road - a new book documenting the slew of destructive impacts of BTC saying, “Supposedly an environmental consultancy, in practice ERM operated more like aPR firm representing BP and now they’re fulfilling a similar role for TransCanada.”

So why does ERM operate more like a PR firm than an environmental consultancy?

Let’s say ERM provided a review claiming a fossil fuel project was skirting safety precautions or moving too quickly to ensure quality seals on the pipeline (see Keystone XL’s faulty welding here). Would a fossil fuel company, whose financial interest is building more fossil fuel infrastructure, want to hire a consultant that results in delays and increased costs for developing that infrastructure?

Checks & Balances Project contacted ERM’s Global Head of Communications Simon Garcia multiple times over the past week without any response.  We requested comment on the following question: Has ERM ever determined that a proposed fossil fuel project was not “environmentally sound” in an assessment?

The answer is probably “no.”

 

 

#NYFrackingScandal Hits Cuomo Administration: Newly Disclosed Documents Show Conflicts of Interest

Photo from NYPost.com

With only two days before the expected release of New York’s Environmental Impact Assessment on fracking (also known by the industry term hydraulic fracturing), Governor Andrew Cuomo’s administration is at the center of a new conflict of interest scandal regarding two of his top aides.  Today, seven groups requested the Albany County District Attorney General David Soares investigate the Cuomo Administration’s conflicts of interest surrounding two staffers that hold “key positions in New York’s decision over whether to allow high-volume hydraulic fracturing.”

There are looming questions on the impartiality of Lawrence Schwartz and Robert Hallman, two top Cuomo Administration officials, who have significant influence on the Governor’s fracking decision. New documents obtained by DeSmogBlog through New York’s Freedom of Information Law (FOIL) show that Mr. Schwartz has significant stock holdings in companies that stand to benefit from fracking in New York state, and that Mr. Hallman failed to make specific financial disclosures, raising questions about his objectivity on the issue.

The two top aides, Lawrence Schwartz, Secretary to Governor Andrew M. Cuomo, and Robert Hallman, Deputy Secretary for Energy and Environment, have significant oversight within the Cuomo Administration on the issue of hydraulic fracturing. According to the groups’ letter, Mr. Schwartz supervises all state deputies and commissioners, including Mr. Hallman and the Commissioner of the New York State Department of Environmental Conservation – the agency that is tasked with studying high-volume hydraulic fracturing and developing the state’s policy regarding this extraction technique. Mr. Hallman is the state’s highest gubernatorial staff member who has oversight over the state Department of Environmental Conservation.

According to financial disclosure documents, Schwartz has substantial holdings in companies engaged in shale gas development, including ConocoPhillips, Occidental Petroleum and ExxonMobil. ExxonMobil alone holds 43,000 acres of leases for fracking in New York under its subsidiary XTO Energy Inc. Schwartz also identified “Williams Co.,” apparently a reference to “The Williams Companies Inc.,” a pipeline company that plans to build a $750 million pipeline through the southern portion of New York.

Mr. Hallman failed to specify his stock holdings in his financial disclosure forms, which seems to violate (at the very least) the spirit of N.Y. Pub. Off. § 73-a. The law states that “Public officials are required to list “EACH SOURCE” of income greater than $1,000 and “the type and market value of securities… from each issuing entity” greater than $1,000,” according to the letter from seven groups to District Attorney General Soares. Instead of disclosing each source, Mr. Hallman listed “various common stock” and “various corporate bonds.” His lack of disclosure should serve as a red flag and calls into question his impartiality on the state’s fracking decision.

Furthermore, records obtained via the FOIL request indicate that fracking companies have recently worked directly with Cuomo Administration officials.  XTO Energy Inc, a subsidiary of ExxonMobil, wrote to Mr. Schwartz and Mr. Hallman requesting changes to the state’s draft regulations on fracking in August 2012. And, The Williams Companies communicated with Mr. Hallman regarding natural gas pipelines twice in the summer of 2012.

