Connecting the Dots: Marcellus Shale Players DRAFT – WORK IN PROGRESSBy Dory Hippauf

© 2012 by Dory Hippauf

Introduction

One Sunday afternoon in the summer of 2009 there was a knock at our door. It was a landman from Encana. He wanted us to sign a gas drilling lease; we agreed to look it over.

We didn’t know much about gas drilling and what it would mean to our area. Although we only have 3/4 of an acre this was our little piece of heaven, from the woods behind our home to the view of the Endless Mountains.

I began searching the internet to learn about the Marcellus Shale Formation and gas leases. Much of what I found was industry talking points promising a lot of money for leases in the form of a signing bonuses and royalties. The money would be nice, but what was the real cost? The industry talking points didn’t say.

A local group, Gas Drilling Awareness Coalition of Luzerne County began holding informational meetings and we went to learn the other side of the issue, the risks, and the potential hazards.

I am naturally skeptical of what I am told by any group, or corporation. My rule of thumb is to disregard half, and verify the rest – so back to Google I went and did my own digging. This resulted in my becoming more involved with GDAC and going back to Google to check out the various Gas Corporations operating in Marcellus Shale.

As I researched Gas Corporations, I found certain names appearing in conjunction with other Gas Corporations. I soon realized that jotting down names was not the way to go, and the Marcellus Gas Play Players spreadsheet was born.

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Chapter 1You Can't Tell the Players Without a Scorecard!

The Marcellus Gas Play Players spreadsheet is very much a work in progress. To date, it contains over 3,800 names of gas corporations, their leadership, and boards of directors, lobbyists, astro-turf groups, industry organizations and politicians. One dot leads to another and creates a very interesting picture of how gas drilling and politics mix.

If anyone tells me that corporate money does not influence politics – please let me know where you live, because it sure isn’t in America. The amount of money pouring into Pennsylvania from the gas corporations is outrageous. Pennsylvania does not have campaign donation limits for state offices – it’s unlimited and its power is enormous.

Marcellus Money.org1 :

Excerpt:The natural gas industry gave $7,175,234 to Pennsylvania candidates and Political Action Committees (PACs) from 2000 through the end of 2010, according to a Common Cause/Pennsylvania (CCPA) analysis released today.  $3,442,212 was donated to elected officials currently in office.  

The top recipient remains Governor Tom Corbett, with a total $1,634,096 in contributions from the natural gas industry. Corbett raised $1,083,315 of that total in 2009-2010 from 216 donations.  He is followed by Senate President Pro Tempore Joseph Scarnati, with $293,333.  

Giving by the industry doubled from the 2008 election cycle ($1,004,757) to the 2010 election cycle ($2,608,187).

Let’s take a look at one of the donors and the recipient.

1 Marcellus Money, http://www.marcellusmoney.org/

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Hockey, Gas and Political Campaigns

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In February 2011, Bloomsburg reports Billionaire Terry Pegula2 bought the National Hockey League’s Buffalo Sabres. What does hockey have to do with gas drilling? Maybe nothing, and maybe in the case of Terry Pegula – a lot.

On February 23, 2011 the Buffalo News reported 3 :

Excerpt:Pegula drew violations as gas drillerIn the course of making his fortune, the Florida billionaire, negotiating to buy the Buffalo Sabres, contributed heavily to politicians in a position to advance his business interests and established a less-than-stellar track record in the environmentally dicey business of drilling for natural gas, The Buffalo News has found.

A news review of compliance records found East Resources, the company Terrence M. Pegula sold last summer for $4.7 billion, had a middling record of complying with environmental regulations in Pennsylvania, his base of operations. The company last year paid the largest regulatory fine in its history and was involved in a spill of toxic wastewater that resulted in the first quarantine of cattle in the history of natural gas drilling in the state. 4

From CollegianOnline September 24, 2010 article 5 :

Excerpt:On Sept. 17, Pegula announced his donation of $88 million — the largest philanthropic act in university history — to help fund a state-of-the-art ice arena, as well as the addition of men’s and women’s NCAA Division I hockey programs to his alma mater (Penn State).Buying a Hockey Team, big donation to Penn State .

Where did the money come from?

Royal Dutch Shell Scoops Up East Resources for $4.7 Billion 6 By Tom Taulli Posted 10:57AM 05/28/10 Energy, Company News

Excerpt: About a year ago, private-equity firm KKR struck a $350 million deal to invest in East Resources, a natural gas exploration and development company focused on an area called the Marcellus Shale, which stretches from Ohio and Virginia to New York. At the time, the transaction got little fanfare.

2 Natural-Gas Billionaire Pegula Purchases NHL's Buffalo Sabres, By Michael Buteau - Feb 1, 2011, Bloomberg, http://www.bloomberg.com/news/2011-02-01/natural-gas-billionaire-pegula-purchases-nhl-s-buffalo-sabres.html3 Pegula drew violations as gas driller, By James Heaney, January 30, 2011, BuffaloNews.com, http://www.buffalonews.com/city/article326485.ece4 A Fracking First in Pennsylvania: Cattle Quarantine, by Nicholas Kusnetz, ProPublica, July 2, 2010, http://www.propublica.org/article/a-fracking-first-in-pennsylvania-cattle-quarantine5 Pegula's donation makes hockey happen Terry Pegula, of Boca Raton, Fl., speaks about his $88 million donation for a new hockey arena on Friday, By Anthony Barton, Collegian Staff Writer, September 24, 2010, http://www.collegian.psu.edu/archive/2010/09/24/pegula.aspx6 Royal Dutch Shell Scoops Up East Resources for $4.7 Billion, By Tom Taulli, 05/28/10, DailyFinance.com, http://www.dailyfinance.com/2010/05/28/royal-dutch-shell-buys-east-resources/

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Well, now it's getting lots of attention. On Friday, Royal Dutch Shell (RDS) announced it had agreed $4.7 billion in cash for most of the assets of East Resources.

In Pennsylvania the subject of gas drilling was beginning to heat up, and it was also mid-term elections. The future of gas drilling would depend heavily on who would be Governor.

There is no campaign donation limit in Pennsylvania. Anyone can give any amount to any candidate. Corporate wallets and Political Campaign are wide open.

Approximately on September 2010:

Pegula: Marcellus Shale Development Good for Us7 EXCERPT: “If you could tell students here at Penn State one thing, what would it be?”

He (Pegula) paused for just a millisecond before saying,

" I would tell students that this contribution could be just the tip of the iceberg, the first of many such gifts, if the development of the Marcellus Shale is allowed to proceed."

Penn State wasn’t the only beneficiary of the Pegula’s fortunes.

Kim Pegula8 (Terry’s wife) donated $180,000 to Tom Corbett’s campaign for Governor.

Terry Pegula9 donated $100,000 to Tom Corbett’s Campaign for Governor

Kim and Terry both list their employer as Royal Dutch Shell:

PEGULA, KIM10

Total Given to Date: $180,500 (4 records)Contributor Type: IndividualAddress: BOCA RATON, FLEmployer: EAST RESOURCES INCOccupations Listed: HOMEMAKER, EXECUTIVEParent Organization: ROYAL DUTCH SHELL

PEGULA, TERRENCE11

Total Given to Date: $100,500 (2 records)Contributor Type: IndividualAddress: BOCA RATON, FL

7 Pegula: Marcellus Shale Development Good for Us, September 2010, OnwardState.com, http://onwardstate.com/2010/09/18/pegula-marcellus-shale-development-good-for-students/8 FollowTheMoney.org, Pennsylvania 2010, Contributions to CORBETT, TOM & CAWLEY, JIM http://www.followthemoney.org/database/StateGlance/contributor_details.phtml?&c=123883&i=33&s=PA&y=2010&summary=1&so=a&filter%5b%5d=pegula&filter%5b%5d=&filter%5b%5d=&filter%5b%5d=#sorttable9 ibid10 ibid11 ibid

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Employer: EAST RESOURCES INCEmployers Listed: EAST RESOURCES, SELFOccupations Listed: PRESIDENT & CEO, RETIREDParent Organization: ROYAL DUTCH SHELL

Per Source Watch12 : Pegula and his wife, Kim's, donations to lobbying groups and candidates accounted for 15 percent of all donations by the fracking industry.

Political Donations by Company ExecsSenior management has donated large amounts of money to politicians, front group PACs and the Republican National Committee.

Pegula and his wife, Kim, were frequent funders of pro-drilling politicians. Kim Pegula donated the most money in 2010 to a single candidate: $360,000 to Tom Corbett. Pegula and his wife are also major contributors at the federal level, with donations of $106,350 since 2006 to the National Republican Senatorial Committee and national and state Republican committees.

Pegula has also donated to his alma mater. In September 2010, he gave $88 million to build a Division I arena for Penn State's hockey team. Penn State is also the home of The Penn State Marcellus Center for Outreach and Research. The center funds research for the advancement of methane drilling technology and procedures in the Marcellus Shale area. They are currently conducting a study on the safety of tap water in the homes surrounding the wells and fracking sites owned by East Resources and Shell.

Politicians who received contributions: Governor Tom Corbett (R-Pa.), Gubernatorial Candidate Lynn Swann (R-Pa.), Senator Don White (R-Pa.), Senator Joseph Scarnati (R-Pa.), Congressman Glenn Thompson (R-Pa.) and Senator Patrick Toomey (R-Pa.)

Below is a list of East Resources employee contributions between 2002-2010: Terrence and Kim Pegula - CEO and President - $630,000 Robert Long - Executive Vice President - $50,000 William Fustos - Chief Operating Officer - $7,000 Jack Showers - Director of Community Relations and Regional Affairs for East and Shell - $1,500 Paul Dudenas - Engineer - $1,000

LobbyingAccording to Common Cause's "Deep Drilling, Deep Pockets13", Pegula and his wife, Kim's, donations to lobbying groups and candidates accounted for 15 percent of all donations by the fracking industry.

In November 2010 Tom Corbett became Governor Tom Corbett. The gas drilling issue is a priority for the new governor, so he decides to form a committee to make recommendations.

12 SourceWatch, East Resources, http://www.sourcewatch.org/index.php?title=East_Resources13 Deep Drilling, Deep Pockets, Common Cause, http://www.commoncause.org/site/pp.asp?c=dkLNK1MQIwG&b=6721533

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March 2011 – Governor Corbett announces the formation of the Marcellus Shale Advisory Committee14.

One of the newly appointed committee members is none other than Terry Pegula.

I’m so surprised. NOT.

November 2011 – The Penn State Sandusky Scandal breaksPegula silent on Penn State15

November 9, 2011, 11:49 PM Excerpt:What does Western New York's most prominent Penn State alum and booster think of the sex-abuse scandal allegedly involving former defensive coordinator Jerry Sandusky that has rocked the university? So far, he's silent.

Buffalo Sabres owner Terry Pegula has declined to make any comment on the chaotic situation at his alma mater that resulted in Wednesday night's firings of football coach Joe Paterno and president Graham Spanier.

Pegula addresses Penn State situation16

Business First by James Fink, Buffalo Business First ReporterFriday, November 11, 2011, 12:20am EST

Excerpt:Cliff Benson, Pegula’s close friend who helped broker the deal to buy the Sabres and is now a team executive, is listed as a board member of the The Second Mile, an agency founded by Sandusky in 1997, that aids at-risk youth in Pennsylvania.

Terry Pegula stands by $88M donation to Penn State, but demands school officials 'come clean'17

Published: Friday, November 18, 2011, 3:42 PM Updated: Friday, November 18, 2011, 10:27 PM

Excerpt: Terry Pegula, the Penn State alumnus whose $88 million gift funded two Division I ice hockey programs, said this week he's "standing behind the university" in the wake of a child sex abuse scandal, but also had candid words for university officials in an interview with Canadian sports network TSN.

Pegula also told TSN he intends to be more active in university affairs in the wake of the scandal to make sure "the right things are done."

14 Governor Corbett Announces Formation of Marcellus Shale Advisory Commission, Prnewswire.com, March 8, 2011, http://www.prnewswire.com/news-releases/governor-corbett-announces-formation-of-marcellus-shale-advisory-commission-117593393.html15 Pegula silent on Penn State, BuffaloNews.com, November 9, 2011, http://www.buffalonews.com/sports/sabres-nhl/article626610.ece16 Pegula addresses Penn State situation, Business First by James Fink, Buffalo Business First Reporter, November 11, 2011, http://www.bizjournals.com/buffalo/blog/morning_roundup/2011/11/pegula-addresses-penn-state-situation.html?page=217 Terry Pegula stands by $88M donation to Penn State, but demands school officials 'come clean', Friday, November 18, 2011, Patriot News, http://www.pennlive.com/midstate/index.ssf/2011/11/terry_pegula_stands_by_88m_don.html

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Is Terry pushing for the big chair as President of Penn State, or a seat at the Trustee’s table? And will Marcellus Gas Drilling take even more control over Penn State and other institutions of higher education?

Although 2012 isn't an election year for PA Governor, Corbett is already filling his campaign coffers for 2014.   He currently has $2,758,32618.

Kim Pegula has already tossed him $50,000

Oil & Gas contributions, as a sector, comes in at 2nd place.   Expect that number to increase significantly the closer we get to 2014 elections

18 FollowTheMoney.org, Pennsylvania 2012, CORBETT, TOM & CAWLEY, JIM, http://www.followthemoney.org/database/StateGlance/state_candidates.phtml?s=PA&y=2012&f=G&filter%5b%5d=&filter%5b%5d=&filter%5b%5d=GOVERNOR%20/%20LIEUTENANT%20GOVERNOR#candidateselect

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A Fracker gets a Cracker

After 6 months of budget cutting things like healthcare, education and the DEP all in the name of “reducing the deficit”, Kevin Harley, spokesman for Gov. Tom Corbett, confirmed a deal on the so-called ethane cracker tax credit. Royal Dutch Shell plc19 has an option to purchase land near Monaca for the plant

Corbett proposed a $66 million annual tax credit for Shell and other companies that can be lured to the state to drill for natural gas in the Marcellus shale formation.

Between 2009-2011, Royal Dutch Shell has given Corbett $385,00020. Over all, Royal Dutch Shell has made campaign contributions to Pennsylvania Legislators amounting to $405,925 (figure includes donation to Corbett) from 2000-2011. Stack it up against a $66.000,000 yearly tax credit over 25 years, and it is a very good return on their investment.

19 Deal struck on tax credit for ethane cracker plant in Beaver County, By Brad Bumsted, June 28, 2012, TribLive News, http://triblive.com/news/2119542-74/tax-plant-corbett-shell-state-credit-bill-billion-budget-governor20 Marcellus Money, Royal Dutch Shell, http://marcellusmoney.org/company/shell

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Chapter 2Chesapeake Energy – Peeking Behind the Curtain

Goodwin said there are limited ways to punish a corporation. "It is not a life. It is not a being. It can't go to jail," he said. "The only thing that it can do is help make sure something like this doesn't happen again." - U.S. Attorney Booth Goodwin speaking about West Virginia Mine Settlement, December 6, 201121

“Corporations are people, my friend,” Former Governor Mitt Romney at Iowa State Fair. August 201122

"I'll believe corporations are people when Texas executes one." – Unknown

In September of 2011, Aubrey McClendon, CEO of Chesapeake Energy23, stood before an audience of industry regulars at a conference in Philadelphia.

"What a glorious vision of the future: It's cold, it's dark and we're all hungry," said McClendon, who co-founded Oklahoma City-based Chesapeake, the most active gas driller in the Marcellus Shale and nationwide. "I have no interest in turning the clock back to the dark ages like our opponents do."

Many families across the Marcellus Shale play feel like they are in the dark ages. They may not be cold, they may not be hungry, but they are thirsty since their water wells turned bad, or very sick from drinking the bad water.

Water Authority President Norman Wright of Plainview, Tx, said “Without water we have no future."24, upon signing a deal with T. Boone Pickens’ company Mesa Water, for the transfer of water rights on 211,000 acres of land.

DEFINE YOUR TERMSBefore we Connect the Dots of Chesapeake Energy, let’s define three terms.

Front Groups or Front Organizations – A front organization is any entity set up by and controlled by another organization, such as intelligence agencies, organized crime groups, banned organizations, religious or political groups, advocacy groups, or corporations. Front organizations can act for the parent group without the actions being attributed to the parent group.

Front organizations that appear to be independent voluntary associations or charitable organizations are called front groups. In the business world, front organizations such as front companies or shell corporations are used to shield the parent company from legal liability. In

21 Mine Settlement Is In, But Closure Is Tougher, by Howard Berkes, NPR, December 6, 2011, http://www.npr.org/2011/12/06/143224368/federal-officials-issue-report-on-massey-explosion22 Mitt Romney says ‘corporations are people’ at Iowa State Fair, By Philip Rucker, August 11, 2011, The Washington Post, http://www.washingtonpost.com/politics/mitt-romney-says-corporations-are-people/2011/08/11/gIQABwZ38I_story.html23 Chesapeake CEO Aubrey McClendon blasts anti-drilling activists, By MICHAEL RUBINKAM, Associated Press, 9/8/2011, http://www.tulsaworld.com/business/article.aspx?subjectid=49&articleid=20110908_49_E1_ULNSur82624824 Group buys Mesa Water rights, Amarilloo Globe News, June 24, 2011, http://amarillo.com/news/local-news/2011-06-24/group-buys-mesa-water-rights#.TuTH31a2_cw

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international relations, a puppet state is a state which acts as a front (or surrogate) for another state.

Astro-Turf - refers to apparently grassroots-based citizen groups or coalitions that are primarily conceived, created and/or funded by corporations, industry trade associations, political interests or public relations firms.

Greenwash or Greenwashing - Is a form of spin in which green PR or green marketing is deceptively used to promote the perception that a company's policies or products are environmentally friendly.

Front Group: American Clean Skies FoundationAmerican Clean Skies Foundation (ACSF)25 is a 501(c)(3) nonprofit organization devoted to research and debate on clean energy. ACSF's mission is to promote understanding and discussion of issues related to energy--to expand America's energy options. It was founded in 2007.

The Board of Directors for ACSF26 consists of:Aubrey K. McClendonChairman of the Board; and Chairman of the Board and Chief Executive Officer, Chesapeake Energy Corporation

Ralph Eads IIIChairman, Energy Investment Banking Group of Jeffries & Company Inc.

Robert A. Hefner IIIFounder and owner of GHK Exploration; Author

Andrew J. LittlefairPresident and Chief Executive Officer, Clean Energy

Thomas S. Price, Jr.Senior Vice President, Corporate Development, Chesapeake Energy Corporation

Gregory C. StapleChief Executive Officer, ACSF

The “ACTIVITES”27 section of ACSF states: The Foundation has an active energy policy and research program.

We also provide funding for energyNOW!, an editorially independent TV news magazine on America’s major energy and environmental challenges. The program is distributed nationally by Bloomberg TV and by the ABC affiliate in Washington DC

25 American Clean Skies Foundation, http://www.cleanskies.org/26 American Clean Skies Foundation Board of Directors, http://www.cleanskies.org/pdf/acsf-board.pdf27 Amercian Clean Skies Foundation, About, http://www.cleanskies.org/about/

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Connecting the dots is not always a straight line from Point A to Point B. More often than not there are many connections from Point A to other points. We’ll follow one of those connections now.

Andrew J. Littlefair, ACSF Director is also President and Chief Executive Officer of Clean Energy.

He is also Vice President of the T. Boone Pickens Foundation.28 Mr. Littlefair is President and CEO of Clean Energy Fuels29, and T. Boon Pickens is on the Board of Directors for Clean Energy Fuels30.

Clean Energy Fuels is a “GOLD MEMBER” of Kentucky Clean Fuels Coalition31.

Mr. Littlefair is Chairman of the Natural Gas Vehicles for America32 and has been a Board Member and Officer for 10 years. Mr. Littlefair was an officer at Mesa Inc., and served in various capacities for 10 years. Mr. Littlefair served in the Reagan White House from 1983–1987.

(Chesapeake Energy is also a member of NGVAmerica33, as are several other natural gas drilling corporations.)

T. Boone Pickens, Director of Clean Energy Fuels.Mesa Petroleum, Founder34: On the verge of bankruptcy in 1996, Mesa Petroleum was acquired by private equity firm Rainwater, Inc., which renamed the company Pioneer Natural Resources.

Mesa Power Group, Founder35: Mesa Power Group founded the American Wind Alliance in 2009.

Mesa Water, Founder: Sold to Canadian River Municipal Water Authority.Per Bloomsburg, Pickens Water-to-Riches Dream Fizzles as Texas Cities Buy Rights36, By David Mildenberg, July 14, 2011

“Pickens, 83, started buying water rights northeast of Lubbock and Amarillo more than 10 years ago. By 2002, the investor was predicting that he could start selling water in three years to the Dallas-Fort Worth area, Satterwhite said. Pickens sought to build a $3 billion pipeline to the fourth- largest U.S. metropolitan area by population, 350 miles (560 kilometers) away, yet couldn’t make a deal.”

28 T. Boone Pickens Foundation, Officers, http://www.tboonepickensfoundation.org/about_foundation.asp29 Clean Energy Fuels Management, http://investors.cleanenergyfuels.com/management.cfm30 Clean Energy Fuels, Board of Directors, http://investors.cleanenergyfuels.com/directors.cfm31 Kentucky Clean Fuels Coaltion, http://www.kentuckycleanfuels.org/members/membership.htm32 Natural Gas Vehicles for America, http://www.kentuckycleanfuels.org/members/membership.htm33 Natural Gas Vehicles for America, Natural Gas And Biomethane Producers, http://ngvamerica.org/about_us/membercompany.html34 Mesa Petroleum, NNDB, http://www.nndb.com/company/147/000177613/35 T. Boone Pickens Invests in Water - Should You?, Seeking Alpha, Jan 17, 2007, http://seekingalpha.com/article/24410-t-boone-pickens-invests-in-water-should-you36 Pickens Water-to-Riches Dream Fizzles as Texas Cities Buy Rights, Bloomsburg, By David Mildenberg, July 14, 2011, http://www.businessweek.com/news/2011-07-14/pickens-water-to-riches-dream-fizzles-as-texas-cities-buy-rights.html

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BP Capital LP, Chairman and Chief Executive Officer37: NOTE BP does not stand for BRITISH PETROLEUM, presumably the “BP” denotes BOONE PICKENS initals.

Exco Resources Inc, Director38

Per The Pickens Plan39: “America’s dependence on OPEC oil forms the intersection of the three most critical issues America currently faces: the economy, the environment, and our national security.

America is blessed with enormous reserves of clean natural gas. The Pickens Plan utilizes this tremendous resource to build a bridge to the future — a blueprint to reduce OPEC oil dependence by harnessing domestic energy sources and buying time for us to develop new technologies to harness wind and solar power and enhance the efficiency of our electrical grid.”

Matthew “Matt” Pitzarella40, contributor to Clean Skies – the Energy and Environment Network. Clean Skies is sponsored by the American Clean Skies Foundation.

Mr. Pitzarella is the Director of Corporate Communications for Range Resources41.

At an Oil Industry Conference in Houston, TX, a group of professionals assembled to discuss “media and stakeholder relations” in the hydraulic

fracturing (fracking). The Natural Gas Industry Corporations are concerned about their public image.

Oil Executive: Military-Style 'Psy Ops' Experience Applied42

Excerpt:In a session entitled “Designing a Media Relations Strategy To Overcome

Concerns Surrounding Hydraulic Fracturing,” Range Resources communications director Matt Pitzarella spoke about

“overcoming stakeholder concerns” about the fracking process.

“We have several former psy ops folks that work for us at Range because they’re very comfortable in dealing with localized issues and local

governments,” Pitzarella said. “Really all they do is spend most of their time helping folks develop local ordinances and things like that. But very much having that understanding of psy ops in the Army and in the Middle East has applied very helpfully here for us in Pennsylvania.”

37 BP Capital, Management, https://www.bpcap.net/cgi-bin/management_team.pl38 Exco Resources, Directors, http://www.excoresources.com/directors.htm39 Pickens Plan, About, http://www.pickensplan.com/about/40 Matt Pizarella, Clean Skies, http://cleanskies.tv/index/matt-pitzarella-0.html41 Matt Pizarella, Range Resources, http://phx.corporate-ir.net/phoenix.zhtml?c=101196&p=irol-newsArticle&ID=157978942 Oil Executive: Military-Style 'Psy Ops' Experience Applied, CNBC, By: Eamon Javers, CNBC Washington, DC Correspondent, November 8, 2011, http://www.cnbc.com/id/45208498

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The Astro-Turf: In 2007, TXU Corporation proposed to build 11 coal-fired electric plants. The proposal was met with immediate opposition by “two well-known environmental groups43”. Ads appeared in the papers, placed by a group called Texas Clean Sky Coalition.

Texas Clean Sky Coalition is Clean Sky Coalition which is an astro-turf group of American Clean Skies Foundation. Chesapeake Energy would later acknowledge “helping” out with several hundred thousand dollars to finance the campaign.

Group launches 'Coal is Filthy' ads against TXU44

Campaign partly funded by large gas company targets proposal for 11 new plantsR.G. RATCLIFFE and MARK BABINECK, Houston Chronicle Tuesday, February 6, 2007

Excerpt:The group's Web site contained links to the Lone Star Chapter of the Sierra Club and to the Texas office of the Environmental Defense Fund. Both groups said they were surprised by the ads and had nothing to do with them.

"I honestly know nothing about it," said Ken Kramer, director of the state Sierra Club. "I've never heard of the Clean Sky Coalition or know who's behind these ads."

Excerpt:Jackson Williams is the executive director of the Texas Clean Sky Coalition. He declined to say who paid for the ads, other than that it was a "diverse" group of businesses.

"I've got everything from a chain of car washes to restaurants," Williams said. "There's some energy companies, too."

Williams said his coalition is not promoting any alternatives to coal-fired plants. He said the group just wants to stop the TXU plants from being built.

"There is no hidden agenda here," Williams said.

Late in the day, Chesapeake Energy acknowledged being part of the coalition. Chesapeake is the nation's third largest producer of natural gas.

The Public Relations company behind the ad campaign “Dirty Faces” was Strategic Perceptions Inc.45 They boast “Our political work sways the electorate, our public affairs practice is designed to sway politicians and those with political stroke.”

43 Group launches 'Coal is Filthy' ads against TXU, Campaign partly funded by large gas company targets proposal for 11 new plants, R.G. RATCLIFFE and MARK BABINECK, Houston Chronicle, Tuesday, February 6, 2007, http://www.chron.com/business/energy/article/Group-launches-Coal-is-Filthy-ads-against-TXU-1801939.php44 ibid45 SPI Public Affairs, Clean Sky Coalition, http://www.strategicperceptioninc.com/cleanSky_1.php

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Beneath a photo of a blue-eyed girl with a very dirty face is a link aptly named “Guerilla Marketing Campaign, Washington DC46.” , which takes you to their Political page. The “Dirty Faces” campaign for Clean Sky Coalition is featured as an example of their abilities:

Clean Sky CoalitionGuerilla Marketing Campaign, Washington, DC

You touch a lump of coal and your hand turns black.

The simple, iconic message behind a 45-day campaign in Texas that helped stop eight multi-billion dollar coal plants - in their tracks. And later spread its irrefutable message to other states then to our nation’s capitol

There’s also a long list of political candidates who have used their services.

46 SPI Political, http://www.strategicperceptioninc.com/cleanSky_2.php

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CNGnow47 (Clean Natural Gas Now) is an industry backed astro-turf group. It’s sponsors include Chesapeake Energy, American Clean Skies, Pickens Plan, NGVAmerica, ANGA (American Natural Gas Alliance) and AGA (American Gas Association.

The GreenwashIt’s not by chance that Chesapeake Energy’s Logo features Green, Blue and White colors. These are colors often associated with being clean, fresh, ecologically sensitive and safe. Many other natural gas corporations also have the same color scheme.

Chesapeake’s Commitment to Environmental Excellence 48 :

“Chesapeake is committed to promoting and conducting responsible exploration and production activities. Our goal is to reduce our country’s dependence on expensive foreign oil and carbon-heavy coal, and transition to clean-burning natural gas through the use of industry-leading operational practices and continuous technological innovation and improvement.”

ProPublica article: Science Lags as Health Problems Emerge Near Gas Fields49

by Abrahm Lustgarten and Nicholas KusnetzProPublica, Sept. 16, 2011, 4:35 p.m.

Excerpt:Exemptions from federal environmental rules won by the drilling companies have complicated efforts to gather pollution data and to understand the root of health complaints. Current law allows oil and gas companies not to report toxic emissions and hazardous waste released by all but their largest facilities, excluding hundreds of thousands of wells and small plants. Many of the chemicals used in fracking and drilling remain secret, hobbling investigators trying to determine the source of contamination. The gas industry itself has been less than enthusiastic about health studies. Drillers declined to cooperate with a long-term study of the health effects of gas drilling near Wallace-Babb's town this summer, prompting state officials to drop their plans and start over.

One would expect an association like the American Lung Association (ALA) would, at the very least, have some concerns with the degradation of air quality surrounding gas well pads, compressor stations etc.

With enough money and the right spin on feeding public relations to the masses, even the ALA succumbs.47 CNGNow, http://www.cngnow.com/Pages/information.aspx48 Commitment to Environmental Excellence, Chesapeake Energy, http://www.chk.com/Environment/Commitment/Pages/information.aspx49 Science Lags as Health Problems Emerge Near Gas Fields, ProPublica, by Abrahm Lustgarten and Nicholas Kusnetz, September. 16, 2011, http://www.propublica.org/article/science-lags-as-health-problems-emerge-near-gas-fields/single

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TAA-DAHHH…. presenting the CLEAN AIR INITIATIVE by the American Lung Association and Chesapeake Energy.

Excerpt:Chesapeake Energy is investing in the American Lung Association’s Clean Air Initiative because of a common concern about air quality. The Clean Air Initiative is an educational campaign that will inform the general public of the importance of air quality, and its impact on lung health, as well as empower individuals to protect our air.

“Partnering with the American Lung Association is a natural fit for us because of our shared concern about air quality. The American Lung Association is a trusted name and a leader on this issue.” —Aubrey McClendon, Chief Executive Officer of Chesapeake Energy

The original link of http://breathecleanair.org/index.php/supporters/chesapeake-energy is no longer valid.

However, I had my thinking cap on and saved the orginal page:

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In August 2011, an article appeared in the Denton Record-Chronicle reporting Breast Cancer Rate Climbs Up.50

Excerpt:Invasive breast cancer is on the rise in Denton County and five neighboring counties, even as the incidence rate for the disease is lower in the state and falling across the rest of the nation.

According to a 2011 report by the Centers for Disease Control and Prevention, six counties in the western Dallas-Fort Worth area have the highest rates of invasive breast cancer in Texas.

50 Breast cancer rate climbs up, Denton Record-Chronicle, August 31, 2011, http://www.dentonrc.com/local-news/special-projects/gas-well-drilling-headlines/20110831-breast-cancer-rate-climbs-up.ece

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The average of the six counties’ rates has risen from 58.7 cases per 100,000 people in 2005 to about 60.7 per 100,000 in 2008, according to the Texas Cancer Registry.

Excerpt:Because the rise in local cancer rates occurred in the same counties as those with the Barnett Shale’s most intense gas drilling development, some residents are concerned about toxic exposures.

In 2010, the Texas Commission on Environmental Quality inventoried emissions sources from natural gas production equipment in all 24 counties of the Barnett Shale. The six counties with the most production equipment are Denton, Hood, Johnson, Parker, Tarrant and Wise counties — the same six counties with high breast cancer rates.

Chesapeake Energy is active in Johnson County51, as are Chief Oil & Gas, XTO, Devon Energy, and EOG among others.

51 The Barnett Shale Formation of North Texas and Oklahoma, http://www.expertsreviewof.com/

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In October 2011, it came to public’s attention of an alliance between an Ephrata-based Breast Cancer Group and Chesapeake Energy.

Partnership challenged52

Environmentalists cite health concerns in objecting to partnership between Pa. Breast Cancer Coalition and Chesapeake Energy.Oct. 09, 2011 – by Jon Rutter, Lancaster OnLine

Excerpt:Matt Sheppard, Chesapeake's senior director for corporate development and government affairs, said in a recent statement that drilling naysayers are a fringe element pursuing a bogus public health threat.

"We strongly support the work of the Pennsylvania Breast Cancer Coalition and invite our more thoughtful neighbors in Pennsylvania to join us in fighting a true health risk," Chesapeake's Sheppard said in a statement.

"We have long believed that the vocal minority of anti-economic-development activists were out of touch with the public interest they claim to speak for," Sheppard said, "and this [brouhaha] is clear proof."

Travis Windle, a spokesman for a Canonsburg-based industry group, Marcellus Shale Coalition, said environmentalists are making outrageous inferences about drilling and public health.

Excerpt:A congressional inquiry, made public in April, found that energy companies injected millions of gallons of hydrofracking fluid containing hazardous or cancer-causing chemicals, such as benzene, into the ground between 2005 and 2009.

The drilling industry maintains that hydrofracking is safe.

This is Greenwashing at its best. Chesapeake Energy is free to continue to tout natural gas drilling and processing as being safe and clean, and even has the backing of the American Lung Association and Breast Cancer Groups to prove it.

Greenwashing for KidsYou may recall The Colbert Report53 doing a segment featuring the coloring book of “Talisman Terry, the Frackosaurus54” . Soon after Talisman Energy stopped handing out the coloring books.

52 Partnership challenged, Lancaster Online, by John Rutter, Staff Writer, Sunday, October 9, 2011, http://lancasteronline.com/article/local/475191_Partnership-challenged.html#ixzz1aJqXQqc253 Stephen Colbert Drills Talisman Energy For Frack-Friendly Kids Coloring Book Talisman Terry, The Huffington Post, by Ryan Grenoble, July 11, 2011, http://www.huffingtonpost.com/2011/07/13/stephen-colbert-fracking-coloring-book_n_897562.html54 Talisman Terry's Energy Adventure In the Wondrous Land of Fracking, Common Dreams, by Abby Zimet, July 15, 2011, https://www.commondreams.org/further/2011/07/15-4

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In 2008, Chesapeake introduced their coloring book featuring “Chesapeake Charlie55” , the Fracking Beagle.

55 Chesapeake Charlie, The Fracking Beagle, Think Progress, By Brad Johnson, August 2, 2011, http://thinkprogress.org/climate/2011/08/02/251417/chesapeake-charlie-the-fracking-beagle/?mobile=nc

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Energy industry produces coloring book to present the case for drilling to children June 2011 56

Excerpt:The friendly dinosaur has a counterpart at Chesapeake Energy, named Chesapeake Charlie. Charlie is an orange-tinged beagle whose own coloring book takes youngsters through the entire life cycle of what the Oklahoma City company calls a "clean-burning, affordable, abundant and American fuel."

Targeting South Park fansThe Natural Gas Industry, as a whole, are extremely worried about their public image and know handing out coloring books to your children is not the answer.

Shale Gas Industry Insider: We Are Losing the Messaging War on Fracking 57

Sep 13th, 2011, By fjgallagher

Excerpts:Today, she [Tisha Conoly-Schuller] explained, those opposed to hydraulic fracturing can no longer be characterized as environmental extremists because the movement has gone mainstream.

“The public is skeptical of anything we say,” she said. “The favorable perception of the oil and gas industry polls at seven percent — that’s lower than Congress. The public does not believe us. We need someone else delivering our message for us.”

...reposition the industry to appeal more broadly to young people — “The issue is serious, but we shouldn’t take ourselves so seriously. We need to become much more clever. Our industry is going to have to become hipper.”

In that respect, Conoly-Schuller said, industry executives and communicators are going to have to become well versed in the use of social media and online tools.

“People that like South Park are our audience,” she said, “and we need to figure out how to talk to them. We need to figure out what works and how to get it out to them.”

56 Chesapeake coloring book stresses patriotism and affordability to DFW’s youngest energy consumers, Pegasus News, by Erin Rice, Wednesday, July 23, 2008, http://www.pegasusnews.com/news/2008/jul/23/chesapeake-coloring-book-stresses-patriotism-and-a/?refscroll=20657 Shale Gas Industry Insider: We Are Losing the Messaging War on Fracking, Natural Gas Watch, By fjgallagher, September 13, 2011, http://www.naturalgaswatch.org/?p=939

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Conoly-Schuller encourages the gas industry to join Facebook and other social networking sites. She wants them to make friends with South Park fans.

Campaign Contributions:In 2009, the Supreme Court of the United States with a decision in Citizen’s United vs. Federal Election Commission58 expanded corporate “personhood” rights. The actual birth of “personhood” rights of corporations began in 1886, with a Supreme Court59 decision granting corporations the same rights as living persons under the Fourteenth Amendment to the Constitution.

Right or wrong, old or new, Corporate personhood is here and expanding it’s ability to influence and craft legislation. If money is the root of all evil, then pocket politicians are the fruit.

Chesapeake Energy’s Political contributions to PA Gov Tom Corbett goes back to 2004.

How a natural-gas tycoon tapped into Corbett60

June 29, 2011By WILL BUNCH philly.com

Excerpt:The $450,000 in campaign checks that energy mogul Aubrey McClendon wrote

that fall helped elect a man he said he'd never even met - a relatively obscure GOP candidate for Pennsylvania attorney general, Tom Corbett.

58 Citizens United v Federal Election Commission (no. 08-205), Legal Information Institute, Cornell University Law School, http://www.law.cornell.edu/supct/html/08-205.ZS.html59 Santa Clara County v Southern Pacific R. Co, 118 U.S. 394 (1886), U.S. Supreme Court, http://www.ratical.org/corporations/SCvSPR1886.html60 How a natural-gas tycoon tapped into Corbett, June 29, 2011, By WILL BUNCH, Philadelphia Inquirer, http://articles.philly.com/2011-06-29/news/29717481_1_corbett-campaign-tom-corbett-marcellus-shale

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That investment arguably changed not just the history but also the political direction of the state. The influx of cash helped Corbett narrowly win the

closest attorney general's race in Pennsylvania history and propelled him toward the governor's mansion, where he has now pledged to turn the Keystone State into "the Texas of the natural-gas boom."

Excerpt:The donations also spun a political mystery that may never be answered.

Excerpt:"The contribution occurred long before Chesapeake had any activity in

Pennsylvania," said Matt Sheppard, a company spokesman. "It is terribly misguided to imply that this contribution was made with future

political considerations in mind. The [committee] . . . gave the money to the Corbett campaign without notifying Chesapeake or Mr. McClendon."

Ummmmm….. right………Mr. McClendon didn’t know? Did Mr. Corbett know? Watergate Flashback – What did anyone know and when did they know it?

Gov. Tom Corbett (R-PA):OpenSecrets.com 2007-2008 Campaign Cycle 61 :

Top National DonorsBased on Combined State and Federal Contributions, 2007-2008

#12: Clean Energy Fuels Corp (remember Pickens and Littlefair?)Total Donations $18,855,650 Federal Donations $37,200 State Donations $18,818,450

#71 Chesapeake Energy Total Donations $4,914,175 Federal Donations $480,771 State Donations $4,433,404

Followthemoney.org 2000-201162 Chesapeake EnergyCompany/Pac Contribution $4,965,454 Subsidiary Contribution $79,550 Employee Contribution $1,449,884 Grand Total $6,494,889

MarcellusMoney.org 2009-2010 63Chesapeake EnergyTom Corbett: Republican $471,500Top 5 Legislators:Joseph B., III Scarnati Republican $16,000.00Mike Turzai Republican 6,500.00

61 Top National Donor, 2007-2008, Opensecrets.org, http://www.opensecrets.org/orgs/list_stfed.php?order=A62 Follow the Money, 2000-2011, Chesapeake Energy, http://www.followthemoney.org/database/search.phtml?searchbox=chesapeake+energy63 Chesapeake Energy 2009-2010, MarcellusMoney.org, http://www.marcellusmoney.org/company/chesapeake-energy

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Samuel H. Smith Republican 6,500.00Jake Corman Republican 4,000.00Michael Gerber Democratic 3,500.00

Totals by Party:Republican Party: $70,790.00Democratic Party: $23,750.00

Lobbying:Chesapeake Energy Lobbying64

OpenSecrets.org2011 Total Lobbying Expenditures: $1,410,000

Lobbying Firms:Duberstein Group $300,000Bracewell & Giuliani $220,000Chad Bradley & Associates $150,000Delta Strategy Group $120,000

And Yes,Virginia, Giuliani of Bracewell & Giuliani65 is none other than Former NY Mayor Rudolph "Rudy" Giuliani

I know a guy who knows a guy …..To advance the Natural Gas message it’s necessary to have people in the right places. This means someone needs to be on committees, and belong to organizations.

In March 2011, Gov. Tom Corbett appointed 30 people to the Marcellus Shale Advisory Commission.

Marcellus Shale Advisory Commission: out of balance?66

Governor's shale commission is long on campaign contributors, drilling interestsSunday, March 13, 2011By Tracie Mauriello and Laura Olson, Post-Gazette Harrisburg Bureau

Excerpt:The group includes 13 people with ties to the gas industry and only four

environmentalists. The others are state and local government officials and a geologist.

Thirteen of the members contributed a total of $557,000 to Mr. Corbett's political campaigns since 2008; 12 have ties with companies whose executives or

political action committees contributed another $562,000; one is the son of a $300,000 contributor. All together that amounted to just over $1.4 million.

64 Chesapeake Energy, Lobbying, Opensecrets.org, http://www.opensecrets.org/lobby/clientsum.php?id=D00002190865 Bracewell & Giuliani, http://www.bracewellgiuliani.com/people/rudolph-w-giuliani66 Marcellus Shale Advisory Commission: out of balance, March 29, 1012, By Tracie Mauriello and Laura Olson, Post-Gazette Harrisburg Bureau, http://www.post-gazette.com/stories/local/state/marcellus-shale-advisory-commission-out-of-balance-212204/#ixzz28tlRStuO

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David "Dave" Spigelmyer67 is the Vice President of Government Relations at Chesapeake Energy. He was appointed to the Marcellus Shale Advisory Commission by Gov. Tom Corbett.

Following two rather embarrassing news articles regarding DEP violations, and a gas well accident, Mr. Spigelmyer resigned from the commission.

Marcellus Shale advisory board members rack up violationsPublished: Wednesday, April 27, 2011By DONALD GILLILAND, The Patriot-News

Excerpt:Chesapeake Energy had the third-highest number of violations at 132; Chesapeake’s vice president of government relations, Dave Spigelmyer, was appointed to the commission, but chose to step off prior to the beginning of its work.

Chesapeake Energy will investigate Pennsylvania gas-drilling spill68

4/26/2011 - USA TodayCANTON, Pa. (AP) — Workers have stopped the flow of liquid and natural gas from a well that spilled chemical-laced water for two days and were to start sealing the well Friday, company officials said.

Mr. Spigelmyer later became a member of the Marcellus Shale Coaltion 69 , an industry organization headed by Kathryn Klaber as the Executive Director. He holds a seat on the Executive Committee.

His other connections include being a former President, and now a Director of the West Virginia Oil and Natural Gas Association. 70

Not Our FaultChesapeake CEO Aubrey McClendon blasts anti-drilling activists71

Excerpt:McClendon accused those critics of distorting the facts. He asserted there have been only a few dozen cases of methane migration of well-water supplies in northeastern Pennsylvania, and that residents were merely inconvenienced.

"Looking back, was anybody hurt? Was there any permanent or even temporary environmental damage? No, no and no. Some folks were inconvenienced, for sure, and for that we're deeply sorry," McClendon said. But he said the industry's benefits -

67 Chesapeake Energy, http://www.chk.com/Pages/default.aspx68 Chesapeake Energy will investigate Pennsylvania gas-drilling spill, USA Today, April 26. 2011, http://usatoday30.usatoday.com/money/industries/energy/2011-04-22-chesapeake-energy-gas-drilling-spill_n.htm69 Marcellus Shale Coalition, Executive Board, http://marcelluscoalition.org/about/executive-committee/70 West Virginia Oil and Natural Gas Association, Board of Directors, http://www.wvonga.com/WhoWeAre/BoardofDirectors.aspx71 Chesapeake CEO Aubrey McClendon blasts anti-drilling activists, By MICHAEL RUBINKAM Associated Press, Tulsa World, September 8, 2011, http://www.tulsaworld.com/business/article.aspx?subjectid=49&articleid=20110908_49_E1_ULNSur826248

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including lower home-heating bills, tens of thousands of new jobs, and millions of dollars of landowner wealth - more than outweigh the isolated cases of contamination.

He also said that new well-casing standards in Pennsylvania have largely eliminated the methane problem.

"Problem identified, problem solved. That's how we do it in the natural gas industry," McClendon said.

However, some residents with contaminated water wells have been forced to get their water delivered for months or years, and say their home values have been destroyed. Last month, the Pennsylvania Department of Environmental Protection announced that it's investigating a fresh case of methane contamination.

As of February 2011, the Pennsylvania DEP72 reports Chesapeake has drilled 181 wells.

Violation Summary Jan 1- Nov 17, 201181 Inspections 133 Violations

Less than half of Chesapeake’s well sites have been inspected.

