Planning A Party On A Shoestring

Dear Drilling Companies That Are Eying Sullivan County (Part 2):

I promised yesterday to provide you with a short primer on “How to organize a 330-mile party in under five weeks for less than $1,000” so, gather round.

(Oh good! Mobil-Exxon’s with us today. Welcome, welcome!)


(I was going to write a Light Up The Delaware River Party wrap-up today but seeing as how photos and stories are still coming in,   I’ll wait  a  few days.)

Dear Drilling Companies That Are Eying Sullivan County (Part 2):

I promised yesterday to  provide you with  a short primer on  “How to organize a 330-mile party in under  five weeks for less than $1,000”  so,   gather round.

(Oh good!  Mobil-Exxon’s with us today. Welcome, welcome!)

1.   The first thing you need when trying to organize a community is a good idea.  It should be easily explained and understood and it should include a component of fun.  (Your idea for  filling the shale bed with toxic chemicals and consequently polluting the land and water is easily enough understood and explained but honestly,  the “fun” piece is  missing.)  For instance, my idea for Lighting Up The Delaware River Party came from Gandhi leading  the Indian people to the sea to make salt.  He wanted them to reclaim their resources and the strength  that comes from working shoulder-to-shoulder in an act of solidarity. So we started with that idea and added puppets, songs, movies, dance, poetry, a canoe regatta, campfires,  kayaking.  It was a blast!

What’s the genesis of your idea?  This is important!  When I asked one of your spokespeople outside the July 15, 2009 DRBC hearing if he’d be willing to put your toxic chemicals in an impermeable container and then place them  in his child’s  glass of  water,  he said, “No!”  without hesitation.  It’s just not a good way  to garner trust and support.  And more important,  it’s just not fun.

2.  You have to meet people where they live. Seriously,  the way you’re going about selling fracking fluids and contaminated wells needs some honing.  It’s no good sitting in a meeting room hoping we’ll  find you.  (Many of us are hanging on by a thread and what with working 2 or 3 jobs,  we don’t have a lot of  time or energy  for your little soirees.)

And for sure,  it doesn’t help your case  to simply deny there’s a problem.  Granted, most of us who’ve been  living in  The Basin or rural New York, Colorado, Wyoming, Pennsylvania, Texas, Louisiana and Ohio  for decades or centuries don’t have a lot of financial  resources but we’re not stupid  for Pete’s sake.  We can read a local newspaper!  We know about Dimock, PA,  Texas, Colorado, Wyoming, Ohio…  It doesn’t help your cause if people  think you’re hiding  a bunch of garbage in a closet.  So in your interest, I  urge you to  come clean.

3.  The best way to promote an idea in a tight-knit community is to  be vested in that community and to have a ton of good-hearted friends:  join the local fire company;  become a well-known agitator whom people trust whether or not they  like you and help bolster your local resources —  rivers, land, schools,  local production & distribution of food and goods.   The list is long and varied so step right up.  Here are a couple  PR beauts you could jump on in a split instant:

  • Vest yourself in the community.  I know it’s not a tact you’re familiar with so it bears some explanation.  For instance,  you can volunteer to help farmers get the hay in during the season.  You can deliver cups of coffee to our  volunteer  firemen who work long hours all day and then roll out of bed when the fire alarm peals.  If that sounds like overkill, at least  provide jobs for local people.  They’ll remember you fondly, I promise!
  • Support the  Fracturing Responsibility and Awareness of Chemicals Act of 2009 so all the nervous Nellies out there feel appeased and safe.  If history’s a clue, you probably won’t have to  fix any of the problems you create but at least you’ll look responsible.
  • Stop funding Congress.  It makes you look bad and detracts from the wonderful product you’re promoting.  (People end up thinking you couldn’t sell gas drilling to a tribe of orangutans without having most of them in your pocket.  You can see how unwholesome it makes you appear.)
  • Pay the damned severance tax you convinced Pennsylvania Governer Rendell to pull.  Are you nuts?  (I’m asking as one organizer to another so don’t get in a huff.)  The tax will cost you barely anything in the billion dollar scheme of things and it’s great publicity.  Pay the tax and look like a regular guy.  You can’t buy that kind of good press.
  • The next time you convince a major  American university like Penn State to write a bogus “economic impact study” for you, at least fess up that you funded it.  (Again, we’re not stupid and it makes you and your university stooges look sleazy.  Sorry.  I can’t help you if we can’t be forthright with each other.)
  • If you aren’t vested in the community and you can’t distinguish Sullivan County from Wayne or Orange,  or if  we look like  numbers on a geologic plat map to you, here’s a great idea:   recruit a local organization to front for you.    (I’ve gotta’ tell ya’,  this is a really important piece and the whole Sullivan County Partnership  thing?  You blew it.  True or not,  most of us don’t think they could find the teats on a hog.   (Let’s try this:   give  me a call  and we’ll see if we can’t find you someone less…forgettable.)

