Tag Archives: ExxonMobil

Aera Energy, Big Oil, California Governor Gavin Newsom, California Independent Petroleum Association (CIPA), California oil industry, Californians Against Fracking, Common Ground Alliance, ExxonMobil, Fracking, Western States Petroleum Association (WSPA)

Gavin Newsom Hands Out Fracking Permits to Connected Driller

While California was convulsed by COVID-19 and George Floyd’s death, the governor gave Big Oil a big gift.

Capital and Main, by Steve Horn,  June 19, 2020

On June 1, in the midst of the turmoil created by the coronavirus pandemic and the death of George Floyd in Minneapolis, California Gov. Gavin Newsom’s administration quietly issued 12 fracking permits to Aera Energy, a joint venture owned by ExxonMobil and Shell.

Oil drilling in California has faced criticism for its disproportionately negative health impacts on Latino communities and other people of color. The 12 new permits will be for fracking in the Lost Hills Oil Field. The Kern County town of Lost Hills is more than 97 percent Latino, according to 2010 U.S. Census data.

The fracking permits are the latest example of California’s oil industry benefiting from regulatory or deregulatory action during the COVID-19 pandemic and came just months after the Newsom administration said it supported taking actions to “manage the decline of oil production and consumption in the state.” Aera, which also received 24 permits from the California Geologic Energy Management Division (CalGEM) on April 3 during the early days of COVID-19, has well-connected lobbyists in its corner who work for the firm Axiom Advisors.

One of them, Jason Kinney, headed up Newsom’s 2018 transition team and formerly served as a senior advisor to Newsom while he was lieutenant governor. He is also a senior advisor to California’s Senate Democrats. The other, Kevin Schmidt, previously served as policy director for Newsom when the latter was lieutenant governor. Aera paid Axiom $110,000 for its lobbying work in 2019 and, so far in 2020, has paid $30,000, lobbying reports reveal.

Axiom’s lobbying disclosure records show both Kinney and Schmidt listed as lobbyists and Aera as one of the firm’s clients. Kinney’s wife, Mary Gonsalvez Kinney, was also the stylist for Newsom’s wife–Jennifer Siebel Newsom–dating back to their time spent living in the San Francisco Bay Area. Kinney and Schmidt did not respond to repeated requests for comment for this article.

Calling the situation “unseemly,” Jamie Court, president for the Los Angeles-based group Consumer Watchdog, wrote via email that “Aera should not be able to buy the influence it apparently has over state oil and gas policy.” Last November, prior to the 24 permits issued in April, Newsom had declared a statewide fracking permit moratorium in response to a scandal involving a regulator for the California Division of Oil, Gas, and Geothermal Resources (DOGGR). The regulator, who had been tasked with heading oversight issues on issuing permits, was revealed to have stock investments valued up to $100,000 in Aera Energy’s parent company, ExxonMobil. Newsom fired the head of DOGGR at the time, Ken Harris, and eventually renamed the agency CalGEM.

Kinney and Schmidt are not the only two with Newsom ties. Aera CEO Christina Sistrunk sits on the governor’s Task Force on Business and Jobs Recovery, created to craft an economic recovery plan in response to the ongoing COVID-19 economic fallout.

Aera is one of the state’s top drillers and accounts for nearly 25 percent of California’s production, its website claims. Aera landed 490 drilling permits from CalGEM in the first quarter of 2020, according to data collected by FracTracker, and 651 permits in 2019.

Lost Hills

The town of Lost Hills has a population of about 2,500 people and its field ranks sixth in oil produced in the state. The field sits in close proximity to a residential neighborhood just west of Interstate Highway 5, close to both a middle school and public park.

Infrared camera footage from 2014, taken by the advocacy group Earthworks and the Clear Water Fund for a 2015 report they published, showed that the Lost Hills field emits prolific amounts of toxic chemicals into the air, including methane, acetone, dichlorodifluoromethane and acetaldehydes. High levels of isoprene and acetaldehydes can cause cancer, while the other substances can result in serious health damage, including heartbeat irregularities, headaches, nausea, vomiting, throat irritation, coughing and wheezing.

