This is why.

When I'm asked why I fight fracking - I say this is why.

More Shoes to Drop?

To Recap - What we know so far:


1. Chesapeake Energy has a Founders Well Participation Program (FWPP) which allows the participants to purchase 2.5% interest in each well


2. McClendon borrowed $1.1 billion using his stake in thousands of company wells as collateral


3. McClendon has 4 personal corporations: Chesapeake Investments, Arcadia Resources, Jamestown Resources, and Larchmont Resources.  The loans were made through three of the companies controlled by McClendon that list Chesapeake's headquarters as their address.  Chesapeake has distributed 2.5 percent shares in wells and land to three McClendon-controlled companies — Chesapeake Investments LP, Larchmont Resources LLC and Jamestown Resources LLC.


4. 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.


5. June 2009 - $225 million from Union Bank, a California lender, pledging his share of wells as collateral.


 December 2010 - $375 million from TCW Asset Management, a private equity firm.


January 2012 - $500 million from a unit of EIG Global Energy Partners, a private equity firm formed by former TCW executives.


In March 2011, Chesapeake sold producing wells and lease acreage in Arkansas to BHP Billiton for $4.75 billion. Chesapeake said at the time that McClendon and two companies he owns personally were “parties to the purchase agreement.”

Documents filed with the Second Circuit Court of Appeals disclose that Chesapeake Energy has structured VPP’s in such a way that the sale and passing of title of reserve volumes is passed directly to the banks. The recorded conveyances confirm this.

This, of course, provides the banks and hedge funds ownership status in the event of a Chesapeake bankruptcy. In short, because the banks own title to the covered assets, the reserves are no longer a part of the debtors estate in bankruptcy and therefore legal entanglement is avoided in paying creditors claims.

 The banks and hedge funds now carry these assets on their balance sheets and Chesapeake has removed them from their balance sheet.

6. Chesapeake has resisted attempts by regulators to get more information on McClendon's well-participation plan before. In 2008, the SEC requested more information about McClendon's benefits from the well plan as part of a review of the company's 2007 annual report.

From May to October that year, Chesapeake and SEC officials exchanged at least eight letters and held negotiations on the issue. After first refusing to provide more information, Chesapeake ultimately agreed to provide shareholders a chart detailing well plan revenues and costs, a review of the letters shows.


7. In November, 2011, 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, 2012, 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.”


8. NY state's $140 billion pension fund owns close to 3 million shares in Chesapeake. Scrutiny over the company has caused its shares to drop considerably over the last month, from $24.24 on March 28 to $17.72 on Friday.


9. EIG raised money for its most recent investment fund from 19 institutional investors, including some of the largest U.S. public pension funds, according to a private equity research firm.


The list of state pensions that put money into the $4.1 billion EIG Global Energy Partners fund include ones from Alaska, Connecticut, Louisiana, Maryland, Minnesota, Missouri and Texas, according to research firm Preqin. Other large investors in the EIG Energy Fund XV were insurance giant MetLife and a Teamsters pension plan.


10. Now-retired board member Frederick Whittemore lent money to McClendon in the late 1990s, the documents show, even as Whittemore helped determine how much the CEO should be paid to run Chesapeake.


11.  Statements from Chesapeake as to how much Chesapeake's Board of Directors (BOD) actually knew about the loans is fuzzy.  First statement said the BOD were "FULLY AWARE" of the existence of the loans, this was "clarified" with a statment the BOD were "GENERALLY AWARE", and later stated the BOD didn’t know about specific transactions.


12.  To date, several law firms have announced investigations into the loan deals


13.  To date: Shareholders filed a lawsuit against Chesapeake management in Oklahoma City federal court last week — just one of at least five suits that attorneys across the country said they plan to pursue. The lawsuits allege that Mr. McClendon’s mortgaging put the company at risk and that when the loans were revealed, stock prices fell sharply, representing a decline of more than $1 billion in market value.


The lawsuits target the board of directors and Mr. McClendon, a larger-than-life figure in an industry used to swagger.


He drank a $400 bottle of wine during an interview with Rolling Stone magazine earlier this year. At an energy summit in Ohio last October, he seemed impervious to critics concerned about drilling’s environmental effects.


