After Fossil Fuel Front Group Attacks on Clean Energy Fail, New Model Bill Emerges to Weaken RPS Laws

ALECFossilFuelFundersMembers of the American Legislative Exchange Council (ALEC), including fossil fuel corporations and front groups, will meet in Chicago this week to discuss their next round of attacks on clean energy policies. The Center for Media and Democracy (CMD), The Checks & Balances Project (C&BP) and Greenpeace released ALEC’s confidential model bills and agenda ahead of their Annual Meeting taking place in Chicago, that include a new anti-clean energy model bill, “The Market-Power Renewables Act.”

 “A little sunlight is a powerful force for good. ALEC is trying every trick in the book to keep the agenda of their upcoming meetings secret,” said Nick Surgey of The Center for Media and Democracy. “They are even claiming every state’s public record laws don’t apply to them. This is preposterous. The ALEC documents that CMD obtained show that ALEC is continuing to scheme on behalf of fossil fuel corporations, working together to undermine state’s efforts to promote renewable energy production.”

 “The Market-Power Renewables Act” will likely serve as the model for another round of attacks on state Renewable Portfolio Standards (RPS) in 2014 following ALEC’s failure to weaken or eliminate clean energy policies this year. The new bill would significantly weaken state clean energy laws by broadening the eligible electricity sources to include existing, large hydroelectric power plants, biomass, biogas and other sources of electricity.

 “Fossil fuel-backed efforts to rollback clean energy laws in states across the country have failed, including in at least three critical battleground states,” said Gabe Elsner, Director of C&BP. “It’s no surprise that ALEC is pushing a new model bill that would eliminate incentives for in-state investments in clean energy. These policies are boosting investment in the clean energy industry and creating jobs, which poses a major threat to fossil fuel interests.”

Despite a robust lobbying effort from fossil fuel corporations and fossil fuel-funded front groups, ALEC and its allies lost in the critical battleground states of Kansas, North Carolina and Missouri. Bipartisan majorities defeated ALEC’s model legislation this year, after ALEC legislators in at least 13 states sponsored or co-sponsored legislation to weaken or eliminate RPS laws.

But despite complete failure in 2013, ALEC’s Energy, Environment and Agriculture Task Force Director Todd Wynn indicated that attacks on clean energy laws would resume in 2014.

 “Fossil fuel-funded front groups connected to the Koch-funded State Policy Network and ALEC advocated to repeal or weaken RPS laws in at least 14 states,” said Connor Gibson of Greenpeace. “Many of these front groups published flawed economicreports written by the fossil fuel-funded Beacon Hill Institute to inflate the cost of RPS and ignore the economic benefits of the pro-clean energy laws.”

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.

The Real Cost of Coal Exports and Fossil Fuels

With major fossil fuel projects ramping up across the globe, fossil fuel interests are ignoring the catastrophic costs that carbon pollution causes (and will cause) around the world. Meanwhile, critics of clean energy technologies continue to spread disinformation to discredit the emerging sector and promote fossil fuels as the only viable source of energy.

Coal exports are on the rise. U.S. coal exports exceeded the Department of Energy’s projections by 30% in 2012 as reported by Nate Aden, a PhD student from the Energy and Resources Group at the University of California, Berkeley. Coal demand is being driven in part by economic growth in China and other developing countries, but these developing countries are not alone. The World Resources Institute found that 1,100 coal-fired power plants are being proposed around the world. And, according to the U.S. Department of Commerce, countries in Europe were the destination for 45% of U.S. coal exports in 2012.

Australia and Indonesia also have major coal export projects underway. According to the Guardian’s Graham Readfearn, Australia is already the world’s largest exporter of coal, sending twice as much CO2 abroad than it emits at home.

Readfearn writes that exports of carbon fuels will come back to bite Australia in the form of climate disruption. In the past two months, Australia has been ravaged by hundreds of wildfires caused by the “biggest and longest heat wave on record in January.” This type of extreme weather is exactly what 97% of climate scientists have been warning our leaders for over two decades. The New Scientist cited Jon Nott who researches extreme weather events at James Cook University (in Australia) saying, “The frequency of more intense events is going to increase” as a hotter world becomes the new reality.

The Washington Post reported, “If we want to avoid severe global warming, we’ll have to stay within a strict carbon budget in the decades ahead…” A new report by Greenpeace details the 14 biggest threats to the “climate stabilization budget” with the top three being China’s coal reserves in the western provinces, Arctic oil drilling and Australian coal exports. Coal exports account for three of the 14 fossil fuel projects under development that would “blow past [our strict carbon] budget.”