In a survey done for that same report of Lost Hills residents, respondents reported having “thyroid problems (7 percent), diabetes (7 percent), asthma (11 percent) and sinus infections (19 percent).”

“Of all respondents, 92.3 percent reported identifying odors in their homes and community,” it further detailed. “Odors were described as petroleum, burning oil, rotten eggs, chemicals, chlorine or bleach, a sweet smell, sewage, and ammonia. Participants reported that when odors were detected in the air, symptoms included headache (63 percent), nausea/dizziness (37 percent), burning or watery eyes (37 percent), and throat and nose irritation (18.5 percent).”

Methane is a climate change-causing greenhouse gas 84 times more potent than carbon dioxide during its first 20 years in the atmosphere, according to the Intergovernmental Panel on Climate Change. A 20-year window falls within the 2030 deadline established by IPCC climate scientists in a 2018 report that concluded that, if bold action is not taken steadily until then, the world could face some of the most severe and irreversible impacts of climate change.

Setbacks

The new Lost Hills permits came as CalGEM completed its pre-rulemaking public hearings, on June 2, for regulations pertaining to distancing setbacks of oil wells from homes, schools, health clinics and public parks.

The rulemaking process also came as a direct result of the Newsom administration’s November fracking moratorium announcement, found within that same directive.

Last January, two months after the directive, new CalGEM head Uduak-Joe Ntuk, Newsom’s legislative affairs secretary Anthony Williams and Department of Conservation director David Shabazian all attended and spoke at a pro-industry hearing convened by the Kern County Board of Supervisors. They held the hearing in direct response to Newsom’s November announcement. Aera CEO Sistrunk spoke at that hearing and the company promoted it on its website.

The lobbying disclosure records also show Kinney and Schmidt’s firm represents Marathon Petroleum, which advocated against legislation that would mandate CalGEM to implement a setbacks rule by July 1, 2022. That bill, AB 345, had previously mandated that a setback rule be put into place by 2020.

But after receiving lobbying pressure from the Common Ground Alliance— which has united major labor groups with the oil industry, and which was incorporated by an attorney whose clients include Chevron, ExxonMobil, BP America and Western States Petroleum Association—Assembly Appropriations Chairwoman Lorena Gonzalez (D-San Diego) made it a two-year bill during the 2019 legislative session. The “two-year” option for state legislators extends the lifeline of a bill for potential amendments and passage into the second year of every two-year legislative session. Gonzalez told Capital & Main the bill received two-year status due to its high implementation cost.

Aera’s parent company, ExxonMobil, has given Gonzalez $5,500 in campaign contributions since her first run for the Assembly in 2013. Aera also gave a $35,000 contribution to the California Latino Legislative Caucus Foundation during the first quarter of 2020, its lobbying disclosure form shows. Gonzalez is the chairwoman of the California Legislative Latino Caucus and the foundation is its nonprofit wing. And both Aera and the Common Ground Alliance share the same attorney, Steven Lucas, incorporation documents and disclosure forms show.

“The Governor has been clear about the need to strengthen oversight of oil and gas extraction in California and to update regulations to protect public health and safety for communities near oil and gas operations,” Vicky Waters, Newsom’s press secretary, told Capital & Main in an emailed statement. “CalGEM has launched a rulemaking process to develop stronger regulations and will consider the best available science and data to inform new protective requirements.”

Waters did not respond to questions about Axiom Advisors and its personnel ties to Gov. Newsom.

“An Afterthought”

The permits handed to Aera coincide with the Newsom administration granting the industry a suite of regulatory relaxation measures during the COVID-19 era. These include a delay in implementing management plans for idle oil wells and cutting the hiring of 128 analysts, engineers and geologists to bolster the state’s regulatory efforts on oil wells—even though the industry was legally obligated to pay for it.