“I’m the biggest fracker in the world. I’ve done it 16,000 times since 1989, and I’m proud of it,” he said.


14. BOD has said it would end a program allowing its chairman and CEO to buy stakes in the company’s wells and review loans McClendon obtained by using those investments as collateral.  The actual date of ending the FWPP is not known.

The fact that the company will have to pay Mr. McClendon to end this program early will further enrage shareholders and activists alike and will lead to further analysis on the company's dealings. It must be pointed out however that SandRidge Energy (SD) did pay their CEO (a former Chesapeake exec) to end their program a few years back. The news is not going to be getting better in the next few days, simply louder.

Side Note:  CEO of Sandridge is Tom Ward.  Ward was a co-founder of Chesapeake Energy, and became it's Chief Operating Officer.  Ward left Chesapeake in 2006 when he managed to accumulate enough stock in Sandridge to take it over.


15. Securities Exchange Commission (SEC) has opened an informal inquiry into Chesapeake and McClendon's loans.


16. Standard and Poor (S&P) downgraded Chesapeake's rating from BB+ to BB.  The cost of insuring Chesapeake's debt has jumped. As recently as mid-March, it cost just over $400,000 to insure Chesapeake debt with a face value of $10 million.  As of Friday(4/27/12) lunchtime, it cost $627,000—similar to the $605,000 cost of insuring a $10 million slug of the sovereign debt of Egypt


17. Chesapeake's stocks went from $19.12/share opening on 4/18/12  to 17.58/share ending 4/27/12


18. In explaining why Chesapeake's board isn't obligated to monitor McClendon's personal loans, Hood cited a September 2003 decision by a Delaware Chancery Court. The ruling in Beam v. Stewart found the board of Martha Stewart Living Omnimedia did not breach its fiduciary duty to shareholders by failing to monitor her personal investments. (Stewart served five months in prison in 2004 following her conviction for obstruction of justice in an unrelated insider-trading case.)


19. EIG Chief Executive R. Blair Thomas sent a letter to some investors this week defending the firm’s loans to McClendon and blames the media for "making something out of nothing".


20. Reuters making some WorldCom comparisons:


Legal experts say the size and terms of McClendon’s borrowing are unusual – and highlight a gap in regulatory scrutiny of American corporate executives.


In the past, major Wall Street banks formed separate companies – or special purpose vehicles, just as McClendon has – to allow select employees to borrow from the employer and make investments. The WorldCom accounting scandal was, in part, fueled by more than $1 billion in loans taken out by former chief executive Bernard Ebbers that were secured by his shares of company stock. And energy giant Enron used off-balance-sheet entities to hide debt from investors. New accounting and corporate governance laws and regulations banned such transactions or required their disclosure.


In September 2006, the SEC revised its related-party transaction rules to require companies to disclose when executives pledged corporate stock as collateral for loans. “These circumstances have the potential to influence management’s performance and decisions,” the SEC wrote.


Chesapeake Energy's earnings report is due out this week.

Is Aubrey TOAST yet?

The hits from Reuters just keep coming.

Exclusive: Chesapeake board member lent money to CEO McClendon
By Brian Grow and Anna Driver - Fri Apr 27, 2012 4:39pm EDT

(Reuters) - As Chesapeake Energy Corp.'s board of directors moves to distance itself from loans taken by CEO Aubrey McClendon, documents reviewed by Reuters show that at least one former board member had undisclosed personal financial ties to him in the past.

Now-retired board member Frederick Whittemore lent money to McClendon in the late 1990s, the documents show, even as Whittemore helped determine how much the CEO should be paid to run Chesapeake.

Excerpt:
Ron Hutcheson, McClendon's personal spokesman, acknowledged the existence of the loan but said the deal between Whittemore and McClendon ended in March 1999. He did not say whether the debt was repaid.

To repeat: He did not say whether the debt was repaid.