Another big help is to know your local media and be trusted by them.  I’ve got to hand it to you on that point.  The work you’ve done with the media in Wayne County, PA  has been inspirational!  Almost as impressive as the national silence on some of the  “ooops”  factors you’ve precipitated in Dimock, Fort Worth and elsewhere.

And that’s where I think we can collaborate.   I’ll introduce you to the crackerjack local media who’ve remained beyond your reach and you can get me 10 minutes  on Lou Dobbs.

Deal?

Chesapeake Energy & Penn State’s Robert Watson: Who Are Those Guys?

Also absent from his letter is the Class Action suit lodged against Chesapeake by investors for making “materially false and misleading statements” during a recent public stock offering.

And he skips any reference to the Court’s judgment that found Chesapeake had defrauded royalty owners in Texas out of $134 million in payments by under-reporting the amount of gas Chesapeake extracted from its lessor’s wells.

The 20 cows that dropped dead in Caddo Parish, Louisiana near a Chesapeake well also escaped Mr. McClendon’s notice.


Pursued  by a well-financed posse,   Butch Cassidy  and The Sundance Kid wondered again and again,  “Who are those guys?”   Their  wild west world —  a place they understood and  felt safe in —  had become more memory than fact.    Even at the very end, when Butch and The Kid  faced certain death at the hands of  hundreds of  Federales Mexicanos,  they and the audience believed  the old ways would survive side-by-side with the  industrial revolution. Because we didn’t understand industry’s insatiable  hungers  in 1908, we still ask in 2009,  “Who are those guys?”

CHESAPEAKE ENERGY:  Its own words and omissions.

Most readers of this column know that Chesapeake Appalachia is a natural gas drilling company that wants to hydraulically fracture and drill the Marcellus Shale. The Marcellus encompasses nearly 44 million acres and  underlies a third of Ohio, bits of Maryland and Virginia, all but a thin wedge of West Virginia,  most of Pennsylvania and stretches under and beyond the Delaware River  into New York State.

Pro-water advocates point to reports that hydraulic fracturing and waste water disposal have resulted in contaminated ground water, ruined private wells, sick residents, explosions and poisoned livestock.  “The Delaware River [Watershed] supplies water to 15 million people, including New York City and Philadelphia,” so Damascus Citizens for Sustainability and other conservation groups are pressing the Delaware River Basin Commission (DRBC) to produce  Environmental Impact Statements and a comprehensive review of drilling’s cumulative impacts before any gas drilling applications are considered or approved.

But behind the scenes,  what does Chesapeake tell its investors (or omit from the telling)?

First,  Chairman and Chief Executive Officer (CEO), Aubrey McClendon,  began his 2008 Annual Report to Shareholders with one of  Charles Dickens’ most famous quotes,  “It was the best of times, it was the worst of times…”  One wonders that any CEO would willingly adopt a Dickensian mantle given the author’s depictions of hatchet-faced money-grubbers, but that’s Mr. McClendon’s look-out.

Chesapeake’s CEO tells his investors that, “As  of December 31, 2008, [Chesapeake] owned interests in approximately 41,200 producing natural gas and oil wells; and had 12.051 trillion cubic feet equivalent of proved reserves…[In 2008], Revenues rose 49% from $7.8 billion to $11.6 billion….”