These measures came after San Francisco public radio station KQED reported that the oil industry’s top trade associations, the Western States Petroleum Association (WSPA) and California Independent Petroleum Association (CIPA), requested that CalGEM take such actions.

Aera’s general counsel, Lynne Carrithers, sits on the board for CIPA, while the company is also a WSPA dues-paying member.

In response to a question about the cancellation of hiring of 128 regulators, Teresa Schilling, a spokeswoman for the Department of Conservation—which oversees CalGEM—said by email that the “Administration had to revisit many proposals in the January budget as a result of the COVID-19 pandemic and the fiscal challenges it created.”

“Significantly expanding a fee-based program in this time of belt-tightening would not be appropriate,” Schilling continued, speaking to the oil industry’s current financial travails. “However, CalGEM is committed to continuing its critical core enforcement and regulatory work with its current resources. Furthermore, all regulations remain in effect and operators are still accountable for meeting them.”

Schilling added that, with regards to the connections with Axiom Advisors, the administration works with “a variety of stakeholders on policy issues and budget decisions,” calling the latest budget proposal “consistent with Administration priorities.”

But Cesar Aguirre, a community organizer with the Central California Environmental Justice Network who lives near Lost Hills in Bakersfield, sees the situation differently.

“The Lost Hills community is already surrounded by extraction and the Newsom administration and CalGEM continue to show that they intend to put the environment and frontline communities as an afterthought,” he said, advocating for the passage of AB 345. “These actions show us that Californians can’t depend on empty political promises to protect public health.”

Big Oil, Canadian regulation, Climate Change, Climate change denial, Fossil fuels, Greenhouse gas emissions, Renewable energy

Big Oil’s scorched-earth legal approach to climate change

Repost from iPolitics

Big Oil’s scorched-earth legal approach to climate change

By Keith Stewart, March 14, 2016
Alberta oilsands
A highway loops around the southeast end of Mildred Lake at a Syncrude facility as seen from a helicopter tour of the oilsands near Fort McMurray, Alta., on July 10, 2012. Jeff McIntosh, The Canadian Press

I want to believe the oil company CEOs who say they’ve seen the light and now support action on climate change. I really do.

But it’s hard to take them at their word when their lawyers are simultaneously engaged in what one legal scholar has called “the first case in which a party has challenged the constitutional validity of any federal greenhouse gas regulations.”

A consortium of seven oil companies is challenging the right of the federal government to adopt a regulation designed to substitute renewable energy for fossil fuels — in part on the grounds that “that the production and consumption of petroleum fuels is not dangerous and does not pose a risk to human health or safety”, and so, “there is no evil to be suppressed”.

Those words are taken from a 2014 legal ruling against the companies. The judge in that case went on to refute their argument at length: “The evil of global climate change and the apprehension of harm resulting from the enabling of climate change through the combustion of fossil fuels has been widely discussed and debated by leaders on the international stage. Contrary to Syncrude’s submission, this is a real, measured evil, and the harm has been well documented.”

Case closed.

Or maybe not. Syncrude was back in court last November to appeal that ruling.

Few Canadians have heard of Syncrude because it’s a consortium of oil companies that jointly operate three massive tar sands mines. Suncor became Syncrude’s largest shareholder when it bought Canadian Oil Sands earlier this year, but the mines’ day-to-day operations are managed by Imperial Oil, the Canadian subsidiary of ExxonMobil.

It’s no surprise to see Exxon involved in this case; the company has a long history of opposing action on climate change. Exxon is now under investigation in New York and California for publicly claiming that the science of global warming was too murky to warrant policy action by governments — even as the company redesigned its drill rigs and pipelines destined for the Canadian Arctic based on company scientists’ predictions of a warming world. Exxon also was the only major oil player not on stage with Alberta Premier Rachel Notley as she announced the province’s ambitious new climate policy.

Yet it’s surprising to see companies like Suncor — which are trying to rebrand themselves as climate leaders — involved in such legal shenanigans. In his assessment of the original case, University of Calgary law professor Nigel Bankes wrote that this litigation “suggests that at least the sector of big oil represented by the Syncrude interests will fight federal greenhouse gas regulations in all of its forms and that it will fight them hard.