Violations include: Discharge of pollutional material to waters of Commonwealth. Failure to adopt pollution prevention measures required or prescribed by DEP by

handling materials that create a danger of pollution. Failure to design, implement or maintain BMPs to minimize the potential for accelerated

erosion and sedimentation. Failure to minimize accelerated erosion, implement E&S plan, maintain E&S controls.

Failure to stabilize site until total site restoration under OGA Sec 206(c)(d) Failure to properly store, transport, process or dispose of a residual waste. Failure to report defective, insufficient, or improperly cemented casing w/in 24 hrs or

submit plan to correct w/in 30 days Failure to report release of substance threatening or causing pollution Improper casing to protect fresh groundwater Pit and tanks not constructed with sufficient capacity to contain pollutional substances. Polluting substance(s) allowed to discharge into Waters of the Commonwealth Stream discharge of IW, includes drill cuttings, oil, brine and/or silt There is a potential for polluting substance(s) reaching Waters of the Commonwealth

and may require a permit.

Pennsylvania fines Chesapeake Energy $1.1 million73

AP / May 17, 2011

72 Pennsylvania Department of Environmental Protection, Compliance Reports, http://www.depreportingservices.state.pa.us/ReportServer/Pages/ReportViewer.aspx?/Oil_Gas/OG_Compliance73 Pennsylvania fines Chesapeake Energy $1.1 million, Bloomberg Businessweek, May 17, 2011, http://www.businessweek.com/ap/financialnews/D9N9C7981.htm

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Pennsylvania has fined Chesapeake Energy Corp. $1.1 million for contaminating well water and causing a tank fire during natural gas drilling operations.

The state environmental protection department said Tuesday that the well contamination fine was the largest it ever imposed against companies drilling in the Marcellus shale, energy-rich formations under the Appalachians.

Chesapeake agreed under a court-monitored consent order to pay $900,000 for contaminating water supplies and $188,000 related to a Feb. 23 tank fire at a drilling site.

Gas Drilling Emergency in Bradford County 74 By Jim Hamill and Sarah BuynovskyApril 20, 2011

Officials said thousands of gallons of fluid leaked over farm land and into a creek from a natural gas well in Bradford County.

Chesapeake Energy officials said Wednesday night the leak had been contained and the situation was stable..

The rupture near Canton happened late Tuesday night, contaminating nearby land and creeks.

The blowout happened on the Morse family farm in LeRoy Township outside Canton, a farming community.

Health Consultation75

Chesapeake ATGAS 2H Well SiteLeroy Township, Bradford County, PANovember 4, 2011

Overview: A Marcellus Shale formation natural gas well known as the Chesapeake ATGAS 2H Well Site in Leroy Township, Bradford County, Pennsylvania experienced a well head flange failure and uncontrolled flowback fluid release on April 19, 2011. This acute event occurred while the well was undergoing hydraulic fracturing by the Chesapeake Energy Corporation (Chesapeake). Chesapeake and the Pennsylvania Department of Environmental Protection (PADEP) and the U.S. Environmental Protection Agency (EPA) concurrently completed an initial groundwater sampling event for the seven private wells closest to the well site on April 27 and 28, 2011. A comparison of the EPA and PADEP split samples showed consistency in the analytical results with the exception of the radionuclide results for one well. EPA requested that the Agency for Toxic Substances and Disease Registry (ATSDR) evaluate the environmental data collected from the seven private wells in order to determine whether harmful health effects would be expected from consuming and/or using the well water. Treated water or bottled water is currently being provided to

74 Gas Drilling Emergency in Bradford County, 4/20/2011, wnep.com, http://webcache.googleusercontent.com/search?q=cache:Kxi01Ll3H84J:www.frackalert.org/index.asp%3Fpage%3D4%26article%3D912+gas+drilling+emergency+in+bradford+county+wnep&cd=7&hl=en&ct=clnk&gl=us75 Health Consultation, Chesapeake ATGAS 2H Well Site, Leroy Hill Road, LeroyTownship, Bradford County, PA, November 4, 2011, http://www.atsdr.cdc.gov/hac/pha/ChesapeakeATGASWellSite/ChesapeakeATGASWellSiteHC110411Final.pdf

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three of the seven residences (RW02, RW03, and RW04). Based on the available data, it is not known if future chemical concentrations in the residential wells will change. Therefore, ATSDR evaluated the currently available data against a range of possible exposure durations (acute, intermediate and chronic).

Problem identified, problem solved, Mr. McClendon? Ummmm….yeah….right.

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Chapter 3Aubrey McClendon: Chesapeake Energy’s Little Problem

Shareholders of Chesapeake Energy received an unwelcomed wake-up call on Wednesday, April 17, 2012.

Reuter's headline screamed "Exclusive: Chesapeake CEO took out $1.1 billion in unreported loans" 76- By Anna Driver and Brian Grow

Aubrey McClendon, the CEO of Chesapeake Energy Corp, has borrowed as much as $1.1 billion over the last three years against his stake in thousands of company wells - a move that analysts, academics and attorneys who reviewed loan documents say raises the potential for conflicts of interest.

The loans, which haven't been previously detailed to shareholders, are used to fund McClendon's operating costs for an unusual corporate perk that offers him a chance to invest in a 2.5 percent interest in every well the company drills. McClendon in turn is using the 2.5 percent stakes as collateral on those same loans, documents filed in five states show.

The size and nature of the loans raise questions about whether McClendon's personal financial deals could compromise his fiduciary duty to Chesapeake investors, experts who reviewed the documents told Reuters.

Over the next few days as more information emerged and Chesapeake Energy attempted damage control, the market saw Chesapeake (CHK) shares hit a new 52-week low of $16.78

The damage control from Chesapeake has been, well, a bit peculiar, and weak. While the actual loan transactions and failure to disclose to the shareholders may be “legal”, it does bring up the issue of conflict of interest and makes one wonder what else is going on with McClendon.

Chesapeake Energy tried to ease concerns 77 by citing similar situation concerning Martha Stewart:

“Chesapeake says it didn’t have to say more and cites as legal justification a court ruling involving Martha Stewart.”

Ummmm… While Martha Stewart was not cited for the non-disclosures to her board of directors, she did end up in jail for other market missteps. OOOOOPSIE……

76 Exclusive: Chesapeake CEO took out $1.1 billion in unreported loans, By Anna Driver and Brian Grow, Wed Apr 18, 2012, Reuters, http://www.reuters.com/article/2012/04/18/us-chesapeake-mcclendon-deals-idUSBRE83H0FN20120418 77 Chesapeake Energy: Are the `e’s’ tilting?, Loren Steffym, April 19, 2012, Houston Chronicle, http://blog.chron.com/lorensteffy/2012/04/chesapeake-energy-are-the-es-tilting/

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Comparisons of Enron’s deals and eventual collapse under the weight of its own arrogance were frequently mentioned in articles.

Recent History of Chesapeake EnergyThe day before the Reuters story made shareholder’s spine shudder Chesapeake Energy announced a public offering of its Oil Field Services.

The Wall Street Journal reports: 78

Chesapeake Oilfield Services Inc. hopes to raise up to $862.5 million in an initial public offering of stock, according to a filing Monday with the Securities and Exchange Commission. The oilfield services company—which owns more than 100 drilling rigs, a hydraulic fracturing subsidiary, an oil field tool rental business and a fleet of trucks that ferry drilling rigs and other heavy equipment—will continue to primarily serve Chesapeake Energy, the filing said. Both companies are based in Oklahoma City, Okla.

Chesapeake Energy is the second largest natural gas producer in the U.S. and spent about $13.3 billion last year to drill and complete 1,662 wells, according to the filing. At year's end, Chesapeake Energy employed more than 130 drilling rigs, more than twice as many as its nearest competitor, Exxon Mobil Corp.

The filing didn't say how many shares Chesapeake Oilfield planned to sell in its IPO or in what range the company hoped to price them. It did say that underwriters Goldman Sachs Group Inc. G and Bank of America Merrill Lynch would have the option of selling up to $112.5 million worth of additional shares if demand warranted.

Chesapeake Energy has been attempting to raise cash and make its balance sheet more appealing by selling or spinning off assets.

The previous week, Chesapeake Energy announced three oil and gas asset monetization transactions for proceeds of $2.6 Billion.

Chesapeake Energy Press Release: 79

Chesapeake has completed the sale of preferred shares of a newly formed unrestricted, non-guarantor consolidated subsidiary, CHK Cleveland Tonkawa, L.L.C. (CHK C-T), and a 3.75% overriding royalty interest in the first 1,000 new net wells to be drilled on CHK C-T leasehold and certain wells contributed at closing for proceeds of $1.25 billion. The purchasing investment group was led by GSO Capital Partners LP, an affiliate of the Blackstone Group , and included TPG Capital, Magnetar Capital and EIG Global Energy Partners. CHK C-T owns approximately 245,000 net leasehold acres in the Cleveland and Tonkawa unconventional liquids-rich tight sand plays in Roger Mills and

78 Chesapeake Oilfield Plans IPO of up to $862.5 Million, Wall Street Journal, April 16, 2012, http://online.wsj.com/article/SB10001424052702304299304577348472811137072.html79 Chesapeake Energy Corporation Announces Three Oil and Gas Asset Monetization Transactions for Proceeds of $2.6 Billion, Press Release, 4/9/2012, http://www.chk.com/news/articles/pages/1681145.aspx

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Ellis counties, Oklahoma. Chesapeake has retained all the common equity interests in CHK C-T.

In a risky play, Chesapeake Energy has gone “naked”:

"....removed most of its 2012 derivatives positions, leaving the company naked to big dips in natural-gas futures prices just as they were headed for a ten-year low.

Late last year, the company removed most of its gas and oil hedges for 2012 and 2013, according to documents and people familiar with the matter, believing that prices were at or near a bottom. " ~ CNBC, April 9, 2012 80

Definition of 'Naked Option' 81: A trading position where the seller of an option contract does not own any, or enough, of the underlying security to act as protection against adverse price movements. If the price of the underlying security moves against the trader, who does not already own the underlying security, he or she would be required to purchase the shares regardless of how high the price is. The potential for losses, then, can be unlimited, and as a result, brokers typically have specific rules regarding naked trading. Inexperienced traders, for example, would not be allowed to place this type of order.

In December 2011, Chesapeake Energy sold its Marcellus Shale gas gathering assets 82 to Chesapeake Midstream Partners, LP, for $865 million. Approximately six months later Cheapeake Midstream Partners, LP was sold to Global Infrastructure Partners (GIP).

Per Rigzone.com: 83 “Global Infrastructure Partners is led by Credit Suisse Group AG and General Electric Co. It partnered with Chesapeake Energy to form Chesapeake Midstream Partners, an entity that went public in 2010 and operates gas-gathering and processing systems in the Marcellus Shale, Barnett Shale and other U.S. locations.

"These transactions will preserve the strategic relationships we have with [Chesapeake Midstream Partners] and [Chesapeake Midstream Development] as our primary midstream service providers and further strengthen the close relationship we have enjoyed with [Global Infrastructure Partners] since 2009," Chesapeake Energy Chief Executive and co-founder Aubrey McClendon said.”

Thick Skin?The Two Sides of Aubrey, by Christopher Helman 84, a Forbes article in October 2011 describes McClendon as:

80 Chesapeake Energy Goes Naked as Gas Hits a Decade Low, CNBC, April 9, 2012, http://www.cnbc.com/id/46992702/Chesapeake_Energy_Goes_Naked_as_Gas_Hits_a_Decade_Low81 Investopedia, http://www.investopedia.com/terms/n/nakedoption.asp#ixzz1skqjKoxg82 Chesapeake Midstream Partners, L.P. Announces Name Change to Access Midstream Partners, L.P. and Change in NYSE Ticker Symbol to "ACMP", Marketwatch, July 24, 2012, http://www.marketwatch.com/story/chesapeake-midstream-partners-lp-announces-name-change-to-access-midstream-partners-lp-and-change-in-nyse-ticker-symbol-to-acmp-2012-07-2483 Chesapeake Energy to Sell Midstream Assets for $4 Billion, by Dow Jones Newswires, Kristin Jones & Ben Lefebvre, Rigzone, http://www.rigzone.com/news/article.asp?a_id=11846984 The Two Sides of Aubrey, Christopher Helman, Forbes Magazine, October 24, 2011, http://www.forbes.com/forbes/2011/1024/feature-aubrey-mcclendon-hero-energy-chesapeake-risk-christopher-helman.html

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He's a hero: Chesapeake Energy may earn $2 billion this year and could solve our energy problems. He's a risk junkie: His aggressiveness could (and almost did kill) the company.

At a steak dinner with McClendon, Helmen remarked further:

"He co-owns the restaurant and had already picked the wine, which was decanted two hours ahead of time. Only the royal stuff: a 1989 Petrus, a 1989 Haut Brion and, conspicuously, a 1982 Lafite Rothschild. Easily ten grand worth of tipple."

Helman confesses to being critical of McClendon, "…called him everything from dangerous to overpaid and suggested that the company he built would fare better without him."

McClendon maintains "a key to success in any walk of life is having a short memory and a thick skin…"

His response to a March 2012 Rolling Stones article 85 left me with the feeling his skin isn’t all that thick. The day after the Rolling Stones article appeared on the internet, Chesapeake Energy released a 2,872 word rebuttal. 86

Rolling Stone rebutted the rebuttal.87 Chesapeake did not rebut the rebutted rebuttal.

Shell GamesAnother story which should have sent red flares through the Chesapeake Energy shareholders morning newspaper was a December 2011 Reuters story By Joshua Schneyer and Brian Grow entitled Special Report: Energy giant hid behind shells in "land grab". 88

The company issuing the rejections wasn't much of a business at all. It was a shell company - a paper-only firm with no real operations - called Northern Michigan Exploration LLC.

One jilted land owner, Eric Boyer-Lashuay, called to complain to the broker who had handled his lease. Northern, he recalls saying, is "a shell company ... a blank door with no one behind it."

Today, he puts it this way: "It was all a fake, all a scam."

Northern has voided hundreds of land deals, and was indeed a facade - a shell company created so that one of America's largest energy companies could conceal its role in the leasing spree, a Reuters investigation has found. Oklahoma-based

85 The Big Fracking Bubble: The Scam Behind Aubrey McClendon's Gas Boom, By Jeff Goodell, Rolling Stone Magazine, March 1, 2012, http://www.rollingstone.com/politics/news/the-big-fracking-bubble-the-scam-behind-the-gas-boom-20120301#ixzz2967H3XsX86 Chesapeake Responds to the Rolling Stone Story, 3/2/2012, http://www.chk.com/News/Articles/Pages/release_20120302.aspx87 Rolling Stone Responds to Chesapeake Energy on 'The Fracking Bubble, By Jeff Goodell, Rolling Stone Magazine, March 6. 2012, http://www.rollingstone.com/politics/blogs/national-affairs/rolling-stone-responds-to-chesapeake-energy-on-the-fracking-bubble-20120306#ixzz2967ng7kS88 Special Report: Energy giant hid behind shells in "land grab", By Joshua Schneyer and Brian Grow, Reuters, December 28, 2011, http://www.reuters.com/article/2011/12/28/us-energy-giant-idUSTRE7BR0G420111228

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Chesapeake Energy Corp., the nation's second-largest gas driller, was behind the entire operation.

Chesapeake had created one shell company that set up another, Northern Michigan Exploration. Next, Northern hired brokers who signed leases with residents such as Boyer-Lashuay. And those brokers were under strict orders not to divulge Chesapeake's role, records reviewed by Reuters show.

In fact, the effort in Michigan was directed from the very top - by Chesapeake's CEO, Aubrey McClendon. In corporate filings that Chesapeake made public earlier this year - nine months after McClendon's agents began signing Michigan land leases - McClendon is named as the chief executive officer of Northern, the shell company that voided hundreds of those leases.

How many other shell companies does Chesapeake have?

On the last pages of Chesapeake Energy - POSASR-20110208, Exhibit-4 document,89 Jennifer M. Grigsby is listed as "Senior Vice President, Treasurer and Corporate Secretary of the Company and of the Subsidiaries listed below".

Northern Michigan Exploration LLC is on the list, as well as companies with exotic names such as Winter Moon Energy Company, L.L.C., Gothic Production, L.L.C. and Empress, L.L.C.

An internet search turned up no websites for these 4 companies.

Overseeing audits of Chesapeake is PricewaterhouseCoopers (PWC). They received a

little less than $3million to look at the books. PWC were also auditors for Enron and American International Group, Inc. (AIG). We know how well that worked out.

89 CHESAPEAKE ENERGY CORP - POSASR - 20110208 - EXHIBIT_4.pdf, https://docs.google.com/file/d/0B9tP1cRHZ8J_NTM0NWRjNjItNWQ5Ny00NjY5LWE1MDYtNzExMmZiNDE1Y2Ux/edit?pli=1

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The Aubrey ProblemFrom 2006 thru the first half of 2008 Chesapeake's board granted McClendon shares of restricted stock. McClendon had borrowed heavily to bet even more of his stock holdings. When Wall Street crashed in October of 2008, McClendon was caught in a margin call. He was forced to sell 31.5 million shares of Chesapeake over a 3-day period. According to a

company statement this was "substantially all" of his holdings.

"My confidence in Chesapeake remains undiminished, and I look forward to rebuilding my ownership position in the company in the months and years ahead.", McClendon stated in response to his losses.

McClendon's losses lasted for about 82 days. His handpicked Board of Directors bailed him out. His 2007 5-year employment agreement was thrown out. On December 31, 2008, the Chesapeake board presented McClendon with $75million bonus and a new pay package.

The board also agreed to purchase McClendon’s antique maps for $12.1 million. Shareholders were upset and sued Chesapeake, it took until this year for a settlement to be reached, whereby McClendon will return the $12.1 million + interest. He will get his maps back.

Oklahoma judge approves Chesapeake settlement in shareholders’ lawsuit90

An Oklahoma County judge has signed off on a settlement in lawsuit filed by Chesapeake Energy Corp. investors upset over CEO Aubrey McClendon’s compensation in 2008.BY JAY F. MARKS - January 31, 2012

Excerpt:

Five groups, led by the Louisiana Municipal Police Employees’ Retirement System, filed lawsuits against Chesapeake and its board.

The parties reached a settlement in the case last fall, calling for McClendon to buy back his map collection while the company adopted “significant” governance reforms.

“This is a rare concession by Mr. McClendon,” said attorney Marc Gross, who represented the plaintiffs in the case. “We’re very proud to have gotten this settlement.”

Oklahoma County District Judge Dan Owens accepted the settlement Monday morning, despite objections from two shareholders. Owens said Chesapeake has about 660 million outstanding shares, but only two shareholders voiced any complaint with the settlement, leading him to conclude it is fair and reasonable.

90 Cheseapeake Oil Settlement McClendon Keeps 2008 Bonus Buys Back 12 Million Dollar Maps, Robert Robles, Attorney, http://robertroblesattorney.wordpress.com/2012/02/01/cheseapeake-oil-settlement-mcclendon-keeps-2008-bonus-buys-back-12-million-dollar-maps/

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The judge is ready to sign off on the agreement, although the Chesapeake shareholders who objected to the deal still can appeal his ruling. Attorneys on both sides of the case were pleased the judge agreed to accept their settlement agreement. Gross said it is unusual for companies or executives in such securities cases to make significant payments like McClendon has agreed to do. He will pay $12.1 million, plus interest, for his map collection. Gross also said Chesapeake has taken steps to establish a review process to avoid such compensation issues in the future. “We’re very pleased with the outcome,” he said. Chesapeake did not admit any wrongdoing in the settlement.

“Chesapeake stands behind its board’s approval of Chief Executive Officer Aubrey McClendon’s 2008 incentive award, but feels this settlement is in the company’s and its shareholders’ best interest,” said Henry Hood, the company’s general counsel. “We are pleased to put this matter behind us and hope shareholders and the public will focus on our efforts to promote natural gas as the clean fuel of choice for power generation and transportation, creating American jobs and reducing dependence on foreign oil.”

Did you notice the attempt to distract attention from the settlement? “We are pleased to put this matter behind us and hope shareholders and the public will focus on our efforts to promote natural gas as the clean fuel of choice for power generation and transportation, creating American jobs and reducing dependence on foreign oil.”

The “map” matter is not behind McClendon or Chesapeake.

Board Turns on Chesapeake's CEO 91 - Excerpt (emphasis added): Earlier this year, Mr. McClendon said he would repay the company to settle a shareholder lawsuit over the matter. The company said in a recent filing, however, that the company has filed an appeal in that case and that Mr. McClendon hadn't repurchased the maps, which have been displayed at the company's headquarters.

The Unreported LoansChesapeake has a little program called Founder Well Participation Plan (FWPP). It grants McClendon a 2.5% direct stake in the drilled wells. The FWPP does not allow McClendon to "cherry pick" the most profitable wells, it's all or nothing.

From Reuters Special Report:92 Chesapeake CEO took $1.1 billion in shrouded personal loans

But because McClendon is using the loans to finance his participation in the well plan, he defrays his risks. Two of McClendon's lenders, both private equity firms, in turn spread the loan risks to other investors by raising money from state pension funds and other investors to fund them. Those insights emerge from a February 2011 document detailing a meeting between McClendon's largest personal lender and a prospective investor.

91 Board Turns on Chesapeake's CEO, By RUSSELL GOLD, Wall Street Journal, April 26, 2012, http://online.wsj.com/article/SB10001424052702304811304577367750138370694.html92 Special Report: Chesapeake CEO took $1.1 billion in shrouded personal loans, By Anna Driver and Brian Grow, April 28, 2012, Reuters, http://www.reuters.com/article/2012/04/18/us-chesapeake-mcclendon-loans-idUSBRE83H0GA20120418

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"If he hasn't had to put up any of his own money, how is that alignment" of McClendon and Chesapeake's interests, asked Mark Hanson, an analyst with Morningstar in Chicago.

In Louisiana, Texas, Arkansas, Pennsylvania and Oklahoma, Chesapeake files conveyance forms and is a regular practice. A conveyance allows the transfer of ownership or interest in real property from one person to another by a document, such as a deed, lease, or mortgage

Pennsylvanians are slowly becoming aware of the problem with leasing property and conveyances.

New surprise in gas boom Notify owners of mortgage 93

Times-Tribune August 3, 2011

Excerpt (emphasis added): Bradford County landowners, who have negotiated mineral rights leases, have received a surprise on the financial side. Like most companies, gas companies use lines of credit secured by company assets to finance ongoing operations. Gas company assets include the leases by which they access natural gas.

As revealed during a recent Bradford County commissioners meeting, Chesapeake Energy Corp. has mortgaged the mineral rights to about 1,000 properties in Bradford County, in order to access a $5 billion line of credit.

The problem is that landowners who have leased those mineral rights typically are not aware of the mineral rights mortgage until they attempt to use their land as collateral for financing of their own. Then the title search reveals the mineral rights mortgage.

Since the mineral rights are distinct, the company's use of the lease to secure its financing should not adversely affect a landowner's attempt to secure financing.

But that's up to individual lending institutions. According to Diane Ward, a former supervisor of Standing Stone Twp., some banks have rejected loan applications from landowners because of the company's mineral rights mortgage.

With McClendon’s loans and use of these wells and leased properties as collateral – where does it leave the property owners in the event of a default?

According to News-OK: Chesapeake Energy Corp. CEO says he began borrowing in 1993 94 BY JAY F. MARKS - April 27, 2012

Chesapeake Energy Corp. CEO Aubrey McClendon has been borrowing money to cover his share of the company's drilling costs since the well participation program began in 1993, he revealed Thursday.

93 New surprise in gas boom Notify owners of mortgage, Times-Tribune, August 3, 2011, http://thetimes-tribune.com/opinion/new-surprise-in-gas-boom-notify-owners-of-mortgage-1.118344394 Chesapeake Energy Corp. CEO says he began borrowing in 1993, By Jay F. Marks, NewsOK, April 17, 2012, http://newsok.com/chesapeake-energy-corp.-ceo-says-he-began-borrowing-in-1993/article/3670103#ixzz296ZrToTA

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McClendon and his companies — Arcadia Resources LP, Larchmont Resources LLC and Jamestown Resources LLC — own oil and natural gas reserves worth $6 million more than they owed on them at the end of 2011, according to his disclosure statement.

McClendon also sold a share of his holdings last year for $108.6 million, netting about $61 million before taxes.

Despite that profit, McClendon's cumulative expenditures under the program have “significantly” exceeded production revenues because of increasing capital costs, according to Chesapeake's proxy statement.

McClendon and his affiliates owed $846 million on loans secured by his interest in wells granted to him by the shareholder-approved Founder Well Participation Plan as of Dec. 31.

The program is expected to be shut down before its scheduled expiration in 2015, the company announced Thursday, citing an agreement between McClendon and its board.

NOTE: We see yet another personal corporation added to the list: Arcadia Resources LP. How many other personal corporations are there? Are the Board of Directors aware of them?

I think I’m having a Nixon-Watergate flashback….. What DID they know and WHEN DID they know it.

Source: Supplemental Disclosure Regarding Aubrey K. McClendon’s Interests in Chesapeake Energy Corporation’s Founder Well Participation Program95

(1) Includes amounts borrowed to pay well costs incurred on wells or leasehold for which no proved reserves have been booked.

(2) This does not include unproved reserves (i.e., probable and possible).

(3) This does not include any value for unproved reserves (i.e., probable and possible) or leasehold.

95 Supplemental Disclosure Regarding Aubrey K. McClendon’s Interests in Chesapeake Energy Corporation’s Founder Well Participation Program, BusinessWire, April 26, 2012, http://www.businesswire.com/news/home/20120426006013/en/Supplemental-Disclosure-Aubrey-K.-McClendon%E2%80%99s-Interests-Chesapeake

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(4) Based on reporting rules of the Securities and Exchange Commission, calculated using an annual discount rate of 10% and the unweighted arithmetic average of prices on the first day of each month in 2011. At PV9, the value would be $447 mm. This does not include any value for (a) unproved reserves (i.e., probable and possible); (b) proved undeveloped reserves or (c) leasehold.

Per Reuters - McClendon borrowed through three companies he controls. These are Chesapeake Investments LP, Jamestown Resources LLC, and Larchmont Resources, LLC. It affords him the opportunity to buy the very same well stake which he uses as collateral against the loans.

Source: From Reuters Special Report

EIG Global Energy Partners spun off from Trust Company of the West (TWC) in January 2011 to form its own independent investment company.

Union Bank is a subsidiary of UnionBanCal Corporation.

UnionBanCal Corporation is a wholly owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a subsidiary of Mitsubishi UFJ Financial Group, Inc.

At a February 2011 meeting between EIG and the New Mexico State Investment Council, the state's public investment fund, EIG chief operating officer Randall Wade sought a $50 million investment from New Mexico.

When asked about a prior EIG investment in McClendon's well interests, Wade boasted EIG had known Chesapeake for more than 25 years and "provided pre-IPO financing for them in the late 1980s."

Those tight bonds, Wade said, have created other unique opportunities for EIG. 96

"In fall 2008, Mr. McClendon didn't have liquidity to participate in the (well) program in 2009, at which point EIG entered into discussions with him" and ultimately formed a special purpose vehicle called Larchmont Resources, Wade said.

96 McClendon lender struck lucrative deal with CEO, By Brian Grow and Anna Driver, April 18, 2012, Reuters, http://www.reuters.com/article/2012/04/18/us-chesapeake-mcclendon-sidebar-idUSBRE83H0HB20120418?feedType=RSS&feedName=everything&virtualBrandChannel=11563

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Through Larchmont, EIG acquired the rights to all of McClendon's well stakes for 2009 and 2010. EIG then set up a new special purpose vehicle - Jamestown Resources - to control McClendon's well shares in 2011, with rights to 2012, Wade said.

EIG's investments have been extremely profitable. "EIG sweeps 100 percent of the cash flow generated by those projects until EIG has gotten all of its money back plus a 13 percent realized return," Wade told New Mexico investors. EIG also gets a 42 percent cut of McClendon's share of the well profits "in perpetuity,"

Chesapeake Energy Corporation was founded in 1989 by McClendon and Thomas “Tom” Ward. Ward was President and Chief Operating officer until 2006.

Ward purchased a significant interest in SandRidge Energy in 2006 and became it’s CEO and Chairman. He left Chesapeake Energy at that time.

McClendon started his first oil and natural gas investment company, Chesapeake Investments LP, in 1982. A 1997 SEC filing describes Chesapeake Investments97 as "... an Oklahoma Limited Partnership, having a business address of 6100 North Western Avenue, Oklahoma City, Oklahoma 73118. Mr. McClendon is the sole general partner of CI. CI is principally engaged in the ownership of working interests in oil and gas wells and leases."

Per Rolling Stone article: The Big Fracking Bubble: The Scam Behind the Gas Boom98, By Jeff Goodell. March 1, 2012

As McClendon put it in a conference call with Wall Street analysts a few years ago, "I can assure you that buying leases for x and selling them for 5x or 10x is a lot more profitable than trying to produce gas at $5 or $6 per million cubic feet."

One needs to ask - more profitable for who and is Chesapeake Energy in the business of Oil & Gas or Real Estate flipping?

Cows and BasketballOil and gas wells and leases aren’t the only interests of Chesapeake Investment. It also has interests in cows, specifically beef cows, and basketball.

An internet search revealed Chesapeake Investments has 50% interest in Heritage Beef Cattle Company, LLC,99 which has locations in Haskell, Labette and Pawnee counties of Kansas and Wheeler County, Texas. Kathleen McClendon is also listed as an owner of the Haskell and Wheeler county locations.

The other 50% is owned by Tlw Investments Inc, owned by Tom Ward.

97 McClendon Aubrey K, et al. · SC 13D/A · Chesapeake Energy Corp · On 3/10/97, http://www.secinfo.com/dRxzp.81z.htm#7pn98 The Big Fracking Bubble: The Scam Behind Aubrey McClendon's Gas Boom, Rolling Stone, By Jeff GoodellMarch 1, 2012, http://www.rollingstone.com/politics/news/the-big-fracking-bubble-the-scam-behind-the-gas-boom-20120301#ixzz2A2O9hUs999 USDA subsidy information for Chesapeake Investments Lp, EWG Farm Subsidies, http://farm.ewg.org/persondetail.php?custnumber=A11897388

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Related is another company called Heritage Feeders LP100 with the Aubrey & Kathleen McClendon and Tom Ward listed as owners.

Source: http://farm.ewg.org

Forbes named Tom L Ward #155 of the 400 richest Americans in 2008. 101

Ward’s bio: Made fortune with former rival Aubrey McClendon at Chesapeake Energy. As private as McClendon is public. Struck out on his own 2006, paid $500 million for controlling stake in Texas gas producer Riata Energy. Renamed SandRidge Energy; fifth-most-active driller of new natural gas wells in America. Production up 83% in first 6 months of 2008. Took public last November; stock down 20% since. Owns stake in basketball's Oklahoma City Thunder, cattle ranches, feedlot operations. Founded White Fields home for troubled boys in Oklahoma.

100 USDA subsidy information for Heritage Feeders Lp, EWG Farm Subsidies, http://farm.ewg.org/persondetail.php?custnumber=A11897391&summlevel=whois101 The 400 Richest Americans, #155 Tom Ward, Forbes, September 17, 2008, http://www.forbes.com/lists/2008/54/400list08_Tom-Ward_SDZK.html

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McClendon – Ward connections

Ward also took part in the FWPP. Per Rigzone102:

Ward, now the chief executive of SandRidge Energy Inc. (SD), said during his time at Chesapeake he opted to buy stakes in Chesapeake's wells every year between 1989 and 2006, a period he said during which the company drilled "tens of thousands" of wells. He used the stakes in the wells as collateral on personal loans, he said, but went through banks that had no business dealing with Chesapeake. Ward declined to give the amount of the loans.

"I had personal loans against a part of the investments," Ward told Dow Jones. "It was just traditional bank debt."

Ward said he sold his stakes in Chesapeake wells to third-parties in 2008 as natural-gas prices fell by more than half after reaching a peak of $13 a million British thermal units. Ward declined to say how much money he received from the sale or name the buyers.

102 Chesapeake Co-Founder Ward Also Took Loans on Well Stakes by Dow Jones Newswires, Rigzone, Ben Lefebvre, April 20, 2012, http://www.rigzone.com/news/article.asp?a_id=117152

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"I sold the wells for more than what was owed," Ward said.

Wonder if Ward is doing the same type of deals with Sandridge interests?

Gas, Oil or Real Estate?Monday (4/23/12) – Reuters published another article: Exclusive: CEO's sales of well stakes raise questions at Chesapeake103

Excerpt:Now, Reuters has found, CEO Aubrey K. McClendon has employed another way to cash in on a perk unique to the company he runs: He sold his share of two large energy plays at the same time the company divested its interest.

Analysts say the deals, which generated $6.5 billion in proceeds, pose a potential conflict because of the possibility that they could have been timed and structured to suit McClendon's personal interests, rather than those of the company he runs.

Excerpt:In the two asset sale deals, one in 2011 in Arkansas worth $4.75 billion and one in 2008 in Oklahoma worth $1.75 billion, McClendon sold his interests in Chesapeake-controlled wells and acreage when the company divested its interests in the same properties.

The financial advisors for these transactions, as well as many others on behalf of Chesapeake Energy, is the firm of Jefferies & Company, specifically the Jefferies Energy Investment Banking Group 104 Chairman of the Energy Investment Banking Group is Ralph Eads III.

From the New York Times, Eads is described as a Small Player on Wall Street Carves Out a Niche105 - By THOMAS KAPLAN – NY Times, Nov. 22, 2010

Excerpt:“A particular bright spot has been in energy. In addition to bankers like Mr. Eads, Randall & Dewey also brought with it a large technical team of geologists and other experts. Mr. Eads credits them with reaching the conclusion that exploring shale formations could be the next big thing. That was three and a half years ago, before even many energy companies were interested in shale.

That got Mr. Eads thinking: if there is all this gas available to be extracted, who is going to pay for it?

“It was very clear to me that the holders of acreage did not have enough capital to be able to develop the assets themselves,” he said. “This was going to have to be financed in large part by the industry.”

103 Exclusive: CEO's sales of well stakes raise questions at Chesapeake, Reuters, By Brian Grow and Anna Driver, Apr 23, 2012, http://www.reuters.com/article/2012/04/23/us-chesapeake-mcclendon-sales-idUSBRE83M16Y20120423104 Jefferies, Energy Transactions, http://www.jefco.com/cositemgr.pl/html/Industries/Energy/SelectTransactions/all_index.shtml105 Small Player on Wall Street Carves Out a Niche, By THOMAS KAPLAN, November 22, 2010, Dealbook-NY Times.com, http://dealbook.nytimes.com/2010/11/22/small-player-on-wall-street-carves-out-a-niche/

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Among the first people to whom Mr. Eads reached out was Aubrey K. McClendon, the chief executive of Chesapeake Energy, who decades earlier had been his fraternity brother at Duke University. Jefferies has advised Chesapeake on more than 15 deals over the last five years — most recently last month, when the Chinese state-run oil company Cnooc struck a $2.2 billion partnership with the company to develop a South Texas shale deposit.

“Certainly with regard to J.V.’s, Ralph is considered by me — and is also generally considered by others — to be the most accomplished energy investment banker in the business, bar none,” Mr. McClendon said of Mr. Eads’s role in joint venture deals.

Remember the energy crisis in California back in 2001? Eads was an executive at El Paso Merchant Energy Group.

El Paso Corp. Executive Tells Regulators of Collusion on Natural Gas Deal106

THE NATION | THE ENERGY CRISISMay 25, 2001|RICARDO ALONSO-ZALDIVAR | TIMES STAFF WRITER

“Excerpt: The admission by El Paso executive Ralph Eads marked a shift from his previous testimony and was elicited through sharp questioning by an angry judge who threatened to subpoena Eads’ boss.

At issue is a February 2000 contract between El Paso Merchant Energy Group, a subsidiary that sells natural gas, and El Paso Natural Gas Co., another subsidiary that owns and operates pipelines. El Paso Merchant paid $38.5 million last year for the right to ship as much as 1.2 billion cubic feet of natural gas per day to California.

The California Public Utilities Commission alleges that El Paso Merchant took advantage of the deal to withhold shipping capacity on the pipeline, creating an artificial shortage that sent Southern California prices soaring.

Southern California Edison estimates that El Paso Merchant’s actions added $3.7 billion to the state’s total energy bill, since most power generators rely on natural gas.

The El Paso companies deny any impropriety and blame increased demand, low storage capacity and other independent factors for a fivefold increase in California natural gas prices since early last year. El Paso’s lawyers have called the $3.7-billion estimate “absurd.”

Eads, president of El Paso Merchant, testified Thursday that he obtained the tacit approval of William A. Wise, head of corporate parent El Paso Corp., for the contract with El Paso Natural Gas Co.

Only 24 hours earlier in the same courtroom, Eads had portrayed Wise’s role in the pipeline deal as marginal. Eads had suggested that he merely briefed Wise on a deal that Eads was in charge of.

106 El Paso Corp. Executive Tells Regulators of Collusion on Natural Gas Deal, May 25, 2001, RICARDO ALONSO-ZALDIVAR , TIMES STAFF WRITER, http://articles.latimes.com/2001/may/25/news/mn-2325

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But on Thursday, Judge Curtis L. Wagner Jr., apparently relying on company documents that remain under court seal, said Eads’ explanation was not believable.

“I think I’m being given the run-around on this,” Wagner told Eads in open court, startling lawyers for both sides into a dead silence. “I am just appalled that you are trying to pull something over my eyes.”

After the Boom in Natural Gas , NY times :107 (emphasis added)

In private, Mr. Eads acknowledged that his pitches involved a bit of bluster.

“Typically, we represent sellers, so I want to persuade buyers that gas prices are going to be as high as possible,” Mr. Eads said. “The buyers are big boys — they are giant companies with thousands of gas economists who know way more than I know. Caveat emptor.”

Eads is on the board of Trustees for the American Clean Skies Foundation (ACSF), a Chesapeake Energy front group, and a trustee Duke University108. (McClendon is also a trustee of ACSF.)

Dominic Dell’Osso109 is another Jefferies – Chesapeake connection. In 2008, Dell’Osso left Jefferies as an investment banker to take a position as Vice President of Finance and Chief Financial Officer of Chesapeake's wholly-owned midstream subsidiary Chesapeake Midstream Development, L.P, Dell’Osso Chesapeake's new Senior Vice President and Chief Financial Officer in 2010.110

Dell’Osso replaced “Marcus C. Rowland, 58, its Chief Financial Officer for the past 18 years, will resign as of October 29, 2010 to join Cisco, Texas-based Frac Tech Services, LLC as its President. Frac Tech is one of the largest providers of hydraulic fracturing services in the U.S. Chesapeake has invested approximately $375

million in Frac Tech and owns an approximate 26% interest in the company.”

Chesapeake Turns to Jefferies’ Eads in $28 Billion Deals: Energy111

By Zachary R. Mider - May 18, 2012 | Bloomsburg

107 After the Boom in Natural Gas, October 20, 2012, NY Times, http://www.nytimes.com/2012/10/21/business/energy-environment/in-a-natural-gas-glut-big-winners-and-losers.html?pagewanted=2&_r=2&hpw&adxnnlx=1350763638-UWawmuRTJaHgPxxlqN37mw&108 Board of Trustees, Duke University, Ralph Eads III, Ralph Eads is vice chairman of Jefferies & Co., Inc., a U.S. investment bank, where he chairs the firm's global energy section. He also serves on the board of the American Clean Skies Foundation. http://www.trustees.duke.edu/trustees/bios/eads.php . See also: http://www.cleanskies.org/pdf/acsf-board.pdf109 Chesapeake Energy Corporation Management Team,http://www.chk.com/About/ManagementTeam/Pages/default.aspx110 Chesapeake Energy Corporation Press Release, October 13, 2010, http://www.chk.com/news/articles/pages/1481993.aspx111 Chesapeake Turns to Jefferies’ Eads in $28 Billion Deals: Energy, By Zachary R. Mider - May 18, 2012 | Bloomsburg, http://www.bloomberg.com/news/2012-05-17/chesapeake-turns-to-jefferies-eads-in-28-billion-deals-energy.html

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Excerpt (emphasis added) : Eads and Jefferies advised Chesapeake on the deals that would help them pay for it: selling future production in the form of “volumetric production payments,” and creating joint ventures with deep-pocketed partners to fund the cost of drilling wells.

The work was particularly profitable for Jefferies, which took the joint-venture model used at Chesapeake and sold it to companies across the energy industry. A wave of the ventures followed, as oil majors and national oil companies sought to get in on the U.S. shale boom.

Jefferies played a role in almost all of those transactions, helping the firm jump to the top ranks of merger advisers in the energy industry through deals like Encana Corp.’s $1.45 billion partnership with Mitsubishi Corp., established this year, in a gas field in Canada.

Chesapeake Chief Financial Officer Domenic Dell’Osso joined after serving as an investment banker with Jefferies for two years, according to the company’s website.

Exactly what part Eads and/or Dell’Osso played in the 2008 and 2011 transactions is unknown at this time, but we do know Jefferies & Company acted as Financial Advisors, and “someone” knew of McClendon’s sale of his shares and “reinvestment” as a purchaser through his 3 personal corporations.

There were two transactions in 2008 between Chesapeake and BP mentioned in this 2008 BP announcement:

Chesapeake Energy Corporation and BP America Announce Fayetteville Shale Joint Venture112

OKLAHOMA CITY, OK AND HOUSTON, TX, SEPTEMBER 2, 2008 - Chesapeake Energy Corporation (NYSE:CHK) and BP America (NYSE:BP) today announced the execution of a Letter of Intent for a joint venture whereby BP will acquire a 25% interest in Chesapeake's Fayetteville Shale assets in Arkansas for $1.9 billion.

Excerpt:BP will pay $1.1 billion in cash at closing and will pay a further $800 million during the remainder of 2008 and in 2009 by funding 100% of Chesapeake's 75% share of drilling and completion expenditures until the $800 million obligation has been funded. Chesapeake plans to continue acquiring leasehold in the Fayetteville Shale play and BP will have the right to a 25% participation in any such additional leasehold. The transaction is subject to the execution of mutually acceptable definitive documentation that the companies anticipate executing within the next week and closing is anticipated to occur later this month.

Excerpt:Just a month after closing the sale of all our Arkoma Basin Woodford Shale assets in Oklahoma to BP for $1.7 billion, we are pleased to now announce a second major

112 Chesapeake Energy Corporation and BP America Announce Fayetteville Shale Joint Venture, BP Press Release, September 2, 2008, http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7047615

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transaction with BP for a 25% interest in our Fayetteville Shale assets in Arkansas for $1.9 billion.

Excerpt:"The PXP Haynesville Shale joint venture and the BP Fayetteville Shale joint venture together will pay for approximately $2.5 billion of Chesapeake's drilling and completion expenditures currently planned for the second half of 2008 through 2010. As previously announced, we are also pursuing a similar transaction involving our Marcellus Shale assets with others in the industry that we hope to complete by year-end 2008."

Per Reuters: Special Report: Chesapeake CEO took $1.1 billion in shrouded personal loans113

McClendon's biggest personal lender, EIG, has been a big financer for Chesapeake, too.

In November, Chesapeake raised $1.25 billion from a group of investors including EIG through the sale of "perpetual preferred shares" in a newly formed entity, Chesapeake Utica LLC, which controls about 800,000 acres of oil and gas-rich land in Ohio. The sale offers lucrative terms to EIG investors, paying an annual dividend of 7 percent and royalty interests from oil and gas wells, according to analysts.

On April 9, the company announced a nearly identical deal to raise another $1.25 billion from EIG and other investors, in another new subsidiary called CHK Cleveland Tonkawa.

Dividends on preferred shares are controversial because they are paid before regular dividends owed to common shareholders. "Basically it's a form of more expensive debt," Morningstar's Hanson said. "It makes it appear that it's not debt, but it sits on top of obligations to the common shareholder."

The fact that McClendon's largest personal lender received favorable terms on its Chesapeake investments caused some Wall Street analysts to call for more information about McClendon's loans.

Another Player is Xiqing Gao114 is President and Investment Manager for China Investment Corporation (CIC) which has a minority stake in the CHK-Utica115 deal between Korea Investment Corporation and Chesapeake. Gao is a Duke University Trustee.

Damage ControlPress Release from Chesapeake Energy, 4/26/2012: Chesapeake Energy Corporation's Board

113 Special Report: Chesapeake CEO took $1.1 billion in shrouded personal loans, Reuters, By Anna Driver and Brian Grow, April 18, 2012, http://www.reuters.com/article/2012/04/18/us-chesapeake-mcclendon-loans-idUSBRE83H0GA20120418114 Board of Trustees, Duke University, Xiqing Gao, Xiqing Gao was named president and chief investment officer of China Investment Corporation in 2007. The corporation, a government-sponsored entity of the People's Republic of China that seeks to invest in securities and commodities abroad, is responsible for managing part of the country's foreign exchange reserves. http://www.trustees.duke.edu/trustees/bios/gao.php115 Chesapeake Energy Corporation Announces Option Exercise and Closing of Private Placement of $900 Million of 5.75% Cumulative Non-Voting Convertible Preferred Stock, Chesapeake Energy Press Release, June 21, 2010, https://www.chk.com/news/articles/Pages/1440024.aspx

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and CEO Aubrey K. McClendon Agree to Negotiate Early Termination of Founder Well Participation Program - CEO Agrees to Separately Provide Enhanced FWPP Disclosure 116

Chesapeake Energy Corporation today announced that its Board of Directors has determined that it does not intend to extend the company's Founder Well Participation Program (FWPP) with its chief executive officer, Aubrey K. McClendon, beyond its present 10-year term ending December 31, 2015.