(I’m  befuddled that he omitted mentioning his own annual compensation of $116.89 million which ranks him third amongst American CEOs even though his performance earned him a less stellar  rating of 66 out 175. Also omitted was the Ontario Teachers’ Pension Plan’s “six-party lawsuit” demanding that Chesapeake rescind the $75-million bonus it awarded McClendon.  I’m sure the omission was an oversight and so I’ve included it here.)

Also absent from his letter is the Class Action suit lodged against Chesapeake by investors for making “materially false and misleading statements” during a recent public stock offering.

And he skips any  reference to the Court’s judgment that found Chesapeake had defrauded royalty owners in Texas out of $134 million in payments by under-reporting the amount of  gas Chesapeake extracted from its lessor’s wells.

The  20 cows that dropped dead in Caddo Parish, Louisiana near a Chesapeake well also escaped Mr. McClendon’s notice.

Nor did I find any allusion to  the recent Texas Supreme Court case which saved the drilling industry’s collective butt by saying company wells could drain  gas from adjacent properties without fault because “subsurface trespass by frac”  can’t be proved and therefore is not a ’cause of action’ in Texas courts.  “Frac treatments may commence at the surface, but the real work occurs unseen in the depths of the well and rock formations, and only theory and hypothesis can be advanced in support of an alleged underground trespass.”   (How, then, does the industry prove  that frac treatments are safe when they’re carried out “unseen in the depths…?”)

In 2008, Chesapeake forecasted that their Marcellus Shale leasing campaign would be finished by 2010 with “approximately two million acres of leasehold in the play.”

Consistently, Chesapeake and other gas companies have said  that moving forward at all possible speed with natural gas exploitation (without levying “deterrent” taxes or conducting  scientific studies) is required by our national interest.  On the other hand, in his letter to investors,  Mr. McClendon states, “Because of lower natural gas prices in the fourth quarter of 2008 and first quarter of 2009, we have substantially reduced our drilling activities in the Barnett [Shale] from 43 rigs in August 2008 to around 20 today. We intend to maintain this lower pace of drilling until natural gas prices recover to more attractive levels.”

Apparently, the national interest is only provocative if it dovetails with Chesapeake’s ability to rake in maximum profits.

As long as we’re  singing paeans to the National Interest,  let’s see what Mr.  McClendon has to say about sharing our national wealth with other multi-national corporations:  “A key to Chesapeake’s Fayetteville success,” he attests,  “was entering into a joint venture with [British Petroleum] in September 2008. In this joint venture, we sold 25% of our assets in the Fayetteville to BP for $1.9 billion in cash and future drilling carries.…Earlier in 2008, we had also sold to BP all of our Woodford assets in the Arkoma Basin for $1.7 billion.”

As to the amount of our  National Interest and Wealth that Chesapeake’s sharing  with Norway’s StatoilHydro,** Mr. McClendon announced proudly,  “After acquiring 1.8 million net acres, Chesapeake began looking for its third shale joint venture partner. This search culminated in a $3.375 billion transaction with StatoilHydro, one of the most innovative, well-respected and largest of the European international energy companies. This transaction, in which we sold a 32.5% interest in our Marcellus assets, was completed in November 2008. StatoilHydro had been seeking an entry point into a big U.S. shale play and had independently arrived at the conclusion that the Marcellus was the best shale play in which to invest….Today, Chesapeake is drilling with 10 rigs in the Marcellus. We plan to end 2009 with at least 20 rigs drilling and project 30 rigs drilling by year-end 2010 and 40 rigs drilling by year-end 2011… In addition, we also are engaged with StatoilHydro in searching for additional shale gas plays around the world in a 50/50 partnership.”

In a more innocuous statement, Mr. McClendon offers this prognostication, “I also see our company continuing as an industry leader in innovation and technology, underpinned by a work force and asset base second to none.”  In part, he is alluding to Chesapeake’s “Energy in Training” intern program [which] maximizes [Chesapeake’s] college recruiting efforts and encourages students to enter the [drilling] industry while still learning.”

Which leads me to wonder about the validity of  Pennsylvania State University’s  (PSU)  July 2009 study, “An Emerging Giant: Prospects and Economic Impacts of Developing the Marcellus Shale Natural Gas Play,” co-authored, among others, by Timothy Considine (University of Wyoming, whose state is home to  the Mowry Shale in Wyoming’s Powder River Basin) and Robert Watson (Pennsylvania State University,  whose state is home to the Marcellus Shale.)

