Wednesday, August 29, 2012

15 Seconds of Fame....

Have to brag....

New Yorkers Rally to Urge Gov. Cuomo to Reject Fracking

......As documented by blogger Dory Hippauf, EID consists of several interrelated fronts in several states, with ties to various PR firms, gas companies, and political lobbyists. The group has worked extensively to try discredit those who express concerns about fracking, targeting the New York Times and the Oscar-nominated documentary film “Gasland," and its director Josh Fox.

Tuesday, August 28, 2012

Chesapeake Energy: A Problem like Aubrey – Part 3

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" - 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.

Why do I suddenly hear a chorus of nuns?
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.  

As Reuters dropped more shoes regarding Chesapeake Energy and Aubrey McClendon over the next few weeks, I kept hearing a chorus of nuns singing “How do you solve a problem like McClendon?”   Unlike Maria von Trapp, Aubrey doesn’t have a Mother Superior looking out for him, but he does have the Securities Exchange Commission (SEC) looking AT him.
Recent History of Chesapeake Energy
The 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: (emphasis added)

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.

Marketwatch reports:   (emphasis added)

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 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

Definition of 'Naked Option':  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 to Chesapeake Midstream Partners, LP, for $865 million.

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

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

Shell Games
Another 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".  

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. 

(Emphasis added)  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 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, 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.

PWC's splash graphic on their website boasts "..Rethinking risk management for new market realities...".    Seems right up Chesapeake's alley.

Damage ControlChesapeake Energy tried to ease concerns 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.”

It wasn't long before ENRON and Chesapeake Energy would be spoken in the same breath.

Forbes | Christopher Helman | June 4, 2012

Secret hedge funds, off-balance-sheet financings, big perks for directors, sweetheart drilling deals and giant non-recourse loans for Chief Executive Aubrey McClendon — it all means that “crony capitalism has been alive and well,” says John Olson. “History seems to be repeating itself in just another way.”

Olson ought to know. He uncovered Enron. Back in the 1990s Olson, a veteran energy industry analyst, was a lonely voice in the wilderness; he was skeptical about Enron for a decade before its collapse. He became a target of Enron‘s Ken Lay, and lost his job at Merrill Lynch because he refused to go bullish on the company. He subsequently worked at Sander Morris Harris, ran a hedge fund, and now, at 69, handles investments for friends and family.

So what’s his take on Chesapeake? Olson quotes philosopher Fredrich Hegel, “The only thing we learn from history is that we don’t learn from history.”

Chesapeake Energy quickly circled the wagons and fired up the spin machine by retaining George Sard, the CEO of Sard Verbinnen.    Sard was described as a "spinmeister of the apocalypse" by Portfolio magazine in April 2009, because he has worked as a PR consultant for so many high-profile clients in moments of utter, humiliating public collapse."

Sard's clients have included the Madoff brothers (Ponzi scheme), Eliot Spitzer (prostitution), Martha Stewart (insider trading), former Lehman Brothers CEO Dick Fuld (Ponzi scheme), and AIG (Ponzi scheme). His firm was also on the scene during the Enron collapse -- JPMorgan hired him to beat back accusations that the bank was complicit in the Enron fraud (it eventually paid $135 million to settle SEC charges).

----Gee, those worked out really well, didn't they?
Sard describes itself as:  (Emphasis added)
Sard Verbinnen & Co (SVC) is a leading strategic corporate and financial communications firm. We provide communications counsel and services to clients including multinational corporations, smaller public and private companies, investment firms, financial and professional service firms, and high-profile individuals.

The firm’s highly experienced senior professionals provide sound, objective advice and execution support to clients across a broad spectrum of industries. Our work encompasses corporate positioning, media relations and investor relations, transaction communications, litigation support, crisis communications, and other special situations.

We are regularly cited as one of the top M&A and crisis communications advisors in North America

Who’s Sorry Now?
McClendon told investors he's "deeply sorry" that his personal finances have come under scrutiny as shares fell the most in three years.

"I'm deeply sorry for all of the distractions of the past two weeks," McClendon, co-founder of Oklahoma City-based Chesapeake, said on a conference call to discuss first-quarter results today. McClendon said the company may have to sell more assets than planned to cover a gap between cash flow and revenue if natural-gas prices remain depressed. These sales won't interfere with debt-reduction targets or plans to boost oil production, he said.