Following consultation with the company's Board of Directors, Mr. McClendon will separately disclose supplemental information regarding the interests he has acquired through the company's Founder Well Participation Program as of December 31, 2011. The company also announced the Board of Directors is reviewing the financing arrangements between Mr. McClendon (and the entities through which he participates in the FWPP) and any third party that has had or may have a relationship with the company in any capacity.

Chesapeake also wishes to clarify a statement appearing in its April 18, 2012 press release captioned "Chesapeake Energy Corporation General Counsel Henry J. Hood Issues Statement." The statement that "the Board of Directors is fully aware of the existence of Mr. McClendon's financing transactions" was intended to convey the fact that the Board of Directors is generally aware that Mr. McClendon used interests acquired through his participation in the FWPP as security in personal financing transactions. The Board of Directors did not review, approve or have knowledge of the specific transactions engaged in by Mr. McClendon or the terms of those transactions.

Is your head spinning over that one? FULLY AWARE actually means GENERALLY AWARE? Since when?

To repeat: " The Board of Directors did not review, approve or have knowledge of the specific transactions engaged in by McClendon or the terms of those transactions."

So they were Fully Aware , but now only Generally Aware but had no knowledge of specific transactions? So they kind of knew but not really knew McClendon was up to something, but didn't know what???

I think I’m having a Nixon-Watergate flashback….. What DID they know and WHEN DID they know it.

Damage Control Too Little Too Late?Within a couple hours of the 4/26 Chesapeake Energy press release made its way into the news, Reuters dropped another shoe.

SEC starts probe of Chesapeake CEO's well stakes117 - Reuters, April 26, 2012

116 Chesapeake Energy Corporation's Board and CEO Aubrey K. McClendon Agree to Negotiate Early Termination of Founder Well Participation Program, 4/26/2012, http://www.chk.com/news/articles/pages/1687832.aspx117 SEC starts probe of Chesapeake CEO's well stakes, Reuters, By Ernest Scheyder and Brian Grow, April 26, 2012, http://www.reuters.com/article/2012/04/26/us-chesapeake-idUSBRE83P0PX20120426

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(Reuters) - The Securities and Exchange Commission has opened an informal inquiry into Chesapeake Energy Corp's controversial program that granted Chief Executive Aubrey McClendon a share in each of the natural gas producer's wells, a source familiar with the matter said on Thursday.

That investigation, being led by the SEC's office in Fort Worth, Texas, comes after Reuters reported about loans McClendon had obtained on those wells that raised concerns about a potential conflict of interest by the company's CEO.

Note: This is an INFORMAL INQUIRY, the first of many steps the U.S. Securities and Exchange Commission may take.

Per SEC Page 118 : All SEC investigations are conducted privately. Facts are developed to the fullest extent possible through informal inquiry, interviewing witnesses, examining brokerage records, reviewing trading data, and other methods. With a formal order of investigation, the Division's staff may compel witnesses by subpoena to testify and produce books, records, and other relevant documents. Following an investigation, SEC staff present their findings to the Commission for its review. The Commission can authorize the staff to file a case in federal court or bring an administrative action. In many cases, the Commission and the party charged decide to settle a matter without trial.

Common violations that may lead to SEC investigations include: misrepresentation or omission of important information about securities; manipulating the market prices of securities; stealing customers' funds or securities; violating broker-dealers' responsibility to treat customers fairly; insider trading (violating a trust relationship by trading on material, non-public information about a security); and selling unregistered securities.

The news of the SEC informal inquiry was followed by: S&P cuts Chesapeake Energy rating to 'BB' 119~ Thu Apr 26, 2012 6:43pm GMT

OverviewU.S. natural gas producer Chesapeake Energy Corp. has announced that it is negotiating an early termination of the Founder Well Participation Program (FWPP) after revelations about the CEO's personal transactions revealed shortcomings in the company's existing corporate governance practices. The board is currently reviewing financing agreements between the CEO and third parties.

Turmoil resulting from these developments could hamper Chesapeake's ability to meet the massive external funding requirements stemming from its currently weak operating cash flow and continuing aggressive capital spending.

We are lowering our corporate credit and senior unsecured debt issue ratings on Chesapeake to 'BB' from 'BB+', and lowering the ratings on two affiliates--Chesapeake Oilfield Operating LLC and Chesapeake Midstream Partners L.P.

118 U.S. Securities and Exchange Commission, The Investor's Advocate: How the SEC Protects Investors, Maintains Market Integrity, and Facilitates Capital Formation, http://www.sec.gov/about/whatwedo.shtml119 S&P cuts Chesapeake Energy rating to 'BB', Reuters, Apr 26, 2012, http://af.reuters.com/article/energyOilNews/idAFWNA591020120426

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-- We are placing all these ratings on CreditWatch with negative implications.

Rating ActionOn April 26, 2012, Standard & Poor's Ratings Services lowered its ratings on Oklahoma City-based Chesapeake Energy Corp., including the corporate credit rating to 'BB' from 'BB+', and lowered ratings on two related entities--Chesapeake Oilfield Operating LLC and Chesapeake Midstream Partners L.P. At the same time, we placed all these ratings on CreditWatch with negative implications.

RationaleThe downgrade and CreditWatch placement reflect our view that recent revelations about personal transactions undertaken by Chesapeake's CEO relating to the company's unusual FWPP underscore shortcomings in Chesapeake Energy Corp.'s corporate governance practices.

Shareholder's Battle

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Chesapeake's CEO should be replaced: Argus120

Reuters – Friday Apr 20, 2012

(Reuters) - Chesapeake Energy Corp's chief executive officer or board, or both, should be replaced because of a growing debt pile, the opaque nature of the oil and gas company's finances and CEO Aubrey McClendon's "questionable" transactions with the company, Argus Research oil analyst Phil Weiss said on Friday.

"When we consider the full financial picture at Chesapeake, including its high debt levels, its use of financial engineering, the relatively low quality of its financial data, the questionable nature of some of the CEO's transactions with the company, and the apparent unwillingness of the board to put a stop to at least some of these practices, we believe the best thing for investors would be to replace the board and/or the CEO," Weiss wrote in a note to clients.

For a number of years, the Shareholders have unsuccessfully attempted to change Chesapeake's Board of Directors. As noted in more than one article, McClendon was well insulated by his handpicked board.

Two of the more interesting former board members are Don L Nickles, and Frank Keating.121

Don Nickles is former Senator Don Nickles (R-OK). He founded the Nickles Group 122 in 2005. 120 Chesapeake's CEO should be replaced: Argus, Reuters, April 20, 2012, http://www.reuters.com/article/2012/04/20/us-chesapeake-ceo-idUSBRE83J0U320120420121 Chesapeake loses a few (but not all) political connections, By Laurie Bennett, Muckety, June 22, 2012, http://news.muckety.com/2012/06/22/chesapeake-loses-a-few-but-not-all-political-connections/37351122 The Nickles Group, Don Nickles - Chairman & CEO, http://www.nicklesgroup.com/bios/nickles.php

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“In his tenure as United States Senator, Nickles built a legacy of advancing free enterprise causes, from natural gas deregulation and repeal of the windfall profits tax in the 1980s, to repeal of onerous ergonomics regulation and the fight against federalized health care during the Clinton Administration. He was the author of the Congressional Review Act and the Child Citizenship Act, and the principal sponsor of President Bush's economic growth package in 2003, which cut capital gains and corporate dividend taxes to 15 percent.

Nickles was chairman of the influential Senate Budget Committee during his last two years in the Senate, and was a senior member of both the Senate Finance Committee and the Energy and Natural Resources Committee.”

The Nickles Group is a lobbying firm providing services such as Legislative Consulting, Political Navigation, Coalition Building, and Policy Development.

During his term as Senator, Nickles was a member of the American Legislative Exchange Council (ALEC).123 While he was Assistant Minority Leader in the U.S. Senate, ALEC began a new alumni forum for former members who serve in public office, called the "ALEC Alumni Forum." It was launched in 2001 and is "charged with developing a national forum to encourage improved communications among current and former ALEC members. Nickles is now an ALEC Alumni.

Frank Keating (R) is the former Governor of Oklahoma from 1995-2003, an now CEO for the American Bankers Association124. He was a former Assistant Secretary, Department of Treasury.

About the American Bankers Association 125 Founded in 1875, the American Bankers Association represents banks of all sizes and charters and is the voice for the nation's $13 trillion banking industry and its 2 million employees.

While Governor, Keating was a member of ALEC, and is now one of ALEC’s “Governors Alumni” 126 .

Chesapeake Energy was a "Director" level sponsor of 2011 American Legislative Exchange Council Annual Conference127, which in 2010, equated to $10,000.

123 Don Nickles, Sourcewatch, Nickles is an alumnus of the American Legislative Exchange Council (ALEC). During the time that he was Assistant Minority Leader in the U.S. Senate, ALEC began a new alumni forum for former members who serve in public office, called the "ALEC Alumni Forum." It was launched in 2001 and is "charged with developing a national forum to encourage improved communications among current and former ALEC members. Alumni Forum activities will include special investigations and speaking engagements at major ALEC events, and joint policy members with state and national leaders. . . . Through the Alumni Forum program, ALEC will seek the support of its former members in the development of reforms that reflect the principles of the organization at all levels of government.", http://www.sourcewatch.org/index.php?title=Don_Nickles124 American Bankers Association, http://www.aba.com/default.htm125 American Bankers Association, About, http://www.aba.com/About/Pages/default.aspx126 American Legislative Exchange Council (ALEC). Governors with Ties to ALEC, Sourcewatch, http://www.sourcewatch.org/index.php?title=ALEC_Politicians#Governors_with_Ties_to_ALEC127 Chesapeake Energy, Sourcewatch, Support for the American Legislative Exchange Council, http://www.sourcewatch.org/index.php?

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New Board of DirectorsChesapeake Energy Corporation Announces Reconstituted Board - 6/21/2012128

OKLAHOMA CITY--(BUSINESS WIRE)--Jun. 21, 2012-- Chesapeake Energy Corporation (NYSE:CHK) today announced the appointment of five new independent directors to its reconstituted nine-member Board of Directors.

Archie W. Dunham, former Chairman of ConocoPhillips and former Chief Executive Officer of Conoco, has been appointed by the Board as Chesapeake’s new independent Non-Executive Chairman. Mr. Dunham has had no previous relationship with Chesapeake. Aubrey K. McClendon has relinquished the position of Chairman but remains a Director and will continue to serve as Chesapeake’s Chief Executive Officer and as President.

Chesapeake’s Board also appointed four other new independent directors: three proposed by Southeastern Asset Management (SAM), its largest shareholder with a 13.9% ownership stake, and one proposed by Carl C. Icahn, its second largest shareholder with a 7.6% stake. The new directors proposed by SAM are Bob G. Alexander, R. Brad Martin and Frederic M. Poses. The new director proposed by Mr. Icahn is Vincent J. Intrieri.

These five new directors replace Richard K. Davidson, Kathleen M. Eisbrenner, Frank Keating and Don Nickles who have resigned and Charles T. Maxwell who retired at the annual meeting on June 8, 2012. Following the annual meeting, Mr. Davidson and V. Burns Hargis submitted their resignations when they did not receive support of a majority of the shares voted. The Board accepted Mr. Davidson’s resignation, but given Mr. Hargis’ current role as Chairman of the Audit Committee, and reflecting input from SAM and Mr. Icahn, the Board has declined to accept his resignation, at this time, to permit completion of the previously announced review of the financing arrangements between Mr. McClendon (and the entities through which he participates in the Founder Well Participation Program) and any third party that has had or may have a relationship with the company in any capacity. Mr. Hargis will continue to lead the review, but is not expected to remain Chairman of the Audit Committee. Upon completion of the review, the Board will revisit his resignation.

Chesapeake and Encana

Reuters dropped another big shoe on Chesapeake with the exclusive report regarding land plans in Michigan. Chesapeake Energy and Encana are under antitrust investigations 129 surrounding emails which reportedly show information being shared to give them the advantage over Michigan land owners.

Excerpt: “By June 2010, the price to lease prime land surpassed $2,000 an acre in parts of Northern Michigan. In the months after Chesapeake and Encana began talking about

title=Chesapeake_Energy#Support_for_the_American_Legislative_Exchange_Council128 Chesapeake Energy Corporation Announces Reconstituted Board, 6/21/2012, Press Release, http://www.chk.com/news/articles/pages/1707305.aspx129 Exclusive: Encana tipped off Chesapeake to land plans in Michigan - Emails, Reuters, By Brian Grow and Joshua Schneyer, Wed Jul 11, 2012, http://www.reuters.com/article/2012/07/11/us-chesapeake-encana-land-idUSBRE86A0G620120711

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splitting up Michigan territory, prices fell as much as 90 percent. In the same period, the price of natural gas futures fell some 20 percent.

Price-fixing, bid-rigging and market allocations by competitors are illegal in the United States under the Sherman Antitrust Act, and companies can be fined up to $100 million for each offense.

Encana said it held talks with Chesapeake without reaching an agreement on a joint venture. It has begun an internal inquiry led by the chairman of its board of directors. Chesapeake also acknowledged it held talks with Encana but said the two companies never consummated any agreement and never bid jointly.”

Following this story, Encana stated they would be conducting an internal investigation. By September 2012, Encana cleared itself of collusion.

Encana clears itself of collusion in Michigan130 :Excerpt (Emphasis added): Encana Corp said on Wednesday an internal investigation has determined that it did not collude with Chesapeake Energy Corp to lower the price of land acquisitions in Michigan two years ago.

The company’s board of directors, which led the investigation launched on June 25 with the assistance of outside attorneys, did not provide a report on the scope of the inquiry, nor explain how it reached its conclusion.

“We can’t offer more detail than what we’ve released as the issue is still under investigation by the Antitrust Division of the Department of Justice and the Michigan Attorney General,” Encana spokesman Jay Averill said in an email.

Encana has been served with subpeonas from Antitrust Division of the U.S. Department of Justice and a civil investigatory demand from the Michigan Attorney General. Encana said it will cooperate with the two agencies.

Chesapeake Energy has confirmed a federal grand jury is looking into the company’s acquisition of land and leases in Michigan.

The entanglements between Chesapeake Energy and Encana became even more interesting with the Reuters’ article regarding Chesapeake’s attempt to unload “worthless” acreage.

Reuters reports131: (emphasis added) On October 30, 2010, Chesapeake CEO Aubrey McClendon told Jeff Wojahn, a top executive of Encana Corp, that he was ready to sell Michigan leases held by Chesapeake - "at reasonable terms if you were interested." Wojahn replied that he wanted to "trade well information first," according to emails reviewed by Reuters.

Encana and Chesapeake declined to comment on the emails.

130 Encana clears itself of collusion in Michigan, Reuters, By Brian Grow and Scott Haggett, September 5, 2012, http://www.reuters.com/article/2012/09/05/us-encana-chesapeake-idUSBRE8841JE20120905131 How Chesapeake tried to unload "worthless" acreage, Reuters, By Brian Grow and Joshua Schneyer, October 2, 2012, http://www.reuters.com/article/2012/10/02/us-chesapeake-landgrab-sale-idUSBRE8910ER20121002

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Chesapeake executives knew that their test well in Michigan had performed poorly. But the emails indicate that McClendon wanted to provide Encana just enough information about Chesapeake's well to keep the sale talks going, without showing the well's full - and disappointing - results.

"But isn't our possible gain that they could want to buy our (now worthless) leases?" McClendon wrote to three top Chesapeake officials on October 31, 2010. The words in parentheses - "now worthless" - were his. So was the suggestion to provide Encana barebones information.

"We need to know what is the data that we could release to Encana that makes us look like we have nothing to hide, yet won't show anything negative about the play?" he wrote in the same email.

Encana didn't bite, and Chesapeake is now marketing some 450,000 acres to other potential buyers.

Though McClendon once called the acreage "worthless," a prospectus for the sale touts it as containing "the strong possibility" of valuable oil and other liquids.

Chesapeake's Michigan prospectus was posted on the website of Meagher Energy Advisors132, an energy-focused asset acquisition and divestiture firm that has sold assets for Chesapeake in the past.

132 Meagher Energy Advisors, Chesapeake Northern Michigan, Northern Michigan, Silurian A-1 Carbonate and Ordovician Collingwood Shale Development Opportunity, http://www.meagheradvisors.com/resources/project/Chesapeake%20Northern%20Michigan/

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Chapter 4Aubrey Tossed – Chesapeake Energy in Search of new CEO

There are 3 rules of business:

1. Logic does not apply2. When the right person gets pissed, something will be done.3. If you don’t own the company, you’re expendable.

Aubrey McClendon forgot rule 3.

When Chesapeake Energy went public in 1993, McClendon no longer “owned” the company; he became an employee and served at the pleasure of the Board of Directors and shareholders. At that time, as Chairman of a hand picked board of directors his job as Chairman and CEO was secure.

On Tuesday (1/29/13), Chesapeake announced the billionaire co-founder, chief executive, and president has “agreed to retire” by April 1. McClendon noted his “philosophical differences with the new Board.”

Last year, amidst news of private loans, private hedge funds, investigations by the Securities Exchange Commission (SEC), and suspicions of colluding with EnCana Corporation to suppress land lease prices, Aubrey lost his BIG seat as Chairman of the Board of Directors. In the spring of 2012, billionaire Carl Icahn became the 2nd largest shareholder of Chesapeake Energy, owning 13.5% of the shares. Southeastern Asset Management, led by Mason Hawkins, owns 13.6%. Together, they took control of the nine member board. A number of board members were replaced.

Archie W. Dunham133, former Conoco CEO/President, became the new chairman. Dunham was Chairman of Conoco-Phillips, following the merger of Conoco Inc. and Phillips Petroleum Company, until his retirement on September 30, 2004.

The “new improved” Chesapeake began selling off assets to raise capital. Among the first to be sold was its midstream operations – Chesapeake Midstream (CMP). It was sold to Global Infrastructure Partners (GIP) in July 2012 for $2-billion dollars, some midcontinent gathering and processing assets of CMP and all of its interests in a subsidiary, Chesapeake Midstream Development, for another $2 billion.

Other asset sales include: April 9, 2012: Obtained $1.25 billion from preferred shares in the Cleveland Tonkawa to

a Blackstone led investor group April 9, 2012: Raised $744 million from a Volumetric production payment to Morgan

Stanley

133 Stuart C. Gilson; Edward I. Altman (2010). Creating Value Through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups. John Wiley and Sons. p. 539. ISBN 978-0-470-50352-2.

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April 9, 2012: Got $572 million for land in the Texoma Woodford play to Exxon September 12, 2012: Announced raising $600 million selling non-core Utica shale

assets

The deals keep the company afloat for 2012. Still, they do not significantly close the gap between the amount Chesapeake needs to spend in the future to maintain its current growth and its projected revenue.

Chesapeake will need to fill a funding gap of at least $4 billion in 2013, Barclay’s analysts estimate.134

For the past couple of years, Chesapeake has been falling behind in paying bills135, and royalties to property owners.

There are also unverified rumors of problems meeting payroll for workers at drill sites in Pennsylvania. Adding to the rumor mill, in some areas of Pennsylvania, Chesapeake has taken to holding informational meetings with angry property owners in an effort to mollify them. Property owners either did not receive a check, did not receive a check in the amount expected, or received a "BILL" for post production instead of a check.

With regards to not paying bills on time, this may result in property owners having a Mechanics Lien place on their property. Such a lien holds the PROPERTY OWNER responsible, not Chesapeake, and may pose problems in the future for refinancing and/or selling the property. Property owners are usually not even aware that such a lien may exist until they try to refinance or sell.

To further muck things up, there is the issue of McClendon’s 2% stake in every well drilled via the Founders Well Participation Program (FWPP). The FWPP allows McClendon to personally own 2.5% of every well, it also means he is responsible for 2.5% of the production costs. Hence, the formation of a number of personal corporations

McClendon set up a few personal corporations. These include: Arcadia Resources, LLC Jamestown Resources, LLC Larchmont Resources, LLC Pelican Energy, LLC

Property owners, who have taken time to check out their paperwork at a Registry of Deeds, may have been surprised to see these names listed, and wondered who the heck are they and why are they on there. Many have been told “Oh, it’s just part of Chesapeake Energy, don’t worry about it”.

134 Chesapeake gets breathing room with $6.9 billion asset sale, Reuters, By Ernest Scheyder and Michael Erman, Wed Sep 12, 2012 http://www.reuters.com/article/2012/09/12/us-chesapeakeenergy-assetsale-idUSBRE88B0LD20120912135 Special Report: Chesapeake, McClendon endure rocky year; more uncertainty ahead, Reuters, By Brian Grow, Anna Driver and Joshua Schneyer, Thu Dec 27, 2012 http://www.reuters.com/article/2012/12/27/us-chesapeake-mcclendon-idUSBRE8BQ0IO20121227

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McClendon borrowed heavily against his 2.5% stake, and has borrowed as much as $1.1 billion136 in the last three years by pledging his stake in the company's oil and natural gas wells as collateral the documents reviewed by Reuters show.

For other loans, McClendon has used his life insurance policy137 and wine collection as collateral.

“In a Goldman Sachs filing, Mr. McClendon offered as collateral his wine collection138, detailed on 78 pages listing the vintages held in his homes in Minnesota, Michigan, Bermuda and Oklahoma City.”

Now that’s scraping the bottom of the barrel.

Don’t count McClendon down and out. It won’t be long before he turns up on some other board of directors or similar. This is how the game of musical chairs is played in the corporate world.

The Board of Directors has also delayed the release of their internal investigation into McClendon’s loans and related activities. Originally, the report was scheduled to be release at the end of December 2012, it was then pushed to the end of January 2013. Now they are saying by end of February 2013.

My guess is the report currently blames everything on McClendon, and this led to him being given the option to “retire”. The delay to end of February in conjunction with the McClendon’s “retirement” leads me to believe the report is going under a major rewrite and fuzzy-up the details.

What does it mean for Chesapeake's natural gas drilling activities going forward? Nothing. Business as usual. There have been rumors of Chesapeake being bought out by larger corporations, but for the people living the drill, it still will be business as usual.

With an April Fools Day date of actually “retiring” from Chesapeake Energy, it brings up the question of parting gifts. Will the parting gifts be short about $12-million (plus 2.8% interest) to buy back the antique maps139 McClendon sold to Chesapeake? Will McClendon be rewarded for failure and given an outrageous severance package? If so, then the April Fools joke will be on the shareholders.

As far as property owners with mechanics liens, lower than expected royalties, or bills for production costs. The joke is on them too.

136 Special Report: Chesapeake CEO took $1.1 billion in shrouded personal loans, Reuters, By Anna Driver and Brian Grow, Wed Apr 18, 2012 http://www.reuters.com/article/2012/04/18/us-chesapeake-mcclendon-loans-idUSBRE83H0GA20120418137 Exclusive: Chesapeake CEO arranged new $450 million loan from financier, Reuters, By Jennifer Ablan, Wed May 9, 2012 http://www.reuters.com/article/2012/05/09/us-eig-chesapeake-mcclendon-idUSBRE8471H020120509138 Board Turns on Chesapeake's CEO, Wall Street Journal, by Russell Gold, April 26, 2012 http://online.wsj.com/article/SB10001424052702304811304577367750138370694.html139 In Legal Settlement, Chesapeake's McClendon To Buy Back Antique Maps, Forbes, Christopher Helman, November 3, 2011 http://www.forbes.com/sites/christopherhelman/2011/11/03/in-legal-settlement-chesapeakes-mcclendon-to-buy-back-antique-maps/

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Chapter 5McClendon Cleared by Chesapeake

In May of 2012, following revelations of Aubrey McClendon’s personal loans and other financial hanky-panky, he was tossed out at Chairman of the Board.140

A new Board of Directors was assembled. The new board stated they would conduct and internal investigation of McClendon’s activities.

The results of the internal investigation were to be released at the end of 2012. This was pushed to January 2013, and then delayed again with no specific timeline.

At the end of January 2013, it was announced McClendon would “voluntary retire” as CEO. This led to some speculation regarding the contents of the “internal investigation”. Is there anything in the report that led to McClendon’s voluntary retirement? Or to ask the question another way – what was left out of the report in exchange for McClendon’s voluntary retirement?

This week, Chesapeake revealed THE REPORT. No surprise…. Just like the results of Encana’s internal investigation of bid rigging in Michigan141 with Chesapeake Energy, the report concluded the hens are safe.

Chesapeake Energy panel: No intentional misconduct by CEO Aubrey McClendon | By Jay F. Marks | NewsOK |February 20, 2013 |142 Chesapeake Energy Corp. has found no evidence of misconduct by CEO Aubrey McClendon after a board panel reviewed his personal finances.

A press release by Chesapeake Energy states: 143 Extensive Review of Alleged Conflicts of Interest and Other Matters Involving CEO

Aubrey K. McClendon Did Not Find Any Intentional Misconduct Board Also Finds Company Did Not Violate Antitrust Laws in Regard to Acquisition of

Michigan Oil and Gas Rights in 2010

The keyword which jumped out at me was “INTENTIONAL”. This is a BIG qualifier as it does suggest there was MISCONDUCT, and we all know what paves the road to hell. Intentional or not, what was the “misconduct”?

Articles covering this news are essentially a copy/paste of Chesapeake’s news release or a rewrite of it and reveal little insight. The actual report is not available so we just have to take their word for it. Perhaps it falls under the category of “proprietary reports”? Maybe we need

140 Aubrey McClendon Out as Chairman of Chesapeake Energy Board, StateImpact, By Joe Wertz, May 1, 2012 http://stateimpact.npr.org/oklahoma/2012/05/01/aubrey-mcclendon-out-as-chairman-of-chesapeake-energy-board/141 Encana clears itself of collusion in Michigan, Reuters, By Brian Grow and Scott Haggettk, Wed Sep 5, 2012 http://www.reuters.com/article/2012/09/05/us-encana-chesapeake-idUSBRE8841JE20120905142 Chesapeake Energy panel: No intentional misconduct by CEO Aubrey McClendon, NewsOK, By Jay F. Marks, NewsOK, February 20, 2013 http://newsok.com/chesapeake-energy-panel-no-misconduct-by-ceo-aubrey-mcclendon/article/3757340143 Chesapeake Energy Corporation Announces Results of Board of Directors Reviews, Chesapeake Energy, February 20, 2013 http://www.chk.com/news/articles/Pages/1786814.aspx

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to have a REPORT-FOCUS, similar to FracFocus? Or wait for Reuters to drop another shoe?

While the Chesapeake Board of Directors bids a fond farewell (maybe not so fond) to McClendon other EXTERNAL investigations and troubles remain. Chesapeake is still under investigation by at least four federal and state agencies. Its board also faces more than a dozen breaches of fiduciary duty lawsuits filed by shareholders.

Michigan Attorney General Bill Schuette will continue his inquiry into collusion allegations against Chesapeake and Canadian rival Encana Corp., even though both companies have cleared themselves in internal investigations.

Another interesting item is the February 4,, 2013 resignation announcement by Regina Hopper, CEO of the America’s Natural Gas Alliance (ANGA)144, just a few days after McClendon’s “voluntary retirement” announcement. Coincidence?

Hopper joined ANGA in November of 2009, the same year the alliance was formed by certain North American independent natural gas exploration and production companies. ANGA represents 29 of the nation’s leading independent natural gas exploration and production companies. Together, ANGA members produce more than 40% of the total US natural gas supply.

Hopper came to ANGA after holding senior positions at USTelecom and the American Trucking Associations. She helped build ANGA into a unique advocacy-marketing hybrid with operations in 18 states, Washington D.C. and Canada.

One of the co-founders of ANGA is Aubrey McClendon145. Did the internal investigation have anything to do with Hopper’s resignation as CEO of ANGA?

“I was hired to build an effective and powerful advocacy organization with strong fiscal management,” Hopper said146. “By all accounts we have achieved these important objectives. I am proud of the team we assembled, the work done and the accomplishments achieved for this important American industry.”

Prior to joining ATA, Hopper served as senior vice president of litigation communications at Weber McGinn. She is departing ANGA to return to litigation communications. Farris said ANGA will immediately begin conducting the search for a successor.

144 Regina Hopper to resign as ANGA CEO, Oil & Gas Financial Journal, By Oil & Gas Financial Journal Staff, February 4, 2013 http://www.ogfj.com/articles/2013/02/regina-hopper-to-resign-as-anga-ceo-.html145 Aubrey McClendon, polluterwatch, http://www.polluterwatch.com/aubrey-mcclendon146 Regina Hopper to resign as ANGA CEO, Oil & Gas Financial Journal, By Oil & Gas Financial Journal Staff, February 4, 2013 http://www.ogfj.com/articles/2013/02/regina-hopper-to-resign-as-anga-ceo-.html

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Chapter 6Energy-in-Depth (EID): The “GAS”roots

On January 6, 2012 a Nuisance Litigation meeting took place in Montrose, Pennsylvania. The purpose of the meeting was to discuss natural gas drilling and legal options for property owners.

Energy-In-Depth’s (EID) - Northeast Marcellus Initiative Field Directors Bill desRosiers and Nicole Jacobs, along with Helen Humphries, Senior Corporate Communications Specialists for the Williams Company, attempted to attend the meeting. They were asked to leave, as the purpose of the meeting was to meet with people wishing to seek litigation against the Natural Gas industry and share information on this matter.

The following day, “Bill” desRosiers published a blog entry on the EID-Northeast Marcellus Initiative website entitled “You’re Not Welcome Here” – This Is Transparency?”.147

Approximately, 2 weeks later, an article appeared on We Are Powershift website, entitled “From Township Planning Consultant to Fracker: Tom Shepstone148” by Alexander Lotorto. EID-Northeast Marcellus Initiative followed up immediately with “Who Is Alex Lotorto, Well Street Occupier?149” by Giles Howard, a Guest Blogger.

The blog hit pieces by EID are the norm.

According to SourceWatch "Energy in Depth (EID)150 is a pro-oil-and-gas drilling industry front group formed by the American Petroleum Institute, the Independent Petroleum Association of America (IPAA) and dozens of additional industry organizations for the purpose of denouncing legislation proposed by Colorado U.S. Rep. Diana DeGette to regulate underground hydraulic fracturing fluids."

June 5, 2009: A letter was sent by Barry Russell, President and CEO of the Independent Petroleum Association of America (IPAA) to members with the “birth announcement” of Energy-in-Depth.

147 Energy In Depth Blog, January 6, 2012, http://eidmarcellus.org/blog/youre-not-welcome-here-this-is-transparency/5724/148 From Township Planning Consultant to Fracker: Tom Shepstone, January 17, 2012, by Alexander Lotorto, We Are Power Shift, http://www.wearepowershift.org/blogs/township-planning-consultant-fracker-tom-shepstone149 Energy In Depth Blog, January 17, 2012, http://eidmarcellus.org/blog/who-is-alex-lotorto-well-street-occupier/5890/150 Energy In Depth, Sourcewatch, http://sourcewatch.org/index.php?title=Energy_in_Depth

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Excerpt from IPAA EID Announcment

Kudos to Desmogblog for locating the announcement. Click here to see full copy. 151

No birth announcement is complete without a photo of the new born.

EID Announcement. NOTE: "to COMBAT" new environmental regulations, especially with regard to hydraulic fracturing.

EID/IPAA launched a debunking campaign against the documentary film, GASLAND, by Josh Fox in later in 2009. EID sent a letter to Academy of Motion Picture Arts and Sciences 152 stating Gasland should be ineligible for nomination because it was based on inaccuracies. EID also published several blog entries “debunking” the film.

151 ‘Energy In Depth’ Was Created By Major Oil and Gas Companies According to Industry Memo, February 2, 2011, Brendan DeMelle, Desmogblog, http://www.desmogblog.com/energy-depth-was-created-major-oil-and-gas-companies-according-industry-memo152 Energy group targets Oscar-nominated 'Gasland', February 15, 201, |By Rebecca Keegan, Los Angeles Times http://articles.latimes.com/2011/feb/15/entertainment/la-et-0215-oscar-gasland-20110215

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EID has two satellite branches: EID-Northeast Marcellus Initiative153 which covers Pennsylvania and New York area, and EID- The Ohio Project154 which focuses on gas/oil drilling in Ohio.

The “grassroots” initiative was launched around May 2011 by EID. Marcellus Drilling News155 stated: “EID has also launched a major new grassroots initiative now spreading from county to county in the region.”

EID describes itself as: (Emphasis added)What’s EID? 156 Launched by the Independent Petroleum Association of America (IPAA) in 2009, Energy In Depth (EID) is a research, education and public outreach campaign focused on getting the facts out about the promise and potential of responsibly developing America’s onshore energy resource base – especially abundant sources of oil and natural gas from shale and other “tight” reservoirs across the country

Important to note: PUBLIC OUTREACH CAMPAIGNRepeat: PUBLIC OUTREACH CAMPAIGN

EID is not a corporation; it’s not an independent group or organization. It’s a public outreach campaign and that means marketing, public relations, advertising, and infomercials. EID could be researching and educating people about toilet paper or the latest Veg-a-Matic Chopper – all advertising is a PUBLIC OUTREACH CAMPAIGN in one form or another.

EID is not grassroots. EID’s “GAS”roots extend from the front groups, Corporations, Public Relations, to the halls of Congress.

This is very different from the reporting by Marcellus Drilling News (MDN) 157 :(Emphasis added)“EID has also launched a major new grassroots initiative now spreading from county to county in the region.”

MDN continues: “The program, known as EID’s “Northeast Marcellus Initiative,” calls for the hiring of several full-time organizers charged with engaging and educating the region’s many supporters of the Mighty Marcellus, and providing them with the tools they need to act.”

Grassroots? Hiring of several full-time organizers? Doesn’t sound grassroots to me.

153 Energy In Depth Northeast Marcellus Initiative, http://eidmarcellus.org154 Energy In Depth Ohio, http://www.eidohio.org155 Marcellus Drilling News, Energy in Depth Launches New Website, Major Grassroots Initiative for Northeast PA and Southern Tier of NY, http://marcellusdrilling.com/2011/05/energy-in-depth-launches-new-website-major-grassroots-initiative-for-northeast-pa-and-southern-tier-of-ny/156 Energy In Depth, http://www.energyindepth.org/whats-eid/157 Marcellus Drilling News, http://marcellusdrilling.com/2011/05/energy-in-depth-launches-new-website-major-grassroots-initiative-for-northeast-pa-and-southern-tier-of-ny/

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In a Q&A paper, EID stated 158: (Emphasis Added)

Q: Who is responsible for this project?A: Energy in Depth is a project of America’s independent oil and natural gas producers. Thesesmall companies (many of which have less than 20 employees) form the backbone of American energy production, and are responsible for 90 percent of our nation’s oil and gas wells, 62 percent of all domestic oil production and 82 percent of all U.S. natural gas production.Q: What prompted independent producers to create Energy in Depth?A: Opponents of responsible energy development and their advocates in Congress are working harder than ever to curb domestic energy production. Unfortunately, the message they’ve sought to deploy appears more consistent with scare tactics than actual facts. Their unfounded attacks can no longer go unanswered—especially when they diverge so much from reality. Energy in Depth reveals the reality behind the rhetoric, and informs the public honestly, accurately and directly.

Three things pop out on the excerpts above:

1. The funding sources159 for EID include: Anadarko, BP, Chevron, El Paso Corporation, EnCana, Halliburton, Marathon, Occidental Petroleum, Schlumberger, Shell API, Talisman and XTO Energy. These corporations have more than 20 employees.

2. What prompted independent producers to create Energy in Depth? Independent producers weren’t prompted. The IPAA decided to create a marketing campaign.

3. Energy in Depth reveals the reality behind the rhetoric, and informs the public honestly, accurately and directly. EID is a marketing campaign, it reveals what it is told to reveal.

The Q&A paper also mentions something called “Project BRIEF”160. What’s Project BRIEF?

“The purpose of ProjectBRIEF is as simple as it is straightforward: Bringing Real Information on Energy Forward. What follows are the bottom-line conclusions of a recent set of studies commissioned by IPAA – a snapshot of what we can expect if Congress moves to revise federal laws and regulations to override the current, effective federal- state regulatory partnership.”

Does all of this really sound like something grassroots and small independent producers could create?

158 Energy in Depth and Project BRIEF Q & A, http://www.kioga.org/communications/project-brief/Project%20BRIEF%20Q-A.pdf/view159 Energy In Depth, Sourcewatch, http://www.sourcewatch.org/index.php?title=Energy_in_Depth160 Energy in Depth and Project BRIEF Q & A, http://www.kioga.org/communications/project-brief/Project%20BRIEF%20Q-A.pdf/view

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EID and the Nanny:Public outreach campaigns need someone to watch it, care for it and manage the message. Call that “someone” a Nanny. EID’s Nanny is FTI Consulting.

EID’s Nanny went through a few changes, so bear with me. The original EID Nanny was Dittus Communications. Dittus Communications was acquired by FD Americas and renamed FD Dittus Communications.

The original founder and CEO of Dittus Communications is Gloria Dittus, Dittus Communitcations became FD Dittus Communications. Financial Dynamics (FD)161 later went yet another name change.

The registrant information for the EID website is listed as FD Dittus Communications. 162

REMEMBER THE NAME FD DITTUS COMMUNICATIONS.

161 FTI Consulting, Financial Dynamics, http://www.fticonsulting.com/services/strategic-communications/index.aspx162 WHOIS Results for energyindepth.org, http://www.networksolutions.com/whois-search/energyindepth.org

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EID - FD Dittus Communications

FD Americas: 163A unit of UK-based strategic and financial communications consultancy FD, FD Americas Public Affairs (formerly Dittus Communications) offers public relations, marketing communications, and issue advocacy services. The firm provides the usual corporate services (media relations, corporate communications, and crisis management) plus public affairs services (issues management, legislative strategy, grassroots organizing and coalition building) as well as marketing, creative, and design services. Clients have included Kraft Foods, Dell, the US Department of Energy, and International Paper. The firm was founded in 1993.

FTI Consulting:164 is a global business advisory firm that provides multidisciplinary solutions to complex challenges and opportunities. With the full power of unique depth of thought combined with the global expertise of leading professionals, we are committed to protecting and enhancing the enterprise value of our clients.163 Hoovers, http://www.hoovers.com/company-information/cs/company-profile.FD_Americas_Public_Affairs.ca29efcb7affa94e.html164 FTI Consulting, “Our Firm”, http://www.fticonsulting.com/our-firm/index.aspx

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EID, IPAA and FTI ConsultingA few words about IPAA before we continue.

Per Sourcewatch 165 : The Independent Petroleum Association of America (IPAA) "has represented independent oil and natural gas producers for three-quarters of a century. On June 10, 1929, President Herbert Hoover called a national and state conference to discuss and formulate a practical program for the conservation of America's natural petroleum resources. At that historic meeting at the Broadmoor Hotel in Colorado Springs, Colorado, oil operators, royalty owners, and land owners alike formed a new national association, the IPAA."

IPAA is one of the largest energy contributors to both Republican and Democratic candidates for Congress. These contributions total $336,500 to the 110th US Congress (as of the third quarter), the largest of which has been to Rep. John Sununu(R-NH) for $10,000. Rep. Sununu, for his part, has consistently voted with the oil industry on energy, war and climate bills.

Lobbying expenditures by IPAA jumped in 2008, per Opensecrets.org. 166 And another big increase in 2009, this was the year EID was born.

165 Independent Petroleum Association of America, Sourcewatch, http://www.sourcewatch.org/index.php?title=Independent_Petroleum_Association_of_America166 Annual Lobbying by Independent Petroleum Assn of America, Opensecrets.org, http://www.opensecrets.org/lobby/clientsum.php?id=D000022041&year=2008

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EID Players:Lee Fuller is the Executive Director of EID 167 , he is also the Vice President of Government Relations for the Independent Petroleum Association of America.168 According to Open Secrets 169 , the top industry represented by Mr. Fuller was Oil & Gas and formerly employed by Van Scoyoc Associates as a lobbyist.

Van Scoyoc Associates 170 Inc. is a full-service Federal Government affairs firm and the foremost independent lobbying company in Washington, D.C. We focus on achieving results for our clients without the distractions that might come from being a subsidiary of a law firm or parent corporation.

Regarding Gasland, "The filmmaker alternates between misstating and outright ignoring basic and verifiable facts related to the impact of these activities on the health and welfare of humans, wildlife and the environment," said Lee Fuller, executive director of Energy in Depth (EID)171, in a letter (pdf)172 today to the academy.

Jeffery “Jeff” Eschelman173 is listed as Executive Vice President at EID. In addition to his position at EID he is the Vice President of Public Affairs & Communication at the Independent Petroleum Association of America174 and former employee of Dittus Communications175.

167 Energy in Depth, http://www.energyindepth.org/meet-the-team/168 IPAA, http://www.ipaa.org/about/management_team.php169 Fuller, Lee O , Independent Petroleum Assn of America, opensecrets.org, http://www.opensecrets.org/revolving/indus.php?id=7450170 Van Scoyoc Associates Inc, http://www.vsadc.com/171 Oil and Gas Group Urges Oscar Judges to Steer Clear of 'Gasland', By MIKE SORAGHAN of Greenwire, NY Times, February 1, 2011, http://www.nytimes.com/gwire/2011/02/01/01greenwire-ioil-and-gas-group-urges-oscar-judges-to-steer-99256.html172 Fuller letter to Academy of Motion Picture Arts and Science, February 1, 2011, http://www.eenews.net/assets/2011/02/01/document_gw_02.pdf173 Energy in Depth, Meet the Team http://www.energyindepth.org/meet-the-team/174 Jeff Eshelman, VP Public Affairs/Communications, IPAA, http://www.lead411.com/Jeff_Eshelman_385885.html175 Jeff Eshelman, Opensecrets.org, http://www.opensecrets.org/revolving/rev_summary.php?id=14476

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Julia Bell176: Researcher at EID, and Public Affairs & Communications Coordinator for the Independent Petroleum Association of America.177

Simon Lomax178 : “Simon Lomax joined FTI Consulting's energy practice in 2012 after a 15-year career in journalism and government. Before joining FTI, he was the editorial director for a national TV show on energy policy, an energy reporter at Bloomberg News and a senior editor at Argus Media Inc., a leading provider of news, analysis and market data for the energy industry. Lomax also worked on energy and environmental policy in the U.S. House of Representatives as a congressional fellow with the American Political Science Association. Before moving to Washington, Lomax worked as a newspaper reporter and editor in Mississippi and Australia.”

Former Editorial Director for energyNOW! 179 Initial funding originated from American Clean Skies Foundation180 which is a front group for Chesapeake Energy.

Research Director for Energy In Depth181

176 Energy in Depth, Meet the Team http://www.energyindepth.org/meet-the-team/177 IPAA Management Team, http://www.ipaa.org/about/management_team.php178 Energy National Journal, http://energy.nationaljournal.com/contributors/simon-lomax.php179 energyNow!, http://www.energynow.com/reporters/simon-lomax180 American Clean Skies Foundation, Sourcewatch, http://www.sourcewatch.org/index.php?title=American_Clean_Skies_Foundation181 Energy in Depth, Meet the Team http://www.energyindepth.org/meet-the-team/

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Chris Tucker182: EID Team Lead, Spokesperson, and Advisor for – you guessed it – the Independent Petroleum Association of America 183 . Mr. Tucker is more closely associated with the EID-Marcellus Initiative branch as Team Leader and Blogger.

Senior Vice President Oil & Gas: FTI Consulting184

Advisor to the Marcellus Shale Coalition185

Former Press Secretary/Communications Director for Rep John E Peterson R-PA186 (Retired at the end of 110th Congress, former member of American Legislative Exchange Council (ALEC)

Rep. Peterson’s Campaign Donors187 for the 2006 campaign:$10,300: Devonian Resources188 (Energy Conservation and

Management Consultants) Top Single Contributor$35,500: Oil & Gas Top Industry Sector Contributor

Former Communications Advisor for House Minority Whip Rep Roy Blunt R-MO189, (elected as Senator in 2008).

2008 Senate Campaign:190

$23,300: Chevron, 2nd highest individual contributor$128,250: Oil & Gas, 3rd highest industry sector contributor2010 Senate Campaign:191

$32,173: Murray Energy, 15th highest individual contributor$29,200: Koch Industries, 16th highest individual contributor$28,800: Exxon Mobil, 17th highest individual contributor$342,050: Oil & Gas, 7th highest industry sector contributor

Chris Tucker is also listed as the registrant for EID Ohio’s website 192 , on behalf of FD Dittus Communications.