“There was no stone left unturned in this litigation. Counsel for Syncrude pursued every possible avenue, no matter how small the chance of success or creative the argument. Big carbon may be just like big tobacco in protecting its turf.”  — University of Calgary law professor Nigel Bankes

That doesn’t sound like something climate leaders ought to do.

As the largest shareholder, Suncor should tell their colleagues to withdraw this appeal. They should then take the money they were spending on lawyers and use it to map out how their businesses can thrive in a world that has moved beyond fossil fuels.

Keith Stewart is the head of the climate and energy campaign at Greenpeace Canada, and teaches a course on energy policy at the University of Toronto
Big Oil, Carbon taxes, End Polluter Welfare Act, Fossil fuel divestment, Fossil fuels, Oil industry lobby, Oil industry subsidies

US taxpayers subsidizing world’s biggest fossil fuel companies

Repost from The Guardian

US taxpayers subsidising world’s biggest fossil fuel companies

Shell, ExxonMobil and Marathon Petroleum got subsidises granted by politicians who received significant campaign contributions from the fossil fuel industry, Guardian investigation reveals
By Damian Carrington and Harry Davies, 12 May 2015 07.00 EDT
Marathon Petroleum refinery in Canton, Ohio, got a job subsidy scheme worth $78m when it started in 2011. Photograph: PR

The world’s biggest and most profitable fossil fuel companies are receiving huge and rising subsidies from US taxpayers, a practice slammed as absurd by a presidential candidate given the threat of climate change.

A Guardian investigation of three specific projects, run by Shell, ExxonMobil and Marathon Petroleum, has revealed that the subsidises were all granted by politicians who received significant campaign contributions from the fossil fuel industry.

The Guardian has found that:

  • A proposed Shell petrochemical refinery in Pennsylvania is in line for $1.6bn (£1bn) in state subsidy, according to a deal struck in 2012 when the company made an annual profit of $26.8bn.
  • ExxonMobil’s upgrades to its Baton Rouge refinery in Louisiana are benefitting from $119m of state subsidy, with the support starting in 2011, when the company made a $41bn profit.
  • A jobs subsidy scheme worth $78m to Marathon Petroleum in Ohio began in 2011, when the company made $2.4bn in profit.

“At a time when scientists tell us we need to reduce carbon pollution to prevent catastrophic climate change, it is absurd to provide massive taxpayer subsidies that pad fossil-fuel companies’ already enormous profits,” said senator Bernie Sanders, who announced on 30 April he is running for president.

Sanders, with representative Keith Ellison, recently proposed an End Polluter Welfare Act, which they say would cut $135bn of US subsidies for fossil fuel companies over the next decade. “Between 2010 and 2014, the oil, coal, gas, utility, and natural resource extraction industries spent $1.8bn on lobbying, much of it in defence of these giveaways,” according to Sanders and Ellison.

In April, the president of the World Bank called for the subsidies to be scrapped immediately as poorer nations were feeling “the boot of climate change on their neck”. Globally in 2013, the most recent figures available,the coal, oil and gas industries benefited from subsidies of $550bn, four times those given to renewable energy.

“Subsidies to fossil fuel companies are completely inappropriate in this day and age,” said Stephen Kretzmann, executive director of Oil Change International, an NGO that analyses the costs of fossil fuels. OCI found in 2014 that US taxpayers were subsidising fossil fuel exploration and production alone by $21bn a year. In 2009, President Barack Obama called on the G20 to eliminate fossil fuel subsidies but since then US federal subsidies have risen by 45%.

“Climate science is clear that the vast majority of existing reserves will have to stay in the ground,” Kretzmann said. “Yet our government spends many tens of billions of our tax dollars – every year – making it more profitable for the fossil fuel industry to produce more.”