Chesapeake Energy – Behind the Curtain – Part 2

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, 2011

“Corporations are people, my friend,” Former Governor Mitt Romney at Iowa State Fair.  August 2011

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

In September of 2011, Aubrey McClendon, CEO of Chesapeake Energy, 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.  

According to the DEP, in Pennsylvania, nearly 9-million households depend on private water wells.  Pennsylvania has more fresh water wells in private use than any other state in the US. 

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

The Curtain:  American Clean Skies Foundation
American Clean Skies Foundation (ACSF) 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.

“ACTIVITES” 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

Aubrey K. McClendon: Chairman of the Board; and Chairman of the Board and Chief Executive Officer, Chesapeake Energy Corporation

Andrew J. Littlefair: President and Chief Executive Officer, Clean Energy

Ralph Eads III: Chairman, Energy Investment Banking Group of Jeffries & Company Inc.

Robert A. Hefner III: Founder and owner of GHK Exploration; Author

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

Gregory C. Staple: Chief Executive Officer, ACSF

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 two of those connections now.

Andrew J. Littlefair :  CEO and President of Clean Energy Fuels and
Vice President of the
T. Boone Pickens Foundation.  

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

Littlefair is Chairman of the
Natural Gas Vehicle America ( and has been a Board Member and Officer for 10 years.  Littlefair was an officer at Mesa Inc. (a T.Boone Pickens venture), and served in various capacities for 10 years.  Littlefair served in the Reagan White House from 1983–1987.

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

T. Boone Pickens, Founder and Director of Clean Energy Fuels.
Mesa Petroleum, Founder: 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, Founder: Mesa Power Group founded the American Wind Alliance in 2009.

Mesa Water, Founder:  Sold to The Canadian River Municipal Water Authority (CRMWA) for approximately $103 million.

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

The Pickens Plan is an energy policy proposal announced July 8, 2008 by American businessman T. Boone Pickens. Pickens wants to reduce American dependence on imported oil by investing approximately $US1 trillion in new wind turbine farms for power generation, which he believes would allow the natural gas currently used for power generation to be shifted to fuel CNG trucks and other heavy vehicles. Pickens thinks that his plan could reduce by $300 billion (43%) the amount the country spends annually on foreign oil.

McClendon donated $250,000 to Picken’s Swift Boat Veterans for Truth in 2004. 
“Dallas billionaire financier and hedge fund manager T. Boone Pickens was a benefactor for the Swift Boat Veterans for Truth’s political activities and media blitzkrieg. A prominent Bush supporter, Pickens had a history of large donations to Republican and conservative causes and candidates. Pickens contributed $2 million to swift boating Sen. Kerry.”

In May 2012, T. Boone Pickens
sold his shares in Chesapeake Energy. 

Ralph Eads III
Aubrey McClendon, CEO of Chesapeake Energy and Ralph Eads III, the Chairman of Jefferies Energy Investment Banking Group go way back in their association.

McClendon and Eads were
Sigma Alpha Epsilon fraternity brothers at Duke University.
Prior to joining Jefferies, Eads was Co-President of Jefferies Randall & Dewey.   In February 2005, Jefferies acquired Randall & Dewey, which became Jefferies' Energy Investment Banking Group.  Eads was President of Randall & Dewey.

His career includes being the Executive Vice President of El Paso Corporation, where he was responsible for El Paso’s unregulated businesses. Previously, he was Managing Director and head of the Energy Group at Donaldson, Lufkin & Jenrette. He has held investment banking positions at S.G. Warburg, Lehman Brothers, and Merrill Lynch.

Eads is the
Board of Trustees for Duke University.  

Also on the Duke Trustee board is
Xiqing Gao, the Vice Chairman, President and Chief Investment Officer of the China Investment Corporation (CIC), China's sovereign investment fund.  CIC has minority interest in Chesapeake Energy's CHK-Utica in Ohio.

McClendon and Eads are partners in
Clos Dubreuil, a winery in Bordeaux, France.