182 Energy in Depth, Meet the Team http://www.energyindepth.org/meet-the-team/183 Michigan Landmen to host National and State Authorities on Hydraulic Fracturing, http://0304549.netsolhost.com/blog/wp-content/uploads/2011/10/Nov-3-2011-meeting-details.pdf184 ibid185 ibid186 Legistorm, Christopher Tucker (Chris), Congressional Staffer, http://www.legistorm.com/person/Christopher_Tucker/16253.html187 John E. Peterson, Representative (R - PA), Opensecrets.org, http://www.opensecrets.org/politicians/summary.php?cycle=2006&type=I&cid=N00001422&newMem=N188 ibid189 Office of the Republican Leader, H-204 The Capitol, http://www.gpo.gov/fdsys/pkg/CDIR-2008-08-01/html/CDIR-2008-08-01-HOUSECOMMITTEES-3.htm190 Roy Blunt, Representative (R-MO), Opensecrets.org, http://www.opensecrets.org/politicians/summary.php?cid=N00005195&cycle=2008191 ibid192 eidohio.org, whois.net, http://www.whois.net/whois/eidohio.org

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Dana Bohan193: EID Staff GeologistJunior Associate - Strategic Communications - Energy Sector: FTI Consulting194

On Saturday, July 28, 2012 a Stop the Frack rally and march was held in Washington D.C. EID staffers and other Natural Gas Industry people were also at the event. At least one EID staffer was wandering in the crowd and talking to people.

We believe it to be Dana Bohan in the photo. She told people she was concerned about energy issues, and conducted interviews for a “new blog”.

Dana Bohan, EID Staff Geologist, and Junior Associate for FTI Consulting

Steven “Steve” Everly195: EID SpokespersonAssistant Vice President: FTI Consulting Financial Dynamics196

The strategic communication division of FTI Consulting, Financial Dynamics helps ensure that its clients’ brand, reputation and market valuation reflect

the true worth of their businesses.

Columnist: Townhall.com197

Steve Everley is Manager of Policy Research at American Solutions and a contributing author to To Save America: Stopping Obama’s Secular-

Socialist Machine by Newt Gingrich. Prior to joining American Solutions, Everley

worked as a research assistant at the American

Enterprise Institute. He graduated summa cum laude from the University of Kansas and attended

graduate school at the University of Southern

California. (emphasis added)

Nicole Jacobs198: Associate at FTI Consulting199

EID- Northeast Marcellus Initiative Field Director.Independent Consultant - Shalenet200

193 Energy in Depth, Meet the Team http://www.energyindepth.org/meet-the-team/194 Dana Bohan, Linkedin, http://www.linkedin.com/pub/dana-bohan/31/139/809

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Shalenet is funded through a grant from Department of Labor, Employment and Training Administration to provide the gas industry with a local workforce. Key

partners include 15 Workforce Investment areas (not named), focusing on Pennsylvania, West Virginia, Ohio, and New York, PA Independent

Oil an Gas Association, Pennsylvania Independent Oil & Gas Association (PIOGA) the Veterans Administration, Allegheny Conference on Community Development, Broome Community College, Eastern Gateway Community College, Pennsylvania College of Technology, West Virginia Northern Community College and Westmoreland County Community College.

ShaleNet operates out of Pennsylvania College of Technology which is affiliated with Penn State.

The UntanglingPay attention to intersecting dots: FTI Consulting, IPAA, Institute for Energy Research, the revolving door of Congress and more.

Brian Kennedy201 Per: NATURAL GAS: BP, others push against federal regulation of fracturing, Brian Kennedy is cited as a spokesman for Energy In Depth. Although, Mr. Kennedy is cited as spokesman in this and others articles, there is no sign of him the the Energy In Depth websites.

"This language seems to be a restatement and endorsement of policies and procedures the industry has been following for decades, as mandated by federal, state and local laws," said Brian Kennedy, a spokesman for Energy In Depth. "To the extent the language helps clarify the existing framework and highlight its overwhelming success to date, it could be a valuable educational tool moving forward." (emphasis added)

Global Head, Energy & Natural Resources Sector: FTI Consulting202

195 Energy in Depth, Meet the Team http://www.energyindepth.org/meet-the-team/196 Steve Everly, Linkedin, http://www.linkedin.com/in/steveeverley197 Townhall.com, Columnists, http://townhall.com/columnists/steveeverley/198 Energy in Depth, Meet the Team http://www.energyindepth.org/meet-the-team/199 Nicole Jabobs, Linkedin, http://www.linkedin.com/pub/nicole-jacobs/32/450/b6a200 Nicole Jacob, radaris, http://radaris.com/p/Nicole/Jacobs/201 BP, others push against federal regulation of fracturing, Mike Soraghan, E&E reporter, E&E Daily: Tuesday, March 23, 2010, http://www.eenews.net/public/EEDaily/2010/03/23/2202 Brian Kennedy, Linkedin, http://www.linkedin.com/pub/brian-kennedy/20/248/8b6

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Excerpt: Mr. Kennedy has also worked closely with Energy in Depth203, Noble Energy, Shell Oil Company, Halliburton and the Independence Petroleum Association of America, among other leading energy companies.

Prior to joining FTI Consulting, Mr. Kennedy was a founding member of the Washington, D.C. office of the Institute for Energy Research (IER), a not-for-profit foundation focused on the advancement of free market energy policy. Before that, Mr. Kennedy filled several senior positions on Capitol Hill as advisor and spokesman for both Members of Congress and committees with a focus on energy policy. After spending six years in the office of U.S. Representative George Radanovich (R-CA) serving as communications director, Mr. Kennedy spent the latter years of his career on Capitol Hill as deputy chief of staff and communications director for the House Committee on Resources and as press secretary for the current Speaker of the House Rep. John Boehner (R-OH).

At the Committee on Resources, Mr. Kennedy fulfilled the role of senior advisor to the committee chairman on all matters of policy, personnel, budget, communications, and strategy. He also led strategic communications efforts for the Speaker’s Task force For Affordable Natural Gas and the House Energy Action Team (HEAT). In the office of the House Republican Leader, Mr. Kennedy served as chief spokesman and liaison to the national media for the House Minority Leader and oversaw messaging initiatives on national priorities such as the War on Terror, energy, budget and tax policies.

Former Senior Managing Director: FD Americas-Public Affairs Former Communications Director: former Rep. Richard Pombo R-CA 204

Rep. Richard Pombo lost his re-election bid in 2006 to Jerry McNerney.205

"Rep. Richard Pombo's loss represents the most significant electoral victory the environmental movement has seen in decades," said

Rodger Schlickeisen, president of Defenders of Wildlife Action Fund. "It should now be clear to all that we have the political strength to take on and defeat extreme anti-environmental politicians."

Environmentalists opposed Pombo for efforts to rewrite species protections and increase oil drilling in Alaska and off-shore while

fundraising from industry groups. He also faced questions about ties to disgraced lobbyist Jack Abramoff, who pleaded guilty in a congressional influence peddling scandal.

2006 Campaign206:$34,800: Chevron, 2nd highest individual contributor$197,648: Oil & Gas, 4th highest industry sector contributor

Former Aide - House Committee on Natural Resources207

203 Brian Kennedy, FTI Consulting, http://www.fticonsulting.com/global2/professionals/brian-kennedy.aspx?ht=204 Rep. Pombo's aide Brian Kennedy, NWF's John Kostyack debate ESA, property rights, May 23, 2005, http://www.eenews.net/tv/video_guide/94?page=99&sort_type=date205 GOP Rep. Pombo Loses to Little-Known Democrat; Doolittle Wins, November 08, 2006, Associated Press, http://abclocal.go.com/kfsn/story?section=news/local&id=4742154206 Richard Pombo, Representative, (R-CA), Opensecrets.org, http://www.opensecrets.org/politicians/summary.php?cycle=2006&type=I&cid=N00007516&newMem=N#cont207 Brian Kennedy, FTI Consulting, http://www.fticonsulting.com/global2/professionals/brian-kennedy.aspx?ht=

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Staff Member – Rep. John Boehner R-OH208

Rep. John Boehner R-OH was Minority Leader in 2008. He became House Speaker in 2010.

Campaign 2010209:$58,100: Murray Energy, 2nd highest individual contributor$47,800: FirstEnergy Corp, 3rd highest individual contributor$369,772: Electric Utilities, 4th highest industry sector contributor$185,650: Oil & Gas, 14th highest industry sector contributor

Co-Founder – Institute for Energy Research210, DC office

Prior to joining FTI Consulting, Mr. Kennedy was a founding member of the Washington, D.C. office of the Institute for Energy Research (IER), a not-for-profit foundation focused on the advancement of free market energy policy. Before that, Mr. Kennedy filled several senior positions on Capitol Hill as advisor and spokesman for both Members of Congress and committees with a focus on energy policy. After spending six years in the office of U.S. Representative George Radanovich (R-CA) serving as communications director, Mr. Kennedy spent the latter years of his career on Capitol Hill as deputy chief of staff and communications director for the House Committee on Resources and as press secretary for the current Speaker of the House Rep. John Boehner (R-OH).

ANOTHER IMPORTANT DOT TO REMEMBER: INSTITUTE FOR ENERGY RESEARCH (IER)

Robert P Murphy 211 is also a columnist at Townhall.comSenior Fellow: Institute for Energy Research 212 Robert P. Murphy is an economist with IER specializing in climate change. His research focuses on the proper discount rate to be used in cost-benefit analyses and the implications of structural uncertainty for policy solutions.

Adjunct Scholoar: Mackinac Center for Public Policy 213 Per SOURCEWATCH 214 : The Mackinac Center for Public Policy is a state-level conservative policy think tank in Michigan. Founded in 1987, it is the largest state-level think tank in the nation. It was established by the state's leading conservative activists to promote free market, pro-business policies. The Center voices its policy positions though publications and has moved beyond Michigan by helping the leaders of similar conservative institutions to improve their operations in many other states and countries around the world.

208 ibid209 John Boehner, Representative, (R-OH), Opensecrets.org, http://www.opensecrets.org/politicians/summary.php?cycle=2006&type=I&cid=N00007516&newMem=N#cont210 Brian Kennedy, FTI Consulting, http://www.fticonsulting.com/global2/professionals/brian-kennedy.aspx?ht=211 Resumé/CV, Robert P. Murphy, Free Advise - The personal blog of economist Robert P Murphy, http://consultingbyrpm.com/resumecv212 Institute for Energy Research (IER), Scholars, http://www.instituteforenergyresearch.org/scholars/213 Mackinac Center for Public Policy, http://www.mackinac.org/bio.aspx?ID=402214 Mackinac Center for Public Policy, Sourcewatch, http://www.sourcewatch.org/index.php?title=Mackinac_Center_for_Public_Policy

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As a side note, you may remember Rachel Maddow bumping heads with the Mackinac Center 215about a year ago:

"The latest incarnation of this breed of conservatism weirdly involves this show," Maddow said. As she described it, a conservative think tank in Michigan called the Mackinac Center submitted a FOIA request seeking any emails from labor professors at the University of Michigan, Wayne State University and Michigan State University. The center demanded any email that includes the words "Scott Walker," "Wisconsin," "Madison," and "Maddow."

Lisa Wallace is a former aide to Former Representative Pombo 216 , and is currently the Senior Vice President, of Operations and Development for IER. 217

Wallace spent twelve years working on Capitol Hill for Congressman George Radanovich and the House Committee on Resources. Initially, she worked as administrative assistant to Congressman Radanovich218, where she served as senior advisor to the congressman on all matters of policy, personnel, political strategy and district operations and managed multi-million dollar budget, legislative, communications and support staff. As Chief Financial Officer for the

215 Maddow Stunned By Think Tank Targeting Professors Who Use Her Name In Emails, The Huffington Post, Jack Mirkinson, 05/30/11, http://www.huffingtonpost.com/2011/03/30/maddow-stunned-by-think-t_n_842774.html216 Responsible Resources, Sourcewatch, http://www.sourcewatch.org/index.php/Responsible_Resources217 American Energy Alliance, Staff, http://www.americanenergyalliance.org/discover/staff/218 George Radanovich, Representative (R-CA), opensecrets.org, http://www.opensecrets.org/politicians/summary.php?cycle=2010&cid=N00007507

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House Committee on Resources, Ms. Wallace managed and administered a $15 million bi-annual committee budget, oversaw all business operations of the full committee, its five subcommittees, and the Office of the Chief Clerk, and managed a 50-member professional staff.

On February 26, 2008, Alex Kaplun of Greenwire reported that former staffers of former Republican Representative Richard Pombo and ex-House Committee on Natural Resources aides Brian Kennedy, Lisa Wallace 219 , Dan Kish and Rob Gordon had launched Responsible Resources220 with an ad campaign asserting that taxes on energy companies are a threat to affordable and reliable energy.

Former GOP aides form new energy group221: ABSTRACTThe article reports that former aides of the Republican Party of the U.S. including Brian Kennedy, Lisa Wallace, and Dan Kish, formed a group, Responsible Resources, to educate people on energy issues. It states that the group denies being a new lobbying group, the advertisement campaign that kicked off was critical of efforts to raise taxes on energy companies. Kennedy said that the group wants to take up simple issues and publish a desk reference on energy resources in the U.S.

The Institute for Energy Research (IER)222

Per SOURCEWATCH 223 : founded in 1989 from a predecessor non-profit organization, advocates positions on environmental issues including deregulation of utilities, climate change denial, and claims that conventional energy sources are virtually limitless. It is a member of the Sustainable Development Network.224

Robert L. Bradley Jr:225 Chief Executive Officer and President.Currently a member of the International Association for Energy Economics, the American Economic Association, Southern Economic Association, and the American Historical Association. Former Director of Public Relations Policy at Enron.

In August 2011, Dr. Robert Bradley, CEO of the IER, spoke at the Energy, Environment and Agriculture Task Force meeting of the American Legislative Exchange Council (ALEC) annual meeting in New Orleans, Louisiana.

For more on ALEC see Sourcewatch’s page “ALEC EXPOSED”226.

In 2009 IER ran a campaign on "green jobs" attacking the expansion of renewables energies. IER commissioned three studies on renewable energies and green jobs in Denmark, Germany

219 Responsible Resources, Sourcewatch, http://www.sourcewatch.org/index.php/Responsible_Resources220 Responsible Resources website is no longer working221 Former GOP aides form new energy group, February 2008, Jim Snyder, Hill;2/28/2008, Vol. 15 Issue 23, p18, http://connection.ebscohost.com/c/articles/32106287/former-gop-aides-form-new-energy-group222 The Institute for Energy Research, http://instituteforenergyresearch.org/223 The Institute for Energy Research, Sourcewatch, http://www.sourcewatch.org/index.php?title=Institute_for_Energy_Research224 ibid225 ibid226 American Legislative Exchange Council, Alec Exposed, Sourcewatch, http://www.sourcewatch.org/index.php?title=American_Legislative_Exchange_Council

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and Spain. These studies by different think tanks were than promoted by IER and other free market think tanks in the US but also used in Europe.

American Energy Alliance 227is a "partner" of Institute for Energy Relations (emphasis added):

The American Energy Alliance (AEA) was founded in 2008 by Thomas Pyle 228 , who previously lobbied on behalf of the National Petrochemical and Refiners Association and Koch Industries when Delay served as Whip 229 and before Delay, as House Majority Leader, stepped down from the U.S. House of Representatives under an ethical cloud.

Pyle was the founder of his own consulting firm,230 Pyle Consulting, Inc.:“…an active public affairs consulting firm with a wide range of private and not-for-profit customers. Prior to starting his own firm, Pyle served as vice president of the Rhoads Group in Washington, DC where he represented and advised a variety of association and corporate clients in meeting their strategic public policy goals and priorities. He also served as director of federal affairs for a major integrated manufacturing and services company focusing on energy, environment, regulatory and transportation issues. Before coming to the private sector, Pyle held numerous positions on Capitol Hill including serving a policy analyst for the Majority Whip of the U.S. House of Representatives and as staff director for the Congressional Western Caucus, as well as other legislative staff positions.”

227 American Energy Alliance, Sourcewatch, http://www.sourcewatch.org/index.php?title=American_Energy_Alliance228 American Energy Alliance, Staff, http://www.americanenergyalliance.org/discover/staff/229 American Energy Alliance, Sourcewatch, http://www.sourcewatch.org/index.php?title=American_Energy_Alliance230 Institute for Energy Research (IER), Staff, http://www.instituteforenergyresearch.org/staff/

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Travis Windle 231 : EID Presenter. Although Travis Windle’s name does not appear on any of the EID websites, he was cited as a presenter on a powerpoint presentation: THE MARCELLUS SHALE: Powering America’s Future,Thanks to Hydraulic Fracturing 232 , dated October 14, 2010, and the email listed for Mr. Windle is at EID.

Windle has also been cited as Spokesman for the Marcellus Shale Coaltion:“Likewise, Marcellus Shale Coalition Spokesman Travis Windle 233said the closure of any one well will have little to no impact on those using it for waste disposal.”

Vice President – FTI Consulting234

231 THE MARCELLUS SHALE, Powering America’s Future, Thanks to Hydraulic Fracturing, Travis Windle, travis@energyindepth.org, http://www.vsbn.org/GCE2010/gce2010_presentations/TK2_20_Windle.pdf232 THE MARCELLUS SHALE, Powering America’s Future, Thanks to Hydraulic Fracturing, Travis Windle, travis@energyindepth.org, http://www.vsbn.org/GCE2010/gce2010_presentations/TK2_20_Windle.pdf233 Experts downplay closing of brine well, Long-term shutdown could be costly, January 4, 2012, By DAN POMPILI , Tribune Chronicle, http://www.tribtoday.com/page/content.detail/id/566165/Experts-downplay-closing-of-brine-well.html?

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Press Secretary, House Republican Conference - US House of Representatives 235 Communications Director, House Financial Services Committee - US House of

Representatives 236 Press Secretary – former Rep John E Peterson R-PA 237

Staff Assistant – former Rep. Melissa Hart R-PA 238 , she was defeated in the 2006 General Election.

Press Secretary - Rep. Tom Petri R-WI 239

Shannon Brushe is a Spokesperson for EID and Director for FTI Consulting 240 241 . Shannon Brushe: Shannon serves FD’s clients242 in her capacity as the team’s radio and television booker. With a constantly-growing rolodex of state and national radio and television producers, Shannon’s skills will be utilized to secure interviews and appearances for ITS America’s in-house and third-party spokespeople.

nav=5021234 Travis Windle, Linkedin, http://www.linkedin.com/pub/travis-windle/3/896/206235 ibid236 ibid237 Travis J. Windle, Congressional Staffer, Legistorm, http://www.legistorm.com/person/Travis_J_Windle/13396.html238 ibid239 ibid240 Investment in clean energy good for future, collegianonline, February 2, 2011, http://www.collegian.psu.edu/archive/2011/02/02/investment_in_clean_energy_good_for_future.aspx241 Shannon Brushe, Linkedin, http://www.linkedin.com/in/sbrushe242 FD Account Team, FTI Consulting, Intelligent Transportation Society of America (ITS America), Media Relations Proposal for the 18th World Congress on Intelligent Transportation Systems and ITS America’s 2011 Annual Meeting & Exposition, November 24, 2010, http://2011worldcongressmarketing.itsa.wikispaces.net/file/view/FD+Proposal+ITS+America+11-24-2010.pdf

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EID-The Ohio Project Players

Rhonda Reda:243 EID – The Ohio Project, Executive Director Executive Director: Ohio Oil and Gas Energy Education Program (OOGEEP)244

Ms. Reda currently serves on the Public Outreach Committee of the Interstate Oil and Gas Compact Commission (IOGCC) and the Colonial Drake Well

Historical “Oil150” Steering Committee. She is an active member of the Independent Petroleum Association of America, the Society of

Petroleum Engineers and the Ohio Geological Society. Recently, Ms. Reda served on the White House Task Force on Energy Education, and has received numerous state and national awards for OOGEEP’s efforts including: AAPG Eastern Section’s Presidential Award for Public Outreach, Friend of Science Award from the Science Council of Ohio, EPA’s Ohio Environmental Education Award for Outstanding Program, World Oil Runner Up for Best Public Outreach Program, Ohio Department of Natural Resources’ Minerals Education Award, and the Interstate Oil and Gas Compact Commission’s Public Outreach Stewardship Award. Ms. Reda is a graduate of both Ohio University and Edison State College.

Executive Director – Ohio Oil and Gas Foundation245

Thomas Stewart246: EID – The Ohio Project, Executive Vice President Member: Interstate Oil and Gas Compact Commission247

Executive Vice President and Board of Trustees: Ohio Oil & Gas Association (OOGA)248

Joel "JR" Rudicil 249 250is a Field Director for Energy-In-Depth (EID) -Ohio, as well as President of JR Resources, and on the Ohio Oil & Gas Association (OOGA) Board of Trustees as Secretary and Treasurer.

Thomas Stewart:251 EID – The Ohio Project, Executive Vice President Member: Interstate Oil and Gas Compact Commission 252 Executive Vice President and Board of Trustees: Ohio Oil & Gas Association (OOGA) 253

Michael "Mike" Chadsey 254 is the Campaign Manager for Energy-In-Depth (EID) -Ohio. He was also the Northeast Ohio Regional Representative 255 for LT Gov. Mary Taylor (OH).

243 EID – The Ohio Project, Meet the Team, http://www.eidohio.org/our-team/244 Rhonda Reda, Linkedin, http://www.linkedin.com/in/rhondareda245 ibid246 EID – The Ohio Project, Meet the Team, http://www.eidohio.org/our-team/247 Some Appointees to Oil and Gas Commission Are Industry Execs, Lobbyists, by Marie C. Baca, ProPublica, Dec. 9, 2010, http://www.propublica.org/article/some-appointees-to-oil-and-gas-commission-are-industry-execs-lobbyists248 ibid249 EID – The Ohio Project, Meet the Team, http://www.eidohio.org/our-team/250 JR Resources, Inc, Royalty Acquisitions, http://jrresourcesinc.com/bio.htm251 EID – The Ohio Project, Meet the Team, http://www.eidohio.org/our-team/252 Some Appointees to Oil and Gas Commission Are Industry Execs, Lobbyists, by Marie C. Baca, ProPublica, Dec. 9, 2010, http://www.propublica.org/article/some-appointees-to-oil-and-gas-commission-are-industry-execs-lobbyists253 ibid254 EID – The Ohio Project, Meet the Team, http://www.eidohio.org/our-team/255 Lt. Gov's aide answers questions on S.B. 5, fracking, June 26, 2011, The Athens News, http://www.athensnews.com/ohio/article-34288-lt-govs-aide-answers-questions-on-sb-5-fracking.html

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Sorry, More TanglesEnergy-in-Depth is not the only “energy” front group with FTI Consulting connections. Secure our Fuels 256 website is registered to Dittus Communications.

Domain Registration257

Secure Our Fuels is a “project” of the Consumer Energy Alliance258.

Per Sourcewatch: The Consumer Energy Alliance (CEA) is a nonprofit organization and a front group for the energy industry that opposes political efforts to regulate carbon standards while advancing deep water and land-based drilling for oil and methane gas. The CEA supports lifting moratoria on offshore and land-based oil and natural gas drilling, encourages the creation and expansion of petroleum refineries and easing the permitting process for drilling. The group also says it supports energy conservation. CEO portrays itself as seeking to ensure a "proper balance" between traditional non-renewable and extractive energy sources and alternative energy sources. The group also supports construction of the Keystone XL Pipeline.

According to Salon.com, which obtained over 300 emails of personal messages between lobbyists and Canadian officials, the CEA is part of a sophisticated public affairs strategy designed to manipulate the U.S. political system by deluging the media with messaging favorable to the tar-sands industry; to persuade key state and federal legislators to act in the extractive industries' favor; and to defeat any attempt to regulate the carbon emissions emanating from gasoline and diesel used by U.S. vehicles.

Salon.com, (12/15/2011) published a story by Geoff Dembicki "Big Oil and Canada thwarted U.S. carbon standards" 259 which pulls the curtain away from the Consumer Energy Alliance.

(Emphasis added): "The story in the emails, reported for the first time here in Salon and The Tyee, Canada’s leading independent online news site, traces a year in the relationship of Michael Whatley, a GOP-connected oil industry lobbyist and his friend, Gary Mar, a smooth-talking and ambitious diplomat at the Canadian embassy in the Washington, DC.

256 Secure Our Fuels, http://www.secureourfuels.org/running-on-empty/257 Networksolutions, secureourfuels.org, http://www.networksolutions.com/whois-search/secureourfuels.org258 Consumer Energy Alliance, Sourcewatch, http://www.sourcewatch.org/index.php?title=Consumer_Energy_Alliance259 Big Oil and Canada thwarted U.S. carbon standards, Geoff Dembicki, December 15, 2011, Salon.com, http://www.salon.com/2011/12/15/big_oil_and_canada_thwarted_u_s_carbon_standards/singleton/

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The messages lay bare a sophisticated and stealthy public relations offensive, one designed to manipulate the U.S. political system; to deluge the media with messages favorable to the tar-sands industry; to sway key legislators at state and federal levels; and most importantly, to defeat any attempt to make the gasoline and diesel pumped everyday into U.S. vehicles less damaging to the climate. The goal of it all? “Defeat” Obama’s effort to reduce carbon consumption and keep America hooked on Canada’s $441 billion tar sands industry, no matter what the cost to our planet’s future.

Perhaps the best place to start is on December 30, 2009. It was a bad day for Michael Whatley, founding partner at a K-Street consulting firm in Washington called HBW Resources that has close ties to Alberta’s tar sands industry. "

Dembicki continues: (Emphasis added) : "Then in the late 2000’s, Whatley’s firm created the Consumer Energy Alliance (CEA), a “grassroots” organization supported by such prominent tar sands producers as BP, Chevron, ExxonMobil, Marathon, Shell and Norway’s Statoil. The group claims to be providing “a voice for consumers interested in vital public issues.”

Environmental groups, however, dismiss the claim, saying the grassroots look more like astroturf, and the consumer rhetoric is a guise. “They’re a front group that represents the interests of the oil industry,” said analyst Luke Tonachel of Natural Resources Defense Council in an interview.

The Consumer Energy Alliance has been one of the most outspoken critics of low carbon fuel standard legislation. In August 2009, it began running a series of slick radio and TV ads in Tennessee, Montana and the Dakotas, warning that such policies “threaten thousands of American jobs” and “would be disastrous for American consumers.” Each ad instructed viewers to complain to their state’s representatives in Congress, providing phone numbers to make it easier."

The CEA was created in the late 2000s by Michael Whatley, a founding partner of a Washington, D.C.-based Republican lobbying group HBW Resources.260

For more on the CEA/HBW Resources efforts to thwart cleaner fuels see “Who’s behind the attack campaigns against cleaner transportation fuels”,261 by Liz Barratt-Brown of the Natural Resources Defense Council (NRDC).

260 HBW Resources, Who We Are, http://hbwresources.com/who-we-are/261 Who’s behind the attack campaigns against cleaner transportation fuels? Part 1, NRDC Switchboard, March 2, 2010, Liz Barrat-Brown, http://switchboard.nrdc.org/blogs/lizbb/whos_behind_the_attack_campaig.html

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Tiny Bits Left OverFor some reason, when the untangling is done, there seems to be tiny bits left over.

From EID-Northeast Marcellus Initiative 262 we have:

Tom Shepstone - Campaign Director, and owner of Shepstone Management Company.263 His blurb on EID reads:"Led on the ground by Wayne County, Pennsylvania, native Tom Shepstone, EID Northeast draws on the considerable expertise and technical insight of EID’s coalition partners in the area (and, as needed, across the country) to bring forth the facts on the promise and potential of the Marcellus Shale."

Bill desRosiers was a Field Director. He has left Energy-In-Depth: Northeast Marcellus Initiative and is now a member of Cabot Oil & Gas External Affairs Team.

Meet the Cabot Crew: Bill desRosiers.264

(Excerpt): “Bill joined our External Affairs team after a two-year position as a Field Director for Energy-In-Depth: Northeast Marcellus Initiative.”

262 Energy In Depth - Northeast Marcellus Initiative, Who We Are, http://eidmarcellus.org/who-we-are-2/263 Shepstone Management Company, http://www.shepstone.net/264 Meet the Cabot Crew, Bill desRosiers, http://wellsaidcabot.com/2012/07/30/billdesrosiers/

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EID Spreads Out

New Field Directors265 have been dispatched to “Mountain States”, Michigan, Illinois, Texas

and California. No official websites have appeared for these areas….yet.

Courtney Loper

Title: Field Director, Mountain States

Home Formation: Denver-Julesberg Basin

Kyna Legner

Title: Field Director, Illinois

Home Formation: New Albany

Erik Bauss

Title: Field Director, Michigan

Home Formation: Niagaran ReefPer Bauss’s Linkedin: 266

Field Director at Energy In Depth

265 Energy In Depth, Meet the Team, http://www.energyindepth.org/meet-the-team/266

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Independent, AAPL Registered Landman at Independent, AAPL Registered Landman

Realtor® at Professional One Real Estate Project manager at Bauss Haus Corporation Landman at Devon Energy Member at Michigan Oil and Gas Association (MOGA)

“Leading the way for EID in Michigan is Erik Bauss267, an independent small-business owner and contractor based in Southeast Michigan, but whose reach and territory for EID will extend across the entire state. In kicking-off the effort this week, Erik joins a growing, nationwide network of EID researchers and staffers spread out across seven states and the District of Columbia – all focused on getting out the best information available on oil and gas issues, and doing so in a manner that’s quick, responsive, accurate and substantive. An avid outdoorsman, Bauss earned his degree in environmental and natural resource policy from Michigan State University.”

Bauss was a former landman for Devon Energy Corporation and listed as an Independent landman by the American Association of Professional Landman. 268

David Blackmon

Title: Field Director, Texas

Home Formation: Eagle Ford

David Blackmon is a managing director of the FTI Strategic Communications269 practice and is

based in Houston. Throughout his 33 year career in the oil and gas industry, David has led

industry-wide efforts to develop and implement strategies to address key issues at the local,

state and federal level.

Prior to joining FTI in 2012, David served for five years as Director of Government

Affairs for EP Energy, LLC.

Prior to joining El Paso, David was Manager for Shell E&P North America's internal and

external communications.

Before Shell, David was at Burlington Resources for 18 years where he became their

Senior Manager of Corporate Affairs.

He has also had previous stops at companies like Tesoro Petroleum, Hughes Texas

Petroleum Ltd, and Coastal States Oil and Gas Co.

267 EID expands outreach effort to Michigan, Energy In Depth, Erik Bauss, Field Director, Michigan, July 31, 2012, http://www.energyindepth.org/energy-in-depth-expands-outreach-effort-to-michigan/268 LinkedIn, http://www.linkedin.com/pub/erik-bauss/3/637/145269 David Blackmon, Managing Director, Strategic Communications and Public Policy FTI Consulting, Growing Texas, http://growingtexas.tamu.edu/Speakers/DavidBlackmon

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From April 2010 through June 2012, David served as the Texas State Lead for America’s

Natural Gas Alliance, where he played a key role in the passage of two major pieces of

legislation during the 2011 session of the Texas Legislature, and handled all media relations

and outreach activities.

David is past Chairman of Department of Interior’s Royalty Policy Committee, and a long-time

Vice Chair of IPAA’s Land and Royalty Committee. He chaired the Access and Environmental

Subcommittee for the National Petroleum Council’s 2003 North American Natural Gas Study,

and served as industry representative on two negotiated rule-making committees created

through the Department of Interior. He has testified before various congressional and

legislative committees on topics such as oil and gas valuation for federal and Indian royalties,

producer obligations to fee royalty owners and on energy education. David attended Texas A&I

University and The University of Texas, earning B.A. in accounting in 1979.

Dave Quast

Title: Field Director, California

Home Formation: Miocene Monterey

Connecting the Dots: Marcellus Shale Play Players 102 of 215

David Quast is also the Senior Vice President in the FTI Strategic Communications 270 practice

and is based in Los Angeles.

“Mr. Quast has led engagements and provided counsel to clients in a variety of sectors. His industrials clients have included Kaiser Aluminum and Belden, Inc.  In the professional services sector, Mr. Quast has represented Mayer Brown; Loeb & Loeb; Grant Thornton; Manatt, Phelps & Phillips; Foley & Lardner; Winston & Strawn; Weston Benshoof and Mitchell, Silberberg & Knupp. Financial services clients have included Northern Trust; LPL Financial, Far East National Bank and Stonnington Investments, and technology clients have included TBG Digital and Guidance Software.  Mr. Quast has also spearheaded engagements for organizations including AARP and the Planned Parenthood Federation of America.

Previously, Mr. Quast worked in New York, managing media relations on state and federal legislative and regulatory issues for Philip Morris where he developed and executed communications strategies to help the company fight significant litigation, regulatory threats, and the prospect of a major Federal tax increase. He served as a company spokesperson and was a frequent guest on talk radio throughout the United States. He also served as national communications manager for Thelen Reid & Priest LLP. Mr. Quast was managing director and executive vice president of RLM Public Relations, managing operations, leading new business development efforts and providing senior counsel to clients.

 In Washington, D.C., Mr. Quast was press secretary to Congressman and House Financial Services Committee Chairman James A. Leach, and he was also director of public affairs at the Cato Institute.  He also served as chief of staff to a Washington state senator.”

270 David C. Quast, Senior Vice President, FTI Consulting, http://www.fticonsulting.com/global2/professionals/david-c-quast.aspx

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The End?There are many more such campaigns going on across many social and business sectors. It is up to each of us as individuals to pay attention, to do our own investigation and research.

I have 3 simple rules:1. Disregard half of what you read or hear and question the rest.2. Follow the Money3. Connect the Dots

Is this the end? No, one dot tends to lead to another.

Connecting the Dots: Marcellus Shale Play Players 104 of 215

Chapter 7Cabot Oil & Gas and Krancer – 212ºF The Boiling Point

“Based on my conversation with you it was clear that EPA is really at the very early stages of its learning curve with respect to Dimock and EPA’s understanding of the technical facts and DEP’s enforcement history with respect to Dimock is rudimentary.” - Michael Krancer, Pennsylvania Department of Environmental Protection (PA DEP) Secretary. Letter to EPA regarding Dimock, PA271

When talking about water contamination due to natural gas drilling Cabot Oil & Gas and Dimock is in the forefront of controversy. In 2009, a spill of 8,000 gallons of “drilling fluids” occurred at a Cabot drill site.

A ProPublica article describes it as 272: “The spills, which occurred at a well site run by Cabot Oil and Gas, involve a compound manufactured by Halliburton that is described as a "potential carcinogen" and is used in the drilling process of hydraulic fracturing, according to state officials. The contaminants have seeped into a nearby creek, where a fish kill was reported by the state Department of Environmental Protection.

The DEP also reported fish "swimming erratically."

The incident is the latest in a series of environmental problems connected to Cabot’s drilling in the Dimock area. Last winter, drinking water in several area homes was found to contain metals and methane gas that state officials determined leaked underground from Cabot wells. And in the spring, the company was fined for several other spills, including an 800-gallon diesel spill from a truck that overturned.

ProPublica interviewed state officials several months ago about drilling problems in Dimock. "Cabot has definitely had their share of problems out there," Craig Lobins, a regional oil and gas division director, said then. "Some of them is just being a little bit careless … or sloppy, or maybe a little bit of bad luck too."

Propublica: Water Problems From Drilling Are More Frequent Than PA Officials Said273

The Department of Environmental Protection asked the company to encase its lower well pipes completely in concrete — a process known in the industry as "cementing" — and assured the public that the contamination in Dimock was rare.

But according to a department spokeswoman, there have been at least 52 separate cases of what the state calls "methane migration" in the past five years. In two of the 2009 cases, regulators responded to complaints from more than 32 households and

271 PA DEP Sec Krancer Tells EPA You Don’t Understand Dimock, Marcellus Drilling News, January 12, 2012, http://marcellusdrilling.com/2012/01/pa-dep-sec-krancer-tells-epa-you-dont-understand-dimock/272 Frack Fluid Spill in Dimock Contaminates Stream, Killing Fish, Frack Fluid Spill in Dimock Contaminates Stream, Killing Fish, by Abrahm Lustgarten, ProPublica, Sept. 21, 2009, http://www.propublica.org/article/frack-fluid-spill-in-dimock-contaminates-stream-killing-fish-921273 Water Problems From Drilling Are More Frequent Than PA Officials Said, by Abrahm Lustgarten, ProPublica, July 31, 2009, http://www.propublica.org/article/water-problems-from-drilling-are-more-frequent-than-officials-said-731

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asked gas companies to supply clean water to at least a dozen homes with contaminated wells.

An undated report from the Pittsburgh Geological Society posted to the DEP's Web site makes it clear that old wells and new drilling can lead to stray gas problems. "Although it rarely makes headlines," the report reads, "damage or threats caused by gas migration is a common problem in Western Pennsylvania."

Craig Lobins, the DEP regional oil and gas manager who initially described the Dimock case as an anomaly in interviews with ProPublica, said he still believes the frequency of contamination incidents is statistically insignificant.

The dismissal of a connection between natural gas drilling and contamination is the standard natural gas corporation’s talking point and has become one for the DEP.

The melding of Cabot and Dimock in the minds of the public began in the winter of 2008 when drinking water wells at several homes were found to contain metals and methane gas. According to PA DEP officials, the contamination was from a “leakage” at a nearby Cabot gas well.

Dimock, PA: "Ground Zero" In The Fight Over Fracking:274

“In 2009, fifteen Dimock families with contaminated water filed a fed eral law suit against Cabot. The company has wracked up more than 130 drilling violations at its Dimock wells, but insists the methane migration in Dimock water wells is naturally occurring; point ing to tests taken after drilling had been halted in the   area.

Under the Rendell Administration, DEP cracked down hard on Cabot. The agency fined the com pany $120,000 for the methane migration incidents, barred it from drilling within the Susquehanna County community, and ordered it to foot the bill for a water pipeline bringing fluid to Dimock residents. Cabot agreed to pay for temporary water supplies at the affected homes.”

It appeared the problem of clean and safe water for Dimock residents was solved with the DEP order for a water pipeline.

“We have more water than we know what to do with.”275 – Michael Krancer, PA DEP Secretary

In October 2010, a group called “Enough Already” was formed and comprised of Dimock citizens and businesses.

Enough Already opposed the waterline because276:

274 Dimock, PA: "Ground Zero" In The Fight Over Fracking, NPR State Impact, http://stateimpact.npr.org/pennsylvania/tag/dimock/275 Keep Tap Water Safe, PA DEP Secretary Krancer’s Top 10 Comments About Fracking, http://keeptapwatersafe.org/2011/11/30/pa-dep-secretary-krancers-top-10-comments-about-fracking/276 Debate over proposed Dimock waterline divides community, BY LAURA LEGERE, TimesTribune, October 24, 2010,http://thetimes-tribune.com/news/debate-over-proposed-dimock-waterline-divides-community-1.1053233#

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“the project represents a big-government solution that penalizes many taxpayers for the benefit of a few and threatens to drive away the gas companies that have brought them money or jobs.”

The PA DEP Secretary in 2010 was John Hanger. With the sudden appearance of “Enough Already”, Mr. Hanger saw evidence of Cabot’s influence. Both Cabot and Enough Already denied this.

Cabot brought in Dr. Robert W. Watson, an emeritus professor of petroleum and natural gas engineering at Penn State University, to prove its claim of pre-existing methane. Dr. Watson was handsomely paid $25,000 by Cabot to review materials, including well-completion records and present a conclusion that Cabot did not cause methane seepage into aquifers.

The DEP records showed photographic evidence of methane bubbling out of Cabot’s gas wells, documentation of excessive well pressures and isotopic analysis (chemical fingerprinting) linking the contamination in the water wells to Cabot’s gas wells.

Dr. Watson co-authored a July 2009 study ““An Emerging Giant: Prospects and Economic Impacts of Developing the Marcellus Shale Natural Gas Play”. The report was sponsored by the Marcellus Shale Committee.277

277 An Emerging Giant: Prospects and Economic Impacts for Developing Marcellus Shale: This report was written and produced for the Marcellus Shale Committee by the Department of Energy and Mineral Engineering, Penn State University. The opinions, findings, and conclusions expressed in the report are those of the authors and are not necessarily those of The Pennsylvania State University or the Marcellus Shale Committee. http://www.empoweredmunicipality.com/an-emerging-giant-prospects-and-economic-impacts-for-developing-marcellus-shale

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Running a google search for “An Emerging Giant: Prospects and Economic Impacts for Developing Marcellus Shale”, I was able to locate a pdf file of the report through the Allegheny Conference on Community Development.278

The Marcellus Shale Committee was created in 2008279. It is an industry front group consisting of Natural Gas corporations and trade associations. Its stated purpose is to promote "the responsible development of natural gas from the Marcellus Shale geological formation in Pennsylvania and the enhancement of the Commonwealth's economy that can be realized by this clean-burning energy source.”

The Marcellus Shale Committee disappeared at some point in 2009, and seems to have reappeared as the Marcellus Shale Coalition.280 Cabot Oil & Gas was a member of the Marcellus Shale Committee and is now a member of the Marcellus Shale Coalition.

The year 2010 was also a time for mid-term elections, and the election of a new Governor of Pennsylvania. Cabot donated $20,000281 to Tom Corbett’s campaign.

Tom Corbett won the election and began the transition to take office. Corbett received $1,634,096 from Natural Gas Corporations282 for his 2010 campaign.

Cabot Oil & Gas Corporation Political Action Committee – 283

2012 FEC PAC - Nonqualified Committee as of October 22, 2012.

278 Allegheny Conference on Community Development, http://alleghenyconference.org/ArchiveConferenceSpotlight.aspAn Emerging Giant: Prospects and Economic Impacts of Developing the Marcellus Shale Natural Gas Play, http://www.alleghenyconference.org/PDFs/PELMisc/PSUStudyMarcellusShale072409.pdf279 Marcellus Shale Committee, Sourcewatch, http://www.sourcewatch.org/index.php?title=Marcellus_Shale_Committee#Coalition_members280 Marcellus Shale Coalition, http://marcelluscoalition.org/281 Marcellus Money.org, http://marcellusmoney.org/candidate/corbett-tom282 ibid283 Cabot Oil & Gas Corporation Political Action Committee - 2012 FEC PAC - Nonqualified Committee, http://fec-political-committees.findthedata.org/l/10695/Cabot-Oil-And-Gas-Corporation-Political-Action-Committee

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The state's infrastructure investment board, Pennvest284, in November 2010 approved an $11.8 million package of grants and loans to fund the Dimock waterline project, which was to have been constructed and maintained by Pennsylvania American Water Co. DEP planned to sue Cabot to recover the cost of the line.

Without consulting the Dimock families, John Hanger worked out a “deal” with Cabot285 to settle the issue before the Corbett administration would take office. There would be NO waterline for Dimock.

“Mr. Hanger said it became clear the waterline would not be built after Republicans won control of both the governorship and the General Assembly during the November elections.

"Cabot's opposition was the opposition of elected members of the General Assembly, whom we respect. Two sit on the Pennvest board and voted against the waterline," he said, naming state Sen. Donald White, R-41, Indiana, and state Rep. Dick Hess, R-78, Bedford.

"It is quite likely that their views will in fact be in the majority come January at Pennvest," he said”

Sen. Donald White286 has received $94,150 from Oil & Gas corporations (2000-2010). Senator White: Committees Assignments 287

Banking & Insurance, Chair Community, Economic & Recreational Development Environmental Resources & Energy State Government Transportation, Vice Chair

Rep. Dick Hess288 has received $4,100 from Oil & Gas Corporations (2000-2010) Representative Dick Hess: Committee Assignments289

Committee Assignments Commerce, Chair Rules Transportation

Senator White and Representative Hess voted for the recent ACT 13 - Pennsylvania Natural Gas Impact bill290 which, among other things, removes local control/zoning over natural gas drilling.284 Pennsylvania Infrastructure Investment Authority (PENNVEST) BOARD MEMBERS, http://www.portal.state.pa.us/portal/server.pt/community/about_us/9320/hide_board_of_directors/551991285 DEP drops Dimock waterline plans; Cabot agrees to pay $4.1M to residents, By Laura Legere, Staff Writer, Times-Tribune, December 1, 2010, http://thetimes-tribune.com/news/gas-drilling/dep-drops-dimock-waterline-plans-cabot-agrees-to-pay-4-1m-to-residents-1.1077910#axzz1n7UP0jce286 White, Donald C., Marcellus Money.org, http://marcellusmoney.org/candidate/white-donald-c287 White, Donald C., Pennsylvania State Senate, http://www.legis.state.pa.us/cfdocs/legis/home/member_information/senate_bio.cfm?id=297288 Hess, Dick L., Marcellus Money.org, http://marcellusmoney.org/candidate/hess-dick-l289 Hess, Dick L., Pennsylvania House of Representatives, http://www.legis.state.pa.us/cfdocs/legis/home/member_information/house_bio.cfm?id=12290 Act 13 of 2012, Pennsylvania Department of Environmental Protection http://www.portal.state.pa.us/portal/server.pt/community/act_13/20789

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The "settlement" worked out by Hanger and Cabot included:

Dropping of plans to build a 12.5-mile waterline from Montrose to Dimock Twp. Cabot to pay the state's environmental oversight agency $500,000 to help offset the

cost of the department's investigation into the stray gas.