Naturally, I had to check out Frederick Whittemore.  I found that he is a Trustee for the Center for Stategic and International Studies  (CSIS)

His Bio from CSIS: Frederick B. Whittemore - CSIS Trustee
Frederick B. Whittemore, advisory director at Morgan Stanley, has held positions at Morgan Stanley & Co., Inc., for over 30 years, becoming a partner in 1967, managing director in 1970, and advisory director in 1989. He is past chairman of the National Syndicate Committee, past governor and vice chairman of the American Stock Exchange, and past international president of the Pacific Basin Economic Council. He has also served as president of the Bond Club of New York and as a director of the Chesapeake Energy Corporation (Oklahoma). He is a member of the Council on Foreign Relations and a lifetime trustee of the Aspen Institute. He serves as a director on the following noncorporate boards: American Associates of the Royal Academy Trust, Dartmouth College’s Tuck School of Business Administration (Board of Overseers), and the Eugene O’Neill Theater Center (Board of Trustees). Mr. Whittemore received an A.B. from Dartmouth College (1953) and an M.B.A. degree from the Amos Tuck School of Business Administration (1954).

Further search turned up this article from March 2010:
Retired Morgan Stanley honcho Frederick Whittemore listed among state's top tax deadbeats
By Jose Martinez / DAILY NEWS WRITER - Tuesday, March 23, 2010, 11:54 PM

A retired Morgan Stanley honcho listed among the state's top tax deadbeats is hoping for a big payday with two lawsuits.

Frederick Whittemore, who spent three decades at the investment bank, is seeking millions in actions filed Tuesday against the Oscar-winning songwriter of "You Light Up My Life" and an investment firm.

In papers filed in Manhattan Supreme Court, Whittemore contends tunesmith and accused sex maniac Joseph Brooks never repaid a $2.4 million loan from 2006.

His suit against Endurance Capital says a $17 million investment in the company "declined drastically" as a result of "waste, mismanagement and fraudulent conduct."

Whittemore is No. 47 on the state's current list of deadbeats, for owing $1.3 million in back taxes.

In a statement to the Web site Gawker, the former Morgan Stanley partner claimed he has paid his taxes.

This presents a few questions:
Did Aubrey pay back his loan? 

If not, will Whittemore sue him?

If Whittemore has investments in Chesapeake, will he sue Chesapeake for "waste, mismanagement and fraudulent conduct."?

And finally Is Aubrey Toast yet?

Damage Control: The Chesapeake Tap Dance

Is your head spinning over Chesapeake Energy and Aubrey McClendon mess?   Well, hold to your head, here comes the damage control from the Chesapeake Tap Dancers. 

My Comments are in RED.
Press Release from Chesapeake Energy, 4/26/2012: Chesapeake Energy Corporation's Board and CEO Aubrey K. McClendon Agree to Negotiate Early Termination of Founder Well Participation Program - CEO Agrees to Separately Provide Enhanced FWPP Disclosure

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

So, McClendon still has about 2-1/2 years to flip wells?

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

What about interests McClendon has acquired so far in 2012?  And those he may acquire from present day through December 31, 2015?

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.

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???

Save me - Nixon - Watergate flashback - What DID they know and WHEN DID they know it.


UPDATE
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 stakes - Reuters, April 26, 2012

 (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:  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.

UPDATE 4-27-12 Previous Report: 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



The original employment agreement from 2008 covered the FWPP until 12/21/15.


It's now being reported as 

Chesapeake said it plans to renegotiate McClendon’s employment contract to terminate the program before its scheduled expiration at the end of 2015. The board is examining McClendon’s borrowing activity and his connections with companies that have had or “may have a relationship with [Chesapeake] in any capacity.”

The Fracking Health Spin

A provision in Act 13 requires medical professions to sign a non-disclosure agreement in order for a Natural Gas corporation to release information about the chemicals used in fracking.   This has raised all sorts of alarm bells throughout the health community.

Both the Pennsylvania Department of Public Health and the Pennsylvania Medical Society have issued statements that doctors will be able to share that information with their patients and public health officials. But a health law expert says the language is too vague.

The Natural Gas corporations have long fought calls for disclosing exactly what is in the fracking cocktails.   They have hidden behind claims of the fracking recipe of being proprietary.   True, there is a "frack chemical" registry, but it's voluntary, and it's completeness is unknown.

One of the talking points frequently trotted out by industry spokespersons is the fracking cocktail is not all that different than what is under your kitchen sink.   Have you ever read the ingredient and warning labels on those products?  A quick peek at what's under my kitchen sink revealed warnings against "internal ingestion", and several are helpful in providing a poison hotline telephone number. 