Jefferies Energy Investment Banking Group, acting as financial advisor, has assisted Chesapeake Energy with many of its ventures which include CNOOC Ltd of China, Hopu Investment Management Co. Ltd. of China, Statoil of Norway, and Total SA of France.  (See America For S(h)ale)

By May 2012, Chesapeake Energy shares had taken a beating.   A series of articles by Reuters revealed many problems both with how Chesapeake Energy conducted business and how McClendon’s personal interests may have some conflicts.

McClendon was removed as Chairman of the Board, and in June 2012 Chesapeake appointed
new board members.

The "Aubrey problem" has contributed to the lack of enthusiasm from various market analysts and the May 2012 S&P downgrade of Chesapeake to BB- rating hasn't helped.

Around the same time as the S&P downgrade other market analysts were downgrading Chesapeake from "Buy" to "Hold", or "Hold" to "Sell". 

Jefferies said that the sale of some of the company’s assets in the Marcellus Shale should help bridge the 2012 funding gap. Commenting, the analyst noted that “Progress along this front should result in the stock reflecting more of the upside embedded in CHK’s asset base. An update on the Utica JV should be imminent.”
Regarding the recent $4-billion dollar loan to Chesapeake, a May 18, 2012 Bloomberg article described it as:
McClendon is depending now on his Jefferies confidant at an even more crucial moment. Falling gas prices, combined with the buying binge, is forcing Chesapeake to unload assets to keep the company afloat. Along with Goldman Sachs Group Inc. (GS), Jefferies bankers are seeking buyers for oil-rich prospects and lending Chesapeake $4 billion in the meantime.

“Without Wall Street, Chesapeake wouldn’t be able to do what it has done,” said Phil Weiss, an analyst at Argus Research in New York who rates the shares “sell.”

Eads and New York-based Jefferies declined to comment.

“Ralph Eads and Jefferies have unmatched expertise in the E&P business and have added enormous value to Chesapeake’s business and its shareholders over many years,” Chesapeake said in a statement, referring to the exploration and production industry. “We deeply value our long-term relationship.” 
Surprised?  You shouldn't be - that's what friends are for......

Chesapeake Energy – Job not finished until paperwork is done. Part 1

This is Part 1 of a series about Chesapeake Energy
Chesapeake Energy has made the headlines this week.  Not because of a gas well explosion or because CEO Aubrey McClendon has more fiduciary responsibility problems, but rather because of
failing to file production reports with the Pennsylvania Department of Environmental Protection (DEP).
Chesapeake Energy stated they did file the reports.  DEP says they didn’t receive them.     Both of the assertions are true.   Chesapeake did file the reports, and DEP didn’t receive them because the Chesapeake’s electronic filing of the reports was so error filled, the DEP database rejected them.Per Bloomberg Businessweek article:  Pa.: Okla. energy firm's data filled with errors, By Kevin Begos on August 21, 2012
DEP spokesman Kevin Sunday said on Tuesday a previous statement by Oklahoma City-based Chesapeake Energy Corp. that suggested state databases were the problem wasn't entirely accurate and omitted important points.
"DEP's production database functioned exactly as designed by rejecting reports that contain obvious data entry errors," Sunday said. For example, Chesapeake attempted to report production information on wells where the drilling start date wasn't listed; attempted to report more producing days than the number of days in the reporting period; and attempted to report drilled wells as wells that were not drilled, Sunday said.
Chesapeake also waited until the end of a 45-day grace period to submit data, Sunday said.”Rory Sweeny, a Chesapeake spokesperson, stated Chesapeake is working cooperatively with DEP to avoid future submission problems.

Perhaps an Intro to Form Completion 101 course is needed?

Proper completion of Production reports aren’t the only paperwork the Natural Gas corporations finds problematic.    Seems many of the natural gas corporations have paperwork problems.
According to Energy-in Depth(EID):
“But most violations are actually administrative in nature and relate to the mountain of paperwork that must be filled out before, during, and after a well is drilled.”

Thanks to EID for confirming the natural gas industry inability to fill out a simple form, and manage proper record keeping procedures.  