Each of the 19 families affected by the methane contamination in their water supplies will receive an amount equal to twice the value of their home, with a minimum payment of $50,000. NOTE: Value of Home is based on ASSESSED value, not market value. Assessed value is considerably lower than market value.

Cabot to pay and install whole-house gas mitigation devices in each of the 19 affected homes - devices that were earlier rejected by many of the families as unwieldy and inadequate.

Nowhere is the settlement agreement did it state the contaminated water wells needed to be restored to a clean and safe state.

Eight of the original 19 families accepted the settlement, and some have joined the “Enough Already” group.

“The myth that terrible chemicals are getting into the groundwater is completely myth. It is bogus.” 291 – Michael Krancer, PA DEP Secretary

In January 2011, Tom Corbett officially became Governor, and appointed Michael Krancer as PA DEP Secretary.

Prior to his appointment as PA DEP Secretary, Krancer was a judge on the Environmental Hearing Board. Krancer, as a judge on the state's Environmental Hearing Board, which considers appeals on certain DEP decisions, had to rule on an appeal brought, in 2001, by The United Mine Workers. The union was challenging an exemption approved by the DEP regarding methane testing at 84 Mining Co.'s mine in South Strabane. The union said the exemption was unsafe, despite DEP's consent.

Don Carmelite, Krancer's first law clerk at the board recalls292: "The guy suited up in all the gear and got the training, and he walked around in a mine a mile below the surface, in thigh-high water. It was consistent with what he did to get it right”.

It’s interesting to note, Secretary Krancer has never visited Dimock. Invitations from residents to stop by and have a glass of water have been ignored. Krancer’s predecessor, Hanger, did make several trips to Dimock, we don’t know if he enjoyed a glass of water.

291 PA DEP Secretary Krancer’s Top 10 Comments About Fracking, Keep Tap Water Safe, http://keeptapwatersafe.org/2011/11/30/pa-dep-secretary-krancers-top-10-comments-about-fracking/292 New DEP pick says he will 'apply the law', By Laura Olson / Post-Gazette Harrisburg Bureau, March 29, 2012, http://www.post-gazette.com/stories/local/state/new-dep-pick-says-he-will-apply-the-law-288093/#ixzz2ADjS6mjP

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Krancer’s resume includes:

Vice Chairman, Pennvest293. CurrentCommittee Member, Marcellus Shale Advisory Commission294.

Marcellus Shale Advisory Commission includes:

Terry Bossert , Vice President Government Affairs, Chief Oil & Gas Terry Engelder, Professor of Geoscience Penn State and Principal co-

owner of Appalachia Fracture Systems Inc.295

Nicolas Haden, Vice President, Reserved Environmental Services Chris Helms, Executive Vice President and Group CEO, NiSource Gas

Transmission and Storage Jeff Kupfer, Senior Vice President, Atlas Energy Resources Terry Pegula, former Chief Executive Officer, Royal Dutch Shell - East

Resources Management, LLC David Porges, Chief Executive Officer, EQT Charles Ramsey, Pioneer Natural Resources Gary Slagel, Director Government Affairs, CNX Gas Corp (Consol Energy) Randy Smith, US Goverment Affairs Manager, Exxon Mobil C. Alan Walker, Chief Executive Officer, Bradford Energy Ray Walker, Jr. , Senior Vice President Environment, Safety and

Regulatory Compliance, Range Resources

Blank Rome, LLP Partner296, Litigation Department 1992-1999Dilworth Paxon LLP Partner 297, Litigation Department 1991-1992Assistant General Counsel for Exelon Corp298. June 2008 through October 2009

Former Governor Tom Ridge has been an independent director for the Exelon Corporation since 2005299. Ridge served as Homeland Security Secretary under former President George W Bush from 2001 – 2005.

293 Pennsylvania Infrastructure Investment Authority (PENNVEST) BOARD MEMBERS, http://www.portal.state.pa.us/portal/server.pt/community/about_us/9320/hide_board_of_directors/551991294 Governor Corbett Announces Formation of Marcellus Shale Advisory Commission, PR Newswire, March 8, 2011, http://www.prnewswire.com/news-releases/governor-corbett-announces-formation-of-marcellus-shale-advisory-commission-117593393.html295 The Marcellus Boom / Origins: the story of a professor, a gas driller and Wall Street, By Jonathan D. Silver / Pittsburgh Post-Gazette, March 29, 2012. Mr. Engelder has an ownership stake in Appalachian Fracture Systems Inc., a consulting firm that has done work on Marcellus Shale. He said he earned $40,000 from it in 2009. http://www.post-gazette.com/stories/local/marcellusshale/the-marcellus-boom-origins-the-story-of-a-professor-a-gas-driller-and-wall-street-288098/#ixzz2ADl27SQO296 Judge Michael L Krancer, http://www.senatormjwhite.com/environmental/2009/100909/krancer.PDF297 ibid298 Corbett names DEP team, by Robert Swift (harrisburg bureau chief), January 12, 2011, Times-Tribune, http://thetimes-tribune.com/news/corbett-names-dep-team-1.1088965#axzz1AoqyKXJT299 Thomas Ridge, Forbes, http://www.forbes.com/profile/thomas-ridge/

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In 2006, Ridge became a partner in Ridge Policy Group, Harrisburg, Pennsylvania and Washington, D.C., a bi-partisan, full-service government affairs and issue management group. From April 2005 to July 2006, he was President and Chief Executive Officer of Thomas Ridge LLC.

Ridge Policy Group was listed as a lobbyist for the Marcellus Shale Coalition.

August 2011: “Former Gov. Tom Ridge’s one-year contract300 to be the public face of the Marcellus Shale Coalition has ended. The Pittsburgh Post-Gazette says the deal, which paid Ridge and his Ridge Policy Group $900,000, expired at the end of July.

Essentially, Ridge lent his credibility to the group representing most major shale natural gas drillers in the state and their arguments for the economic and environmental benefits of natural gas. “

“At the end of the day, my job is to get gas done.”301 – Michael Krancer, PA DEP Secretary

George Stark, Director of External Affairs302, is Cabot’s spokesperson in Dimock, and has consistently maintained the water is safe.

Cabot denies polluting local water supplies303.

"We still feel very comfortable that the water meets safe drinking water standards," said Cabot spokesman George Stark. "We have a lot of data on well water there."

October 2011 – Cabot contacts the PA DEP and informs them that “it had met all these require ments 304, and asked for permission to stop delivering water to the Dimock families. Act-ing Deputy Secretary Scott Perry approved the request, and Cabot stopped providing water on December 1. In a letter to the Chambersburg Public Opinion, Secretary Mike Krancer defended the decision. “We were guided by a legal agreement dating to the previous adminis-tration,” he wrote. “The agreement…required Cabot to satisfy specific water provision obliga-tions and meet certain requirements….Cabot satisfied those requirements, and the law, in turn, requires DEP to follow its obligations.”

DEP’s decision allowing Cabot to stop providing water to Dimock residents had nothing to do with whether or not methane levels have increased or decreased at the affected water wells.

300 Tom Ridge Joins the Marcellus Shale Coalition's Natural Gas Gold Rush, by Steve Horn, PR Watch, August 2, 2010,http://www.prwatch.org/node/9321301 PA DEP Secretary Krancer’s Top 10 Comments About Fracking, Keep Tap Water Safe, http://keeptapwatersafe.org/2011/11/30/pa-dep-secretary-krancers-top-10-comments-about-fracking/302 George Stark, LinkedIn, http://www.linkedin.com/in/georgestark1303 EPA may truck water to residents near fracking site, By Edward McAllister and Timothy Gardner, Reuters, Jan 6, 2012, http://www.reuters.com/article/2012/01/06/us-usa-fracking-epa-idUSTRE8041YE20120106304 DEP’s Dimock Decision Based On 2010 Agreement, Not Water Quality, By Scott Detrow, Decvember 8, 2011, StateImpact, http://stateimpact.npr.org/pennsylvania/2011/12/08/deps-dimock-decision-based-on-2010-agreement-not-water-quality/

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“The [Consent Order and Agreement] didn’t require DEP to deem the water safe305 before per-mitting Cabot to stop delivering water,” explained department spokeswoman Katy Gresh via email.

“Many of those chemicals found in the water are food-grade.”306 – Michael Krancer, PA DEP Secretary

Water deliveries by Cabot were stopped and 11 families now had no reliable water source. Binghamton Mayor Matt Ryan307 offered to provide water to the families. All that would be needed is an agreement of mutual aid with the township of Dimock.

The offer of water from Binghamton would provide the families with a little breathing room while they review their options and make plans for a more steady water source.

The Binghamton Mayor's offer308 to send water in city-owned trucks directly to Dimock was contingent on the township signing a legal agreement with Binghamton. The mutual aid agreement would not obligate Dimock to pay for any costs, in fact the cost of water and delivery would be the sole responsibility of the city of Binghamton.

“Binghamton Mayor Matt Ryan said the township needed to sign the one-page "mutual aid" agreement to allow Binghamton to send water directly to Dimock and allow the city [Binghamton] to pick up the tab. Under the agreement, neither party would be liable for any mishaps in shipping the water”

Mayor Matt Ryan was told "You keep your nose in Binghamton. I'll give you that place," Mathew Neenan, Dimock Supervisor, said to Ryan, drawing 15 seconds of sustained applause. "We'll worry about Dimock."

Dimock Township supervisors voted 'no' to mutual aid309, saying there are concerns about future liability. Carter Road residents say they were not surprised.

"The Township Supervisors are going to do whatever Cabot wants. They don't care about us. They care about the almighty dollar," says Ray Kemble, Dimock resident.

305 DEP’s Dimock Decision Based On 2010 Agreement, Not Water Quality, By Scott Detrow, Decvember 8, 2011, StateImpact, http://stateimpact.npr.org/pennsylvania/2011/12/08/deps-dimock-decision-based-on-2010-agreement-not-water-quality/306 PA DEP Secretary Krancer’s Top 10 Comments About Fracking, Keep Tap Water Safe, http://keeptapwatersafe.org/2011/11/30/pa-dep-secretary-krancers-top-10-comments-about-fracking/307 Binghamton offers fresh water to Dimock Township, YNN, By Melissa Kakareka, December 2, 2011, http://centralny.ynn.com/content/top_stories/565803/binghamton-offers-fresh-water-to-dimock-township/308 Dimock rejects Binghamton water offer; Ryan loses final appeal to help 11 familiesBy Steve Reilly , December 5, 2011, pressconnects, http://www.pressconnects.com/interactive/article/20111205/NEWS01/112050375/Dimock-rejects-Binghamton-water-offer-see-video?nclick_check=1309 Dimock Township Wants No Help From Binghamton By Jenna Hanchard, WBNG Action News, Rally for Water in Dimock, December 6, 2011, http://www.wbng.com/news/local/Dimock-Township-Says-No-To-Help-From-Binghamton--135075358.html

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Cabot and Enough Already members 310 met with the Dimock Supervisors, in what has been characterized as a “secret” town meeting, a clear violation of Pennsylvania’s Sunshine Laws. Dimock Superviors denied there was any meeting or vote regarding Binghamton’s offer of water.

Riverkeeper, Josh Fox, Mark Ruffalo311 and local Pennsylvania groups concerned about Gas Drilling, joined together and organized a water delivery to the 11 Dimock families.

This effort was criticized by Energy-In-Depth312(EID):

“Folks in Dimock have had enough. They are, in fact, declaring “Enough Is Enough” and starting to speak out against the ongoing effort aimed at maligning their community, aided and abetted by a fawning media inclined to believe anything that is said about natural gas producers as long as it happens to be negative.”

Enough Already became Enough is Enough soon after, and EID staff began to make more frequent appearance in Dimock. Enough is Enough began a Facebook page313 in late January 2012, and Dimock Proud signs began to on lawns in town.

Initally, the Environmental Protection Agency 314(EPA) determined the water to be safe (December 2, 2011).

“The EPA sent an email to Dimock residents informing them of the agency’s findings regarding the state of the town’s drinking water supply. “While we are continuing our review,” Community Involvement Coordinator Trish Taylor wrote, “to date, the data does not indicate that the well water [in Dimock] presents an immediate health threat to users.”

That finding supported claims by Cabot Oil and Gas, which has been sued by Dimock residents. A judge from the Pennsylvania Department of Environmental Protection recently ruled that Cabot had satisfied its requirements under the law to provide potable water to Dimock residents, and the company has announced plans to discontinue water deliveries.

EPA’s findings comport with EPA Administrator Lisa Jackson’s previous statements regarding the effects – or lack thereof – of hydraulic fracturing on drinking water. Earlier

310 Dimock resident accuses supervisors of 'secret' meeting with Cabot, drilling supporters, by Steve McConnell (staff writer), Times-Tribune, January 4, 2012, http://thetimes-tribune.com/news/gas-drilling/dimock-resident-accuses-supervisors-of-secret-meeting-with-cabot-drilling-supporters-1.1253131#axzz1n7UP0jce311 Riverkeeper, Mark Ruffalo, Gasland Director, Josh Fox, New Yorkers Send Emergency Water Relief to PA Fracking Victims, December 2, 2011, http://www.riverkeeper.org/news-events/news/safeguard-drinking-water/mark-ruffalo-gasland-director-josh-fox-new-yorkers-send-emergency-water-relief-to-pa-fracking-victims/312 Energy-In-Depth, VIDEO Dimock Residents Tell Binghamton Mayor Enough is Enough, http://www.energyindepth.org/tag/tipping-point/313 Enough is Enough Facebook, As residents of Dimock Twp., PA, we have had “enough” when it comes to the negative propaganda and extremely frustrating misinformation that is circulating about our town. That is why we have formed a group – Enough Already!, https://www.facebook.com/Enough.Is.Enough.Dimock.Proud314 EPA: Drinking Water in Dimock, PA Uncontaminated by Fracking, Lachlan Markay, The Foundry, December 5, 2011, http://blog.heritage.org/2011/12/05/epa-drinking-water-in-dimock-pa-uncontaminated-by-fracking/

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this year, Jackson told a US House committee that she was “not aware of any proven case where the fracking process itself has affected water.”

Scott Perry, director of the Pennsylvania Department of Environmental Protection’s Bureau of Oil and Gas Management, echoed that position. “There has never been any evidence of fracking ever causing direct contamination of fresh groundwater in Pennsylvania or anywhere else,” Perry said in April, 211.

Shortly after, the EPA changed their minds315:

"... an information sheet provided to residents during visits this week, the EPA wrote that it "has recently received additional Cabot data from residents that merit further investigation." The EPA is now "concerned about" potential gaps in water sampling and test results, the number of water supplies potentially affected, if residents that need them have alternate sources of fresh drinking water, and if residents have any more data to share."

“Cabot spokesman, George Stark, said the company will provide the EPA with all the data it has collected over several years.

"If there are data gaps, they exist due to lack of access, not lack of trying," spokesman George Stark said. "Cabot is confident that the water meets federal drinking water standards, and is committed to installing state-of-the-art treatment systems and resolving this matter."

“Victoria Switzer, one of the affected Dimock residents, was visited Thursday evening by EPA officials.

"Something in the water disturbed them," she said. "They were very concerned about what they were seeing."

“The industry group Energy in Depth, which touted the EPA's preliminary finding of Dec. 2010, scolded the agency Friday for overstepping its regulatory authority in a matter over which the state has jurisdiction.

Oil and gas drilling in Pennsylvania is primarily regulated by the state Department of Environmental Protection.

Energy in Depth spokesman John Krohn said the EPA's efforts this week are different than the earlier review he praised because "they're now actively going through the process of gaining new information" and have indicated the possibility of taking water tests.

"That changes the dynamics," he said.

Cabot denies responsibility for the presence of any chemicals found in the wells.

315 EPA: Dimock water supplies 'merit further investigation', Times-Tribune, By Laura Legere, December 31, 2011, http://thetimes-tribune.com/news/epa-dimock-water-supplies-merit-further-investigation-1.1251334#axzz1n7UP0jce

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EPA said the sampling data316 it reviewed turned up hazardous levels of substances including:

o Arsenic, a cancer-causing element that may be present in elevated concentrations due to drilling;

o Barium, a silvery-white metal and a common constituent in drilling fluids that can damage the kidneys with extended exposure.

o DEHP, a chemical added to plastics to make them flexible, a probable human carcinogen; also used in drilling;

o Glycols, including ethylene glycol, an antifreeze commonly found in drilling fluids;o Manganese, a naturally occurring substance that is sometimes used in drilling

fluids and can damage the central nervous system if ingested.

Cabot rejected EPA's characterization of the sampling data and insisted that Dimock's drinking water meets federal standards.

"Cabot believes that the US EPA has a flawed interpretation of the data and has taken it out of context; this has resulted in an unwarranted investigation by US EPA regarding water quality. PADEP has extensively investigated alleged groundwater concerns in the Dimock area and concluded, using sound science, that it was safe," Cabot spokesman George Stark said in a statement.

The EPA targeted an additional 61 homes in Dimock for water testing. Cabot317, EID and Krancer have since characterized this as interference of big government. This appears to be an effort to divert attention from the question of water contamination.

EID’s Tom Shepstone calls it a “Comedy of Errors”318 in a blog entry and asks “Are we to suppose this is a basis for a Superfund action?”

Shepstone seems unaware fracking is exempt from the Superfund as well as 6 other major federal regulations:

As of 2012, fracking is exempt from seven major federal regulations:319

The Clean Water Act and Safe Drinking Water Act, due to the "Halliburton loophole" pushed through by former Vice-President/former Halliburton CEO Dick Cheney, exempting corporations from revealing the chemicals used in fracking fluid;

Resource Conservation and Recovery Act, which exempts fracking from federal regulations pertaining to hazardous waste;

316 Dimock, Pennsylvania: EPA To Send Water To Town With Tainted Wells, MICHAEL RUBINKAM 01/19/12, HuffPost, http://www.huffingtonpost.com/2012/01/19/dimock-pennsylvania-epa-_n_1217422.html317 Cabot questions EPA's justification for delivering water to Dimock, January 31, 2012, By DONALD GILLILAND, The Patriot-News, http://www.pennlive.com/midstate/index.ssf/2012/01/cabot_questions_epas_justifica.html318 EPA’s Comedy of Errors in Dimock, 2012 February 1, by Tom Shepstone, http://eidmarcellus.org/blog/epas-comedy-of-errors-in-dimock/319 Renee Lewis Kosnik, "The Oil and Gas Industry’s Exclusions and Exemptions to Major Environmental Statutes," Oil and Gas Accountability Project, 2007 Report.http://www.earthworksaction.org/files/publications/PetroleumExemptions1c.pdf?pubs/PetroleumExemptions1c.pdf

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Superfund law, which requires that polluters remediate for carcinogens like benzene released into the environment, except if they come from oil or gas;

Comprehensive Environmental Response, Compensation, and Liability Act;

Resource Conservation and Recovery Act;

National Environmental Policy Act; and

Toxic Release Inventory under the Emergency Planning and Community Right-to-Know Act.

PA DEP Secretary Krancer’s letter to the EPA makes it clear he thinks the EPA has no idea320 what it’s talking about, when it comes to methane migration in Dimock. “Based on my conversations with you it was clear the EPA is really at the very early stages of its learning curve with respect to Dimock,” he writes, calling the federal agency’s grasp of the facts, and DEP’s enforcement actions, “rudimentary.”

Enough is Enough has an on-line petition321:

“Enough is Enough has launched an online petition to ask EPA Administrator Lisa Jackson to “reign in” the “rogue Regional Office” of the EPA doing the investigating, and to end their involvement in Dimock”

Dimock residents Jim Grimsley and Ann Van Lenten are part of the Enough is Enough group. Writing for the Energy in Depth website yesterday, they said:We are tired of having our gas leases put on hold (since April, 2010) because of 11 families that will not accept remedies handed to them – for free. The ENOUGH IS ENOUGH campaign has included a petition asking the Department of Environmental Protection to lift the drilling ban imposed on Cabot. That petition was sent to the DEP on December 14th and we are hoping it will not fall on deaf ears. While going door-to-door, I met so many people who have lived here for generations and who were more than willing to tell me how it really was to grow up here, and how they feel about the misinformation being spread about their town. We are here to pass that information on to you.”

As previously mentioned, the EPA had targeted 61 additional homes for water testing. Before the EPA was able to contact these families, it is rumored that EID or Enough is Enough (EIE) beat the EPA to the doors. According to the rumor, EID or EIE told home owners they had the right to refuse a water test.

If the rumor is true, EID or EIE were somewhat successful in discouraging about 20 families from accepting a water test.

320 Krancer Strikes A Chilly Tone In EPA Dimock Letter, January 9, 2012, By Scott Detrow, StateImpact, http://stateimpact.npr.org/pennsylvania/2012/01/09/krancer-strikes-a-chilly-tone-in-epa-dimock-letter/321 Dimock Residents Petition EPA to Stop Their Investigation, February 1, 2012, Marcellus Drilling News, http://marcellusdrilling.com/2012/02/dimock-residents-petition-epa-to-stop-their-investigation/

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“If we are able to gather this resource and use it, we’ll clean the air; we’ll be more healthy, and economically healthy.”322 – Michael Krancer, PA DEP Secretary

Although the reporting on what has been happening in Dimock has been good, the media has failed to ask a few important questions:

1. Why is Cabot fighting the EPA tests so hard? If the EPA tests come back and show the water is “safe”, as Cabot maintains, wouldn’t this put the issue to bed?

2. Is there something in the water that Cabot is afraid the EPA will find?

3. If the EPA does find “something”, what will it mean for Cabot or the entire Natural Gas Industry in Pennsylvania and elsewhere?

4. Why is Krancer protecting the Natural Gas Industry instead of the Environment? Does he have political ambitions beyond being PA DEP Secretary?

The Natural Gas Industry and its supporters had, in the past, attempted to portray reports of water contamination as being anomalies, yet these “anomalies” are appearing with more frequency. How many homes have had their water contaminated? We really don’t know. The PA DEP doesn’t track it, and many homeowners have been gagged through non-disclosure agreements with the Natural Gas Corporations and are unable to reveal they are receiving water deliveries.

Dimock is not the only community in Pennsylvania with “water problems”. As long as the current administration prefers to listen to the Natural Gas industry instead of the People of Pennsylvania, Dimock won’t be the last.

"The rumor that DEP is not competent, not doing a good job, is so false I'd love to get on the pulpit and dispel it," 323- Michael Krancer, PA DEP Secretary

Recent DEP News:-- Butler County, PA: 324SOS Butler County: Black Water + Purple Water = A Fracking Nightmare

…..Both families say that Pennsylvania Department of Environmental Protection (PA DEP) has told them their water troubles are “just aesthetic,” and has assured them that the water is safe to drink.  Requests for re-tests have gone unanswered, and Janet McIntyre said that one PA DEP regulator told her, “You should be grateful for the fracking because they’re injecting lots of water underground, raising the level of the aquifer.”

Note: If fracking water is raising the level of the aquifer, doesn’t this mean fracking water is getting into the aquifer? Just asking…….

322 PA DEP Secretary Krancer’s Top 10 Comments About Fracking, Keep Tap Water Safe, http://keeptapwatersafe.org/2011/11/30/pa-dep-secretary-krancers-top-10-comments-about-fracking/323 ibid324 SOS Butler County: Black Water + Purple Water = A Fracking Nightmare, February 11, 2012, by Iris Marie Bloom, Protecting Our Waters, http://protectingourwaters.wordpress.com/2012/02/11/sos-butler-county-black-water-purple-water-a-fracking-nightmare/

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-- Report: Pennsylvania DEP undercounted number of gas-producing wells from Marcellus Shale

Pennsylvania's Department of Environmental Protection undercounted the number of wells producing gas325 from the Marcellus Shale, frustrating industry, environmental groups, and elected officials, according to a newspaper report.

The Pittsburgh Post-Gazette reported that an analysis of DEP data found 495 more wells producing gas, or ready to produce gas, than the DEP has recorded as ever being drilled, and that 182 of those wells don't even show up on the state's Marcellus Shale permit list.

"There has been a frustration over the last six or seven months that DEP does not have information that is always beyond reproach," said Drew Crompton, chief of staff to Senate President Pro Tem Joe Scarnati, R-Jefferson.

Senate President Pro Tempore Joseph Scarnati326 from 2000-2012 received $ 359,146 from Natural Gas corporations.

-- Clean Air Council: Pennsylvania DEP Has Dropped the Ball on Fracking Pollution and US EPA Should Step In

Clean Air Council Executive Director Joseph Otis Minott, Esq., said: "Pennsylvania is simply dropping the ball on a significant source of pollution in the state. Federal and state laws are very clear about requiring monitoring and any necessary remedial action at the site of major polluters. Frackers should not get a free pass in this state, particularly when their methane emissions are among the biggest contributors to climate change.

Our view is very simple: If Pennsylvania DEP is going to abandon its duties here, the US EPA should step in to protect the public and environment."

We wonder which environment the DEP is really protecting. The environment on which all life depends - our air, our water and our land? Or is the DEP protecting the business environment?

List of the Harmed327 - An ever-growing list of the individuals and families that have been harmed by fracking (or shale gas production) in the US.

325 Report: Pennsylvania DEP undercounted number of gas-producing wells from Marcellus Shale, January 09, 2012, By The Associated Press, http://www.pennlive.com/midstate/index.ssf/2012/01/report_pennsylvania_dep_underc.html326 Joseph Scarnati, MarcellusMoney.org, http://marcellusmoney.org/candidate/scarnati-joseph-b-iii,327 List of the Harmed, Pennsylvania Alliance for Clean Water and Air, http://pennsylvaniaallianceforcleanwaterandair.wordpress.com/the-list/

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Chapter 8Pieces of Silver – Act 13

Everyone thinks our elected officials are under some influence of “special interest” money. It’s very apparent in Pennsylvania with Act 13 – The Marcellus Shale328 now being the law of the commonwealth.

The Votes 329

The PA House vote was 101 YEAS, 90 NAYS. The PA Senate vote was 31 YEAS and 19 NAYS. Yes, it was all along party lines.

On Feb. 14, 2012, without cameras, reporters or other fanfare – Gov. Tom Corbett quietly signed ACT 13.

ACT 13 dangles a little bit of money to each community in the form of an “impact fee” paid by the natural gas corporations. In exchange for 30 pieces of silver, communities will no longer be able to set zoning or other conditions on where or how the natural gas corporations may drill, frack, or otherwise industrialize the community.

The Sierra Club has published “The 10 Top Myths about Pennsylvania’s The Mad Rush to Frack Act” 330– read it.

In his article, “Why I Voted NO on the Marcellus Shale Bill”331, State Rep. Jesse White of the 46th district stated:

“This bill is loaded with blatant giveaways for the natural gas industry. There’s money for a “Housing Affordability Programs,” which means we will be paying for temporary housing for workers from out of state who will no longer be staying in our hotels. There are subsidies for natural gas vehicle programs the industry apparently couldn’t afford to do without a government handout. And there is a massive direct cash giveaway intended to go to the Shell Oil Corp., which had a profit of more than $20 billion in 2010.If you were upset about the potential funding of the Arlen Specter Library (which Corbett approved last week), you have to be losing your mind over a deal to subsidize a major foreign oil company with your tax dollars.”

He continues: “Supporters of House Bill 1950 will tell you the law is a compromise. The only compromise could have been between the lobbyists for the natural gas industry

328 OIL AND GAS (58 PA.C.S.) - OMNIBUS AMENDMENTS, Act of Feb. 14, 2012, P.L. 87, No. 13 Cl. 58. 20120013ua, Session of 2012, No. 2012-13, HB 1950, http://www.legis.state.pa.us/WU01/LI/LI/US/HTM/2012/0/0013..HTM329 Regular Session 2011-2012 House Bill 1950, http://www.legis.state.pa.us/cfdocs/billinfo/bill_votes.cfm?syear=2011&sind=0&body=H&type=B&bn=1950330 The Top Ten Myths about Pennsylvania’s "The Mad Rush to Frac k Act" (Act 13 of 2012), The Biggest Gas Industry GiveAway Yet, Sierra Club, http://www.sierraclub.org/pressroom/downloads/FrackingMythbustersFactSheet.pdf331 Why I Voted NO on the Marcellus Shale Bill, State Rep. Jesse White calls House Bill 1950 'a terrible law.', By Jesse White, State Representative, 46th District,February 15, 2012, Canon-McMillan Patch, http://canon-mcmillan.patch.com/articles/why-i-voted-no-on-the-marcellus-shale-bill

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and the people who agreed with them already, because they were the only ones in the room negotiating this 174-page bill, which was drafted in secret and almost immediately put up for a vote. House Bill 1950 wasn’t a compromise; it was a back room deal made by a small group of people whose primary concern was the profit margin for the energy industry.”

The BackroomOn January 12, 2012, letter was sent to Representatives Smith, Turzai and Ellis 332 on behalf of Kathryn Z. Klaber, President, Marcellus Shale Coalition and Stephanie Catarino Wissman, Executive Director, Associated Petroleum Industries of Pennsylvania.

A copy of the letter was also sent to all Pennsylvania House Members in the PA Legislator and to Gov. Tom Corbett.

The letter was accompanied with 4 pages of suggestions. All but 3 of the “suggestions” found their way into the final version.

WHO are Klaber and Wissman?API is the American Petroleum Institute 333: largest U.S trade association for the oil and natural gas industry. It claims to represent about 400 corporations involved in production, refinement, distribution, and many other aspects of the petroleum industry.

API is also part of the VOTE 4 ENERGY334, an industry and corporation funded ad campaign.Vote4Energy is a project of the American Petroleum Institute representing more than 490 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America’s energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers more than $85 million a day in revenue to our government, and, since 2000, has invested more than $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.

Marcellus Shale Coalition (MSC)335

Founded in 2008, the Marcellus Shale Coalition (MSC) is an organization committed to the responsible development of natural gas from the Marcellus Shale geological formation and the enhancement of the region’s economy that can be realized by this clean-burning energy source.

Kathryn Klaber:336 Executive Director of the Marcellus Shale Coalition (MSC)Prior to joining the MSC, Ms. Klaber was Executive Vice President for Competitiveness at the Allegheny Conference on Community Development and the Executive Director of the Pennsylvania Economy League.

332 Klaber-Wissman API-MSC Letter http://ia700809.us.archive.org/26/items/MarcellusShaleCoalitionAssociatedPetroleumIndustriesOfPennsylvania/MSCAPILetterToSmithTurzaiEllis01-12-12.pdf333 American Petroleum Institute (API), http://api-ec.api.org/334 Vote 4 Energy, http://vote4energy.org/about/335 Marcellus Shale Coalition, http://marcelluscoalition.org/about/336 Kathryn Klaber, Marywood University, Marcellus Shale Forum, http://www.marywood.edu/green/series/presenters/klaber.html

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Through the 1990s, Ms. Klaber worked in the environmental consulting business in mergers and acquisitions, environmental management systems, air and water quality projects, Brownfields redevelopment, accidental release preparedness, and other environmental initiatives.She is a member of the Commonwealth of Pennsylvania's Air Quality Technical Advisory Committee.

Environmental consulting business?337 Which one?Through the 1990s, Kathryn Klaber worked for the international environmental, health and safety consulting firm, Environmental Resources Management, Inc. (ERM), first at the company’s headquarters in Philadelphia, then in her native Pittsburgh. Her client work consisted primarily of mergers and acquisitions, environmental management systems, air and water quality projects, and other facilities’ engineering engagements. She supervised multinational projects, primarily for Fortune 1000 companies, involving staff from across the company’s 130 offices. In southwestern Pennsylvania, she worked with regional companies on air quality compliance, Brownfields redevelopment, accidental release preparedness, and a myriad of other environmental initiatives. During her last three years with the firm, Ms. Klaber managed the Pittsburgh regional office, responsible for all aspects of the practice including business development, product delivery, staffing, and financial management.

Environmental Resources Management, Inc. (ERM)338

As a leading global provider of environmental, health, safety, risk, and social consulting services, ERM has sustainability at the heart of both our services and how we operate our business. We employ over 4,000 people with 140 offices in 40 countries worldwide.For over 40 years we have been working with clients around the world and in diverse industry sectors to help them to understand and manage their environmental, health, safety, risk and social impacts.

The key sectors we serve include Oil & Gas, Mining, Power, and Manufacturing, Chemical and Pharmaceutical.

Stephanie Catarino Wissman:339 Executive Director of Associated Petroleum Industries of Pennsylvania (API-PA), a division of the American Petroleum Institute(API).

Former Director, Government Affairs340 :Stephanie Catarino Wissman joined the Pennsylvania Chamber of Business and Industry as director of Government Affairs in October 2007. Stephanie graduated from Penn State University with a bachelor’s degree in political science. With nearly 15 years of experience in government relations, Stephanie primarily serves as the PA Chamber’s energy and environmental lobbyist, with additional responsibilities including general business advocacy, transportation and technology.

337 Pittsburgh Chemical Day, 2012 Speaker Presentations Kathryn Klaber - "Marcellus & Utica Shale Gas/Liquids", http://www.pittchemday.com/speakers.html338 Environmental Resources Managment, Inc (ERM), http://www.erm.com/About-Us/Business-Information/339 American Petroleum Institute, API: Announces Stephanie Catarino Wissman as Executive Director, API-PA, http://www.api.org/News-and-Media/News/NewsItems/2011/sept-2011/api-announces-stephanie-catarino.aspx340 Zoominfo, Stephanie Catarino Wissman, http://www.zoominfo.com/#!search/profile/person?personId=252818503&targetid=profile

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Prior to joining the PA Chamber, Stephanie served as manager of Government Affairs for Embarq (formerly Sprint). Highlighting her career at Embarq was her work on Act 183 of 2004, commonly referred to as Chapter 30. Stephanie played a major role in passing this landmark telecommunications alternative regulation legislation, which has become a model for other states confronting telecommunications reform.

As a registered lobbyist, Stephanie has also held positions at Pennsylvanians for Effective Government and Associated PA Constructors. She is a member of Women in Pennsylvania Government Relations and serves on the Pennsylvania Highway Information Association’s (PHIA) Board of Directors.

Governor Corbett Announces Recent Nominations, Appointments 341

HARRISBURG, Pa., Dec. 12, 2011 /PRNewswire-USNewswire/ -- Governor Tom Corbett today announced the following recent nominations and appointments: Stephanie Catarino Wissman, Mechanicsburg - Underground Storage Tank Indemnification Board

The Pieces of SilverPerhaps it’s a misnomer to refer to campaign donations from the Natural Gas Industries as 30 pieces of Silver as according to Marcellusmoney.org 342, the Natural Gas Industries have “donated” $7,945,933 to Pennsylvania candidates and Political Action Committees (PACs) from 2000 through 2012.

Donations from the Natural Gas Industry and its associates doubled during the 2009-2010 election cycle. In 2007-2008 donations totaled $1,004,757; by the end of 2010 $2,608,187 had found its way into campaign coffers.

341 Governor Corbett Announces Recent Nominations, Appointments, PR Newswire, http://www.prnewswire.com/news-releases/governor-corbett-announces-recent-nominations-appointments-135438073.html342 Marcellusmoney.org, http://marcellusmoney.org/

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The data in this chart was taken from Marcellusmoney.org343 spreadsheet. This covers donations made between 2000 thru 2010. I have broken out the totals by year and noted the Election year info.

Gov. Tom Corbett (R) – PennsylvaniaBio: Corbett was the Attorney General of Pennsylvania from 1995 to 1997; he was appointed by Governor Tom Ridge to fill the unexpired term of Ernie Preate.

As a condition of his Senate confirmation, Senate Democrats required him to pledge that he would not run for re-election in 1996. This is a common practice in Pennsylvania for appointments to elected offices. Corbett left office in 1997 and again went into the private sector, first as general counsel for Waste Management, Inc.344, then opening his own practice.In 2004, Tom Corbett won the election for Pennsylvania Attorney General. His 2004 campaign funds were fattened a bit, by a $450,000 check from Aubrey McClendon, CEO of Chesapeake Energy.

343 Marcellusmoney.org, http://marcellusmoney.org/344 Appalachian Regional Commission, Pennsylvania Governor Tom Corbett, http://www.arc.gov/about/GovernorofPennsylvania.asp

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The Philadelphia Inquirer writes:345

“The $450,000 in campaign checks that energy mogul Aubrey McClendon wrote that fall helped elect a man he said he'd never even met - a relatively obscure GOP candidate for Pennsylvania attorney general, Tom Corbett.

That investment arguably changed not just the history but also the political direction of the state. The influx of cash helped Corbett narrowly win the closest attorney general's race in Pennsylvania history and propelled him toward the governor's mansion, where he has now pledged to turn the Keystone State into "the Texas of the natural-gas boom."

In the 2009-2010 campaign cycle, Chesapeake Energy and its employees donated $87,150 to candidates in Pennsylvania. David Spigelmyer, Chesapeake’s Vice President for Government Relations was given a seat on the Marcellus Shale Advisory Commission in 2010.

345 How a natural-gas tycoon tapped into Corbett, June 29, 2011, By WILL BUNCH, Philadelphia Inquirer, http://articles.philly.com/2011-06-29/news/29717481_1_corbett-campaign-tom-corbett-marcellus-shale

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Note: Mr. Spigelmyer was asked to resign from the Marcellus Shale Advisory Commission in April 2011 following a report on gas drilling violations 346and a gas well blowout in Leroy, Pa.347

Chesapeake racked up 132 violations in 2010, putting it in the #3 spot. Chief Oil & Gas led the violations pack with 174 violations.

Chesapeake Energy disputes this account:348

“Chesapeake spokesman Matt Sheppard disputes the account of the people Pennsylvania Public Radio spoke with, who come from both inside and out of state government, emailing, “[Spigelmyer] stepped aside from the Marcellus Commission prior to the first meeting to focus on Chesapeake operations and his duties as vice chair of the Marcellus Shale Coalition.” Corbett’s office did not return calls for comment.”

To my knowledge, Spigelmyer’s seat has not been filled by anyone.

Gov. Corbett has been extremely supportive of natural gas drilling; he believes it will bring jobs and millions of dollars to Pennsylvania.

“Pennsylvania is blessed with remarkable resources,349 innovation and a legendary work ethic. Even in its infancy, the Marcellus Shale is beginning to have a great economic impact on Pennsylvania. At a time when the national and state unemployment rates are rising and our country is slowly trying to regain its traction from the recession, the Marcellus Shale is working to create jobs and millions of dollars in royalty fees and local and state tax revenues. The commonwealth currently finds itself at a competitive

advantage when compared to other states with similar gas shale plays. Capital investment to develop Pennsylvania's Marcellus Shale is increasing rapidly, and,

346 Corbett asked Chesapeake executive to quit Marcellus Shale Commission, by Scott Detrow, StateImpact , April 27, 2011, http://www.witf.org/state-house-sound-bites/2011/04/sources-corbett-asked-chesapeake-executive-to-quit-marcellus-shale-commission.php347 Gas well blowout spills frack fluids onto farm, streams in Bradford County, By Laura Legere, April 21, 2011, Citizens Voice, http://citizensvoice.com/news/drilling/gas-well-blowout-spills-frack-fluids-onto-farm-streams-in-bradford-county-1.1135482348 ? Corbett asked Chesapeake executive to quit Marcellus Shale Commission, by Scott Detrow, StateImpact , April 27, 2011, http://www.witf.org/state-house-sound-bites/2011/04/sources-corbett-asked-chesapeake-executive-to-quit-marcellus-shale-commission.php349 Tom Corbett, Governor - The Issues, http://www.tomcorbettforgovernor.com/issues/faq/#7

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according to an economic impact study released by Penn State University in 2009, industry activity is expected to generate over $600 million in tax revenues to the Commonwealth during 2010 without a severance tax. Tom Corbett believes that a punitive tax on the industry at this stage would reduce capital investment in the commonwealth and reduce the potential for new jobs, tax revenues and other economic benefits associated with development of the Marcellus Shale. In addition, Tom Corbett would support dedicating a portion of the royalty fees to communities that are being impacted by drilling.”

In 2011, Gov. Corbett's proposed budget included $2 billion in cuts to education and reduces aid to colleges and universities by 50 percent. The budget passed with only a 19 percent chop to the funding of Pitt, Penn State, Temple and Lincoln.

Those concerned with the quality and importance of education protested the cuts. Gov. Corbett told them Pennsylvania universities should consider drilling for natural gas below campus to help solve their financial problems.

By September 2012, a bill authorizing fracking on state school campuses passed.

Pennsylvania State Senate passed Senate Bill 367: Short Title: An Act providing for indigenous mineral resource development; and imposing powers and duties on the Department of General Services and the State System of Higher Education.Prime Sponsor: Senator D. WHITE Last Action: Signed in Senate, Sept. 25, 2012

Text of Senate Bill 367350 (excerpt)Section 3. Development of resources on State-owned land.(a) Authority.--The department has the following powers:(1) To make and execute contracts or leases in the name of the Commonwealth for the mining or removal of valuable coal, oil, natural gas, coal bed methane and limestone which may be found in or beneath State-owned land and to convey Commonwealth rights to coal, oil, natural gas, coal bed methane and limestone.

(2) To grant a right-of-way through State-owned land to any individual or corporation that applies if the department determines that the grant will not so adversely affect the land as to interfere with its usual and orderly administration.

In addition to cuts in education:

The Department of Environmental Protection will see funding cut by 7.8 percent or $10.5 million; and the Department of Conservation351 and Natural Resources’ budget is decreased by about $2.5 million or 4.6 percent.

350 Regular Session 2011-2012, Senate Bill 367, http://www.legis.state.pa.us/cfdocs/billinfo/billinfo.cfm?syear=2011&sind=0&body=S&type=B&bn=367351 Corbett’s Budget Would Cut DEP Spending, February 8, 2012, By Scott Detrow https://stateimpact.npr.org/pennsylvania/2012/02/08/corbetts-budget-would-cut-dep-spending/

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Secretary Krancer commented on the proposed cuts:352

Department of Environmental Protection Secretary Michael Krancer took his turn before the state Senate’s Appropriations Committee yesterday. Discussing his department’s budget, Krancer said DEP has the staff it needs to inspect Pennsylvania’s Marcellus Shale wells. That’s despite Governor Corbett’s proposal to trim the department’s budget by more than $10 million.

We seem to have a slight problem here. Education is being cut, DEP is being cut, and with ACT 13 rolling out the red carpet for gas drilling everywhere, the need for regulators is a pressing concern.

Patriot-News, by Donald Gilliland asks: 353

What happens when the fox builds the hen house?

The drilling industry helped get some of the most influential lawmakers elected with lavish donations to their campaigns. It paid millions to lobbyists to influence legislation, and it has hired many of the experienced regulators away from public service.

Now the industry will pay to train the people who set policy and enforce it.

ExxonMobil and GE will be investing $1 million each to establish new training programs at three universities, including Penn State, “to ensure that regulators and policymakers have access to the latest technological and operational expertise to assist in their oversight of shale development,” according to a Penn State press release issued Thursday.

With money from the drilling industry, Penn State’s Marcellus Center for Outreach and Research will offer a new “Shale Gas Regulators Training Program” to provide “best-practices training” to people who oversee the drilling industry.

The center’s co-director, Tom Murphy, said in a press release the program will “offer new regulators the chance to learn the latest science-based concepts related to geology, petroleum technology and environmental quality.”

Until now, Murphy had maintained that the Marcellus Center operated free and clear of industry funding.

Responding to complaints by the Natural Gas corporations that permit approval was taking too

352 Krancer: DEP Has Expanded Its Inspection Staff, February 23, 2012 , By Scott Detrow, http://stateimpact.npr.org/pennsylvania/2012/02/23/krancer-dep-has-expanded-its-inspection-staff/353 Gas drilling industry paying Penn State to train those who regulate the gas drilling industry, March 08, 2012, By DONALD GILLILAND, The Patriot-News, http://www.pennlive.com/midstate/index.ssf/2012/03/gas_drilling_industry_paying_p.html

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long. Corbett issued an executive order described as “Permit Decision Guarantee”354.

Foes: Pa. state permit order threatens environment, By Kevin Begos:

Excerpt: Corbett said last month that many groups have complained about how long it takes to approve permits.

"One of the biggest complaints I have received over and over again is the time it takes for businesses, nonprofit organizations and local governments to work through the permitting process," Corbett said in a statement. "I promised to correct this."

Excerpt: Last year, The Associated Press reported that state environmental regulators said they spend as little as 35 minutes reviewing355 each of the thousands of applications for natural gas well permits. Even then, the regulators said, they didn't spend extra time for requests to drill near high-quality streams and rivers even though the waterways have special state and federal protections.