When was the last time you added a couple of teaspoons of Comet to your morning coffee?  Or sprayed Pledge on a baking sheet before making cookies?  Steaming cauliflower in Fantastic does not improve it's flavor.

Whether it's medical testing or water testing, you need to know what chemicals may be present.   There is no one-test-fits-all procedure.

The other problem with requiring doctors to obtain the frack cocktail recipe is each driller may use a different recipe and different recipes may be used in each well by a driller.   All frack chemicals are not created equal.  This means for a doctor to properly treat each patient suspected of chemical contamination, he or she would need to contact a driller every time, and can not rely on previous chemical disclosures.

The patient would need to know who the drillers are in their area, and which wells are nearby.  And how large of a radius do you go?  One mile? Two?   Anecdotal information has hinted at fracking chemical effecting people as far as 9 miles away from their home. 

Furthermore, patients may not have been exposed the chemicals at their home.  It could be while vacationing in a gasland area, or staying at a friend's home, or even at their workplace where an entirely different driller is fracking.   Is it reasonable to expect a person to keep a fracking drill journal and noting where they have been, the driller's company and which wellpad is nearby?

The ridiculousness of the non-disclosure agreement is beyond the pale.   It's provision is not to protect people, it's not to aide the medical community, it's there to protect the Natural Gas Industry from liability.

MORE SPIN:
"Scarnati Aide Says Drilling Foes Hijack Act 13 Doctor Provision"


Excerpt:

Drew Crompton is an aide to Senate President Pro Tem Joe Scarnati and helped craft the bill. Crompton says those who are raising questions about the law have an anti-drilling bias and are using it to further their agenda.

“Not to discredt those who are sincerely looking out for the well being of others,” said Crompton, “but I think they’re making a mountain out of a molehill. These allegations are coming from people who don’t appreciate the industry and want to voice their opinion against it.”

Crompton says no lawmakers, whether Democrats or Republicans, raised any issues about the provisions while it was getting debated in Harrisburg. He says the intent of the law is to protect patients, not the industry.

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.

“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.

PLEASE NOTE:

Public health officials raised the question of why no one from the health field was at the table. 

Crompton said everything was vetted through the Department of Public Health.  Vetted or rubber stamped? 

"No one with a medical degree was at the table".    If no one with a medical degree was at the table, then how were medical concerns properly considered?  Oh yeah, it was "vetted".

Flashback

Originally, state lawmakers had alotted $2 million from the proposed Marcellus Shale impact fee last year for a health registry. But that money was cut from the bill before it came to a vote. The impact fee passed, without money for a health registry.

Republican State Senator Joe Scarnati, who steered the bill to passage in February, said he was “not a fan” of the registry. Instead, he favored giving money for water testing by the Department of Environmental Protection.

Drew Crompton, Scarnati’s chief of staff, called a shale health registry potentially “inflammatory and unnecessary.”

Crompton said “there was a lot of uneasiness” among Republican legislators about the public health study “being all spelled out” in the legislation.

“It’s very sensitive when talking about peoples’ health. What types of studies were they going to do? We didn’t want additional burdens placed on our constituents,” said Crompton. 

“This has to be very slowly developed. We think Marcellus shale drilling is almost entirely safe,” he said. “We don’t want to stir up any fears.”

Crompton said a public health registry “has to be carefully messaged” because of what he characterized as misinformation about the safety of hydraulic fracturing. “The last thing we need is to propel this (mis)information.” he said.

PLEASE NOTE:

1. Crompton said “there was a lot of uneasiness” among Republican legislators....   Uneasiness?  Are Republican legislators uneasy about what a health registry may reveal, how it would impact the Natural Gas industry and trickle down to impacting campaign contributions?   Who are these legislators really looking out for?   It's not the health of Pennsylvanians.

2. "We THINK Marcellus shale drilling is ALMOST entirely safe.   Think? Almost?  That doesn't exactly inspire confidence in the fracking technology.

3. ...public health registry “has to be carefully messaged”.  So no health registry because the natural gas industry and supporters are having trouble figuring out how to spin it?

What the Frack is Going on Fracking Friday ?

