As many people who watch the oil industry know, oil spills are not avoidable, preventable, or unlikely. From extraction to combustion, oil is a destructive and dirty business, based on sacrificing the health of environments and peoples for corporate profits.
This fact was especially evident last week, when Exxon’s Pegasus pipeline spilled over 150,000 gallons of toxic tar sands crude oil into Lake Conway and adjoining neighborhoods in Mayflower, Arkansas.
However, Exxon’s Mayflower spill is not an isolated incident. In fact, there were three other significant oil spills that occurred last week.
The spills, which were the result of both train derailments and pipeline ruptures, spilled many hundreds of thousands of gallons of toxic crude oil in and around neighborhoods, marshes, and rivers.
March 26 - Train Derailment in Minnesota - 30,000 gallons of crude oil spilled
Last week's cacophony of oil industry irresponsibility began with a train derailment in Minnesota, which spilled 30,000 gallons of crude oil. The oil was from Canada which has become a top exporter of crude to the United States because of their exploitation of the tar sands in Alberta.
In a fit of ill-timed opportunism, supporters of the Keystone XL pipeline, which would pump tar sands oil from Canada to the gulf coast, used this this spill as a justification for building the tar sands pipeline. A spokesman for North Dakota Senator John Hoeven, who has been one of the chief political proponents of the Keystone XL pipeline, had this to say:
"It should be clear that we need to move more oil by pipeline rather than by rail or truck...This is why we need the Keystone XL. Pipelines are both safe and efficient."
March, 29 - Lake Conoway, Arkansas - 156,000 gallons of tar sands crude oil spilled
In an incident that should make anyone question the "safety and efficiency" of oil pipelines, Exxon’s Pegasus Pipeline spilled 157,000 gallons of tar sands crude into Lake Conway and surrounding neighborhoods in Arkansas. Since the spill, Exxon has limited press access to the spill site, oiled animals, and even the skies above the spill area. Exxon has even claimed that Lake Conway has been unaffected by the oil spill, though Arkansas Attorney General Dustin Mcdaniel has set that particular record straight.
"Of course there's oil in Lake Conway"
April, 3 - Houston, Texas - 30,000 gallons of crude oil spilled
Four days after Exxon's Pegasus pipeline ruptured and seven days after Keystone XL pipeline proponents claimed "pipelines are both safe and efficient," a Shell pipeline running through a bayou outside of Houston spilled 30,000 gallons of oil into the Texas marsh. The actual amount of oil spilled by Shell's West Columbia Pipeline is still unknown, as the cause of the leak has not been released by Shell.
April, 3 - White River, Ontario - 16,642 gallons of crude oil spilled
At the same time that Shell was spewing oil into the wetlands of Texas, a train derailment in White River, Ontario was leaking oil in Canada. Most people know White River as the original home of Winnie the Pooh, but it is also a major train depot for shipping crude oil. The company responsible claimed that 4 barrels of oil were spilled, though the actual number turned out to be 10 times larger, at 400 barrels. That's 16,642 gallons of toxic crude oil. Sorry Winnie.
As the oil industry proved this week, they are incapable of protecting people and the environment from their product. As Micheal Brune of Sierra Club said:
"In Ontario, the company said it spilled four barrels when it had actually spilled 400. In Arkansas, Exxon learned about the spill from a homeowner but kept pumping tar sands crude into the neighborhood for 45 minutes, and is bullying reporters who want to tell the public what's going on. In Texas, a major oil spill came to light that Shell had been denying for days. Transporting toxic crude oil -- and tar sands in particular -- is inherently dangerous, more so because oil companies care about profit, not public safety. This is why Keystone XL, at nine times the size of the Arkansas Pegasus pipeline, must never be built.”
If built, the Keystone XL pipeline will spill. Stop the Keystone XL pipeline.
Sure seems like it. According to reports from the ground, Exxon is in full control of the response to the thousands of barrels of tar sands oil that began spilling from Exxon's ruptured pipeline in Arkansas last weekend. The skies above the spill has been deemed a no-fly zone, and all requests for aerial photos must be approved by Exxon’s own “aviation advisor” Tom Suhrhoff.
In addition, the entire area has been cordoned off and news media have been prevented from inspecting the spill zone.
Now, Exxon is trying to limit access to the animals impacted by the tar sands crude. A wildlife management company hired by Exxon has taken over all oiled wild animal care. The company, called Wildlife Response Services, is now refusing to release pictures and documentation of the animals in their care, unless they are authorized by Exxon’s public relations department.