So, with these identifiable threats to stabilizing the earth’s climate, why aren’t we rapidly decommissioning fossil fuel projects around the world?

One answer lies in the powerful and fossil fuel-funded opposition to clean energy solutions to climate change.

Clean energy opponents argue that clean energy technology is “too expensive” while ignoring the much larger subsidies and externality costs of fossil fuels (for more on these advocacy groups see our report, “Fossil Fuel Front Groups on the Front Page”).

While the argument about clean energy may have been true a decade ago, rapidly falling prices of wind, solar and other clean technologies are rendering that argument obsolete. In January, the International Renewable Energy Agency released a report (PDF) showing that “the rapid growth in the deployment of solar and wind is driving a convergence in electricity generation costs for renewable power generation technologies at low levels.” The report goes on to say that the rapid cost reductions of installed renewable energy technology mean that data one or two years old can significantly overestimate the cost of electricity from renewable energy technology. In other words, cost reductions are making clean energy competitive with fossil fuels around the world.

Moreover, the costs for fossil fuels (including fuels coming from the 14 projects above) do not account for the potential damage their emissions will cause as we drift towards climate disaster. These fossil fuel pollution externalities should be factored into the cost of business. After factoring in the cost of pollution, maybe digging up coal and shipping it across the globe won’t look like such a great investment.

For future generations, let’s hope the real cost of fossil fuels is factored into our calculations soon.

Donors Trust: The Secret Group Funding Attacks on Clean Energy & Climate Science

New research shows almost $120 million flowed from two secretive groups, called “Donors Trust” and “Donors Capital” to 102 groups denying climate science and attacking clean energy. The Guardian’s Suzanne Goldenberg reports that “the funds, doled out between 2002 and 2010, helped build a vast network of think tanks and activist groups working to a single purpose: to redefine climate change from neutral scientific fact to a highly polarizing ‘wedge issue’ for hardcore conservatives.”

Greenpeace research (.pdf) into the tax records of these organizations shows that publicly-disclosed funding for climate denial groups from foundations connected to the Koch Brothers began to decrease in 2006. But, funding from Donors Trust and Donors Capital Fund soared from less than $20 million per year to almost $35 million per year from 2006 to 2009. Kert Davies, research director at Greenpeace said to the Guardian, “These groups are increasingly getting money from sources that are anonymous or untraceable. There’s no transparency, no accountability for the money. There is no way to tell who is funding them.”

Many of these organizations funded by Donors Trust and Donors Capital Fund are also working to attack clean energy. Goldenberg notes in a companion article that recipients, including groups like the Heartland Institute and Americans for Prosperity (AFP), have received millions from the two secretive organizations.

AFP, which received $7.6 million from Donors Trust and Donors Capital Fund in 2010 (43% of its budget), drove anti-wind efforts last fall, leading a coalition of fossil fuel-funded groups to write a letter calling on Congress to block tax credits for wind energy. The Washington Post reported in November 2012 that the Heartland Institute, which received $1.6 million from Donors Trust and Donors Capital Fund in 2010 (27% of its budget), joined with the American Legislative Exchange Council (ALEC) to push model legislation to state legislators in an effort to eliminate state clean energy standards across the country. In addition, organizations that are part of the State Policy Network (SPN), which received $4.8 million from Donors Trust in 2010 (36% of its budget), published reports bashing clean energy standards that are now likely being used to attack clean energy policies in states across the country (like Kansas and Ohio).

Furthermore, the Guardian revealed in a third story that Donors Trust bankrolled the Franklin Centre for Government and Public Integrity, a newly established organization founded in 2009, which is running a campaign to “stop state governments moving towards renewable energy.” The Franklin Centre has strong ties to American’s for Prosperity and the Koch Brothers, including former staff members of both AFP and a Koch Family Foundation according to a PR Watch investigation.

Are these attacks ideological? Or are other fossil fuel interests like the Koch Brothers funding these efforts to stop a potential market threat? We know that fossil fuel corporations that have a financial incentive to stop the growth of the clean energy industry and their benefactors and foundations have funded many of these groups over the years. With an ability to hide the money trail through groups like Donors Trust, I would bet fossil fuel interests continue to fund fake grassroots campaigns and front groups to attack clean energy.

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