Meanwhile cautions us about brushing aside problems with “paperwork”: Administrative Violations Should not be Dismissed – by Matt Kelso, February 16, 2012: (Emphasis added)
“…about 58 percent of the total number of violations are indeed categorized as administrative, which is a significant majority of all the Marcellus Shale violations in Pennsylvania (1).  And yet, this is merely an observation, not an effective counterpoint to the argument that there sure are a lot of violations associated with this industry.  This is doubly true when trying to address the fact that some operators have a better culture of compliance than others.  If we were to take the leap that many have that administrative violations amount to paperwork, shouldn’t they be easy to avoid?  If a drilling operator in this multi-billion dollar industry wanted to convey respect for Pennsylvania’s laws, wouldn’t adequate paperwork be a good place to start?”

Wonder what Chesapeake’s own Paperwork looks like…..
In May 2012, the Securities and Exchange Commission (SEC) launched an inquiry into McClendon’s Founders Well Participation Plan (FWPP).  The FWPP allows McClendon (as Chesapeake’s co-founder) to buy a 2.5% stake in each of Chesapeake’s wells.

The Fort Worth SEC regional office asked Chesapeake and McClendon to preserve certain documents related to the inquiry.     If these documents were prepared with the same care exhibited with the production reports the SEC will be pulling out their hair.

Per Reuters:
Chesapeake Energy in U.S. antitrust investigation, By Brian Grow, ATLANTA, Thu Aug 9, 2012
Excerpt (Emphasis added) : Chesapeake has received a subpoena from the antitrust division of the Justice Department's Midwest field office, requiring the company to produce documents before a grand jury in the Western District of Michigan, according to a filing with U.S. regulators on Thursday. 
In June, Reuters reported that Chesapeake plotted with its top competitor, Canada's Encana Corp, to suppress land prices in the Collingwood shale in Northern Michigan.
Emails between Chesapeake and Encana showed the two companies repeatedly discussed how to avoid bidding against each other in a public land auction in Michigan two years ago and in at least nine prospective deals with private land owners.
Excerpt (Emphasis added) : The Reuters report showed Chesapeake and Encana executives, including Chesapeake Chief Executive Aubrey McClendon, exchanged emails about dividing up the nine Michigan counties and landowners in an effort to prevent "acreage prices from continuing to push up," and establishing "bidding responsibilities" ahead of an October 2010 Michigan state land auction.

Ohhhh, that pesky paperwork again….

Part 2: Chesapeake Energy – Behind the Curtain

Friday, August 17, 2012

Grains of Na needed with CO2

Salt, or Sodium is Na on the Periodic Table
 Salt or Sodium is represented on the periodic table as Na.  

"(With) a grain of salt," in modern English, is an idiom which means to view something with skepticism, or to not take it literally.

Many of you might have seen the headlines, and soon to be Energy-in-Depth infomercial/talking point regarding CO2 (carbon dioxide) levels.

Decline in CO2 surprises science
Experts cite power plants’ switch from coal to natural gas as a driving factor.

I read the article beyond the hyperventilating headline, and have a few questions.

The article stated CO2 levels dropped for FIRST 4 MONTHS OF THIS YEAR.
January-April were also part an extremely warm winter  The Natural Gas industry have attributed the rapid drop of natural gas prices, the natural gas glut, and their own financial woes on the warm winter. 

If we had a normal winter or colder winter - would CO2 levels dropped?  A normal or colder than normal winter would have resulted as an increase in demand for Natural Gas by powerplants and homeowners.  

We are now having record-breaking HEAT all over the country - which means more electrical usage for Air Conditioning, and power plants would be using more fuel to meet the demand.

Assume for a moment, that the "driving factor" is the switch from coal to natural gas, then May-August CO2 levels should show a similar drop.

Here's where the grains of Na are needed.   "In a little-noticed technical report, the U.S. Energy Information Agency, a part of the Energy Department, said this month that total U.S. CO2 emissions for the first four months of this year fell to about 1992 levels"
LITTLE NOTICED TECHNICAL REPORT - was little notice given to it because it only covered 4 months of data?  On something of this nature, is it reasonable to expect this is a trend?

The article mentions it as a Littled Noticed Technical Report, little noticed why?  Because it only covers 4 months? And who noticed it?

Without reading the entire report, it's unknown what factors were included or excluded to get those numbers.  