On next Friday 4/27 I will be a guest on What the Frack is Going on Fracking Friday  8pm-10pm est

I will be discussing the Natural Gas corporation connections with each other and our legislators.


Debbie Lambert will also be a guest.
She will be talking about what Chesapeake Energy is doing in Darlington, Beaver County PA, forced pooled, and Chesapeake's refusal to comply with cease-and-desist order issued by Darlington officials.




My series - Connecting the Dots: The Marcellus Natural Gas Play Players series has been picked up by Raging Chicken Press.
Parts 1 & 2 are in this month's issue.


On CommonSense2 for the full series:

You Can’t Tell the Players Without a Scorecard!

Chesapeake Energy –  Peeking Behind the Curtain

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

Cabot, Krancer and Dimock

Pieces of Silver - Act 13

What's in a Word?

Reality must take precedence over public relations, for nature cannot be fooled. ~ Richard P. Feynman


The words used in any public relations campaign are extremely important.  Words (and images) do create the framework to influence public opinion.  The Natural Gas corporations know they have a public perception problem and are in the process of finding and defining new "buzzwords".  

The pattern the Natural Gas industry and it's front groups have devised may be broken down into what I call the 4-Ds:

DENY there is a problem.      
DISTRACT the public.
DISTORT the facts.
DELAY official proceedings.

You may have noticed over the past few years, whenever a serious and hazardous event occurs, or there is a report/news article released which highlights the problems of Natural Gas activities - the Marcellus Shale Coalition(MSC) immediately sends out a press release.  These press releases typically ignore the "problem" or "issue" at hand to distract public scrutiny.

They rely on short attention spans and short memories.

Below is a letter, from a fellow fracktivist.  She takes a look at the rhetoric emerging from Kathryn Klaber, Executive Director of the Marcellus Shale Coalition (MSC).

 Dear Fellows,

Part of what is so disturbing about this letter is the care taken to craft a rhetoric that makes the shale industry sound reasonable--it's an excellent sample of the work and care Kathryn Klaber--who is certainly not stupid--is willing to go to to insure the industry's objectives. The strategy of this letter, I think, is this:

1. Generate sympathy for a "struggling" industry by pointing out "price differential between natural gas and oil." Consider: "Poor poor frackers--we need to do everything we can to help these nice working folks who

2. Just want to bring wealth and prosperity to all Pennsylvanians, and who love those pesky environmentalists and other assorted do-gooders even though they're, well, rather in the way of

3. Fracking, and all those fracking-profits. So,

4. Can't we all just be reasonable? That is, can't we just step aside and let those smart folks and their bought off university professors, elected representatives, government representatives, tell us what "reasonable" means?

5. And what does "reasonable " mean? Well, reasonable might mean "regulation" if we weren't in a recession, but since we are, regulation just needs to wait for another day. Right now, folks need all those natural gas benefits like jobs, and collateral industry and such--and well, we can all stand a teeny bit of dirt, can't we, for the sake of all those wondrous profits that will trickle down to Pennsylvania citizens and communities."

The trouble with all of this, of course, is that its false.

Staggeringly false.

From the exploitation of the "recession" (at least in PA) as a way to justify what amounts to a fracking-free-for-all to the claims about jobs to the use of buzz words like

• "Reasonable,": No regulations, thanks--unless they're ours, in which case, let's call them "Schmegulations.".
• "Uniform": Whatever we say goes.
• "Safety": "Did somebody say "safety"? Safety Schmafety!"
• "Growth": Profiteering; Profits out the wazoo for a few.
• "Market dynamic": "The fake free market's not quite as awesomely profitable for us as it would be if we could pillage without end."
• "We wish to commend you for your work": "Get out of our goddamn way. And THANKS! We just knew you would. Let's smooch."
• "Nation’s Energy Security": "the conversion of America to America, Inc. by way of fear-mongering slimy appeals to patriotism. Only them damn communist lefty-environmentalists would oppose fracking--so opposition=anti-American."
• "These enhanced standards are not without cost": Didn't I already ask you to get out of the damn way? And t
• "Impact fee": "sure, we'll toss your communities a crumb in exchange for their wholesale capitulation to, say, fracking 1000 ft from a public school."
• "The magnified impact of any increased costs in the current economic situation for natural gas producers": Poor poor Aubrey McClendon--it's just not enough to be the highest paid CEO in America, Inc."