New York state law states that public officials should avoid personal investments that could “create substantial conflict between his duty in the public interest and his private interest.” Both Mr. Schwartz and Mr. Hallman may have conflicts of interest that violate this standard.

Today during a press conference in Albany, Alex Beauchamp, Food & Water Watch Northeast Region Director, said, “We are outraged to discover that Governor Cuomo’s top aide is so heavily invested in oil and gas companies. And further, that he made these investments during the very timeframe this administration has been considering whether to allow fracking in New York. Clearly, this administration must not allow fracking to move forward under this cloud of scandal.”

Learn more at NYFrackingScandal.com.

ALEC Attacks Clean Energy Standards: Ohio & Virginia

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Over the past couple weeks, fossil fuel interests and their allies have ramped up attacks on clean energy on the state level. As the Washington Post reported in November, the American Legislative Exchange Council (ALEC), a fossil fuel-funded advocacy group, has made it a priority to eliminate clean energy standards across the country.

From the East Coast to the Southwest, ALEC members, alumni and operatives are moving full steam ahead to eliminate clean energy projects and the policies that support them.  However, not all of these attacks are coming from ALEC members sitting in state legislatures.  In Ohio and Virginia, former ALEC legislators, now in other positions, are driving anti-clean energy attacks. Below is part one of our series on former ALEC legislators spearheading fossil fuel-funded attacks on the clean energy industry.

 VIRGINIA

Two weeks ago, Virginia Attorney General Ken Cuccinelli, a former ALEC legislator, struck an agreement with Dominion, one of the largest electric utilities in the U.S., to support legislation effectively eliminating the state’s voluntary clean energy standard. According to the Associated Press, under the agreement, the power companies would no longer have the same financial incentives for using sources of renewable energy in Virginia. Without a legally-binding clean energy standard, killing the financial incentives of the law would stop big utilities from investing in new sources of energy, especially when they can keep profiting off of old coal-fired power plants.

So why is the Attorney General Cuccinelli working to stop clean energy in Virginia? There’s one thing that might show his hand. Attorney General Cuccinelli is running for Governor of Virginia in the 2013 election, and has received over $100,000 from fossil fuel energy interests for his campaign (and over $400,000 from dirty energy interests since 2001) including:

  • $50,000 from David H. Koch, co-owner of Koch Industries, a major fossil fuel conglomerate.
  • $25,000 from Consol Energy, a coal and natural gas producer.
  • $10,000 from Alpha Natural Resources, a coal mining and processing company.
  • $10,000 from Appalachian Power, a subsidiary of American Electric Power, one of the largest electric utility companies.
  • $10,000 from Dominion, one of the largest electric utility companies.
  • $10,000 from Koch Industries, a major fossil fuel conglomerate.

The Attorney General’s office claims that he sought to eliminate the standard because it allowed utilities to buy renewable energy certificates from existing facilities rather than build new clean energy in the state of Virginia. Dominion charged ratepayers $77 million as part of the clean energy law, without building a single clean energy project in the state.

Ken Cuccinelli - Soiree

Virginia Attorney General Ken Cuccinelli at an event sponsored by the Koch Brothers’ Americans for Prosperity.

But, Mike Tidwell, of the Chesapeake Climate Action Network (CCAN), which has worked with lawmakers to propose several bills to improve the incentive program, said that, “The standard is flawed; but there’s a clear way to fix that.” CCAN is working with Delegate Alfonso Lopez to propose a solution that would require Dominion to invest in wind and solar projects in Virginia in order to qualify for financial incentives.

But instead of trying to fix the renewable energy standard, Mr. Cuccinelli is advocating for the elimination of clean energy incentives while also raking in over $100,000 dollars from fossil fuel interests for his gubernatorial campaign. This clear conflict of interest is compounded by the fact that Mr. Cuccinelli was a member of ALEC, which has publicly stated eliminating clean energy laws as one of its goals for 2013. And, it is Mr. Cuccinelli’s fossil fuel donors, most of which are corporate members of ALEC, that stand to profit from killing clean energy laws and slowing the growth of the clean energy economy.