Those coincidences alone are enough to ask  “Who are those guys?” but what really piqued my interest was that the study cites no funding sources and  sings hosannas for a projected economic boom in Pennsylvania without addressing the costs of environmental degradation.  (Costs that are already emerging in Fort Worth, TX,  Dimock, PA,  Hickory, PA and the state of Wyoming.)

The copy of the study I’ve linked  to is located at PA Marcellus — a consortium of drilling companies.  The Study’s authors  (1)  oppose legislation that will force drilling companies to reveal the toxins used in drilling and frakking; and  (2)  suggest that levying a production tax on the industry will burden Pennsylvania with lost revenues because,  the authors predict,  such State actions will deter companies from drilling in Pennsylvania and lead to slowed exploitation of the Marcellus Shale.

At last count, more than sixty organizations have  already opposed the Study’s assertion that a tax would impede exploitation of the Marcellus Shale.  In fact, opponents say, drilling companies are salivating at the prospect of drilling into the Marcellus’ rich heart.

Anyone — including drilling company employees — who tracks down the entities who funded this propaganda in a prestigious American university will win a gift from  CottageWorks.

In the meantime, who is Robert Watson, one of the study’s two lead authors?  He is the Director of Penn State University’s Consortium for Petroleum and Natural Gas.  Penn State’s website describes The Consortium thusly,  “The Consortium is industry driven and focused on identifying, expanding, and creating new value-added markets for petroleum and natural gas-based products. Research is also being done to identify and develop new technologies to increase the efficiency and/or productivity of petroleum and natural gas exploration, production, and refining.”

Perhaps he knows who funded his study. The PSU website lists his email address as:  bob@pnge.psu.edu and his phone number as  814-865-0531.

So who are these guys?  They’re the people who pay Congress to enact drilling-friendly legislation with provisions like the Halliburton Loophole.  They’re the people who help establish drilling-friendly curricula in publicly-funded universities.  They’re the people who benefit to the tune of billions of dollars when publicly-funded universities write studies supportive of their private industry.

More important,  who are the People of Pennsylvania whose lives are, according to PSU, improved by Penn State’s cosy relationship with the natural gas drilling industry?

They’re the people whose children will pay at least $12,538  to attend and live on PSU’s  University Park Campus this next academic year. (It’s not clear that the University’s tuition calculator incorporates a proposed 3.7% tuition hike.)

They’re the people whose unemployment rate climbed to 8.3% in June 2009.  (The average income of the bottom 90% of Pennsylvania taxpayers actually declined by 4% from 2001 to 2005.)

They’re the people who “..lost nearly 202,000 manufacturing jobs since 2001, according to the Alliance for American Manufacturing…”

They’re the people who are being conned into a poker game where drilling companies hold all the chips (jobs) and make all the rules.

Disclaimer:  As a New York State resident who’s  lived three decades in or near  the Delaware River Basin, these observations about PSU have been spurred by this particular study.  I have no doubt that  similar instances of Corporate Cronyism exist at the State University of New York.

Coming soon: Discussion of gas drilling leases recently signed in Wayne County, Pennsylvania.

********************

*There is great debate about when and where the “real” Butch and Sundance died.

** Of their lucrative deal with Chesapeake,  Statoil Hydro says at their website, “The holding covers 1.8 million acres in the Appalachian region of the north-eastern USA. The acquisition is part of a strategic agreement between the two companies to jointly explore unconventional gas opportunities worldwide.  The agreement covers more than 32,000 leases in the states of Pennsylvania, West Virginia, New York and Ohio. Chesapeake plans to continue acquiring leases in the Marcellus shale play. StatoilHydro has the right to a 32.5% participation in any such additional leasehold. With this transaction StatoilHydro has acquired future, recoverable equity resources in the order of 2.5-3.0 billion barrels of oil equivalent (boe). StatoilHydro’s equity production from the Marcellus shale gas play is expected to increase to at least 50,000 boe per day in 2012 and at least 200,000 boe per day after 2020. Both companies believe that the development programme could support the drilling of 13,500 to 17,000 horizontal wells over the next 20 years.”

Powered by ScribeFire.