Tax credits, defined as a subsidy by the World Trade Organisation, are a key route of support for the fossil fuel industry. Using the subsidy tracker tool created by the Good Jobs First group, the Guardian examined some of the biggest subsidies for specific projects.

Shell’s proposed $4bn plant in Pennsylvania is set to benefit from tax credits of $66m a year for 25 years. Shell has bought the site and has 10 supply contracts in place lasting up to 20 years, including from fracking companies extracting shale gas in the Marcellus shale field. The deal was struck by the then Republican governor, Tom Corbett, who received over $1m in campaign donations from the oil and gas industry. According to Guardian analysis of data compiled by Common Cause Pennsylvania, Shell have spent $1.2m on lobbying in Pennsylvania since 2011.

A Shell spokesman said: “Shell supports and endorses incentive programmes provided by state and local authorities that improve the business climate for capital investment, economic expansion and job growth. Shell would not have access to these incentive programmes without the support and approval from the representative state and local jurisdictions.”

ExxonMobil’s Baton Rouge refinery is the second-largest in the US. Since 2011, it has been benefitting from exemptions from industrial taxes, worth $118.9m over 10 years, according to the Good Jobs First database. The Republican governor of Louisiana, Bobby Jindal has expressed his pride in attracting investment from ExxonMobil. In state election campaigns between 2003 and 2013, he received 231 contributions from oil and gas companies and executives totalling $1,019,777, according to a list compiled by environmental groups.

A spokesman for ExxonMobil said: “ExxonMobil will not respond to Guardian inquiries because of its lack of objectivity on climate change reporting demonstrated by its campaign against companies that provide energy necessary for modern life, including newspapers.”

The Guardian is running a campaign asking the world’s biggest health charities, the Bill and Melinda Gates Foundation and the Wellcome Trust, to sell their fossil fuel investments on the basis that it is misguided to invest in companies dedicated to finding more oil, gas and coal when current reserves are already several times greater than can be safely burned. Many philanthropic organisations have already divested from fossil fuels, including the Rockefeller Brothers Fund whose wealth derives from Standard Oil, which went on to become ExxonMobil.

In Ohio, Marathon Petroleum is benefitting from a 15-year tax credit for retaining 1,650 jobs and a 10-year tax credit for creating 100 new jobs. The subsidy is worth $78.5m, according to the Good Jobs First database. “I think Marathon always wanted to be here,” Republican governor John Kasich said in 2011. “All we’re doing is helping them.” In 2011, Kasich was named as the top recipient of oil and gas donations in Ohio, having received $213, 519. The same year Kasich appointed Marathon Petroleum’s CEO to the board of Jobs Ohio, a semi-private group “in charge of the economic growth in the state of Ohio”.

A spokesman for Marathon Petroleum said: “The tax credit recognises the enormous contribution we make to the Ohio economy through the taxes we pay and the well-paying jobs we maintain. We have more than doubled the 100 new jobs we committed to create.” The spokesman said the company paid billions of dollars in income and other taxes every year across the US.

“Big oil, gas, and coal have huge influence on politicians and governments and they get that influence the old fashioned way – they buy it,” said Kretzmann. “Through campaign finance, lobbying, advertising and superpac spending, the industry has many ways to influence candidates and government officials seeking re-election.”

He said fossil fuel subsidies were endemic in the US: “Every single well, pipeline, refinery, coal and gas plant in the country is heavily subsidised. Big Fossil’s lobbyists have done their jobs well for the last century.”

Ben Schreiber, at Friends of the Earth US, said. “There is a vibrant discussion about the best way to keep fossil fuels in the ground – from carbon taxation to divestment – but ending state and federal corporate welfare for polluters is one of the easiest places to start.”

Schreiber also defended subsidies for renewable energy: “Fossil fuels are a mature technology while renewable energy is nascent and still developing. It makes sense to subsidise technologies that are going to help solve climate change, but not to do the same for those that are causing the problem.”