Incomplete articles, such as this one, are only fit for Energy-in-Depth (EID) and Natural Gas industry infomercials, which I'm sure we will be seeing soon. 

Speaking of infomercials does EID double your order for if you call in the next 30 minutes (pay separate shipping and handling)? 

Wednesday, August 15, 2012

Make ‘em Spend Money

Sometimes it seems as if we are spinning our wheels, preaching to the choir, and not making progress.

Consider this: 

The Marcellus Shale Coalition spent over $1,000,000 just to lobby for Act 13 in Pennsylvania.   

The Natural Gas Industry has spent over $23,000,000 in campaign donations to Pennsylvania candidates.

Gas and Oil lobbies have spent $71,182,656 this year alone.

Individuals and political action committees affiliated with oil and gas companies have donated $238.7 million to candidates and parties since the 1990 election cycle.
Add in the amount of money spent on public relations, television ads, radio ads, bill boards, magazines and newspaper ads.  Add in the cost of labor to maintain and produce all of that, plus the time and money for presentations, smoozing the public, and damage control.
 TV commercials during the Olympics aren’t cheap.

That adds up to one large pile of money.

Well, people, and I’m talking to YOU the real people, ask yourself – would it be necessary to spend all of that money if we weren’t making a difference?  If our efforts weren’t having an impact, would the Natural Gas and Oil companies be spending money to rebut our concerns, divert attention and wrap it all up in sunshine and daisies?

NO. If we weren’t effective in our efforts, the Natural Gas and Oil industry would not have to spend money on public relations, lobbying, and campaign donations.

Keep up the good work.  Make ‘em Spend their Money.

FrackFocus and Fig Leaves

The term Fig Leaf is used figuratively associated with the covering up of an act or an object that is embarrassing or distasteful with something of innocuous appearance. Sometimes paintings and statues had the genitals of their subjects covered by a representation of an actual fig leaf or similar object, either as part of the work or added afterwards for perceived modesty.

Today it’s more widely applied to include anything which may be embarrassing and the application of a fig leaf is supposed to make the offending item less offensive. 
FrackFocus has lately gotten the beating it deserves.  Today Bloomberg launched a detailed and comprehensive analysis of the fracking FrackFocus failures.
Fracking Hazards Obscured in Failure to Disclose Wells - By Benjamin Haas, Jim Polson, Phil Kuntz and Ben Elgin – Aug 13, 2012 11:01 PM CT
Apache’s transparency was shot through with cracks. In Texas and Oklahoma, the company reported chemicals it used on only about half its fracked wells via, a voluntary website that oil and gas companies helped design amid calls for mandatory disclosure.
Energy companies failed to list more than two out of every five fracked wells in eight U.S. states from April 11, 2011, when FracFocus began operating, through the end of last year, according to data compiled by Bloomberg. The gaps reveal shortcomings in the voluntary approach to transparency on the site, which has received funding from oil and gas trade groups and $1.5 million from the U.S. Department of Energy.
FracFocus describes itself as:
 “FracFocus is managed by the Ground Water Protection Council and Interstate Oil and Gas Compact Commission, two organizations whose missions both revolve around conservation and environmental protection.
The primary purpose of this site is to provide factual information concerning hydraulic fracturing and groundwater protection.  It is not intended to argue either for or against the use of hydraulic fracturing as a technology.  It is also not intended to provide a scientific analysis of risk associated with hydraulic fracturing. Finally, this site does not deal with issues unrelated to chemical use in hydraulic fracturing such as Naturally Occurring Radioactive Material (NORM).  This topic is beyond the current scope of this site.”
Participation in FracFocus is voluntary.   There are no regulations or legislation which require frackers to use the “chemical registry”.  Nor are there an assurances that the information is correct, complete and/or up to date.   
More fracking leaves are the Guiding Principles being promoted by the Marcellus Shale Coalition (MSC).   One piece of paper.  Geeee…. I feel so safe now.
The MSC has also published a document entitled RECOMMENDED PRACTICES FOR SITE PLANNING, DEVELOPMENT AND RESTORATION”.   It’s 34 pages long.  
Please note the preface: (emphasis added)
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.

The frackers need a bigger fig leaf.