Kunz said the emphasis on speed might make sense for an agency that promotes business development but not for the DEP

354 2012-11 - Permit Decision Guarantee for the Department of Environmental Protection, http://www.portal.state.pa.us/portal/server.pt?open=512&objID=708&PageID=224602&mode=2&contentid=http://pubcontent.state.pa.us/publishedcontent/publish/cop_general_government_operations/oa/oa_portal/omd/p_and_p/executive_orders/2010_2019/items/2012_11.html355 AP: Pennsylvania is approving gas drilling permits with scant review, By Michael Rubinkam, Associated Press, http://usatoday30.usatoday.com/money/industries/energy/2011-04-13-pa-gas-drilling-permits.htm

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Chapter 9Marcellus Shale Coalition: In the Lobby

The Marcellus Shale Coalition (MSC) is an industry coalition made up of 299 natural gas and related corporations and businesses.356 Its function is to promote natural gas and MSC does this through public relations and lobbying at the state and federal levels.

MSC describes itself 357as:The Marcellus Shale Coalition (MSC) works with exploration and production, midstream, and supply chain partners in the Appalachian Basin and across the country to address issues regarding the production of clean, job-creating, American natural gas from the Marcellus and Utica Shale plays.

We provide in-depth information to policymakers, regulators, media, and other public stakeholders on the positive impacts responsible natural gas production is having on families, businesses, and communities across the region.

Sourcewatch describes MSC358 as:The Marcellus Shale Coalition is an industry coalition that fights against environmental protections sought by citizens facing the prospect of methane gas drilling near their water supplies. It is engaged in an extensive state and federal lobbying campaign to protect the financial interests of the corporate members of the coalition.

Is MSC a helpful educator which simply provides “provide in-depth information to policymakers, regulators, media, and other public stakeholders on the positive impacts responsible natural gas production is having on families, businesses, and communities across the region.”? Or are they “an industry coalition that fights against environmental protections sought by citizens facing the prospect of methane gas drilling near their water supplies. It is engaged in an extensive state and federal lobbying campaign to protect the financial interests of the corporate members of the coalition?”

What the Marcellus Shale Coalition SaysMarcellus Shale Coalition was founded in 2008 and at that time boasted a gas industry membership of approximately 95 corporations. It has since grown to nearly 300 members.There are 44 corporations listed as Board Members359.

Leading MSC as President is Kathryn Klaber,

Kathryn Klaber serves as the Marcellus Shale Coalition’s first President.360 In this role, on behalf of the MSC member companies, she works closely with elected leaders, regulators and the civic community to realize the responsible development of natural gas from the Marcellus and Utica Shale geological formations and the enhancement of the region’s economy that can be realized by this clean-burning American energy source.

356 Marcellus Shale Coalition Members, http://marcelluscoalition.org/about/associate-members/357 Marcellus Shale Coalition About, http://marcelluscoalition.org/about/358 Marcellus Shale Coalition, Sourcewatch, http://www.sourcewatch.org/index.php?title=Marcellus_Shale_Coalition359 Marcellus Shale Coalition, Board Members http://marcelluscoalition.org/about/full-members/360 Marcellus Shale Coalition, About President, Kathryn Z. Klaber, http://marcelluscoalition.org/about/president/

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Prior to joining the MSC, Katie served as Executive Vice President for Competitiveness at the Allegheny Conference on Community Development and as the Executive Director of the Pennsylvania Economy League. A lifelong Pennsylvanian, she earned her undergraduate degree in environmental science from Bucknell University and her Masters in Business Administration from Carnegie Mellon University.

She received the Enterprise Award for Entrepreneurship at Carnegie Mellon for her business plan for an innovative environmental reporting and metrics company. She was elected by her peers as President in the school’s archetypical Management Game. Katie was appointed by Pa. Dept. of Environmental Protection Sec. McGinty and reconfirmed by Sec. Hanger to Pennsylvania’s Air Quality Technical Advisory Committee

On the Executive Board 361 there are representatives from Chesapeake Energy Corporation, CNX Gas Company LLC (Formerly Consol), Range Resources Corporation, MarkWest Energy Partners L.P., Williams. Talisman Energy USA, EXCO Resources (PA) LLC, Pennsylvania General Energy, XTO Energy, Chief Oil & Gas, and EOG Resources.

The MSC announced a new leadership team for 2013: Marcellus Shale Coalition names new exec board 362| Written by Laura Olson | December 6, 2012

Excerpt: Pittsburgh, Pa. – Today, the Marcellus Shale Coalition (MSC) announced that Chesapeake Energy Corporation vice president of government affairs Dave Spigelmyer was re-elected as the organization's chair. Randy Albert (Chief Operating Officer, Gas Operations, CONSOL Energy), Scott Roy (Vice President, Government and Regulatory Affairs, Range Resources Corporation) and John Mollenkopf (Senior Vice President and Chief Operating Officer, MarkWest Energy Partners) were re-elected as vice chair, treasurer and secretary, respectively.

In addition to the officers, the MSC announced that the following individuals will serve as 2013 executive board members:

· Dave Cannon, Deputy General Counsel, Government and Environmental Affairs, EQT Corporation· Jeff Kupfer, Senior Advisor, Policy and Government Affairs, Chevron· Heather Lamparter, Vice President, Legal EXCO Resources (PA), LLC· Craig Mayer, General Counsel, Pennsylvania General Energy· Gary Smith, Vice President and General Manager, EOG Resources· Jack Williams, President, XTO Energy

The following members of the Board of Directors were elected by their peers to serve as at-large members of the Executive Board:

361 Marcellus Shale Coalition, Executive Board http://marcelluscoalition.org/about/executive-committee/362 Marcellus Shale Coalition names new exec board, Pittsburgh Post Gazette, Written by Laura Olson, December 6, 2012, http://pipeline.post-gazette.com/news/archives/24943-marcellus-shale-coalition-names-new-exec-board

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· John Bonn, President - NiSource Midstream Services, NiSource Gas Transmission & Storage· Terry Bossert, Senior Vice President – Environment & Regulatory Affairs, Chief Oil & Gas

Figure 1: Screen Print MSC Guiding Principles363

On the MSC "Helpful Resources364" link page is a list of 22 sites "that will help act as resources to help further your learning and understanding of what the coalition is about and some of the typical processes."

The resources include:• America’s Natural Gas Alliance (ANGA)• American Gas Association (AGA)• American Petroleum Institute (API)• Independent Petroleum Association of America (IPAA)• Energy In Depth (EID)• Interstate Natural Gas Association of America (INGAA)

363 Marcellus Shale Coalition, Guiding Principles, http://marcelluscoalition.org/about/guiding-principles/364 Marcellus Shale Coalition, Helpful Resources, http://marcelluscoalition.org/about/helpful-resources/

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• Natural Gas Vehicles for America (NGVAmerica)

MSC launched the Marcellus on Main Street365 which is a business directory is designed to support responsible Shale Gas Development by connecting the Natural Gas Industry to local vendors, suppliers, and services. It features information related to WORK-LIVE-PLAY and claims to serve the Marcellus and Utica Communities. The photos for LIVE and PLAY do not show drill rigs or compressor stations in the background which many of us are seeing as we travel across Pennsylvania.

The Guiding Principles, as shown in Figure 1, are repeated in a newly released MSC publication entitled: Site Planning, Development and Restoration366 (pdf download)

MSC states367: “Through months of research, stakeholder outreach, and collaboration amongst MSC member companies, the coalition recently released its first Recommended Practice, which offers guidance on site planning, development and restoration.”

Through months of research, stakeholder outreach, and collaboration amongst MSC member companies, the coalition recently released its first Recommended Practice, which offers guidance on site planning, development and restoration.

NOTE:1. MSC has been in operation since 2008, and this is the FIRST time these have been published.2. This is RECOMMENDED PRACTICE, not hard rules, not regulation and not a law. MSC makes no mention of what would happen should a “member” fail to follow the RECOMMENDED PRACTICES.

MSC states this very clearly in the Preface: This document provides general guidance on recommended practices for the subject(s) addressed. It is offered as a reference aid and is designed to assist industry professionals in improving their effectiveness. It is not intended to establish or impose binding requirements. Nothing herein constitutes, is intended to constitute, or shall be deemed to constitute the setting or determination of legal standards of care in the performance of the subject activities. The foregoing disclaimers apply to this document notwithstanding any expressions or terms in the text that may conflict or appear to conflict with the foregoing.

What the MSC Isn’t SayingUsing a simple browser search, you will find the vast majority of press releases from MSC center around Jobs, Economic benefits to communities, Jobs, Income to the state, Jobs, and Jobs. Very few press releases address the environmental and health concerns except to dismiss the concerns and divert a reader’s attention to look at all the jobs.

365 Marcellus Shale Coalition, Marcellus on Main Street, http://www.marcellusonmainstreet.org/366 Marcellus Shale Coalition, Recommended Practices, April 2012, http://marcelluscoalition.org/wp-content/uploads/2012/04/Site-Planning-Development-and-Restoration.pdf367 ibid

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Just for the month of May 2012, the MSC Press Release368 headlines include: Ridgway Record: Website Can Help Connect Area Businesses With Marcellus Shale -

May 18, 2012 Charleston Daily Mail Op-Ed: Shale Gas Can Re-Value West Virginia - May 18, 2012 Erie Times-News: Shale Drilling Will Play a Role in Erie-Area Economy - May 15, 2012 Benefits of Natural Gas Production Realized by “Every Single Pennsylvanian” - May 7,

2012 Associated Press: Gas Drillers Generate About $3.5 Billion in Revenues From

Marcellus Shale - May 5, 2012

A few recent events were not mentioned by MSC Lathrop Compressor Station explosion 369 in Springville Township, Susquehanna County

PA - March 2012 Pipeline installation drilling 370 blowout (5 incidents over 1 week period) in Dallas

Township, Luzerne County PA - May 2012 Methane Migration 371, contaminate wells, bubbling creeks in Granville Summit, Bradford

County PA - May 2012

MSC does not recognize any connection between drilling and drinking water contamination.

Per SOURCEWATCH372:Kathryn Klaber of the Marcellus Shale Coalition is the former Executive Director of the Pennsylvania Economy League. In an interview with the so-called "Clean Skies TV Network," a channel affiliated with the American Clean Skies Foundation (which is largely funded from profits from gas drilling), Klaber stated that toxins entering into peoples' water wells was a myth, and also stated that the FRAC Act was unnecessary because other organizations like the Environmental Protection Agency already have regulations in place to serve as a watchdog, neglecting to mention that chemicals used in methane drilling are exempt from federal water protection disclosure rules, thanks to the Halliburton loophole, and the process is subject to woefully inadequate state inspection agencies.

American Clean Skies Foundation (ACSF) is a front organization founded by Chesapeake Energy Corporation. Aubrey McClendon, CEO of Chesapeake Energy, in on the board of trustees for ACSF.

368 Marcellus Shale Coalition, Newsroom, http://marcelluscoalition.org/category/newsroom/369 Explosion rocks natural gas compressor station, By Laura Legere (Staff Writer), Published: March 30, 2012, http://thetimes-tribune.com/news/explosion-rocks-natural-gas-compressor-station-1.1292502370 Drilling blowout in Back Mountain, Citizens Voice, Staff report, Published: May 8, 2012, http://citizensvoice.com/news/drilling-blowout-in-back-mountain-1.1312313371 Gas migration under investigation in Bradford County, River Reporter, May 24, 2012, http://www.riverreporter.com/news/11/2012/05/24/gas-migration-under-investigation-bradford-county372 Marcellus Shale Coalition, Sourcewatch, http://www.sourcewatch.org/index.php?title=Marcellus_Shale_Coalition

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American Clean Skies Foundation

The “DOTS”While figures and statistics cited by MSC regarding jobs and economic benefits have been called into question373, one thing is clear - there is a lot of money flowing from lobbyists and natural gas corporations to Harrisburg.

373 Marcellus Shale Job Creation Numbers Questioned, PAMatters.com, by Cathy Clark, June 22, 2011, http://www.pamatters.com/2011/06/22/marcellus-shale-job-creation-numbers-questioned/

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As reported by Marcellusmoney.org374: The natural gas industry gave $7,175,234 to Pennsylvania candidates and Political Action Committees (PACs) from 2000 through the end of 2010, according to a Common Cause/Pennsylvania (CCPA) analysis released today. $3,442,212 was donated to elected officials currently in office.

The top recipient remains Governor Tom Corbett, with a total $1,634,096 in contributions from the natural gas industry. Corbett raised $1,083,315 of that total in 2009-2010 from 216 donations. He is followed by Senate President Pro Tempore Joseph Scarnati, with $293,333.

Giving by the industry doubled from the 2008 election cycle ($1,004,757) to the 2010 election cycle ($2,608,187).

Heading into the 2012 Elections, Follow the Money.org reports Oil & Gas campaign contributions to Pennsylvania is currently $330, 670

Top 10 Donors Pennsylvania 2011-2012

Industry Location Total Amount

PEGULA, KIM BOCA RATON, FL $50,000

CHESAPEAKE ENERGY OKLAHOMA CITY, OK $42,950 CHIEF OIL & GAS DALLAS, TX $38,500 RANGE RESOURCES CORP CANONSBURG, PA $27,605 EXXONMOBIL IRVING, TX $27,500

PENNSYLVANIA ENERGY RESOURCES GROUP PAC

HARRISBURG, PA $15,025

EQT CORP PITTSBURGH, PA $14,100 NATIONAL FUEL GAS CO ERIE, PA $13,100 FORREST III, J CLIFFORD PITTSBURGH, PA $12,500 TOPPER JR, JOSEPH V & MAUREEN BETHLEHEM, PA $20,000 Follow the Money.org 375

Campaign contributions to candidates are often highlighted while the amount of lobbying money is sometimes ignored.

The First Amendment of the United States of America Constitution states: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances. What we call "lobbying" is the exercise of the right to petition the government.

374 Marcellus Money, http://marcellusmoney.org/375 Follow the Money, http://www.followthemoney.org/database/StateGlance/contributor_details.phtml?&i=33&s=PA&y=2012&summary=1

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A little history lesson376: The BBC holds that "lobbying" comes from the gathering of Members of Parliament and peers in the hallways (or lobbies) of Houses of Parliament before and after parliamentary debates. One story states that the term originated at the Willard Hotel in Washington, DC, where it was used by Ulysses S. Grant to describe the political wheelers and dealers who frequented the hotel's lobby to access Grant—who was often there to enjoy a cigar and brandy. Others have made the claim that this story of the word's origin is erroneous

The term "lobbying" appeared in print as early as 1820:. Other letters from Washington affirm, that members of the Senate, when the compromise question was to be taken in the House, were not only "lobbying about the Representatives' Chamber" but also active in endeavoring to intimidate certain weak representatives by insulting threats to dissolve the Union. —April 1, 1820.

Lobbying the US Congress or State Legislatures has become an industry in itself. While no firm advertises itself as Lobbying-R-Us, more often than not the “lobbying” service is offered as consultant or advisor.

A good lobbyist will have connections and be familiar with who is who in the legislature. The most desired lobbyists are former politicians or political staffers.

Figure 3: Revolving Door

376 Lobbying, Wikipedia, http://en.wikipedia.org/wiki/Lobbying

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In Figure 3, note Steve Forde, Chris Tucker, and Travis Windle are all former US House of Representative staffers. Tucker and Windle are both employed by FTI Consulting, which also employee many others connected to Energy-In-Depth.

During a 60 Minutes interview, former lobbyist, Jack Abramoff described how the “revolving door” worked.377 (Emphasis added)

ABRAMOFF: When we would become friendly with an office and they were important to us, and the chief of staff was a competent person, I would say or my staff would say to him or her at some point, “You know, when you’re done working on the Hill, we’d very much like you to consider coming to work for us.” Now the moment I said that to them or any of our staff said that to ‘em, that was it. We owned them. And what does that mean? Every request from our office, every request of our clients, everything that we want, they’re gonna do. And not only that, they’re gonna think of things we can’t think of to do.

Also finding their way to MSC after leaving political service is Former PA Governor Tom Ridge. Upon leaving his position a Homeland Security Secretary, Tom Ridge formed the Ridge Policy Group, lobbying is one of the services it provides. Ridge became a lobbyist for MSC.378 He left as lobbyist in 2011.379 Ridge Policy Group is listed as an Associate member 380.

The ACT that Money BuiltBy January 2012 the political debate in Pennsylvania turned to the issue of an “Impact Fee”. However, lobbyists and natural gas corporations were been busy long before ACT 13 hit the halls of Harrisburg.

Per The Morning Call - January 12, 2012381:In 2011 Range Resources decided to rub elbows with policymakers shortly after the Corbett administration took office in 2011, it invited them to a Super Bowl party at a ranch outside Fort Worth, Texas, where attendees — which also included the company's vendors and property owners who'd leased to the company — were encouraged to cheer on the Pittsburgh Steelers over the Green Bay Packers.

Additional inducements included "classic Texas barbecue," live entertainment and the opportunity to meet past Steelers stars. Range Resources then spent $411,414 through the first nine months of last year to get its voice heard in the Capitol.

377 Jack Abramoff Explains How He ‘Owned’ Members Of Congress And Their Staff, ThinkProgress, By Lee Fang on Nov 7, 2011. http://thinkprogress.org/special/2011/11/07/362392/abramoff-owned-congress/378 Tom Ridge Joins the Marcellus Shale Coalition's Natural Gas Gold Rush, by Steve Horn, August 2, 2010, PRWatch, http://www.prwatch.org/node/9321379 Ex-Gov. Tom Ridge's job with Marcellus Shale Coalition ends, Associated Press, August 05, 2011, http://www.pennlive.com/midstate/index.ssf/2011/08/ex-gov_tom_ridges_job_with_mar.html380 Marcellus Shale Coalition, Associate Members, http://marcelluscoalition.org/about/associate-members/381 Pro-Marcellus Shale gas drilling lobbyists spending millions more than critics, January 21, 2012, By John L. Micek, Morning Call Harrisburg Bureau, http://articles.mcall.com/2012-01-21/news/mc-pa-marcellus-shale-lobbying-expenses-20120120_1_lobbyist-disclosure-marcellus-shale-debate-natural-gas

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All told, Pennsylvania's natural gas industry and its trade groups spent $3.37 million on lobbying between January and September 2011, according to Department of State records. Environmentalists spent $178,909 during the same time period.

The Marcellus Shale Coalition, an industry trade group in Washington County, led in lobbying expenditures, laying out $1.2 million. Range Resources finished second.

Rounding out the top five spenders during the first nine months of last year were Chesapeake-Appalachia LLC, $296,596; Shell Oil Co., $277,323; and Spectra Energy Transmission LLC, $147,000, state records showed.

On January 12, 2012 a letter382 was sent to Representatives Sam Smith, Mike Turzai, and Brian Ellis from Kathryn Z. Klaber, President - Marcellus Shale Coalition, and Stephanie Catarino Wissman, Executive Director - Associated Petroleum Industries of Pennsylvania. Letter was also cc'd to Governor Tom Corbett and all House Members.

The letter contained a list entitled “Suggestions for Final Marcellus Shale Legislation”. There were 27 “suggestions”. All but 3 of suggestions found their way into the bill.

Klaber and Wissman are aware of the less than favorable public image the Natural Gas industry and how words and terms used do influence public perceptions. In the aforementioned letter, Klaber and Wissmen suggested the words “hazardous and other chemicals” in (§3222(b)(4)(i) to be changed. Act 13 did not use the “chemical additive” term, instead the term “hydraulic fracturing additive” was used.

However, further down in the suggestion list, §3215 (well location restrictions), the letter took no exception to the use of the term “hazardous chemicals”, and apparently neither did Smith, Turzai and Ellis. (See chart below)

382 Marcellus Shale Coalition, January 12, 2012 letter to Pennsylvania legislators, http://ia700809.us.archive.org/26/items/MarcellusShaleCoalitionAssociatedPetroleumIndustriesOfPennsylvania/MSCAPILetterToSmithTurzaiEllis01-12-12.pdf

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Suggestions for Final Marcellus Shale Legislation

ACT 13

The provision in the House-passed version (§3222(b)(4)(i) (well completion reports)) should be harmonized with recently promulgated provisions set forth in Pennsylvania’s oil and gas regulations at 25 Pa. Code §78.122(b)(6) by requiring the stimulation record to include a descriptive list of the "chemical additives" in the stimulation fluid. This term should be used rather than “hazardous and other chemicals” as proposed.

§3222(b)(4) At the time of claiming that any of the following are entitled to protection under paragraph (3), a vendor, service provider or operator shall file a signed written statement that the record contains a trade secret or confidential proprietary information: (i) A hydraulic fracturing additive. (ii) A chemical. (iii) A concentration. (iv) Any combination of subparagraphs (i), (ii) and (iii).

The provision in the Senate-passed version (§3215 (well location restrictions)) contains arbitrary permit conditions based on potential impacts to public drinking water supplies and floodplains. Additionally, the special restrictions on hazardous chemicals storage within 750 feet of a stream, spring or body of water lacks any scientific basis and should not be carried in the final document.

§3215 (d.1) Additional protective measures. The department may establish additional protective measures for storage of hazardous chemicals and materials intended to be used, or that have been used, on an unconventional well drilling site within 750 feet of a solid blue lined stream, spring or body of water identified on the most current 7 1/2 minute topographic quadrangle map of the United States Geological Survey.

Total campaign contributions 383 from the Natural Gas Corporations for Representatives Smith, Turzi and Ellis:

Representative Total YearsRep Sam Smith (R) District 66 $59,250 2003-2010Rep Mike Turzai (R) District 28 $79,100 2001-2010Rep Brian  Ellis (R) District 11 $23,000 2003-2010

Total $161,350

To ensure the legislation would be written to benefit the Natural Gas Industry interests, the lobbyists were sent to Harrisburg. Whether working directly or through surrogates (such as the MSC), the lobbyists spent $1,300,000 just on the “impact fee bill”. 384 This is approximately 1/3 of the amount spent for the entire previous year.

383 Marcellus Money, http://marcellusmoney.org/384 Pro-Marcellus Shale gas drilling lobbyists spending millions more than critics, January 21, 2012, By John L. Micek, Morning Call Harrisburg Bureau, http://articles.mcall.com/2012-01-21/news/mc-pa-marcellus-shale-lobbying-expenses-20120120_1_lobbyist-disclosure-marcellus-shale-debate-natural-gas

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The BlowbackOn February 14, 2012, Governor Tom Corbett signed an amended version of HB1950 and it officially became ACT 13.

Act 13 has been characterized as a “Gift to Gassers” and called the “Worst N ew Environmental Law in the Nation” 385 However, it was not the lack of environmental protections which has riled up many Pennsylvanians and communities.

The first is the issue of Zoning Act 13 included a statute which allows state rules on zoning for oil and gas drilling to supersede or override local zoning laws.

§ 3302. Oil and gas operations regulated pursuant to Chapter 32.Except with respect to local ordinances adopted pursuant to the MPC and the act of October 4, 1978 (P.L.851, No.166), known as the Flood Plain Management Act, all local ordinances purporting to regulate oil and gas operations regulated by Chapter 32 (relating to development) are hereby superseded. No local ordinance adopted pursuant to the MPC or the Flood Plain Management Act shall contain provisions which impose conditions, requirements or limitations on the same features of oil and gas operations regulated by Chapter 32 or that accomplish the same purposes as set forth in Chapter 32. The Commonwealth, by this section, preempts and supersedes the regulation of oil and gas operations as provided in this chapter.

Several municipalities have joined together and filed a lawsuit to have Act 13 overturned 386. The courts ordered a temporary halt to the Zoning Provisions and a June 2012 court date was scheduled.The zoning provision in Act 13 was struck down in July 2012.387 The Corbett administration immediately appealed the decision to the Pennsylvania Supreme Court. Testimony and

385 Fracking Democracy: Why Pennsylvania's Act 13 May Be the Nation's Worst Corporate Giveaway, AlterNet, By Steven Rosenfeld, March 7, 2012, http://www.alternet.org/story/154459/fracking_democracy%3A_why_pennsylvania%27s_act_13_may_be_the_nation%27s_worst_corporate_giveaway386 Pennsylvania Court Petitioned to Stop Act 13, March 29, 2012, Protect Eagle Mere Alliance, http://protecteaglesmere.org/2012/03/29/pennsylvania-court-petitioned-to-stop-act-13/

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arguments were heard by the PA Supreme Court in the fall of 2012.

The PA Supreme Court is currently one member short, leaving 6 sitting on the bench – 3 Democrats and 3 Republicans. In the event of a “tie”, the lower court decision can not be overturned. Judges are elected to 10-year terms.

In 2013, 2 members are eligible for retention, 2 others will be leaving, and 1 judge remains on suspension388. Of the 5, 4 are Republicans and 1 Democrat.

As of this writing, no date has been announced when the decision will be announced, or even if one has been made. Perhaps waiting until after 2013 election, or for the suspended judge’s seat to be filled via appointment?

The Doctor’s Gag

The second item of contention is what has become known as the Doctors Gag Rule.

Excerpt from § 3222.1. Hydraulic fracturing chemical disclosure requirements.(11) If a health professional determines that a medical emergency exists and the specific identity and amount of any chemicals claimed to be a trade secret or confidential proprietary information are necessary for emergency treatment, the vendor, service provider or operator shall immediately disclose the information to the health professional upon a verbal acknowledgment by the health professional that the information may not be used for purposes other than the health needs asserted and that the health professional shall maintain the information as confidential. The vendor, service provider or operator may request, and the health professional shall provide upon request, a written statement of need and a confidentiality agreement from the health professional as soon as circumstances permit, in conformance with regulations promulgated under this chapter.

The general interpretation is doctors will be unable to share information with other medical personnel, or the patient’s family. Many Pennsylvania doctors are not even aware of the probable health hazards associated with exposure to fracking chemicals and therefore would not even think to test for them. Without the freedom to share information and educate medical personnel about fracking chemicals the health care of many people will be compromised.

Governor Corbett, who promoted, endorsed and signed Act 13 is at a loss how the Doctor Gag Rule got in there.

387 Pa. court overturns Act 13 zoning rules, Written by Laura Olson and Erich Schwartzel, July 27, 2012, Pittsburgh Post Gazette, http://pipeline.post-gazette.com/index.php/news/archives/24715388 Joan Orie Melvin, On May 18, 2012, Justice Orie Melvin was indicted by a grand jury for utilizing her staff at the Superior Court during campaigns for the Supreme Court in 2003 and 2009. In addition, Orie Melvin is accused of also being directly involved in coordinating the staff of her sister, state Senator Jane Orie, for the benefit of Orie Melvin's campaigns. Following the indictment, Orie Melvin was suspended with pay from the Supreme Court. http://judgepedia.org/index.php/Joan_Orie_Melvin

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Governor Corbett says he’s not sure how the rule389 governing a healthcare worker’s access to trade secret information got into the state’s new drilling law. He also says the controversial local zoning provisions of Act 13 re-establish a Pennsylvania law that existed before a Supreme Court ruling in the 1980’s. WHYY’s Radio Times host Marty Moss-Coane interviewed Corbett Tuesday night at an annual event sponsored by the Greater Philadelphia Chamber of Commerce and WHYY. The local zoning restrictions within Act 13 are being challenged in court by several municipalities. Corbett defended the provision.

Marty Moss-Coane also asked Corbett about the so-called “gag rule” for doctors. Act 13 has a provision that requires doctors to sign a confidentiality agreement should they need information on trade secret chemicals used by drillers, in order to treat patients. Corbett says that provision may be amended.

“We gotta take a look at that,” said Corbett. “I’m not sure how that got put in there. I don’t recall how that got in there. There are certainly confidentiality issues. We have to see what happens with the federal government because they’re getting ready to issue regulations on the formula so that might become moot down the road.”

Is it unreasonable to expect Governor Corbett to at least KNOW what is in a bill before signing it?

Pennsylvania officials, legislators and representatives of the Natural Gas industry are denying the existence of the “gag order”. Additionally, money for health studies in the original drafts of the bill was removed from the final version.

Doctors critical of Pa. drilling bill that strips health study money390

Apr. 12, 2012 - Pressconnets.com

Excerpt:Yet when legislative leaders and the governor's office negotiated the most sweeping update of the state's oil and gas law in a quarter century, they stripped $2 million a year that included funding for a statewide health registry to track respiratory problems, skin conditions, stomach ailments and a host of other illnesses potentially related to gas drilling

Excerpt:Patrick Henderson, Gov. Tom Corbett's top energy official, said doctors will be permitted to inform their patients and other members of the patient's treatment team. But he declined to address other circumstances in which a doctor might feel there's a legitimate need to share information outside a tight circle, saying he wouldn't discuss "potentially endless scenarios."

389 Governor Corbett Says Doctors’ Concerns Over Act 13 May Be “Moot”, StateImpact, May 16, 2012, By Susan Phillips, http://stateimpact.npr.org/pennsylvania/2012/05/16/governor-corbett-says-doctors-concerns-over-act-13-may-be-moot/390 Doctors critical of Pa. drilling bill that strips health study money, Associated Press, Written by Michael Rubinkam and Kevin Begos, April 12, 2012, http://www.pressconnects.com/viewart/20120412/NEWS11/204110344/Doctors-critical-Pa-drilling-bill-strips-health-study-money

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He said fears about the new law are unwarranted.

"There is no gag order," Henderson wrote in an email. "Quite the contrary, the law seeks to foster health professional access to the information, and implicit in that is the free exchange of information with their patient so they can, together, make informed decisions."

Christine M. Sanchez, a spokeswoman for the Society of Chemical Manufacturers and Affiliates, an industry group based in Washington, D.C., says the confidentiality provision "seems to be working well for all stakeholders."

"It strikes an important balance between protecting proprietary information about a company's intellectual property while making it available to specific persons for specific reasons," she said.

Travis Windle, a spokesman for the Marcellus Shale Coalition, an industry group, says it's "very telling" and "sad" that fracking opponents blame gas drillers for a law that's been used nationally since the mid-1980s.

While some doctors are upset over the confidentiality provision, experts say the behind-the-scenes funding cut could hurt public health even more.

Corbett's own Marcellus Shale Advisory Commission recommended last summer that the Health Department create a first-of-its-kind population-based health registry that would follow residents who live within a mile of gas drilling and production sites.

Excerpt:The funding was killed because GOP senators from the Marcellus region felt the department didn't have a good grasp of what it would do with the money -- especially given the sensitivity of collecting private health information, said the lead Senate negotiator.

"What we heard about how the money would be used did not put our minds at ease. The primary concern from the folks that I represent was that there wasn't a plan, a detailed plan in place for how the money was going to be utilized," said Drew Crompton, chief counsel for Senate President Pro Tempore Joe Scarnati, R-Jefferson.

"Rather, we heard that, 'Well, we'll use the money for a study.' OK, a study of what?" Crompton said.

The governor's office didn't fight for it, either, he said.

"It was clear to me that it wasn't their highest priority. I'm not going to say they laid down on it, but no side gets everything they wanted, and we had true reservations about endorsing such a plan," Crompton said.

Pennsylvania officials are saying concerned doctors are “making a mountain out of a molehill”..

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"It's not to discredit those who are sincerely looking out for the health of others, but I think a mountain has been made out of a molehill391," says Drew Crompton, a legislative staffer and one of the primary drafters of the law. "It's important to have disclosure, and that's what we tried to do. And I think this is coming from people who oppose the industry."

The law was modeled after a Colorado initiative, which was modeled after a federal Occupational Safety and Health Administration regulation. At a recent talk for local officials, Michael Krancer, the head of Pennsylvania's Department of Environmental Protection, defended what some are calling the "doctor gag rule."

"The 'gag order on physicians' — nothing could be further from the truth or more nonsensical than this," Krancer said. "The provisions of Act 13 are exactly like what we have already and had had in the federal system since the '70s. There's nothing new there."

But there are some differences. The federal law was designed for workers, while the new state laws cover everyone. And critics say some important parts of the federal law are missing in these state laws.

Removal of funding for Health Research When legislative leaders and the governor's office negotiated the state's oil and gas law, $2 million a year was stripped from the bill. It included funding for a statewide health registry to track respiratory problems, skin conditions, stomach ailments and a host of other illnesses potentially related to gas drilling

Drew Crompton, Senate President Pro Tem Joe Scarnati’s chief of staff, and one of the main authors of Act 13, stated one of the main authors of the bill, says funding such a study would be “dangerous.”392

He says funding a baseline study in heavily drilled areas could cause unnecessary panic among the residents.

“Imagine living near a well, and everything’s fine, and you get a letter in the mail asking to take part in medical tests,” says Crompton. “And then those people are like: ‘Why do I have to get tests? What could be wrong with me?’”

Crompton says funding health studies with impact fee money is not out of the question. But he says it would have to be handled “very carefully.”

Gov. Corbett's own Marcellus Shale Advisory Commission recommended last summer393 that the Health Department create a first-of-its-kind population-based health registry that would

391 Pennsylvania Doctors Worry Over Fracking 'Gag Rule', National Public Radio (NPR), by Susan Phillips, May 17, 2012, http://www.npr.org/2012/05/17/152268501/pennsylvania-doctors-worry-over-fracking-gag-rule392 Doctors critical of Pa. drilling bill that strips health study money, Associated Press, Written by Michael Rubinkam and Kevin Begos, April 12, 2012, http://www.pressconnects.com/viewart/20120412/NEWS11/204110344/Doctors-critical-Pa-drilling-bill-strips-health-study-money393 ibid

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follow residents who live within a mile of gas drilling and production sites.

Several public health officials have raised questions about why no one from their field of expertise was at the table while the law was being drafted. But Crompton says everything was vetted through the state’s Department of Public Health.394

“No one with a medical degree was at the table, that’s true,” said Crompton. “But to somehow think that this language wasn’t getting vetted through public health officials, I think is mistaken.

In July 2012, Dr. Alfonso Rodriquez, a Luzerne County PA nephrologist395, filed a federal lawsuit against the Medical Gag rule provision 396 .

Guthrie Health and Geisinger announced they would collaborate to study the health impacts397 of Marcellus Shale drilling in August 2012.

Excerpt: A team from Guthrie and Geisinger will lead the effort to utilize their electronic health records to investigate the health effects of Marcellus Shale gas drilling. The study will look at detailed health histories of hundreds of thousands of Geisinger and Guthrie patients who live near the Marcellus shale formation, a rock formation in which energy companies have already drilled about 5,000 natural gas wells.

Excerpt: Some of the health effects that will be investigated first may include asthma, cardiovascular disease and cancer. Preliminary results of data analysis may be released within the next year, Dr. Carey said, while other aspects of the research will unfold over five, 10 or 15 years.

Frack, Baby, FrackIn June 2012, MSC lobbying attention turned to HB1659 regarding permit approval398.  HB 1659 – the Department of Environmental Protection Permit Review and Issuance Act – introduced by Rep. Jeff Pyle, R-60 of Armstrong and Indiana counties. The bill’s provisions, which would apply to all permit applications submitted to DEP, include:

● Permit applications will be deemed approved if the DEP fails to issue a decision in accordance with agreed-to review schedules.● Applicants may select a licensed permit review professional to review the application.● Require the DEP to establish requirements for licensed permit review professionals.

394 Scarnati Aide Says Drilling Foes Hijack Act 13 Doctor Provision, StateImpact, By Susan Phillips, April 20, 2012, http://stateimpact.npr.org/pennsylvania/2012/04/20/scarnati-aide-say-drilling-foes-hijack-act-13-doctor-provision/395 A nephrologist is a medical doctor who specializes in kidney care and treating diseases of the kidneys. http://www.davita.com/kidney-disease/overview/treatment-overview/what-is-a-nephrologist?/e/6884396 Doctor Sues Over Act 13 “Gag Rule”, StateImpact, By Susan Phillips, July 30, 2012, http://stateimpact.npr.org/pennsylvania/2012/07/30/doctor-sues-over-gag-rule/397 Guthrie Health and Geisinger collaborate on Marcellus shale research effort, Guthrie Health Press Release, August 20, 2012, http://www.guthrie.org/press-releases/guthrie-health-and-geisinger-collaborate-marcellus-shale-research-effort398 HB1659: An Act providing for the effective and thorough review of permit applications to the Department of Environmental Protection and other entities to ensure environmental protection and foster economic growth. Removed from table, Oct. 15, 2012. http://www.legis.state.pa.us/cfdocs/billinfo/billinfo.cfm?syear=2011&sind=0&body=H&type=B&bn=1659

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● Reviews of application completeness, technical issues, responses to deficiencies, final reviews and determinations shall take no more than 30 days.● The DEP shall accept recommendations by permit review professionals unless they are “clearly erroneous.”● Require pre-application meetings between applicants and the DEP.

There are three troubling provisions:1. If the DEP does not review and make a decision regarding a permit within a pre-set

timeline, the permit is automatically APPROVED. Given Gov. Corbett’s budget cuts to the DEP, there will be the high probability of “rubber stamping” permits.

2. Privatizing of the permit review process will allow the Natural Gas corporations to go “permit approval shopping” and find “permit review” companies who are able to review and stamp APPROVED the quickest. The bill does require the DEP to establish requirements for “licensed permit review professionals”, however given the amount money in the form of campaign donations and lobbying the Natural Gas industry spends – how stringent will the requirements really be?

3. The DEP shall accept recommendations by permit review professionals unless they are “clearly erroneous.” Define “clearly erroneous”. How much time will DEP really spend reviewing permits which have been “approved” by these professionals?

The Pennsylvania Legislature did not have the opportunity to vote on HB1659. Gov. Tom Corbett enacted it via “Executive Order”. In July 2012, Pennsylvania Gov. Tom Corbett issued an executive order requiring the Department of Environmental Protection to set established timelines for processing permit applications.

Excerpt from: Corbett Tells DEP to Expedite Permit Process399, July 24, 2012, StateImpact, By Susan Phillips

Corbett says he’s responding to complaints about how long DEP takes to issue permits.

“One of the biggest complaints I have received over and over again is the time it takes for businesses, non-profit organizations and local governments to work through the permitting process,” Corbett said. “I promised to correct this, and today we are setting the wheels in motion to deliver on that promise. At the same time, DEP will continue its longstanding mission to protect our environment.”

The executive order also instructs DEP to coordinate the multiple permits often required by large or complicated projects.

Public concerns about health risks and environmental impact are increasing as people become more aware and informed. As 2012 is a big election year, many local, state and federal candidates will be facing questions about the Natural Gas industry and their activities. The MSC, related organizations and the Natural Gas industry will busy with re-spinning, and re-framing the standard talking points. Do expect health and environmental concerns to be

399 Corbett Tells DEP to Expedite Permit Process, July 24, 2012, StateImpact, By Susan Phillips, http://stateimpact.npr.org/pennsylvania/2012/07/24/corbett-tells-dep-to-fast-track-permit-process/

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downplayed, while jobs and the economy will take center stage.

The MSC and its partners have deep pockets. In 2010, Pennsylvania candidates received $2,608,187 in campaign donations, expect that number to double or triple for 2012.

The industry spent $3,370,000 between January - September 2011 on lobbying Pennsylvania legislators, and $1,300,000 just on Act 13. Those numbers are sure to increase in the coming months. While it is unclear as to when bills such as HB1659 will come to the floor of the Pennsylvania legislature and what the final form will be, we can be sure that it will be the best legislation that money can buy.

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Chapter 10Marcellus Shale Advisory Commission’s Swivel Chairs

The Marcellus Shale Advisory Commission400 (MSAC) was officially created by Gov. Tom Corbett (R-PA) in March 3, 2011. The MSAC expired on July 11, 2011. Its purpose is described as “The Commission shall develop a comprehensive, strategic proposal for the responsible and environmentally sound development of Marcellus Shale.”

A predecessor of the MSAC was the Energy-Environment Committee.

In November of 2010, Tom Corbett became Governor Elect of Pennsylvania, and as any in-coming Governor will do, Corbett organized his transition team. One of the teams was the Energy-Environment Committee.

ENERGY & ENVIRONMENT COMMITTEE401 (EEC)

Chair – David Kleppinger of McNees, Wallace & NurickMembers - Richard Allan, Principal, RJ Allan Consulting; Scott Baker, Buchanan, Ingersoll & Rooney PC; Cynthia Carrow, VP, Government & Community Relations, Western PA Conservancy; Rosemary Chiavetta of the Public Utility Commission; Thomas Chiomento, Director of Government at Exelon Generation; Brian Clark, Shareholder, Buchanan, Ingersoll & Rooney PC; Nick DeBenedictus, Chairman, Aqua America; George Ellis, President, PA Coal Association; Ellen Ferretti, VP, PA Environmental Council Josh First, President , Appalachian Land & Conservation Services Co., LLC; John Giordano, Chief Legal, Philadelphia Works; Pete Gleason, Partner, K&L Gates; Grant Gulibon, Regional Specialist, PA Builders Association; Dave Hess, Former Secretary, Department of Environmental Protection; John Hohenwarter, National Rifle Association; Charlie Kirkwood, President, Shawnee Insurance; Mike Krancer; John Oliver, Oliver Brothers; Stan Rapp, Senior Partner, Greenlee Partners; John Rich, Ultra Clean Fuels; Todd Rucci; Hasu Shah; John Skoutelas, VP of Governmental Affairs, Waste Management; Pat Solano; Glen Thomas, GT Power Group; Eric Thumma, Director of Institutional Relations, Iberdrola Renewables; Don Welsh, Former President, Pennsylvania Environmental Council; Pam Witmer, Energy & Environmental Practice Lead, Bravo Group; and PA State Senator Mary Jo White.

To better understand who is who on the EEC, see the chart below:

400 Creation of Governor’s Marcellus Shale Advisory Commission, Executive Order, Commonwealth of Pennsylvania, Governor's Office, March 8, 2011, http://www.portal.state.pa.us/portal/server.pt?open=512&objID=708&PageID=224602&mode=2&contentid=http://pubcontent.state.pa.us/publishedcontent/publish/cop_general_government_operations/oa/oa_portal/omd/p_and_p/executive_orders/2010_2019/items/2011_01.html401 Gov.-elect Corbett announces members of his transition team, Press Release, November 2010, http://wallaby.telicon.com/PA/library/2010/2010113079.HTM

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By Sector, the EEC is 30% Lobbying, 20% Energy, 20% Government, 13% Environment and 4% other.

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Lobbying at the EEC Table

The 4 largest lobbying firms with seats on EEC are Bravo Group Buchanon, Ingersoll & Rooney, Greenlee Partners, and K&L Gates. On the surface the presence of lobbyists may not have caused any undue concern, however when you consider WHO are the lobbyists representing, well, more than a few “caution” lights should have been blinking. A partial list of clients shows these 4 lobbying firms represent 29 different parties with interest in the fracking of the Marcellus Shale.

Interesting side note:

“Corporate Board Member Magazine ,402 in association with FTI Consulting, Inc., ranked K&L Gates as one of the top 25 law firms in its 2012 list of “America’s Best Corporate Law Firms.” Based on a survey of nearly 2,000 general counsel of U.S. publicly held companies, the rankings focused on those law firms that survey respondents said they would engage in a variety of important legal subject matters.”

FTI Consulting, Inc. is the Public Relations Firm for Energy-in-Depth, an industry front group noted for its hit piece on Josh Fox’s documentary, Gasland.

EEC and the Marcellus Shale Coalition

Corporations and lobbying firms represented on the EEC are also listed as members of the Marcellus Shale Coalition.

402 K&L Gates, Firm Overview, http://www.klgates.com/about/

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Lobbyists: K&L Gates, Buchanan, Ingersoll & Rooney PC, and McNees Wallace & Nurick, LLC

Corporations: Chief Oil & Gas, Aqua America, CNX Gas, Range Resources Corp, Williams, Energy Transfer Partners, LP, UGI, Reserved Environmental Services, and Talisman.

The Money

Members or related to members of the EEC enriched Corbett’s 2010 campaign by $918,165. The highest donors are Ronald Krancer, father of Michael Krancer (now PA Department of Environmental Protection DEP) with $230,000. He was followed with $190,000 from the lobbying firm of Greenlee Partners, and $100,000 from Trevor Rees-Jones the CEO of Chief Oil and Gas.

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With 29 members on the committee, it averages $23,730 per seat,

The Marcellus Shale Advisory Commission (MSAC)

On March 3, 2011 the MSAC became an official commission. Swiveling in their chairs from the EEC table to the MSAC table are Michael Krancer, now the DEP Secretary, and Cynthia Carrow, Vice President of Western PA Conservancy, Although PA Senator Mary Jo White is part of the MSAC, her former aide, Patrick Henderson did receive a seat.

Shortly after the MSAC released its final report in July 2011, Patrick Henderson became Gov. Corbett’s “Energy Executive”.

Patrick Henderson: Corbett's point man on energy403

July 24, 2011, By Angela Couloumbis, Inquirer Harrisburg Bureau

Excerpt: At 37, Henderson is Gov. Corbett's "energy executive" and top adviser driving policy on the emotionally and politically charged issue of drilling for natural gas in the Marcellus Shale.

He was, by all accounts, the brains behind the governor's task force on the issue, and the author of whole swaths of the 136-page report that the panel issued Friday - a document that's sure to set the tone in the Capitol for the ongoing debate on drilling and its impact.

David “Dave” Spigelmyer is the Vice President of Government Relations for Chesapeake Energy Corporation, a Director of the West Virginia Oil and Natural Gas Association as well as its past president.

He barely warmed his seat at the MSAC table when Gov. Corbett asked for his resignation.