The spill, which leaked heavy, viscous tar sands oil, emanates from the Pegasus Pipeline, which was built in the 1940’s. The pipeline pumps diluted bitumen from the Alberta tar sands to refineries on the Gulf Coast, just like the proposed Keystone XL pipeline. However, the Pegasus is much smaller, carrying 90,000 barrels per day (BPD), while the Keystone would carry 800,000 BPD. Tar Sands oil is shipped through pipelines in the form of Diluted Bitumen (Dilbit), which must be heated and forced through the pipeline at high pressure. Due to the corrosive nature of the tar sands oil, which contains sand, plus the high temperature and high pressure needed to pump it through the pipes, tar sands oil pipelines are particularly dangerous.
Exxon’s control of the oil spill response is reminiscent of the BP spill in the Gulf of Mexico, when the polluter, BP, effectively controlled the response and cleanup.
The Center for Media and Democracy has released a new report on the State Policy Network, a web of interconnected groups that attack climate change science and oppose support for renewable energy. The new guide details the $80 million that right-wing billionaires and corporations are spending each year to fuel Tracie Sharp's State Policy Network (SPN) and its 59 state "think tank" members.
The guide, a product of a three month investigation by the Center for Media and Democracy, has found previously unreported funding for SPN flowing directly from Koch Industries, in addition to the known contributions from the Koch family foundations. CMD also tracks SPN's connections to the Koch funded Donors Trust and Donors Capital Fund, known as the "Dark Money ATM" for attacks on climate science.
State Policy Network’s connections to the American Legislative Exchange Council (ALEC), are also explored in the report. According to the guide:
"Through ALEC, SPN helps draft templates to change state laws; then ALEC's public sector and private sector members vote in secret for those bills; and then SPN supports the introduction or adoption of those bills as law, sometimes with help from David Koch's [Americans for Prosperity] AFP echo chamber in a state.”
Called the Reporters Guide to the State Policy Network, CMD’s report details how SPN works, who funds it, what the network's groups do, and looks at some of their legislative goals, including undermining workers' rights and weakening unions as well as undoing renewable energy laws and expanding ways in which tax dollars are redirected to the private sector, for example through funding so-called "virtual schools." Key resources include:
- Documentation that exposes the close funding connections between SPN, its members, and the controversial ALEC.
- Highlights of the significant and previously unknown Koch brothers' funding for SPN groups, demonstrating that prior estimates of Koch funding have been understated. (These materials were discovered by CMD and researchers in materials filed with the IRS by two of the SPN groups.)
- Entries about every SPN member think tank on CMD's SourceWatch.org.
Read CMD’s Reporter’s Guide to the “State Policy Network” here.
ExxonMobil, other pipeline operators don't have to pay into oil spill fund when it's tar sands oil?!
As Think Progress has just reported, a bizarre technicality allowed Exxon Mobil to avoid paying into the federal oil spill fund responsible for cleanup after the company's Pegasus pipeline released 12,000 barrels of tar sands oil and water into the town of Mayflower, Arkansas.
According to a thirty-year-old law in the US, diluted bitumen coming from the Alberta tar sands is not classified as oil, meaning pipeline operators planning to transport the corrosive substance across the US - with proposed pipelines like the Keystone XL - are exempt from paying into the federal Oil Spill Liability Trust Fund.
News that Exxon was spared from contributing the 8-cents-per-barrel fee to the clean-up fund added insult to injury this week as cleanup crews discovered oil-soaked ducks covered in "low-quality Wabasca Heavy Crude from Alberta." Yesterday officials said 10 live ducks were found covered in oil, as well as a number of oiled ducks already deceased.
Photographer Eilish Palmer, known as Lady with a Camera, has been working with HAWK (Helping Arkansas Wild Kritters), a wildlife rehabilitation centre, to locate and help ducks and other animals affected by the spill.
We I connected with Eilish on the phone she was in the rain, searching for more oil-covered animals: "I'm actually out in the woods right now looking for animals. We just found two dead ducks and one live one…We actually saw a dead wood duck and we saw its mate, it couldn't fly away, only walk. It was pretty saturated."
Eilish said HAWK was the first responder for affected wildlife in the area but has since seen Exxon establish a local mobile unit to treat animals on site. "As the number of animals increased Exxon brought in their own rehabilitation centre because we were taking that animals to a centre about an hour away. HAWK doesn't have a mobile unit."
In addition to ducks, the team working with HAWK also found this oil-laden male muskrat, suggesting a number of species may be affected.
Faulkner Country Judge Allen Dodson said "I'm an animal lover, a wildlife lover, as probably most of the people here are. We don't like to see that. No one does."