Clean energy, Fossil fuel divestment, Tar sands crude

Bank Advises Clients Against Fossil Fuel Investment

Reprint from Time Magazine

HSBC Advises Clients Against Fossil Fuel Investment

By Nick Cunningham / Oilprice.com, April 29, 2015
The HSBC logo on the facade of HSBC France headquarters in Paris on Feb. 9, 2015.
The HSBC logo on the facade of HSBC France headquarters in Paris on Feb. 9, 2015.

The bank wrote to its clients that fossil fuel companies will become “economically non-viable”

The fossil fuel divestment campaign is picking up steam.

Often dismissed as unwise by oil industry proponents and criticized as a distraction even by supporters of action on climate change, the divestment movement is no longer being ignored.

Look no further than CeraWeek, an annual get-together of North America’s fossil fuel elite. On April 22, amid discussion panels such as “Asia: Still the Promised Land for New Energy Investment?” or “Canada’s role in the rising North America energy powerhouse,” there was also a session dedicated to divestment and the implications for energy companies. The conversation analyzed how sustainable the business model is for fossil fuel companies as the world moves towards regulating carbon emissions.

The attention paid to the divestment at CeraWeek suggests that the growing publicity and success from the environmental movement’s ability to secure divestment commitments from universities, banks, pension funds, churches, and other wealth funds are starting to be perceived as a threat by the fossil fuel industry.

A few weeks earlier, The Guardian made a splash with its “Keep it in the Ground” campaign, a very firm declaration in support of divestment. The Guardian Media Group vowed to divest its £800 million fund as well.

The growing concern over carbon pollution raises the possibility of a regulatory or tax crackdown, both at the national and international level. Newsweek reported on April 21 that HSBC wrote in a private note to its clients that there is an increasing risk that fossil fuel companies will become “economically non-viable.” As a result, HSBC advised its clients to divest from fossil fuels because they may be too risky. If investors fail to get out of fossil fuels, the bank says, they “may one day be seen to be late movers, on ‘the wrong side of history.’” As the divestment campaign builds up steam, major oil and gas companies are starting to see the writing on the wall.

But there could be a way to adapt. The Carbon Tracker Initiative (CTI) just published a “blueprint” for fossil fuel companies to adapt to a carbon-constrained world. The blueprint provides several recommendations. For example, oil companies should avoid high cost projects such as the struggling Kashagan field in Kazakhstan or expensive oil sands projects in Canada. High-cost projects put companies at risk when they are hit with unforeseen events, such as an oil price crash, a decline in demand, or a change in tax regimes. Instead, companies should invest in lower risk projects with higher rates of return, CTI says. CTI also insists that corporate governance within fossil fuel companies is critical – management needs a clear-eyed prognosis of how exposed their assets are to a potential scenario in which their oil and gas reserves are no longer wanted.

It is far from clear whether or not the oil majors will heed CTI’s advice on adapting their companies. In mid-April, 98 percent of BP’s shareholders voted in favor of an initiative that would force the company to disclose which of its assets would become “unburnable” in a low-carbon world. The results of that analysis will be much anticipated. ExxonMobil undertook a similar study, but summarily dismissed the likelihood that its assets would be affected in the future by climate action.

“Our analysis and those of independent agencies confirms our long-standing view that all viable energy sources will be essential to meet increasing demand growth that accompanies expanding economies and rising living standards,” William Colton, ExxonMobil’s vice president of corporate strategic planning, said in a March 2014 statement. In other words, investors have little to fear — ExxonMobil will be fine.

However, much has changed since then. The divestment movement has gathered quite a bit of momentum as protests hit more campuses and city halls. The U.S. and China reached a landmark agreement to reduce their greenhouse gas emissions. More countries will set policies to reduce energy demand ahead of international negotiations in Paris later this year. Oil prices have crashed, highlighting the vulnerabilities of many over-leveraged oil companies. And clean energy continues to make inroads, amid falling costs for solar, wind, and energy storage.

Oil companies ignore the divestment campaign – and other threats to their business models – at their own peril.

This article originally appeared on Oilprice.com.