Sources: Corbett asked Chesapeake executive to quit Marcellus Shale Commission 404

Written by Scott Detrow, StateImpact Pennsylvania Reporter Wednesday, 27 April 2011

Excerpt:According to four sources, Corbett asked him to withdraw from the panel after a February fire at a Chesapeake drilling site in Washington County injured three workers. Corbett advisors were worried the company’s violations would become a distraction, as the commission debates drilling policy.

Chesapeake, which currently operates 105 Marcellus Shale wells in Pennsylvania, racked up 132 violations in 2010, according to the Clean Water Action report. Last

403 Patrick Henderson: Corbett's point man on energy, July 24, 2011, By Angela Couloumbis, Inquirer Harrisburg Bureau, http://articles.philly.com/2011-07-24/news/29809992_1_marcellus-shale-drilling-drilling-for-natural-gas-executive-director404 Sources: Corbett asked Chesapeake executive to quit Marcellus Shale CommissionWritten by Scott Detrow, StateImpact Pennsylvania Reporter, Apr 27, 2011, http://www.witf.org/state-house-sound-bites/2011/04/sources-corbett-asked-chesapeake-executive-to-quit-marcellus-shale-commission.php

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week, one of its Bradford County wells leaked tens of thousands of gallons of fracking fluid. The company has voluntarily halted hydraulic fracturing and other well completion activities at its Pennsylvania sites while it investigates the cause of the spill.

Spigelmyer soon found a new chair as a member of the Executive Committee for the Marcellus Shale Coalition. Spigelmyer’s chair at the MSCA was not filled.

C. Alan Walker is the PA Secretary of Community and Economic Development. He is also President and CEO of Bradford Energy. In March of 2011, Gov. Corbett submitted his budget proposal. One Paragraph, buried in the 1,184-page budget gives Walker the power to “expedite any permit or action pending in any agency where the creation of jobs may be impacted.”

PA Governor Gives Energy Executive Supreme Authority Over Environmental Permitting405

by Abrahm Lustgarten, Nicholas Kusnetz and Joaquin SapienProPublica, March 9, 2011, 11:50 p.m.

Excerpt:A spokesman for the economic development office said Walker will not speak publicly until his confirmation. But Walker did post a statement on the department’s website.

“The budget introduced today represents a completely new way of doing business for DCED and its economic development partners,” the statement said. “In a tough economic climate, we need to send a powerful message to the Pennsylvania Business Community that Pennsylvania is open for business.”

Walker’s ties to the energy industry are deep. He is listed on state disclosure forms as an executive of the Pennsylvania Coal Association and he has served as chairman of the Pennsylvania Chamber of Business and Industry. He also has firsthand experience with the state’s environmental regulations, because his companies would likely have applied for permits similar to those the oil and gas industry is now pursuing in the Marcellus. And like many energy companies, his, too, have run into problems with the state.

In 2002, three of Walker’s coal companies notified Pennsylvania’s Department of Environmental Protection that they had run out of money and were going to stop treating the 173 million gallons of polluted water they produced each year and released into tributaries of the Susquehanna River. The state eventually got a court injunction to force them to continue treating the wastewater as required by state and federal law.

See DCED Secretary Alan Walker at NPR State Impact for more on Walker’s background.406

405 PA Governor Gives Energy Executive Supreme Authority Over Environmental Permitting, by Abrahm Lustgarten, Nicholas Kusnetz and Joaquin Sapien, ProPublica, March 9, 2011, http://www.propublica.org/article/corbett-pa-energy-exec-authority-environment406 DCED Secretary Alan Walker, StateImpact, http://stateimpact.npr.org/pennsylvania/tag/alan-walker/

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Jeffrey Kupfer: Senior Advisor of Government Affairs at Chevron. He previously held a Senior Vice President position at Atlas Energy. In November of 2011, Chevron acquired Atlas 407Energy for $3.2 billion and assumed pro forma net debt of approximately $1.1 billion.

From 2006 to 2009, Mr. Kupfer served as Deputy Secretary of Energy at the U.S. Department of Energy. He was the Acting Deputy Secretary and Chief Operating Officer, as well as the Chief of Staff.

Prior to the DOE, he worked in the GW Bush White House as a Special Assistant to the President for Economic Policy and as the Executive Director of the President’s Panel on Federal Tax Reform.

During the first term of the Bush Administration, he served as the Treasury Department’s Deputy Chief of Staff. Prior to these positions, he was a counsel for the U.S. Senate Finance Committee.

Terry Pegula, former CEO of East Resources. East Resources was acquired by Royal Dutch Shell (Headquartered in the Netherlands) in 2010 for $4.7billion408.

Pegula, through a deal brokered by Cliff Benson (former Trustee for 2nd Mile Charity), bought the Buffalo Sabers Hockey Team. Benson is a team executive. Penn State received a donation from Pegula of $88 million for a Hockey Arena.

Between Pegula and his wife, Kim, they donated $280,000 to Corbett’s 2010 gubernatorial campaign, making them the highest single donor.

Sectors of the MSAC

With the resignation of Spigelmeyer, the MSAC table seats 29. Of this, 12 seats are filled by energy/gas corporations, 11 PA government, 3 by lobbying interests, 3 related to the environment and 4 others. NOTE: Totals do not add up to 29 due to individuals being associated with one or more sectors.

407 Chevron Announces Agreement to Acquire Atlas Energy, Chevron, Press Release, http://www.chevron.com/chevron/pressreleases/article/11092010_chevronannouncesagreementtoacquireatlasenergy.news408 Royal Dutch Shell Scoops Up East Resources for $4.7 Billion, By Tom Taulli, Daily Finance, May 28, 2010, http://www.dailyfinance.com/2010/05/28/royal-dutch-shell-buys-east-resources/

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Notice anything missing from the above sectors? How about someone from the Health field?To its credit, the MSAC did include a few short paragraphs regarding health in the Governor’s Marcellus Shale Advisory Commission Report 409 .

On Page 112 of the MSAC Report

9.2.37The Department of Health should work in partnership with the Commonwealth’s graduate schools of public health and other appropriate medical institutions to better protect and enhance the public health interests of citizens, such as through the establishment of the population-based health registry and curriculum development.

9.2.38The Department of Health should collect and evaluate clinical data provided by health care providers.

9.2.39The Department of Health should routinely evaluate and assess Marcellus Shale-related environmental data, such as air, water, solid waste, and fish and other food samples, that is collected from a variety of entities, such as PA DEP, US EPA, the US Geologic Survey, water works or treatment facilities, industry and academic partners.

9.2.40

409 Marcellus Shale Advisory Commission Report, July 22, 2011, http://files.dep.state.pa.us/publicparticipation/marcellusshaleadvisorycommission/marcellusshaleadvisoryportalfiles/msac_final_report.pdf

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The Department of Health should create, or oversee the creation of, a population-based health registry with the purpose of characterizing and following over time individuals who live in close proximity (ie one mile radius) to gas drilling and production sites.

9.2.41The Department of Health should establish a system to provide for the timely and thorough investigation of and response to concerns and complaints raised by citizens, health care providers or public officials.

9.2.42The Department of Health should educate health care providers on the presentation and assessment of human illness that may be caused by material in drilling constituents.

9.2.43The Department of Health should establish public education programs regarding the constituents used in the drilling process, potential pathways to humans, and at what level, if any, they have the potential to cause human illness.

Unfortunately, the PA Legislature chose to ignore these health recommendations and instead included what has become known as the Medical Gag Rule.

What You Need To Know About Act 13’s Confidentiality Requirements410

April 19, 2012 , StateImpactBy Scott Detrow

Excerpt:You can find the relevant section on page 98 of the final bill.

The new legislation requires drillers to provide the state with a list of chemicals used during hydraulic fracturing, with the exception of chemicals the energy companies deem “trade secrets.” Every driller uses a different combination of chemicals to frack, and don’t want competitors to see their ingredients and ratios. If a driller claims a trade secret, it doesn’t have to post the provision online.

The controversial language allows doctors to access that proprietary information, if they think proprietary chemicals are directly related to an illness they’re treating.

Nothing controversial about that.

What’s controversial: drilling companies only need to hand the information over “if the health professional executes a confidentiality agreement. …”

"Governor Corbett says he’s not sure how the rule411 governing a healthcare worker’s access to trade secret information got into the state’s new drilling law." Obviously, he didn’t read the bill before signing it.410 What You Need To Know About Act 13′s Confidentiality Requirements, StateImpact, April 19, 2012, By Scott Detrow, http://stateimpact.npr.org/pennsylvania/2012/04/19/what-you-need-to-know-about-act-13s-confidentiality-requirements/411 Governor Corbett Says Doctors’ Concerns Over Act 13 May Be “Moot”, StateImpact, May 16, 2012, By Susan Phillips, http://stateimpact.npr.org/pennsylvania/2012/05/16/governor-corbett-says-doctors-concerns-over-act-13-may-be-moot/

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The Money at the Table

Tom Corbett saw $1,658,795 flow into his campaign through MSAC members, their corporations, and executives of that corporation and/or through corporate PACS.

A seat at the MSAC table was an average of $79,372.

And the Seats Swivel

Swiveling a seat around, the lobbying firms of Buchannon, Ingersoll & Rooney and K&L Gates, joins the Marcellus Shale Coalition412 as members, as do 10 corporations.

412 Marcellus Shale Coalition, Executive Board, http://marcelluscoalition.org/about/executive-committee/

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Terry Bossert, Vice President, Government & Regulatory Affairs of Chief Oil & Gas has a seat on the Marcellus Shale Executive Board, and Dave Spigelmyer, Vice President, Government Affairs of Chesapeake Energy Corporation is the Executive Board Chairman.

One thing which enabling doors to revolve and chairs to swivel is money. Lots and lots of money. In 2010, the natural gas industry spent $3.5 million to lobby lawmakers and state officials regarding the Marcellus Shale.

For promoting and passage of Act 13413 to the natural gas industry’s desires the Marcellus Shale Coalitions rolled out $1,300,000. Range Resources pushed chairs with $133,766, Chesapeake Energy spun them around for $111,099, Royal Dutch Shell greased the wheels $102,400 and Spectra Energy Transmission padded cushion $48,000.

Although not up for re-election until 2014, Gov. Corbett’s campaign chest is open. Contributions from Energy & Natural Resources are at $444,958.414, and there is still 2 years left to fill the campaign chest. Of the top 20 Contributors so far – Kim Pegula, (Wife of Terry Pegula), and Richard W Vague (CEO, Energy Plus) have all contributed $50,000 each.

All that money buys a lot of seats.

413 Five Biggest Shale Interests Spent $1.3 Million During Impact Fee Debate, Records Show, Capital Ideas, John L. Micek, the Morning Call, May 17, 2012, http://blogs.mcall.com/capitol_ideas/2012/05/five-biggest-shale-interests-spent-13-million-during-impact-fee-debate-records-show.html414 CORBETT, TOM & CAWLEY, JIM , GOVERNOR / LIEUTENANT GOVERNOR, Follow the Money.org, http://www.followthemoney.org/database/StateGlance/candidate.phtml?c=140828

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Chapter 11America For S(h)ale

The America’s Natural Gas Alliance (ANGA)415, an industry backed front-group, entreats the readers with “We need reliable energy to meet our growing needs. We need clean energy to protect our health and the environment. And we need domestic energy to reduce our reliance on foreign oil and bring jobs to our communities.” The ANGA page features a building with the American Flag painted across its side.

One of ANGA’s co-founders416

is Aubrey McClendon, CEO of Chesapeake Energy.

ANGA’s members include Chesapeake Energy, Devon, Encana, Cabot Oil & Gas, BG Group, BHP Billiton, Talisman Energy and Range Resources to name a few. Encana and Talisman Energy are Canadian corporations, BG Group is from the United Kingdom and BHP Billiton is from Australia.

The Marcellus Shale has been described as both the “New Texas” and as the “Saudi Arabia of Natural Gas”. Natural Gas has been promoted as the fuel that will break the oil habit and the media ads tug at our patriotic heartstrings “American Natural Gas for America”.

Terry Engelder, Professor of Geoscience at Penn State University and Co-Principal of Appalachian Fracture Systems Inc., invoked the words of John F. Kennedy during a presentation in January of 2011 417 , “ask not what your country can do for you, ask what you can do for your country”. From there, Engelder went on to explain why people living in gas drilling fields are the sacrifice for the good of the country. Waving flags and a marching band playing Stars and Stripes forever were not part of his presentation and sorely missed.

In November of 2011, Reuters reported “Chesapeake CEO Opposes US LNG Exports” 418 : The head of Chesapeake Energy, one of the biggest U.S. natural gas drillers, does not want the country to ship its huge gas reserves overseas, despite agreeing to supply fuel for a proposed export project.

415 America's Natural Gas Alliance, http://www.anga.us/why-natural-gas416 Aubrey McClendon, Chesapeake Energy, Polluters Watch, http://www.polluterwatch.com/aubrey-mcclendon417 2-Engelder Cumulative Environmental Effects of Gas Drilling , Prof. Terry Engelder of Penn State, ShaleShock, Jan 14, 2011, http://www.youtube.com/watch?v=1u6aqXaI3s4418 Chesapeake chief opposes exporting US natural gas, Chesapeake CEO says hopes US will not export LNG, Reuters, Nov. 16. 2011, http://uk.reuters.com/article/2011/11/16/natgas-export-chesapeake-idUKN1E7AF1L720111116

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Record U.S. natural gas production has sparked a debate about whether the resource should be used more at home, potentially for wider use in transportation, or shipped abroad to fetch higher prices on the global market.

“I want the right to export natural gas, but I am really hopeful that we never do," said Chesapeake chief executive Aubrey McClendon during a panel discussion on natural gas vehicles in New York on Wednesday.

America has no export facilities for natural gas. We do have import facilities, and more than one proposal to convert the import facilities to export is being reviewed by U.S. Federal Energy Regulatory Commission (FERC).

April 2012: The U.S. Federal Energy Regulatory Commission approved Cheniere Energy Inc. (LNG)’s proposal to build the nation’s largest natural-gas export terminal 419 in Louisiana. The export terminal is expected to be operational by 2015.

So, what happened to being hopeful that we never export natural gas? “Industry giant, "Chesapeake Energy wants to export LNG 420 " says Mike Stice, senior vice president for natural gas projects at Oklahoma City-based Chesapeake Energy, would like to create new markets for the natural gas that is inundating the US, due in part to dramatically increased production in shale gas plays. Also, liquefying and exporting shale gas from shale plays like the Haynesville, Barnett, and Eagle Ford to global markets holds major promise as the US confronts an oversupply of cheap supplies, said analyst Rick Smead of Navigant Consulting.”

Oregon “A proposal to build a liquefied natural gas (LNG) terminal 421near the mouth of the Columbia River in Warrenton is reentering the regulatory running, resuscitated by burgeoning North American gas supplies after being left for dead by opponents.

Backers of the controversial Oregon LNG terminal, which would sit just across Youngs Bay from Astoria, have briefed regulators and politicians on their $6 billion plan and say they plan to file an initial application by next week with the Federal Energy Regulatory Commission.

While the proposal retains its previously planned capability to offload LNG tankers from abroad, its economic rationale is based on exporting Canadian gas through Oregon to lucrative markets in Asia.”

Louisiana: “Sempra Energy has signed development agreements with two Japanese conglomerates to help build a $6 billion liquefied natural gas export terminal at its existing import terminal in Louisiana 422 , the San Diego based company announced Tuesday.”

419 Cheniere Energy Wins U.S. Approval for Gas-Export Terminal, Bloomberg, By Brian Wingfield, Apr 16, 2012, http://www.bloomberg.com/news/2012-04-16/cheniere-energy-wins-u-s-approval-for-gas-export-terminal.html420 Cheniere Energy - A Tsunami About to Happen in the Worldwide $LNG Market, Seeking Alpha, Jan 17, 2012, http://seekingalpha.com/instablog/310523-expstocktrader/161531-cheniere-energy-a-tsunami-about-to-happen-in-the-worldwide-lng-market421 Oregon Liquefied Natural Gas export terminal proposed near the mouth of the Columbia River, Wednesday, April 18, 2012 By Ted Sickinger, The Oregonian, http://www.oregonlive.com/business/index.ssf/2012/04/oregon_liquified_natural_gas_e.html422 Sempra signs on partners for $6B natural gas export terminal, UT San Diego, By Morgan Lee, April 17, 2012, http://www.utsandiego.com/news/2012/apr/17/sempra-wins-backing-natural-gas-export-terminal/

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From Gulf to Canada: May 2012 - Excelerate Energy, the U.S. liquefied natural gas company founded by Oklahoma billionaire George Kaiser, plans to develop the country's first floating LNG export plant off the Gulf Coast 423 , while Royal Dutch Shell has partnered with Asian buyers to build a plant in western Canada.

Cove Point, Maryland : April 2012 - Dominion won approval from the U.S. Department of Energy to use Cove Point for exporting up to 1 billion cubic feet of liquefied natural gas to about 20 nations 424 with which the United States has free-trade agreements. The company is seeking federal permission to allow shipments to any foreign country, except those barred because of embargoes.

Selling natural gas overseas requires turning it into a liquid by cooling it to minus-260 degrees F, putting it in specially insulated Liquefied Natural Gas (LNG) ships, and then heating and re-gasifying it once it reaches its destination. The expense of re-gasification and shipping makes it easier and cheaper to sell gas in the U.S. instead, so why the sudden push to export LNG? Call it over production, low demand, or an “unusually warm winter” – there’s a glut on the market and that has driven prices to approximately $2.80/MMBtu. Much too low to drill economically, yet the Natural Gas Drillers must drill or risk losing leases on land they have already staked out. The more they drill, the bigger the glut and the lower the price. In comparison, natural gas prices are much higher in Japan and Europe.

Under U.S. law, the Energy Department cannot deny exports to 15 countries that have bilateral free trade agreements with the United States, a list that will soon expand when pacts with South Korea, Colombia and Panama take effect. Exports to other countries are reviewed on a case-by-case basis

.Natural Gas Prices in Us, Europe and Japan Why US Natural Gas Prices Are So Low 425

423 Two more North American LNG export projects planned, Chicago Tribune, May 15, 2012, Edward McAllister and Jeffrey Jones, Reuters,http://articles.chicagotribune.com/2012-05-15/news/sns-rt-us-lng-export-namericabre84e1kv-20120515_1_terminals-before-shale-gas-lng-canada-natural-gas424 Dominion to move forward with Cove Point project, Proposed export facility draws opposition from Sierra Club, April 26, 2012, By Hanah Cho, The Baltimore Sun, http://articles.baltimoresun.com/2012-04-26/news/bs-bz-dominion-lng-20120426_1_cove-point-natural-gas-dominion-resources425 Why US Natural Gas Prices Are So Low - Are Changes Needed?, By Gail Tverberg, Investing.com, Commodities, Mar 25, 2012, http://www.investing.com/analysis/why-us-natural-gas-prices-are-so-low---are-changes-needed%20-118082

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The International Players: Natural Gas corporations stand to make larger profits by exporting. It should be no surprise to find many American Natural Gas corporations have deals with foreign corporations in Europe and Asia.

Europe

Brigham Exploration - StatoilASA (Norway):426 Statoil ASA from Norway acquired Brigham Exploration Co. for $4.4 billion in late 2011, enabling entry into the Bakken and Three Forks plays in the Williston basin in North Dakota and Montana. Statoil entered the US shale gas industry in 2008 when it acquired a stake in Marcellus shale gas acreage from Chesapeake Energy and then in the Eagle Ford in a deal with SM Energy and Talisman. Statoil produces dry gas from the Marcellus, dry gas and liquids from the Eagle Ford, and now liquids from the Bakken.

Chesapeake Energy Corporation - Total E&P USA 427 (Total SA Subsidiary): On January 25, 2010, Chesapeake entered into a joint venture with Total E&P USA, Inc., a wholly owned subsidiary of Total S.A. (Total), to develop the Company’s Barnett Shale leasehold in north-central Texas.

Chesapeake Energy Corporation - Total SA 428(France): France's Total SA, long established as an international oil giant, will pay $2.25 billion for a 25 percent stake in Chesapeake's extensive lease holdings in the Barnett Shale, the companies announced Monday.

Chesapeake Energy Corporation - StatoilHydro 429(Norway): joint venture transaction with StatoilHydro Chesapeake sold a 32.5% interest in its Marcellus Shale assets in Appalachia for $3.375 billion of consideration and retained a 67.5% working interest. The assets included approximately 1.8 million net acres of leasehold, of which StatoilHydro now owns approximately 0.6 million net acres and Chesapeake owns approximately 1.2 million net acres. Chesapeake received $1.25 billion in cash from StatoilHydro at closing and will receive a further $2.125 billion from 2009 to 2012 through StatoilHydro funding 75% of Chesapeake's 67.5% share of drilling and completion expenditures until the $2.125 billion obligation has been funded. Chesapeake plans to continue acquiring leasehold in the Marcellus Shale play and StatoilHydro has the right to a 32.5% participation in any such additional leasehold.

426 Big overseas investors supply momentum for North American shale growth, Oil & Finance Journal, Don Warlick, WarlickEnergy. July 5, 2012 http://www.ogfj.com/articles/2012/07/big-overseas-investors-supply-momentum-for-north-american-shale-growth.html427 Chesapeake Energy Corp (CHK), Reuters, http://www.reuters.com/finance/stocks/companyProfile?rpc=66&symbol=CHK428 Big overseas investors supply momentum for North American shale growth, Oil & Finance Journal, Don Warlick, WarlickEnergy. July 5, 2012 http://www.ogfj.com/articles/2012/07/big-overseas-investors-supply-momentum-for-north-american-shale-growth.html429 Chesapeake Energy Corporation Announces Closing of Marcellus Shale Joint Venture with StatoilHydro, Chesapeake Energy, November 25, 2008 http://www.chk.com/news/articles/Pages/1229883.aspx

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East Resources - Royal Dutch Shell 430 (Netherlands): The acquisition of East Resources, a Pennsylvania-based oil and gas company, on July 29, 2010, is the foundation for Shell’s new operations and growth in the Appalachian Basin. Shell’s current Marcellus Shale operations are focused in Tioga County.

Exco Resources Inc - BG Group (United Kingdom) 431 : U.K. natural gas company BG Group said Monday that it has entered a further joint venture with Exco Resources Inc. , under which it will pay $950 million for a 50% interest in companies that hold Exco's producing and non-producing assets in the Appalachian Basin. BG Group said the deal will give it a 50% interest in a total of 654,000 net acres in the Appalachian Basin and increase its estimated gas resources by 2.4 trillion standard cubic feet.

Sandridge Energy - Repsol 432(Spain): SandRidge Energy Inc. entered a $1 billion deal with Spain's Repsol, who agreed to pay SandRidge $250 million and to finance $750 million in drilling expenses over 3 years for a non-operated stake in two areas in the Mississippian requiring horizontal drilling and multistage fracturing. The venture involves a 25% non-operated working interest in the Extension Mississippian play and a 16% non-operated working interest in the Original Mississippian play.

430 Shell Appalachia, http://www.shell.us/aboutshell/projects-locations/appalachia.html431 EXCO Resources, Inc. Announces 2010 Operating Results and 2011 Outlook, Business Wire, January 24, 2011 http://www.businesswire.com/news/home/20110124005522/en/EXCO-Resources-Announces-2010-Operating-Results-2011432 Big overseas investors supply momentum for North American shale growth, Oil & Finance Journal, Don Warlick, WarlickEnergy. July 5, 2012 http://www.ogfj.com/articles/2012/07/big-overseas-investors-supply-momentum-for-north-american-shale-growth.html

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ASIA-AUSTRALIA

Anadarko Petroleum Corp - Mitsui & Co (Japan): 433 joint-venture agreement with Mitsui E&P USA LLC, an affiliate of Mitsui & Co., Ltd. (NSDQ:MITSY), whereby Mitsui will participate with Anadarko as a 32.5-percent partner in Anadarko’s Marcellus Shale assets, primarily located in north-central Pennsylvania, for approximately $1.4 billion. Mitsui will earn approximately 100,000 net acres in exchange for funding 100 percent of Anadarko’s share of development costs in 2010, and 90 percent of these costs thereafter, with an estimated completion of all obligations by 2013. In addition, Mitsui will have the opportunity to purchase a 32.5-percent share of Anadarko’s existing wells and additional acreage acquisitions by reimbursing a proportionate share of Anadarko’s prior expenditures, currently estimated to be approximately $100 million.

433 International Corporation Invests In Marcellus Shale Despite Controversy, Cornell Daily Sun, By Sun Staff, February 18, 2010 http://cornellsun.com/section/news/content/2010/02/18/international-corporation-invests-marcellus-shale-despite-controvers

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Cabot Oil & Gas - Osaka Gas Co., Ltd. 434 (Japan): Cabot's joint venture with Osaka transfers a 35% non-working interest in 50,000 acres of Cabot's Pearsall Shale holdings to Osaka for $125 million in cash and $125 million in future drilling costs under a carry. The Pearsall Shale underlies the Eagle Ford Shale at depths between 7,000 and 12,000 feet, with a significantly thicker window than the Eagle Ford Shale at 600 to 900 feet

Cameron LNG - Mitsubishi Corporation 435(Japan): Cameron LNG, a unit of Sempra Energy , said it signed agreements with Mitsubishi Corp and Mitsui & Co to develop and construct a natural gas liquefaction export facility in Louisiana. Cameron LNG is strategically located near a major pipeline hub that serves nearly two-thirds of all U.S. natural gas markets. Cameron LNG has access to a deep ship channel close to the shoreline and is far removed from highly populated residential areas. The receipt terminal was developed to align with state and local government land-use planning efforts and is fully permitted

Carrizo Oil & Gas - Sumitomo Corp 436(Japan): Oil and gas explorer Carrizo Oil & Gas Inc has agreed to sell a portion of its Barnett Shale asset to a subsidiary of Sumitomo Corp for $15.7 million. As part of the deal, Japan's Sumitomo will buy a 12.5 percent stake in 16 of Carrizo's Barnett drilling units in Texas and help in drilling other wells at the site. Sumitomo will also have the right to participate in up to 56 future wells within these units.While announcing the joint venture in December, Sumitomo highlighted Carrizo’s holdings in the Marcellus and indicated its interest in expanding its shale presence in the U.S.

Carrizo Oil & Gas - Reliance Industries Limited (RIL) 437 (India): Carrizo Oil & Gas announces new Marcellus joint venture with Reliance Industries and the participation in the sale of Avista Capital partners' Pennsylvania properties Carrizo will serve as the development operator for the joint venture and Reliance has the option to act as a development operator in certain regions in the coming years as part of the joint venture.

Chesapeake Energy Corporation - CNOOC Ltd 438(China): CNOOC paying an initial $1.08 billion to acquire a one-third stake in Chesapeake's Eagle Ford shale gas field, plus an additional $1.08 to fund drilling and completion costs.

434 Cabot Oil & Gas Corp, Bloomsburg Businessweek, http://investing.businessweek.com/research/stocks/news/article.asp?docKey=600-201206220910DOWJONESENRGYSVC000949-1&params=timestamp||06/22/2012%209:10%20AM%20ET||headline||Cabot%20Oil%20%26%20Gas%20In%20%24250%20Million%20Texas%20Oil%20Venture%20Deal%20With%20Osaka%20Gas||docSource||Dow%20Jones%20and%20Company%2C%20Inc.||provider||ACQUIREMEDIA||bridgesymbol||US;COG&ticker=COG435 UPDATE 1-Sempra unit signs deals for US LNG export plant, Reuters, Tue Apr 17, 2012. http://www.reuters.com/article/2012/04/17/sempraenergy-idUSL3E8FH58V20120417436 UPDATE 1-Carrizo to sell part of Barnett Shale asset to Sumitomo, Reuters, Tue Dec 15, 2009, http://www.reuters.com/article/2009/12/15/carrizo-idUSSGE5BE0HD20091215437 Reliance Industries Limited, 2010 News Release, http://www.ril.com/downloads/pdf/PR11092010.pdf438 Foreign Investors Tap Into U.S. Shale Gas Play, Investopedia, October 15, 2010, http://www.investopedia.com/stock-analysis/2010/foreign-investors-tap-into-u.s.-shale-gas-play-ceo-chk-sto-tlm-eog-pxd-sm1015.aspx#ixzz2LqKyeXmJ

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Chesapeake Energy Corporation - BHP Billiton 439 (Australia): In February 2011, Australia's BHP Billiton Petroleum agreed to buy all of Chesapeake Energy Corp.'s interests in the Fayetteville shale in Arkansas for $4.75 billion. BHP chief executive J. Michael Yeager mentioned that the expertise gained in the Fayetteville would be useful in future developments in Australia and elsewhere.

Chesapeake Energy Corporation - China Investment Corp 440(China): China Investment Corp (CIC) and Singapore state investor Temasek Holdings would also take stakes in Chesapeake, although the exact investment amount was not disclosed, KIC said in a statement.

Chesapeake Energy Corporation - Hopu Investment Management Co. Ltd. 441(China): said it was selling a 20 percent stake in its Appalachian operations to raise $3.5 billion to pay down debt. Its first $600 million will come from Temasek Holdings, the investment company that owns and manages money for the government of Singapore, and from Hopu Investment Management Co. Ltd., a Chinese private equity firm.

Chesapeake Energy Corporation - Korea Investment Corp 442 (South Korea): would invest $200 million in Chesapeake Energy Co as the US No.2 natural gas company was set to issue $900 million worth of convertible preferred stock.

Chesapeake Energy Corporation - Temasek Holdings 443(Singapore): said it was selling a 20 percent stake in its Appalachian operations to raise $3.5 billion to pay down debt. Its first $600 million will come from Temasek Holdings, the investment company that owns and manages money for the government of Singapore, and from Hopu Investment Management Co. Ltd., a Chinese private equity firm.

Chevron - Reliance Industries Limited (RTL) 444 (India): Reliance Industries (RIL) today got a new partner for its Marcellus Shale gas assets in the US, as Atlas Energy shareholders approved its merger with Chevron Corporation. While RIL spokesperson declined to comment, a source close to the company said RIL was keen and interested in the shale gas business. Instead of working with Atlas Energy, it will now work with Chevron, he said. On January 10, Reliance Holdings USA, an arm of RIL, had written to the Atlas Energy management, questioning why RIL was not informed of the Chevron deal. RIL was miffed about being kept in dark and displeased with the fact that the valuation of Marcellus shale gas asset for Chevron deal was half of what Reliance paid for its 40 per cent stake. RIL has a 40 per cent stake in the joint venture with Atlas

439 Big overseas investors supply momentum for North American shale growth, Oil & Finance Journal, Don Warlick, WarlickEnergy. July 5, 2012 http://www.ogfj.com/articles/2012/07/big-overseas-investors-supply-momentum-for-north-american-shale-growth.html440 KIC, CIC, Temasek to invest in Chesapeake stake, Daily Times, June 27, 2010, http://www.dailytimes.com.pk/default.asp?page=2010\06\27\story_27-6-2010_pg5_20441 ibid442 Korea Investment: To Invest $200 Million In Chesapeake Energy, ADVFN, http://www.advfn.com/nyse/StockNews.asp?stocknews=CHK&article=43301687443 New international investors tap into Marcellus Shale rush, Pittsburgh Business Times, http://www.bizjournals.com/pittsburgh/stories/2010/05/17/story3.html444 RIL gets new partner for Marcellus, Business Standard, http://www.business-standard.com/article/companies/ril-gets-new-partner-for-marcellus-111021700097_1.html

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Energy, which it had formed last April. It had agreed to pay $1.7 billion for the said working interest in the underlying shale asset, Marcellus Shale. This included $340-million upfront cash payment and $1.36-billion drilling carry.

Devon Energy Corporation - Sinopec International Petroleum Exploration and Production Co 445 (China): China Petrochemical Corp., the second-largest Chinese oil company, agreed to buy a one-third stake in five Devon Energy Corp. exploratory oil projects in the U.S. for $900 million to expand holdings of reserves trapped in shale. The company, known as Sinopec Group, will pay $900 million in cash and as much as $1.6 billion in Devon’s future drilling costs, funding 125 wells in the coming year, according to a statement from Devon today.

Gastar Exploration Ltd - Atinum E&P, Inc. (South Korea): 446 $70 million Marcellus shale joint venture agreement with an affiliate of Seoul, South Korea-based investment firm Atinum Partners Co. Ltd. as part of the growing trend of international player involvement in unconventional resources in North America. Atinum Marcellus I LLC, will initially acquire a 21.43% interest in all of Gastar's existing Marcellus Shale assets in West Virginia and Pennsylvania, approximately 34,200 net acres, and certain producing shallow conventional wells.

Hunt Oil Co. - Marubeni Corp 447 (Japan): Japan's Marubeni Corp. subsidiary Marubeni Eagle Ford Ltd. agreed to buy a 35% stake in Hunt Oil Co.'s holdings in South Texas. Marubeni will pay drilling expenses for several hundred wells in future years. Marubeni and Hunt plan to jointly acquire additional Eagle Ford acreage beyond the currently held 52,000 acres.

Petrohawk Energy Corp - BHP Billiton 448 (Australia): BHP Billiton announced an agreement in July 2011 to acquire Petrohawk Energy Corp. for $12.1 billion, giving BHP operated positions in the Eagle Ford and Haynesville shale resource plays, and also in the Permian Basin

Pioneer Natural Resources - Reliance Industries Limited (RIL) 449 (India): Reliance Industries buys 45 percent of Pioneer Natural Resources shale gas venture for $1.3 billion Eagle Ford Shale

Rex Energy Corporation - Sumitomo Corp (Japan)450: Rex Energy, an independent oil and gas company, has entered into a joint venture agreement with Summit Discovery Resources,(subsidiary of Sumitomo Corp) a trading and investment firm in Japan.

445 Sinopec Group to Buy Stakes in Devon Energy Oil Projects, Bloomsberg Businessweek, http://www.businessweek.com/news/2012-01-04/sinopec-group-to-buy-stakes-in-devon-energy-oil-projects.html446 Gastar Exploration enters $70M Marcellus JV with Atinum, Oil&Gas Financial Journal, http://www.ogfj.com/articles/2010/09/gastar-exploration.html447 Big overseas investors supply momentum for North American shale growth, Oil&Gas Financial Journal, http://www.ogfj.com/articles/2012/07/big-overseas-investors-supply-momentum-for-north-american-shale-growth.html448 Ibid449 Reliance Industries and Pioneer Natural Resources announce Eagle Ford shale joint venture, E&P Mag, http://www.epmag.com/Exploration/Reliance-Industries-Pioneer-Natural-Resources-announce-Eagle-Ford-shale-joint-venture_62190450 Rex Energy Corporation Announces Marcellus Shale Joint Venture, Updated Guidance and Borrowing Base Increase, NBC News, http://www.nbcnews.com/id/38937927/#.UZIDJUpvCaQ

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Pursuant to the agreement, Rex Energy will sell and transfer interests in its Marcellus Shale assets located in Pennsylvania, including 12,900 net acres, certain producing Marcellus Shale wells and associated mid-stream assets, in a transaction valued at approximately $140.4 million.

Samson Investment Co - Itochu Corp (Japan)451: Japan's Itochu Corp. was part of an investor group led by KKR that acquired Tulsa-based Samson Investment Co. for $7.2 billion in November, 2011. Samson operates in the Bakken, Bossier, Cana Woodford, Cotton Valley, Granite Wash, Green River, Haynesville, Powder River and Green River areas. Itochu previously purchased a 25% stake in the Niobrara shale oil play in Wyoming from MDU Resources Group.

Sandridge Energy - Atinum E&P, Inc. (South Korea)452: Atinum Partners Co. Ltd. acquired a non-operated working interest in SandRidge's Mississippian fields for $500 million, agreeing to a drilling carry obligation to pay 13.2% of SandRidge's share of drilling and completion cost for wells up to $250 million during a 3-year period.

SM Energy - Mitsui & Co 453 (Japan): In mid-2011 a subsidiary of Mitsui & Co. Ltd. acquired a 12.5% working interest in Denver-based SM Energy Co.'s non-operated Eagle Ford shale position. Mitsui agreed to carry 90% of SM Energy's drilling and completion costs up to a $680 million cap.

451 Big overseas investors supply momentum for North American shale growth, Oil&Gas Financial Journal, http://www.ogfj.com/articles/2012/07/big-overseas-investors-supply-momentum-for-north-american-shale-growth.html452 ibid453 ibid

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Sinopec and Chesapeake EnergyUnder increasing financial pressures, Chesapeake Energy is trying to bring things under control and raise some serious cash. It sold CHK-Midstream to Global Infrastructure Partners (GIP) For $2.0 Billion, 454and will need to sell more assets quickly.

In May of 2012, Chesapeake’s largest investor, Southeast Asset Management (SAM), was reported as saying: “We urge the board to be open to any offers to acquire the whole company,455” Southeastern Asset Management Inc. Chairman and Chief Executive Officer O. Mason Hawkins wrote in a letter to Chesapeake today. While the shares have declined, “we don’t want to use this large price-to-market gap as an excuse to refuse discussions with potential acquirers who would be willing to pay a price today that recognizes the longer term value of the company.”

The Financial Times, on June 20, 2012, reported “Sinopec , the Chinese oil and gas group456, is considering bidding for billions of dollars’ worth of assets owned by Chesapeake Energy, the U.S. gas producer.

The prize asset in Chesapeake’s disposal program for this year is its leases on 1.5 million acres (600,000 hectares) of land in the Permian Basin region of west Texas and New Mexico, one of the most coveted areas of the U.S. for oil development.

454 Chesapeake Energy Corporation, Reuters, http://www.reuters.com/finance/stocks/CHK/key-developments455 Chesapeake Should Consider Selling, Shareholder Says, Bloomberg, http://www.bloomberg.com/news/2012-05-07/chesapeake-should-be-open-to-any-offers-southeastern-says-1-.html456 Sinopec eyes move for Chesapeake, Financial Times assetshttp://www.ft.com/cms/s/0/0e8ac61a-bac5-11e1-81e0-00144feabdc0.html#axzz2TG2tMyrn

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Analysts suggested last month that the land could fetch $6 billion or more, although the fall in the price of oil and the possibility of further falls to come are expected to have curbed buyers’ willingness and ability to pay higher prices. The company hopes to agree a deal by the end of September at the latest, possibly sooner”

Sinopec, if serious, is proceeding cautiously and learned the lessons from CNOOC and Unocal. 457

Whether its Sinopec or CNOOC or Total SA, foreign corporations have invested billions in US gas and oil drilling. These are not just joint ventures, they are also the sale of corporations and/or leases. US Natural Gas corporations and their supporters may try to downplay the foreign corporation participation, but sooner or later somebody with a question about their gas lease will make a phone call and discover their lease has been sold to “Peggy”.

457 Chinese Drop Takeover Bid for Unocal assets, LA Times, http://www.ft.com/cms/s/0/0e8ac61a-bac5-11e1-81e0-00144feabdc0.html#axzz2TG2tMyrn

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Chapter 12Let’s Go to the Movies

TruthlandTruthland is a 34-minute movie created by the Independent Petroleum Association of America (IPAA). The Truthland 458 website promo states:

“In the HBO movie “Gasland,” New York City filmmaker Josh Fox tried to scare people into thinking that natural gas development and hydraulic fracturing are new, unregulated and dangerous. It made one Pennsylvania mom living atop the Marcellus Shale wonder what she was getting into. She asked environmentalists, academics and everyday people what they think. Nobody got paid to talk — all they were asked was to tell the truth.”

In general, Truthland is a 34-minute infomercial for the gas industry and is being caravanned around the various shale plays by Energy-In-Depth (EID). Attendance at the showings has been small or mostly attended by “fractivists”.

I am not going to go into the anatomy of Truthland’s accuracy, there has been plenty written on that topic: see: Fracking Industry’s Answer to “Gasland”: Devised by Astroturf Lobbying Group and Political Ad Agency.459

I will be looking at connections, or if you will – “the DOTS”.

Truthland – the DOTS As previously stated the movie was created by IAPP and EID. EID is a project of the IAPP.

Figure 2: Bottom of Truthlandmovie.com website

458 Truthland, A project of IPAA and Energy-in-Depth, http://www.truthlandmovie.com/459 Fracking Industry’s Answer to “Gasland”: Devised by Astroturf Lobbying Group and Political Ad Agency, LittleSis, http://blog.littlesis.org/2012/06/13/fracking-industrys-answer-to-gasland-devised-by-astroturf-lobbying-group-and-political-ad-agency/

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It appears the actual professionals filming, editing etc. of Truthland may have been done by Strategic Perceptions, Inc. 460(SPI). SPI was also involved with the Dirty Faces campaign461 (anti coal burning), a joint project by Chesapeake Energy and the American Lung Association.

Figure 3

460 SPI Public Affairs, http://www.strategicperceptioninc.com/Truthland_movie.php461 SPI Public Affairs, Dirty Faces, http://www.strategicperceptioninc.com/cleanSky_1.php

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Figure 4

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Truthland’s website was originally registered to Chesapeake Energy.

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Figure 5 – Chesapeake Energy Truthland Registration

Later it was changed to MFL Holdings, ATTN TRUTHLANDMOVIE.COM.

Figure 6 - MFL Holding Truthland Registration

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Truthland website registration was changed again. This time it is listed as being registered to the IPAA.

Figure 7: Truthland site registered to IPAA 462

Strategic Perceptions Inc. (SPI) is not what you would characterize as non-partisan. Perusing it the website, you will soon notice a pronounced tilt towards conservative and Republican positions. CEO of SPI is Fred Davis. Bloomberg BusinessWeek 463describes him as:

“Republican media strategist Fred Davis has made some of the most attention-grabbing political ads ever aired on television.”

462 truthlandmovie.com registry whois, http://www.whois.com/whois/truthlandmovie.com463 Fred Davis's Campaign Credentials, Bloomsberg BusinessWeek, http://images.businessweek.com/slideshows/2012-07-26/fred-daviss-campaign-credentials

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SPI website describes Fred Davis in more detail in “Unusual History of Fred Davis 464 ”. Of special note here’s a short excerpt: (Emphasis added)

“Davis was drawn into the world of politics in 1994 when, after having moved his business to Los Angeles in the mid 80's and rechristening it as Strategic Perception Inc., he received a call from his uncle, then Oklahoma Congressman James M. Inhofe, to help rescue his campaign for the U.S. Senate.”

Truthland has been shown in Pennsylvania, Ohio, New York and West Virginia in rented venues and sometimes there are panel Q&A sessions following the showing.

I don’t know if Homeland Security is taking names of Truthland movie goers as they reportedly did with Gasland attendees.

'Gasland': When Going to the Movie Means You're a Terrorist HuffingtonPost, by Alison Rose Levy, 09/15/10Excerpt: “However if you saw the film in Pennsylvania, watch out. According to a leaked document from the State Department of Homeland Security, published by Pro Publica, since so-called "environmental extremists" pose an increasing threat to the energy sector," your seeing the film in Pennsylvania could get your name circulated to law enforcement officials eager to protect the gas drilling industry from ordinary citizens like you.”

Maybe Homeland Security aren’t taking names for Truthland attendees, but the Natural Gas Industry will be taking steps to squash critics as one PA-Representative found out.

Rep Jesse White (PA-46th Allegheny, Beaver and Washington Counties) posted the following on his Facebook page: (Emphasis Added)

"Just came from a screening of "Truthland" in my district465, sponsored by Energy in Depth, because I always want to learn and hear differing viewpoints so I can make sure I'm making rational decisions based on my own experiences. While the 'movie' was nothing more than a condescending 34-minute infomercial produced by the energy industry, the really interesting part was the panel discussion afterwards

464 Unusual History of Fred Davis, Strategic Perceptions Inc, http://www.strategicperceptioninc.com/fred.php465 Babes In Truthland, Keep Tap Water Safe, http://keeptapwatersafe.org/2012/07/18/babes-in-truthland/

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Industry representatives told the 211 people in attendance the gas industry is going to start getting more aggressive in attacking people who don't agree with them, and that because their facts are totally right, there can be no middle ground in the debate. So much for that 'honest and fact-based' discussion we always hear about but rarely see, huh? Maybe there was more truth revealed than I realized tonight..."

Figure 85 - Rep Jesse White (PA-46th Allegheny, Beaver and Washington Counties)

FRACKNATIONComing Soon to a rented hall near you will be FrackNation. The original release coincided with the release of Promised Land, starring Matt Damon.466

The movie production costs were partially funded through the use of KickStarter – an on-line site for raising project funds.

Industry gets cast in 'FrackNation, 467 ' the latest documentary on the drilling debateNovember 30, 2011 - Pittsburgh Post Gazette, By Erich Schwartzel

Excerpt: "The film, however, is being partially funded through donations on the Kickstarter website, and the roster of "executive producers" who have donated at least $1 includes scores of energy industry associates. The filmmakers said Thursday they plan to return any donations given by "senior" workers in the industry, which they define as executives."

Excerpt: “FrackNation was directed by Phelim McAleer and Ann McElhinney, a married couple living in Marina del Rey, Calif., whose previous subjects include Al Gore and anti-coal environmentalists. Their treatment of natural gas drilling will "look at both sides of the argument," Mr. McAleer said.”