And on and on and on. THIS is nothing at all but a rapacious wolf in a very thin sheep outfit. It is monumentally insulting, and represents the lengths to which the MSC will go to manipulate and extort our ELECTED representatives--representatives that are already in bed with the frackers.

The only question that's really important here is: What are we going to DO about this? I write and write and write about this issue, I share posts on Facebook with hundreds of like-minded folks. I rant. I rave. I bitch. But we all know that what's going on here is the RAPE of our state forests, our game-lands, our WATER, our private properties, and our communities, and we all KNOW that the price we are preparing to pay for what jobs there are vastly exceeds the value of those jobs, and we all KNOW that the health risks are immense and that these risks will be borne entirely by regular folks like US. We all KNOW that this letter is just the latest masturbatory exchange in the sick romance between the industry and the state it effectively owns.

So, I keep thinking I still live in a free country where the people have a voice about the conditions under which they are expected to live. Have we conceded this to the corporate profiteers? Are we comfortable with corporate feudalism? What are we going to DO? I'm a writer, and I'm getting tired of writing.

Respectfully,
Wendy Lynne Lee

American Natural Gas for America?

Remember the ads, the talking points about how we have to drill and frack for natural gas in order to "break the oil habit"?  If we frack up the countryside then we would not have to import "foreign oil"?   Natural Gas will provide us with security, and allow energy independence and everything would be coming up sunshine and roses? 

Wave the FLAG, sacrifice and frack your land, your air, your water and your family for the good of the country.

 American Natural Gas for America........yeah, right.

Joint ventures between US Natural Gas Corporations and Foreign Investors are set up and in line waiting for export facilities to be built.

Cheniere Energy has been approved by regulators to construct the Sabine Pass LNG terminal in Cameron Parish, Louisianna.  It will be the first of many more to come.  Once this facility and others are in operation, it will provide a relief to the current gas glut as well as producing higher profits for the Natural Gas industry.

CHINA and elsewhere - here we come!

Click here for a spreadsheet on Joint Ventures with foreign investors. 

Best Scientific Research that Corporate Money can buy

On April 13, 2012, the Ithaca Journal ran an article entitled:

Can science be bought?: Opponents in fracking debate discredit each other's research

 The article mainly focuses on the Natural Gas Industry bashing studies which were funded by "environmental" sources. 

There's only one paragraph mentioning "industry" money and buying science, as follows:

"Industry groups have received their share of criticism for funding studies as well, including several industry-funded papers from Pennsylvania State University that have found great potential for job creation and gas production from drilling into the Marcellus Shale."

We'll try to remedy the Ithaca Journal's "oversight" by connecting a few "dots".

1.  In October 2007, Engelder was named a distinguished lecturer for the American Association of Petroleum Geologists. That position brought him to the attention of Chandra, the investment banker. Wall Street's interest had already been piqued by the success of the Barnett Shale in Texas, but analysts thought it was a unique formation. Just as Zagorski had realized, Chandra grew to understand that Barnett and Marcellus bore intriguing similarities. What investment firm Jefferies Group needed was someone who knew the rock. ``We looked around and Terry seemed at the time to be a geologist focused specifically in Pennsylvania or the Appalachian region,'' Chandra said.

Chandra is Subash Chandra, managing director for Jefferies Group, an investment group.  Jefferies has a whole area dedicated to ENERGY INVESTMENT BANKING.

Terry Engelder is a professor at Penn State, and since 2007, has become the "go to person" for pumping the shale gas.

Heading up the Jefferies Energy Investment Banking, is 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, a nonprofit charitable organization that provides information about environmental and energy issues.

Jefferies & Co Energy Investments has helped Chesapeake Energy close on many big deals.

American Clean Skies Foundation is a front group for Chesapeake Energy.  Aubrey McClendon is CEO of Chesapeake Energy.  

On the Duke University donor profile link, Ralph Eads III is described as "...fraternity brother, close friend, and fellow donor/volunteer Aubrey McClendon.




2. Terry Pegula, former CEO of East Resources, "donated" $88million to Penn State for a hockey arena. He was interviewed by a Penn State student publication and asked about the "donation"

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.”