Instead of fighting for Virginia families and small businesses, it appears that Mr. Cuccinnelli is more concerned with the interests of his big, fossil fuel donors. It’s probably a good indication of how he’ll run the state from the governor’s mansion.

OHIO

In Ohio, no legislation has been proposed to rollback the state’s “Alternative Energy Resource Standard,” yet. But three weeks ago, former ALEC legislator Todd Snitchler, now Chairman of the Public Utilities Commission of Ohio (PUCO), and two other commissioners, decided to squash a solar power plant proposed by American Electric Power (AEP) – a move that seems to correlate with ALEC’s agenda to stop the growth of the clean energy market.

AEP planned to build the Turning Point solar power plant, a 50 MW solar power plant comprised of panels from a factory in Ohio. The company planned this project to comply with the requirements of the renewable energy standard according to the PUCO opinion and order. Ohio’s clean energy law calls for 12.5% of the state’s electricity to come from renewable energy resources by 2025.

Todd Snitchler, Chairman of the Public Utilities Commission of Ohio, with Governor John Kasich. Both politicians are ALEC alumni.

Todd Snitchler, Chairman of the Public Utilities Commission of Ohio, with Governor John Kasich. Both politicians are ALEC alumni.

One of the primary opponents arguing against the solar plant in front of the PUCO was FirstEnergy Solutions, an electric utility (that generates 72% of its electricity from fossil fuels) and a major donor to Governor John Kasich, another ALEC alumnus.  Gov. Kasich received over $600,000 from oil, gas and mining interests for his 2010 election campaign and in early 2011, Gov. Kasich appointed Mr. Snitchler to chair the PUCO.

Mr. Snitchler and the two other Republican commissioners voting to stop the Turning Point solar plant disregarded Public Utilities Commission of Ohio staff experts who stated that the project was necessary to comply with the state’s renewable energy standard.

Mr. Snitchler’s Twitter traffic affirms his ideological disdain for clean energy. He consistently attacked clean energy technology and the legitimacy of climate science (ignoring the Pope, United States Military, and every national academy of science in the world) according to a Columbus Dispatch analysis of his twitter traffic over the past year.

With anti-clean energy ALEC alumni in powerful positions in Ohio, pro-clean energy advocates must work to stop attempted rollbacks of the state’s clean energy standard in the state legislature or face a grim future in the Buckeye state.

Reality check on gas prices, public lands

Rhetoric in the public debate on gas prices is heating up from politicians this week. Unfortunately, oil and gas apologists continue to push misinformation on the American public.

Instead of exporting American resources so that oil companies get richer, let’s use our oil at home to the benefit of all Americans.

There is another simple step we can take to help American families whose pocketbooks are hurting because of high prices at the pump. We should end the billions in special tax breaks to Big Oil and reinvest those funds in transportation solutions, high tech vehicles, and the next generation of renewable fuels.

Here are some facts to consider about gas prices and energy development.

Oil and gas drilling
Oil and gas drilling in America is its highest level since Ronald Reagan was in office. Over the last four years, there appears to be a direct correlation between gas prices and drilling activity. Higher prices means more drilling, but more drilling has failed to lower gas prices.


Domestic oil production
Earlier this year, the Associated Press found that there is no correlation between how much oil is produced and the price of gas. In fact, domestic crude oil production is at its highest level since the late 1990’s.

Over the last four years, oil production has increased right alongside the price of gas. Clearly, we need an all-of-the-above energy policy that goes beyond oil.

Public lands
The Congressional Research Service found that oil production on federal lands is higher in 2011 as compared to 2007.

Oil and gas companies have also failed to develop more than 20 million of acres of public lands that are already leased for oil and natural gas. According to a May 2012 Interior Department report, the oil and gas industry had conducted production or exploration activities on just 56% of public lands leased in the U.S.

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