466 Promised Land, http://www.imdb.com/title/tt2091473/467 Industry gets cast in 'FrackNation,' the latest documentary on the drilling debate, Post-Gazette.com, http://www.post-gazette.com/stories/business/news/industry-gets-cast-in-fracknation-the-latest-documentary-on-the-drilling-debate-220871/#ixzz2TG9kCfce

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FrackNation 468 describes itself as “FrackNation is a feature documentary that will tell the truth about fracking for natural gas. Watch the video to find out more.” McAleer’s definition of “looking at both sides of the argument” is to portray pro-drillers in a very positive light, and knock down the anti-drillers. He also features himself quite prominently, perhaps a more appropriate title should have been McAleerNation?

Let’s take a look at McAleer and McElhinney, shall we?

Together they own Ann and Phelim Media LLC,469 and are documentary film makers. To their credit their films include:

Not Evil Just Wrong, a rebuttal to Al Gore's An Inconvenient TruthMine Your Own Business. A review from The Guardian describes the film as:

Green goblins - A Michael Moore-style documentary depicts environmentalists as misguided meddlers 470 Media Guardian, by Rory Carrol, Wednesday 1 November 2006

Excerpts:"The feature-length documentary follows the Michael Moore template of championing the underdog, in this case impoverished communities in Romania, Madagascar and Chile, but instead of attacking the mines it goes for the ecologists.

Mine Your Own Business, whose British premiere is this week, casts the green movement as the influential villain of a worldwide campaign to block development and deny people the chance of jobs and a decent life."

Of the couple, McElhinney seems to be popular one. She’s described as Tea Party activist according to the College Conservative.

The Real Conspiracy: A Report from RightOnline 471 College ConservativeJun 24 by Nicholas Kowalski

Excerpt (Emphasis added): “The inaugural Andrew Breitbart Award for Excellence in Online Activism and Investigative Reporting was announced at the closing dinner. John Fleischman of Flash Report – a site dedicated to exposing corruption in corruption-plagued California – received the recognition. Documentarian Ann McElhinney, Tea Party activist and radio show host Dana Loesch, and pollster Scott Rasmussen paid tribute to his life’s work”

RightWing Watch, a project of People for the American Way, writes:

Ann McElhinney - Is This Woman ‘Fracking’ Crazy? 472– Ann McElhinney of Frack Nation at CPAC 468 Fracknation, http://fracknation.com/469 Ann & Phelim Media, http://www.annandphelim.com/470 Green goblins, A Michael Moore-style documentary depicts environmentalists as misguided meddlers, the Guardian, http://www.guardian.co.uk/media/2006/nov/01/film.filmnews471 The Real Conspiracy: A Report from RightOnline, http://thecollegeconservative.com/2012/06/24/the-real-conspiracy-a-report-from-rightonline/

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Submitted by Josh Glasstetter on Wed, 02/15/2012 - 7:00pm

“Ann McElhinney is very upset about dumb, lying environmentalists and very excited about fracking, which is a miraculous gift from God. She’s making a film about it – Frack Nation – and she pitched the CPAC crowd last Saturday on her right-wing response to the critically acclaimed documentary Gasland. The thesis of McElhinney’s manic, meandering speech is that fracking is the best thing to ever happen to us, but it could be squandered by ignorant and dumb people who have been tricked into opposing it by scheming, dishonest environmentalists who agree with Vladimir Putin and secretly hate the Bald Eagle.”

More recently, Fracknation has been shown by Energy-in-Depth in selected areas of Pennsylvania and New York to coincide with the release of Gasland-II, a documentary by Josh Fox. McAleer was available for questions and answers following the screening.

As expected, pro-drilling questions and comments were cheerfully answered.

However, don’t ask a serious question about drilling concerns or point out facts, McAleer’s response was to berate, shout and insult the commenter.

472 Is This Woman ‘Fracking’ Crazy? – Ann McElhinney of Frack Nation at CPAC, RightWing Watch, http://www.rightwingwatch.org/content/woman-fracking-crazy

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Chapter 13FracUNfocusED

Bloomberg news ran this article: Frack Secrets by Thousands Keep U.S. Clueless on Wells | By Ben Elgin, Benjamin Haas & Phil Kuntz - Nov 30, 2012 473

Briefly, the article states drilling companies are to disclose the chemicals used in fracking, yet drilling companies did not disclose 1/5th of the chemicals. Why? Drilling companies claim these “non-disclosed” chemicals are trade secrets, proprietary and therefore exempt from disclosure.

Excerpt: In August, the largest well-servicing companies that worked in Texas withheld the most information about frack jobs.474 Wells serviced by Halliburton and Houston-based Baker Hughes Inc., the second- and third-largest oilfield services companies respectively, contained more than nine secrets per well according to reports filed by the companies. Frack jobs by Superior Well Services, the Nabors subsidiary, omitted the most information with more than 32 secrets per well.

Not to worry, the drilling companies disclose to FracFocus.

Excerpt: Oil and gas companies are permitted to withhold disclosure of chemicals and their concentrations in any product that they claim to be a trade secret under the Texas law. Such claims can be challenged by state regulators and landowners of well sites or adjacent parcels.

Several other states that require disclosure of fracking chemicals, including Louisiana, Montana, New Mexico and North Dakota, also leave it up to energy companies to determine what chemicals can be labeled secrets. North Dakota’s rule requires companies to report fracking chemicals to FracFocus, beginning last April.

“We require whatever FracFocus requires,” said Alison Ritter, a spokeswoman for the state Department of Mineral Resources’ Oil and Gas Division.

The FracFocus website states that chemicals should be disclosed unless they’re a trade secret, as defined by the U.S. Occupational Safety and Health Administration. The operators of FracFocus, which is supported by funds from the industry, don’t check trade-secret claims or offer a way to challenge an exemption.

FracFocus 475 is managed by the Ground Water Protection Council and Interstate Oil and Gas Compact Commission. Unless otherwise required by state authorities, participation is voluntary. Required or voluntary, there seems to be little to no consequences if the chemical disclosure is inaccurate, incomplete or not filed in a timely manner and note in the previous excerpt : The operators of FracFocus, which is supported by funds from the industry, don’t check trade-secret claims or offer a way to challenge an exemption.

473 Fracking Secrets by Thousands Keep U.S. Clueless on Wells, Bloomberg, http://www.bloomberg.com/news/2012-11-30/frack-secrets-by-thousands-keep-u-s-clueless-on-wells.html474 Fracking Secrets by Thousands Keep U.S. Clueless on Wells, Bloomberg, http://www.bloomberg.com/news/2012-11-30/frack-secrets-by-thousands-keep-u-s-clueless-on-wells.html475 FracFocus, http://fracfocus.org/welcome

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FracFocus domain is registered by Brothers & Company, a public relations firm.

Brothers & Company also represents: 476

American Clean Skies Foundation (front group for Chesapeake Energy) America's Natural Gas Alliance Chesapeake Energy Corporation Energy Advances New Mexico Interstate Oil & Gas Compact Commission

476 Brothers & Company, http://www.broco.com/work

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Kansas Strong (KOGRF) Oklahoma Energy Resources Board Powering Progress

Public relations campaigns, such as Energy-In-Depth often point to FracFocus as "proof" the natural gas industry is disclosing the chemicals.   

Using diesel fuel in drilling explicitly prohibited by Safe Drinking Water Act - not even the Natural Gas Industry could wiggled out of this provision, well actually there is wiggle room.

Diesel still used to 'frack' wells, FracFocus data show 477 Mike Soraghan, E&E reporter | EnergyWire: Friday, August 17, 2012

(emphasis added)  Diesel fuel has been used to "frack" at least 138 wells in the United States in the past year and a half, according to data filed by drillers with the FracFocus.org registry.

But if the definition of diesel proposed by U.S. EPA were used, that figure would rise to 408, according to an EnergyWire analysis of FracFocus data provided by PIVOT Upstream Group.

The data from PIVOT's D-Frac database show that diesel fuel is still used in hydraulic fracturing, despite industry reassurances that it had been all but discontinued.

They also define the terms of the disagreement between EPA and the companies that do the fracking as they try to figure out regulations for fracking with diesel. EPA's definition would have covered about 270 more wells.

Environmental groups say federal law requires a permit for hydraulic fracturing with diesel, so each instance is an environmental violation. Sites in Pennsylvania where wells were fracked with fluids containing diesel fuel, according to the definition proposed by U.S. EPA.

"They're violating the law, and EPA ought to be enforcing it," said Dusty Horwitt of the Environmental Working Group.

Oil and gas companies note they cannot get a permit because EPA has never created one. And, they say, there is no indication that fracking with diesel has damaged the environment.

Harvard Law’s Environmental Law Program issued FracFocus a big F as a compliance tool, according to the April 23, 2013 study.

The study’s title says it all:

477 HYDRAULIC FRACTURING: Diesel still used to 'frack' wells, FracFocus data show, E&E Publishing, LLC, http://www.eenews.net/stories/1059968900

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LEGAL FRACTURES IN CHEMICAL DISCLOSURE LAWS – WHY THE VOLUNTARY CHEMICAL DISCLOSURE REGISTRY FRACFOCUS FAILS AS AREGULATORY COMPLIANCE TOOL 478

FracFocus has been touted by the energy industry and their supporters as being a effective means of reporting what chemicals are used in the process of hydraulic fracturing (fracking). Currently, 11 states rely on it and the Bureau of Land Management (BLM) has proposed adopting FracFocus as a reporting method for companies fracking on federal and tribal lands.States requiring use of FracFocus include: Mississippi, Utah, Oklahoma, Louisiana, Montana, Pennsylvania, South Dakota, North Dakota, Texas, Ohio and Colorado.FracFocus is operated by two groups: the Ground Water Protection Council, a group of state water officials; and the Interstate Oil and Gas Compact Commission, an association of states that produce the fuels.

“We believe the research done by the Harvard team fails to reflect the true capabilities of the FracFocus system and misrepresents the system’s relationship to state regulatory programs,” the Ground Water Protection Council said in an e- mailed statement479.

The Study cites 3 shortcomings of FracFocus:

478 Legal Fractures in Chemical Disclosure Laws: Why the Voluntary Chemical Disclosure Registry FracFocusFails as a Regulatory Compliance Tool, Harvard Law School, Environmental Law Program, Policy Initiative, http://blogs.law.harvard.edu/environmentallawprogram/files/2013/04/4-23-2013-LEGAL-FRACTURES.pdf479 FracFocus Fails as Fracking Disclosure Tool, Study Finds, Bloomberg, http://www.bloomberg.com/news/2013-04-23/fracfocus-fails-as-fracking-disclosure-tool-study-finds.html

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RELATED TO MEDICAL GAGSCurrent and pending legislation often include the use of FracFocus as justification to gag medical personnel by saying the chemicals are listed on FracFocus’s site and available. However, chemicals deemed as “trade secrets” are not on FracFocus, and medical personnel are being required to sign a non-disclosure form for access to the “trade secrets”.

States protect “trade secrets” and other “confidential business information” from disclosure under public information laws. Federal laws also contain proprietary exemptions to public disclosure requirements, including those set forth in the Occupational Safety and Health Act (OSHA), the Toxic Substances Control Act (TSCA), the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), and the Emergency Planning and Community Right to Know Act (EPCRA). A comparative review of these regimes suggests that three procedures may contribute to higher rates of disclosure, while protecting true trade secrets: substantiation by the company seeing protection; agency verification; and public challenge.

STRUCTURALLY SKEWED TO DISCOURAGE CORRECTIONSWhether it was poor inception from get-go or for other reasons, the FracFocus disclosure procedure for operators is cumbersome and inconsistent. More often than not, when an error in reporting is found, correcting that error takes a long and involved process. This discourages operators from taking the time to make those corrections.

In addition, FracFocus has a “deletion default” for forms that need to be corrected. FracFocus enables well operators to pull down forms off the site when they “discover an error in a disclosure but [are] unable to correct the error immediately.” When the operator selects this function, the document is stored for 90 days in a temporary holding container. During this time,

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the operator can replace the form with a corrected version, or restore the original form. However, if no action is taken, the form is deleted. It is easy to imagine a busy company pulling down a form to correct later, and forgetting about the form. Therefore, FracFocus appears structurally skewed to discourage corrections and facilitate deletions.

WHO IS GUARDING THE FOX GUARDING THE HEN HOUSE?Apparently, no one is verifying the accuracy. CAS Registry Numbers are unique numerical identifiers assigned by the CHEMICAL ABSTRACTS SERVICE to every chemical described in the open scientific literature (currently including those described from at least 1957 through the present) and including elements, isotopes, organic and inorganic compounds, ions, organometallics, metals, nonstructurable materials (aka 'UVCB's- i.e., materials of Unknown, Variable Composition, or Biological origin). They are also referred to as CAS RNs and CAS Numbers.

FracFocus does not review the submissions for completeness or accuracy. Together with the cumbersome “correction” process, the lack of review encourages inadequate reporting by operators. As far as we know, an operator entering gummy bears and ketchup as chemical ingredients would go unnoticed.

There are no minimum state reporting standards, or requirements for alternative compliance should FracFocus fall off the face of the earth (with the exception of Texas).

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Chapter 14IHS Global Insights: A Game of Clones

On December 21, 2012, John Hanger, former Pennsylvania Secretary of the Department of Environmental Protection (DEP) headlined a report on his “John Hanger’s Facts of the Day” blog .

PA Ranks Second In Shale Gas Jobs: 103,000 Total According To New Study 480

“IHS Global Insight finds that shale gas development has created 103,000 jobs in Pennsylvania. The Commonwealth ranks second in shale gas jobs, behind Texas, according to the IHS new report that was funded in part by the oil and gas industry.

There is continuing controversy about the number of jobs created by shale gas development in Pennsylvania, with estimates ranging from less than 20,000 to as much as 240,000.  I will be curious to see how the IHS analysis weathers likely critiques.”

Hanger’s blog post does questions the accuracy of the IHA Global Insight’s report.

IHS Global Insights describes itself as 481 : With a tradition of excellence and a diversity of suppliers, employees and customers, IHS is the leading provider of diverse global market and economic information.

One of IHS’s divisions is IHS Cambridge Energy Research Associate 482 (IHS CERA). IHS CERA provides:

Advisory service membership Industry forums Multiclient studies Analytics and forecasting Coal reports and publications

IHS CERA is also listed as an affiliate member of the Massachusetts Institute of Technology (MIT) Energy Initiative program. 483

IHS has produced 4 reports from 2009-2012 dealing with the economic benefits of Natural Gas Drilling.

2009: Measuring the Economic and Energy Impacts of Proposals to Regulate Hydraulic Fracturing - Task 1 Report 484 . Prepared for the American Petroleum Institute (API)

April 2011: The Economic Contribution of the Onshore Independent Oil and Natural Gas Producers to the U.S. Economy - Final Report. 485Prepared for the Independent Petroleum Association of America (IPAA)

480 PA Ranks Second In Shale Gas Jobs: 103,000 Total According To New Study, John Hanger's Facts of The Day, http://johnhanger.blogspot.com/2012/12/pa-ranks-second-in-shale-gas-jobs.html481? IHS at a Glance, http://www.ihs.com/about/glance/index.aspx482 Energy Strategy: IHS CERA, http://www.ihs.com/products/cera/index.aspx483 Massachusetts Institute of Technology (MIT) Energy Initiative program, Members, http://mitei.mit.edu/about/members484 Measuring the Economic and Energy Impacts of Proposals to Regulate Hydraulic Fracturing Task 1 Report http://www.api.org/newsroom/upload/ihs_gi_hydraulic_fracturing_task1.pdf

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December 2011: The Economic and Employment Contributions of Shale Gas in the United States. 486Prepared for the American Natural Gas Alliance (ANGA)

October 2012: America’s New Energy Future: The Unconventional Oil and Gas Revolution and the US Economy 487- Volume 1: National Economic Contributions. Supported by American Petroleum Institute, Institute for 21st Century Energy, the American Chemistry Council, and Natural Gas Supply Association.

All reports are similar in that they tout how great the Natural Gas Industry is for the economy, and how many jobs will be created. Read one report and you’ve read them all. Gee, almost like cloning.

IPAA’s Public Relations Campaign – Energy-in-Depth (EID) features the April 2011 report on their website. The Marcellus Shale Coalition (MSC) has the October 2012 report available for download.

ANGA issued a press release about the 2011 488 report but failed to mention the report was prepared for ANGA. Similarly, the American Chemistry Committee (ACC) touts the 2012 report in a press release 489 and forgot to mention their “support” of the report.

This is where we get into the Game of Clones. We have a report prepared by a private corporation for a special interest group. The special interest group issues a press release about the report and cites the private corporation while omitting who paid for the report.

The public, in general, and sadly many journalists, rarely look beyond the press release. Hanger, in his blog post, gives a link to a newspaper article; did he actually read the report? Did he notice who “supported” the report?

It goes further than self-validation cloning by pointing to one another. These reports (or at least a press release about reports) go to legislators, who in turn issue their own press releases about the report. The legislator’s press release is then pointed out by the special interest as further validation.

Rep. Fred Upton (R-MI) issued such a press release in October 2012. 490 Upton is Chairman of the House Energy & Commerce Committee.

Upton has his own connections to Natural Gas Interests. His cousin is Katie McClendon, wife of Aubrey McClendon, CEO of Chesapeake Energy.

485 The Economic Contribution of the Onshore Independent Oil and Natural Gas Producers to the U.S. Economy - Final Report. http://www.ipaa.org/wp-content/uploads/downloads/2012/03/IHSFinalReport.pdf486 The Economic and Employment Contributions of Shale Gas in the United States. http://www.energyindepth.org/wp-content/uploads/2011/12/Shale-Gas-Economic-Impact-Dec-2011_EMB1.pdf487 America’s New Energy Future: The Unconventional Oil and Gas Revolution and the US Economy Volume 1: National Economic Contributions, http://marcelluscoalition.org/wp-content/uploads/2012/10/IHS_Americas-New-Energy-Future.pdf488 ANGA Statement on the IHS Shale Gas Economic Study, http://www.prnewswire.com/news-releases/anga-statement-on-the-ihs-shale-gas-economic-study-135202123.html489 Chemistry group pleased by economic potential of shale drilling, Akron Beacon Journal Online, http://www.ohio.com/blogs/drilling/ohio-utica-shale-1.291290/chemistry-group-pleased-by-economic-potential-of-shale-drilling-1.359110490 STUDY: Shale Energy Production Could Support 3.5 Million Jobs by 2035, Energy & Commerce Committee, United States House of Representatives, Chairman Fred Upton, http://energycommerce.house.gov/icymi/study-shale-energy-production-could-support-35-million-jobs-2035

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Exerpt from Politico article (emphasis added): Fred Upton finds it's good to be the chairman

Chesapeake Energy spokesman Michael Kehs said the natural gas giant’s $20,000 contributions for the 2012 cycle — beyond the $9,800 given in 2010 or $5,000 in 2008 — stem in part from Upton’s primary challenge.

“We don’t believe in everything he professes, but we think he’s doing an excellent job trying to balance the broad interests of our nation’s energy policies,” Kehs said. “We think that’s certainly a laudable goal.”

Kehs also gave another reason for backing Upton: Chesapeake CEO Aubrey McClendon’s wife, Katie, is the chairman’s first cousin. “When a family member is a member of Congress, we tend to give them our full support,” Kehs said.

The December 2011 report was prepared for ANGA. One of the co-founders of ANGA was Aubrey McClendon. See Steve Horn's December 2012 article: ANGA Lobbyist Spins Through Revolving Door To Work For Fred Upton

Let’s take a look at the people who prepared the reports. Essentially the 2011 and 2012 reports were written by the same people. We don’t know who wrote the 2009 reports because there are no names on it.

In January of 2012, Jannette M. Barth, Ph.D. issued Comments on IHS Global Insight study, "The Economic and Employment Contributions of Shale Gas in the United State," December 2011.

I suggest you read the December 2011 report as prepared by IHS, then read Jannette Barth’s comments. Next read the 2012 report and see if any of the omissions and errors mentioned by Barth were corrected.

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Chapter 15HBW Resources, The Frack Pack

I was checking my twitter account, and found an interesting “New Follower”, by the name of Michael Zehr. I clicked on his name to see if he was worth following back or not, and had a good chuckle.

Michael Zehr works for HBW Resources as Vice President of Federal Affairs. HBW Resources has been in my connect-the-dots data because in February 2009, the American Petroleum Institute (API) hired HBW Resources. Andrew Browning, a partner in HBW Resources is the lobbyist.

Browning is the “B” in HBW Resources, David Holt is the “H”, and Michael Whatley is the “W”, but we will get into their connections a bit later in this article.

I hadn’t done much “dot chasing” with regards to HBW Resources, but since Zehr was nice enough to follow me on twitter, I decided that it was time. And besides, if he is checking out my “tweets”, I figure turn about is fair play. That’s his “twitter pic” to the left.

No big surprise, Zehr is a Senate Revolving Door, meaning he previously worked in the US Senate. The Revolving Door is a frequent occurrence.

2009: Minority Staff Director, US Senate Subcommittee on Aging

2009-2010: Legislative Director, Former Senator George S LeMieux (R-FL). LeMieux appointed on September 9, 2009, to the United States Senate to fill the vacancy caused by the resignation of Melquiades R. Martinez; took the oath of office and served from September 10, 2009, to January 3, 2011; did not seek election in 2010.

2006-2009: Legislative Director, Former Senator Mel Martinez (R-FL) Martinez resigned stating he was homesick, however he had his share of controversy which included the Terry Schiavo memo. In 2005 amid the right-to-life case involving Terri Schiavo, the brain-damaged Pinellas County woman who ultimately was removed from a feeding tube. Martinez, who sought federal review of the case, accidentally handed a Democratic senator a memo detailing why the Schiavo bill was good for Republicans. And there was also the problem of illegal campaign contributions, and Campaign Finance irregularities.

2003-2006: Legislative Assistant, Senator Mitch McConnell (R-KY)

1999-2003: Legislative Assistant, Senator Tim Hutchinson (R-AR)

Spinning through the revolving door, Zehr started up a company called Rhone Strategies. The company looks defunct, it has 0 employees, and not much on the website to indicate it is active. Rhone Strategies describes itself as: Rhone Strategies is a full-service political intelligence and government relations firm specializing in detailed political analysis and innovative strategic advocacy. Our expertise in government relations and analysis has been

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built through more than a decade of dealing with all aspects of federal relations, policy development and political strategy.

Zehr is listed as a lobbyist for HBW Resources. The top industries he represents include Tobacco, Misc. Energy, Air Transport. TOBACCO??? Hey, its another Fracking Joe Camel!

Echo Chamber

In any sector, the public and political relation game is played using a now popular technique called the echo chamber.

Per Sourcewatch: Echo chamber is a colloquial term used to describe a group of media outlets that tend to parrot each other's uncritical reports on the views of a single source, or that otherwise relies on unquestioning repetition of official sources.

Philip Morris & the Echo Chamber Technique: In 1998 John Scruggs, a Washington D.C. lobbyist for Philip Morris described the "echo chamber" approach to advocacy as constituting the repetition of a selected message by the most credible sources that surround a decision maker. "The more a particular view or piece of information 'echoes' or resonates through this group, the greater its impact. Grassroots efforts are so effective in modern day advocacy programs because they cause many constituents to repeat the same message to the target Member. Grasstops or "Influentials" campaigns work because those highest on the hierarchy scale, with the greatest degree of credibility, repeat the same or similar messages. You will note that the echo chamber effect can work in two different ways. First, the same message can reverberate among multiple sources toward the target Members. For example, the same information from polling data captured in a single poll can be repeated by the media, congressional colleagues, lobbyists and advertising. Second, similar but complementary messages can be repeated by a single source...Either the repetition or "piling on" approach provide the same result: enhanced credibility and influence of the essential message," he explained.

The Phillip Morris Echo Chamber Technique is being applied to the issue of Natural Gas. Between 1998 and today, the echo chamber has expanded to include multiple websites and blogs. The echo chamber no longer depends on traditional media outlets like television, radio, newspapers and magazines.

In my research into the Natural Gas public relations, the echo chamber reminds me more of a puffer fish. A puffer fish will inflate itself with water several times its original size to appear larger and discourage any potential predator from attacking. The Natural Gas industry also inflates its influence several times over through the use of and cooperation between its front groups.The US Carbon standard is a good example of how the “echo chamber” has morphed into a puffer fish.

Big Oil and Canada thwarted U.S. carbon standards - Emails show how a Washington lobbyist enlisted Canadian officials to beat back U.S. carbon standards | By Geoff Dembicki | Salon.com | Dec 15, 2011Excerpt: Despite their skills and experience, Mar and Whatley knew that defeating climate policy required allies. That’s why one of the first strategy proposals in Whatley’s January 25,

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2010, campaign briefing to Mar was to team up with “affiliated energy coalitions and trade associations, thought leaders, elected officials, unions and key allies.” The goal was to enlist these players to “build opposition” towards low carbon fuel standards “in each of our target regions.” The campaign apparently needed “state-based and regional 3rd party advocates for Canadian oil sands” to give it legitimacy.

Who better to play that role than the “energy consumer groups” — the airlines, truckers, railroads, highway users, shippers — most dependent on oil? So item #1 on Whatley’s “Action Plan” was to develop “easy-to-read and user friendly informational briefs” for trade associations, unions and others. With the proper motivation, these groups could “generate op-eds and letters to the editor of regional and local newspapers,” reads the proposal. And they could also “write letters to governors and key elected officials.”

This supposed popular groundswell would then be legitimized further, it explained, by a select group of “thought leaders”, those public intellectuals with the ear of political power. Whatley’s proposal suggested engaging with seven prominent think tanks, two of which, the Cato Institute and the Heritage Foundation, received millions of dollars in funding from Koch Industries to question the science behind global warming.

To keep everything moving smooth, HBW Resources (aka the Consumer Energy Alliance) would perform its traditional functions: running anti-fuel standard ad campaigns, coordinating with such “key allies” as the American Petroleum Institute, lobbying policymakers and political leaders and generating as much media attention as possible. If everything went to plan, Whatley’s briefing concluded, “HBW Resources will be able to successfully draw critical local, state and regional attention to the adverse impacts of efforts to restrict imports of Canadian oil sands into the United States.” In other words, let the assault begin!

Excerpt of a January 26, 2011 email from N. Joubert to K. Koehler and D. Holt of Consumer Energy Alliance.“Echo Chamber”These bullet points are strategy updates prepared by the Consumer Energy Alliance and sent by oil industry lobbyist Michael Whatley to Albertan diplomat Gary Mar and others.Note the bullet labeled “‘Echo Chamber’ Update & Discussion.” The fact that an oil industry-supported public relations group would explicitly make reference to creating an “Echo Chamber” is quite remarkable. This term is typically part of lexicon used by environmentalists to evoke shady fossil fuel conspiracies — as in, “such and such an oil company created an Echo Chamber to spread its propaganda across the blogosphere…”In practical terms, the Consumer Energy Alliance’s “Echo Chamber” is a strategy where any message created by that group or its supporters would be “echoed” across many different blogs and websites, creating the impression of a large-scale movement. The Alliance appears to have also utilized this tactic to rally support for TransCanada’s controversial Keystone XL pipeline.

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The same technique has been applied to the Natural Gas issue. API has several websites as does the Independent Petroleum Association of America (IPAA).

Vote-4-Energy another Energy-in-Depth Frackin’ Front Groups and PR Campaigns

Drilling for Dots at HBW ResourcesWhile Zehr did provide some interest, the real “DOTS” were found at HBW Resources. As mentioned previously, HBW has hired by API as lobbyists.The centerpiece is Consumer Energy Alliance (CEA), created by Michael Whately. (The same Whatley mentioned in Big Oil and Canada thwarted U.S. carbon standards).

Whatley is CEA’s Executive Vice-President.

Note the use of the word “Consumer”. This is meant to give an inclusive feel to the general public, after all we are all consumers, right? Other “inclusive” feel good words often used are America, American, or Citizens. If the target audience is more local the name of a state or town or occupation may be used. This is all carefully designed to “puff” things up and make them seem larger.

An affiliate of CEA is Southeast Energy Alliance, where Whatley is the Executive Director. IPAA and API are also affiliates of CEA.

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Secure Our Fuels is an interesting “hybrid” as it has several connections. The website is registered to Dittus Communications, which was taken over by FD Dynamics. FD Dynamics then became FTI Consulting. Energy-in-Depth (EID) is a public relations campaign by IPAA, and FTI Consulting manages it. A number of FTI Consulting employees are also listed as “OUR TEAM” on EID. EID’s website is also registered to Dittus Communications.

For more on EID see: Energy-in-Depth (EID) “GAS”roots – 1 Energy-in-Depth (EID) “GAS”roots – 2 Energy-in-Depth (EID) “GAS”roots – 3

Under CONTACT at the Secure our Fuels website the emails for CEA are listed. Note David Holt and Michael Whatley are listed.

(Yep, the same David Holt and Michael Whatley mentioned in Big Oil and Canada thwarted U.S. carbon standards).

What we have here are 4 “organizations: Secure Our Fuels, Consumer Energy Alliance, Southeast Energy Alliance, and Energy-in-Depth under 2 trade groups, API and IPAA, and all are funded by Natural Gas Corporations and their affiliated interests.

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The puffer fish puffs bigger and bigger.

HBW Resources’s name comes from the 3 partners. David Holt, the managing partner and President, Andrew Browning and Michael Whatley are partners.Holt is also President of CEA.

Andrew Browning, through HBW Resources is a lobbyist for API, he has also been a “Guest Blogger” on EID. Browning is the Vice President of CEA. His revolving door spins at the US Department of Energy as Special Assistant, Office of Fossil Fuels.

Michael Whatley’s “dots” are much more involved and will require an additional diagram. Let’s begin with the current diagram below.

Whatley is credited with being the “creator” of the CEA. He is currently the Executive Vice President of CEA and the Executive Director of Southeast Energy Alliance.Whatley’s Revolving Door:

Former Chief of Staff- Former Sen. Elizabeth Dole US Dept. of Energy – Former Principal Deputy Assistant Director Former Senate Counsel- Republican Conference

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OK – Next Diagram, Please!Connected to CEA is David Blackmon as Executive Director of the CEA Texas Chapter. Blackmon was Director of Government Affairs (a lobbyist) for the El Paso Corporation, a methane gas drilling and pipeline company based in Houston, Texas. Blackmon previously served as Communications Manager for Shell Oil Company.

Blackmon is a Managing Director–Houston for FTI Consulting, a Field Director-Texas for EID, and the Vice-Chair for IPAA’s Land and Royalty Committee.

Whatley writes columns about the XL Pipeline, carbon capture, natural gas, climate change and energy related issues for Townhall.Com.

Townhall.com is a website that publishes numerous conservative columnists. Formerly a project of the Heritage Foundation, it was purchased in 2006 by Salem Communications Corporation.

Also writing for Townhall.com is Steve Everly, a spokeman for EID and Assistant Vice President at FTI Consulting. Everley was Manager of Policy Research at American Solutions and a contributing author to To Save America: Stopping Obama’s Secular-Socialist Machine by Newt Gingrich. Prior to joining American Solutions, Everley worked as a research assistant at the American Enterprise Institute.

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What looked like a huge message PR machine is not really that big, it just puffs itself up to look that way. The cost of puffing up the message is not cheap when you factor in lobbying costs and campaign donations – and the cost is going up as word spreads through “fractivist” groups.

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Chapter 16Washington Legal Foundation (WLF): Joe Camel with Law Books

Perhaps you’ve notice the similarities between Tobacco advertising and that of the Natural Gas Industry.

Years ago the tobacco industry vehemently denied any connection between smoking and health issues.

Tobacco advertising in the 1950’s would often include doctors and other medical professionals in their ads as a method of allaying public concerns. After all if you doctor smoked, what’s the harm?

The Natural Gas industry hasn’t gone as far as including doctors or even actors dressed up as doctors in their advertising, nonetheless, the advertising and talking points do include words like “Safe”, “Natural”, “Clean”. These words are selected to make the public feel more comfortable.

TXSharon of the BlueDaze blog has noticed the Natural Gas Industry's approach is like a template lifted from the tobacco industry's play book. She tagged them as Fracking Joe Camels.

A number of Natural Gas spokespeople and other players had roots in tobacco. Tobacco industry players traded to fracking industry Fracking’s Joe Camel: A new player card Fracking’s Joe Camel designed a new advertising campaign

A couple of examples: David Quast, Senior Vice President at FTI Consulting and Field Director for the IPPA/EID office in California, previously worked in New York, managing media relations on state and federal legislative and regulatory issues for Philip Morris where he developed and executed communications strategies to help the company fight significant litigation, regulatory threats, and the prospect of a major Federal tax increase.Quast fought “significant litigation” for Philip Morris.

David Poole, Sr. Vice President – General Counsel & Corporate Secretary for Range Resources, was an attorney for Hunton & Williams, which was counsel for Philip Morris. Hunton & Williams was counsel for Philip Morris. (PMI’s Introduction to Privilege Log and Glossary of Names, Estate of Burl Butler v. PMI, et al, April 19, 1996). They are a law firm in Richmond, Virginia (USA) and were a major law firm used by Philip Morris Cos. Inc., circa 1993.(NJL 5/9/94) Attorneys T. Justin Moore III, Robert E.R. Huntley, were on the board of directors of Philip Morris Cos. Inc., circa 1993.(NJL 5/9/94)

Seems when you drill into the background of many Natural Gas people you strike tobacco.

The Tobacco industry also used “scientific studies” to prove the smoking had no adverse health effects. Although the Natural Gas industry’s advertising doesn’t feature a big splashy ad about studies, it does frequently tout reports and studies through its front groups and public relation campaigns.

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One example from EID/IPAA: UT Study: ‘No Evidence of Groundwater Contamination’ from HF : In a release, Brad Gill, executive director of the Independent Oil and Gas Association of New York (IOGA of NY), said the report validates what regulators and other scientists have long maintained: that hydraulic fracturing “is a proven and safe method for extracting natural gas and oil.”

The problem emerges when you start drilling into WHO funded the studies, who produced the studies and their connection to the Natural Gas industry.

MIT Joint Frackademia Frackademia strikes again Frackademics in Frackademia

I like to bring your attention to WLF mentioning of one particular study.

The WLF stated in a news release: This week the Washington Legal Foundation (WLF) filed formal comments with the New York State Department of Environmental Conservation (DEC) urging it to come to a swift conclusion as to the future of hydraulic fracturing (“fracking”) in the State. In particular, if (as expected) state environmental experts determine that fracking does not pose a significant threat of environmental harm, WLF urged the DEC to rule that local jurisdictions are not permitted to veto such activity within their borders.

On WLF webpage: In re Hydraulic Fracturing in New York StateCase Date: 1/11/2013Project Name: Environmental Law ProjectOn January 11, 2013, WLF filed formal comments with the New York Department of Environmental Conservation (DEC), urging it to move forward with its proposed regulation of hydraulic fracturing (“fracking”) within the State. Fracking is a method of extracting oil and gas that has led to significant production increases throughout the U.S. in recent years, but New York has imposed a moratorium on all fracking for the past five years while it studies potential environmental concerns. The Commissioner of Health is expected soon to issue a study that will conclude that the health hazards of fracking are minimal, provided that adequate environmental controls are put in place. WLF recommended that once that report is issued, DEC should immediately: (1) issue its regulations and lift its moratorium on fracking; and (2) make clear that local jurisdictions are not permitted to impose their own moratoriums.From WLF's comments to NY DEC: : Page 5 excerpt: The DEC’s regulations respond to environmental and health concerns, and the state’s own recently released report signals that hydraulic fracturing can be pursued with no detrimental effect on public health or safety.

The report concludes, “Significant adverse impacts on human health are not expected from routine HVHF.

Gas Drilling Is Called Safe in New York | By DANNY HAKIM | NY Times | Published: January 3, 2013 Excerpt: The eight-page analysis is a summary of previous research by the state and others, and concludes that fracking can be done safely. It delves into the potential impact of fracking on water resources, on naturally occurring radiological material found in the ground, on air emissions and on “potential socioeconomic and quality-of-life impacts.”

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WLF has emphasized ONE 8 page analysis which states fracking CAN be done safely. Perhaps it can be done safely, but WILL it be done safely? Will corporations be willing to forego some profits in order to actually do it safely?

The Pennsylvania Alliance for Clean Water and Air has an on-going project called List of the Harmed. It was updated as of January 12, 2013, and now contains a list of the 778 individuals and families that have been harmed by fracking (or shale gas production) in the US. These are taken from news reports or individuals coming forward with their stories. There are many, many more.

It is a wide chasm between "can" and "will".

Washington Legal Foundation (WLF) BackgroundWLF describes its mission as: National in scope, the Washington Legal Foundation (WLF) works with our allies in government and our legal system to maintain balance in the Courts and help our government strengthen America's free enterprise system. WLF champions free market principles, limited and accountable government, individual rights, business civil liberties, and legal ethics.

WLF is a unique institution with three essential cornerstone programs: shaping public policy through aggressive litigation and advocacy publishing timely legal studies educating policy-makers and the public through extensive communications outreach

Per SourceWatch: The Washington Legal Foundation (WLF) was established in 1977 to "fight activist lawyers, regulators, and intrusive government agencies at the federal and state levels, in the courts and regulatory agencies across the country". WLF is classified as a national, non-profit, tax-exempt public foundation under section 501(c)(3) of the Internal Revenue Code.

WLF has a special Environmental Law Project, described as: Environmental extremist groups, activist courts, and the media foster the false notion that the environment is always threatened by economic activities. The Washington Legal Foundation’s Environmental Law Project promotes a rational balance between environmental protection, on one hand, and economic growth and property rights on the other.

Notice the repeating themes? Activists? Regulators? Intrusive government agencies? Essentially anyone expressing opinions which are contrary to the corporate world, and threatens to upset the Golden Apple Cart is an “activist”. Regulations are bad because the “intrusive government agency” will cost the corporations money by requiring safeguards to protect people. The only economic growth the WLF is interested in is that of the corporations they represent.

From page 6 of WLF’s comments to NY DEC - excerpt: If policy is to be truly science-driven, rather than pursued on the basis of unverified activist claims and hyperbolic rhetoric, the DEC will heed the results of its own study and permit the development of shale gas.

Let’s Connect some WLF Dots

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The Legal Policy Board of WLF has a number of familiar names. These include Kenneth Starr of former President Bill Clinton-Monica Lewinsky fame, Ted Olson who represented then Candidate George W. Bush in the Bush V Gore Supreme Court decision. There is also an array of Governors (past and current), Attorney Generals, Law Professors and Partners of notable law firms.

With regards to Natural Gas Drilling, two names pop out. Richard Thornburgh, Counsel of K&L Gates LLP, and Richard Willard, Partner of Steptoe-Johnson LLP.

Thornburgh is Chairman of WLF, and Willard is Chairman Emeritus.

K&L Gates Natural Gas DotsPer K&L Gates: Energy, Infrastructure and Resources: Our energy, infrastructure and resources practice integrates the many disciplines involved in project-related representations. We represent clients with operations in the oil and gas, mining and minerals, electric power, transportation, water and wastewater, construction and related industries in North and South America, Western, Central and Eastern Europe, Russia and the CIS States, Australia, the Middle East, Africa and Asia. Our U.S. oil and gas practice is recognized for its extensive experience in both conventional and unconventional formations, including the largest onshore domestic shale plays.

K&L Gates boasts: Corporate Board Member Magazine, in association with FTI Consulting, Inc., ranked K&L Gates as one of the top 25 law firms in its 2012 list of “America’s Best Corporate Law Firms.” Based on a survey of nearly 2,000 general counsel of U.S. publicly held companies, the rankings focused on those law firms that survey respondents said they would engage in a variety of important legal subject matters.

NOTE FTI CONSULTING, INC.... Remember that David Quast was mentioned earlier as being a Senior Vice President at FTI Consulting, Inc.

Representative Clients of K&L Gates include: Duke Energy Corporation Halliburton Company PPG Industries, Inc. PPL Corporation

As side notes:Duke Energy is an Associate Members with MIT Energy Initiative (MITEI)PPG Industries is a member of the Energy Alliance of Greater Pittsburgh.K&L Gates is an associate member of the Marcellus Shale Coalition, as is Halliburton Company

A number of their lobbyists represent Peabody Energy, Sapphire Energy, NextEnergy and the Environmental Defense Fund among others. Talk about conflicting lobbying. Click here for a list of 2011 lobbyists from K&L Gates. See also K&L Gates - 2012 Lobbying per OpenSecrets.com.

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Their connections to Tobacco? K&L Gates received lobbying income of $170,000 from International Cigars/Pipe Retailers Assn, and $90,000 Cigar Rights of America in 2012.

And in the smoking room: IPCPR's Washington lobbyists, K&L Gates, were instrumental in organizing the IPCPR teams and their visits with Congressional members and their staffs on the day after the CCA reception." The Congressional Cigar Association and International Premium Cigar & Pipe Retailers Association (IPCPR) are clients of K&L Gates.

Steptoe & Johnson LLP

Steptoe & Johnson describes itself: Over the past six decades, Steptoe has established a reputation for vigorous advocacy in complex litigation and arbitration, successful representation of clients before governmental agencies, and creative and practical advice in guiding business transactions. The firm has more than 500 lawyers and other professionals in offices in Beijing, Brussels, Century City, Chicago, London, Los Angeles, New York, Phoenix, and Washington.

The firm is known for its ability to help clients solve high-stakes, multi-dimensional problems, particularly those with a governmental aspect.

Specific to Energy: Steptoe & Johnson's energy team provides comprehensive services to the energy industry across the firm's major practices. Team attorneys have been top listed in a number of energy-related practice areas by the authors of The Best Lawyers in America in Ohio, Pennsylvania and West Virginia, including Energy Law, Oil & Gas Law, Natural Resources Law and Real Estate Law. These team members provide solutions tailored to the specific needs of energy developers throughout Kentucky, Ohio, Pennsylvania, Texas and West Virginia.

And they emphasis "Strategic locations throughout the Marcellus and Utica shale plays"

Per OpenSecrets.com, Steptoe & Johnson's Lobbying Income from Oil & Gas interests:American Gas Assn $20,000Chemtex International $190,000Soc of Ind Gasoline Marketers of America $210,000

They are also Associate Members of the Marcellus Shale Coalition, Affiliate Member of MIT Energy Initiative (MITEI) , and “Scout” member of the Ohio Oil & Gas Association (OOGA).OOGA membership is interesting because Thomas Stewart is listed as a member of OOGA’s Board of Trustees and its Executive Vice President. Stewart is a busy kind of guy, he is also Executive Vice President of IPAA’s Energy-in-Depth Ohio Project, and a member of the Interstate Oil and Gas Compact Commission.

Interstate Oil and Gas Compact Commission and Ground Water Protection Council manage FracFocus, an industry site for disclosure of NON-PROPRIATORY chemicals used in fracking. (For more on FracFocus see: FracUNFocused)

Other WLF Natural Gas Publications

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HYDRAULIC FRACTURING & TSCA: EPA’S SURPRISING MOVE AND ITS SWEEPING IMPLICATIONS | by Eric Waeckerlin and Joe Green

MISINFORMATION CAMPAIGN TARGETS HYDRAULIC FRACTURING | by Steve Everley

The Everley article is essentially regurgitation of the Natural Gas industry talking points, and bashing those who oppose the industrialization of communities. It is not so much as what he writes but rather his own set of “Dots”.

Everley is a Spokesman for IPAA/EID, and Assistant Vice-President for FTI Consulting, Inc. He is listed as a columnist for Townhall.com., which is a website that publishes numerous conservative columnists. Formerly a project of the Heritage Foundation, it was purchased in 2006 by Salem Communications Corporation.

Per his bio on Townhall.com: Steve Everley is Manager of Policy Research at American Solutions and a contributing author of To Save America: Stopping Obama’s Secular-Socialist Machine by Newt Gingrich. Prior to joining American Solutions, Everley worked as a research assistant at the American Enterprise Institute.

Be sure to read TXSharon's exchange with Everley in Fracking’s Joe Camel Seeks New Career.

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What does all mean now the WLF has jumped into the Fracking Fray? It means we are making a difference.

The Natural Gas Industry are running scared, pulling out the BIG GUNS and spending more money on litigation, public relations, and lobbying. Convincing people that Natural Gas drilling and its related infrastructure is getting more expensive.

They have even engaged a company called “Control Risks Group” (CRG) to evaluate the “fractivist” problem. CRG has issued a “white paper” entitled: THE GLOBAL ANTI-FRACKING MOVEMENT – What it wants, how it operates and what’s next.

Read: Control Risks Group Limited (CRG) joins the Fracking Play

All of our little Fractivist groups are making a difference. Keep it up. Make’em Spend MORE money.

If you took the time to read WLF’s comments to the NY DEC, they spend an overwhelming amount on words emphasizing economic benefits and jobs. Economics and Jobs are the big shiny the Natural Gas industry waves in its talking points. There is very little on health issues, environmental impact, and what industrialization will do to communities. Which makes me wonder how much time did WLF actually spend in researching the issue as opposed to doing a copy/paste of the talking points?

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Chapter 17Frackademia: Best “Science” Money Can Buy

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