Now ask yourself, if the $88-million was an above board honest donation for a hockey arena - why did Pegula mention Marcellus shale?

On a side note: Terry Pegula, and his wife, Kim, donated $280,000 to the 2010 Tom Corbett to his campaign for Pennsylvania Governor.  Their combined total makes them the #1 individual donor.

The #2 highest individual donor was Ronald Krancer, father of Michael Krancer (the now PA-DEP Secretary) at $230,000.

3. Training the Hens to Guard themselves?

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.

4. 11/1/2010 - AUSTIN, Texas — ConocoPhillips has committed to contribute $1.5 million over five years to support cutting-edge energy research at The University of Texas at Austin. The five-year grant, administered through the university's interdisciplinary Energy Institute, is split evenly between the Cockrell School of Engineering and the McCombs School of Business. The Energy Institute provides guidance to the state of Texas and the nation on sustainable energy security through the pursuit of research and education programs.

A study was recently released by the University of Texas on connection between Fracking and Water contamination.  It concluded there is no connection.

Heading up the study was one Charles "Chip" Grout, Director, Center for International Energy and Environmental Policy; Director, Energy & Earth Resources graduate program; Jackson Chair in Energy and Mineral Resources Department of Geological Sciences.

Charles "Chip" Grout also serves on the board of Plains Exploration and Production Co. (PXP) as an independent director. He formerly served six and a half years as Director of the U.S. Geological Survey, having been appointed by President Clinton and retained by President Bush.

Buried in the study and under-reported by the media is this little nugget:

There are other dangers, the study says:

"In spite of the much broader disclosure of the ingredients of the [fracturing] additives, there is not yet a clear understanding of what are the key chemicals of concern for environmental toxicity or their chemical concentration in the injected fluid."

"The greatest potential for impacts from a shale gas well appears to be from failure of the well integrity," meaning a poor job of cementing the well casing, allowing chemicals to leak into an aquifer by flowing upward between the casing and the borehole.

ad more here: http://www.star-telegram.com/2012/02/23/3758663/ut-fracking-study-dispels-one.html#storylink=cpy

PA colleges/universities DO NOT have to disclose funding/donation sources, which means high probability even more industry money is being pumped into these institutions.

Gov. Corbett's budget cuts have increased pressure on colleges and universities to accept more "donations" from the Natural Gas Industry and/or lease land for fracking.
See: Pieces of Silver - Act 13  Connecting the Dots: The Marcellus Natural Gas Play Players – Part 5

UPDATE 4/16:  Is DEP head Krancer is pressuring Wilkes University to change Wilkes University report on Act 13  because he doesn't agree with it?

DEP boss raps Wilkes report on drilling Michael Krancer calls the university study of new state regulations ‘biased.’  By MATT HUGHES - Apr 14, 2012

During a February visit to the Institute for Energy and Environmental Research at Wilkes University, Department of Environmental Protection Secretary Michael Krancer praised the institute’s work in conducting unbiased scientific research into the environmental impact of Marcellus Shale gas drilling.

Last week, Krancer changed his tone, harshly criticizing a March report on Act 13, Pennsylvania’s newly-enacted drilling impact fee law.

In a letter to institute Director Ken Klemow, Krancer referred to statements he made during his February tour of the facility, when he said the institute is “interested in science just as we’re interested in science,” and “we can’t have too many institutions do this kind of work. It’s great work, as long as it remains unbiased.”

“However,” the secretary wrote this week. “I found the recent Institute Report on Act 13 to be neither science nor unbiased. It is political commentary and very misleading to boot.”

Excerpt: The directors of the two institutes that crafted the study referred comment to Wilkes University spokesman Jack Chielli, who said the university and institute directors are “reviewing the secretary’s comments carefully and may modify our analysis of Act 13 should we determine that is necessary.”

Rep. Tim Holden (? PA) Frack Friendly?

Fracker's Best Friend?
DEMOCRAT?
Blue Dog?
or DINO?


Click Here - Read and Decide for yourself!

Pieces of Silver - Act 13

Pieces of Silver - Act 13
Connecting the Dots: The Marcellus Natural Gas Play Players – Part 5
By Dory Hippauf