He added, "Crude oil is crude oil. None of it is real good to touch."
The Exxon spill leaked 80,000 gallons of oil into an Arkansas residential area, causing the evacuation of 40 homes. This weekend Exxon Mobil Pipeline Co. president Gary Pruessing told displaced homeowners, "If you have been harmed by this spill then we're going to look at how to make that right."
According to InsideClimate News, Exxon is currently preventing the media from accessing the spill scene. Today the Arkansas Attourney General announced an investigation is being launched into the cause of the 60-year old pipeline's rupture.
The Pegasus pipeline was originally built in the 1940s and was recently dormant for four years before its flow was reversed to carry Alberta diluted bitumen from Illinois to the Gulf Coast. In 2006 Exxon called the line's reversal a win-win for the people of the Gulf Coast and Canada.
The revelation that companies transporting diluted bitumen in the US have some concerned about pre-existing pipelines, as well as the proposed Keystone XL pipeline that will transport the tar sands-derived oil across a number of ecologically sensitive areas.
According to the NRDC, in 2011 a number of pipelines carried Alberta bitumen in the US:
Although the spread of oil refineries across the US receiving bitumen suggests the network of tar sands oil transport is much more widely spread across the States:
The network potentially connecting bitumen-carrying pipelines with other pipelines is quite extensive across the US:
Last week a coalition of environmental groups, communities and inviduals petitioned the US EPA and Pipelines and Hazardous Materials Safety Association (PHMSA) to place a moratorium on pending tar sands pipelines, including the Keystone XL pipeline, until new safety rules are established.
"Simply put, diluted bitumen and conventional crude oil are not the same substance," the petitioners wrote. "There is increasing evidence that the transport of diluted bitumen is putting America's public safety at risk. Current regulations fail to protect the public against those risks. Instead, regulations ... treat diluted bitumen and conventional crude the same."
Written by Gabe Elsner of the Checks and Balances Project. Crossposted with permission from Huffington Post: ALEC Energy Director Misleads the Wall Street Journal
In Friday's Wall Street Journal story, "States Cooling to Renewable Energy," American Legislative Exchange Council (ALEC) Energy, Environment and Agriculture Task Force Director Todd Wynn claimed, "I have not received one dime to work directly on renewable-energy mandates." Wynn may not have received a check where the memo read: "For your efforts to attack clean energy policies" but his ALEC paycheck certainly comes (in part) from fossil fuel interests.
ALEC received approximately 98 percent of its budget from corporations, trade associations and corporate foundations, according to IRS 990 tax forms from the organization in 2009.
The members (as of June 2011) of Mr. Wynn's task force include at least 23 fossil fuel companies and utilities, like ExxonMobil, Continental Resources, Peabody Energy and Duke Energy, that have a direct financial interest in slowing the growth of clean energy. Task force members fund almost all of ALEC's operations.
ALEC corporate members each pay between $7,000 and $25,000 or more to be members. The corporate task force members also pay fees to have a vote on what pieces of "sample legislation" should be sent to state legislators. And, last fall, the energy task force members voted to push the "Electricity Freedom Act," which repeals state clean energy standards, through state legislatures across the country.
So it's no surprise these bills are showing up and being pushed by fossil fuel interests and front groups in states across the country. Wynn probably received at least a few dimes to coordinate this effort to attack clean energy policies. If ALEC wants to provide some transparency on its budget, Checks and Balances Project would be happy to take a second look.
Peabody Energy dumps retirees in to company "created to fail," then cuts their pensions and benifits
Peabody Energy, the largest coal company in the US and one of the largest in the world, is once again embroiled in controversy over shady treatment of employees. In 2007, Peabody Energy created Patriot Coal, a spin-off company comprised of Peabody’s eastern US mines. According to lawsuits involving the United Mine Workers (UMW), Patriot was formed as a place to stash union mines in West Virginia and the Midwest, along with the significant pension and health-care obligations that these eastern mines held. According to UMW, Patriot was essentially a "company created to fail," to give Peabody Energy and Arch Coal (another major US coal company who sold union mines to Patriot) an easy way to avoid paying union pensions and health-care benefits, while continuing to profit from their giant, nonunion surface mines in the Powder River Basin of Montana and Wyoming.
Once Patriot declared bankruptcy, which it did last July, all of the pensions and medical benefits Peabody was obligated to pay their workers were put on the chopping block, just as Peabody had hoped. If Peabody succeeds, 10,000 retirees and another 10,000 dependents will lose the benefits promised them. Now, retired mine workers who labored for Peabody under the promise that they would receive health care and pensions, are outraged. Protests have forced Peabody to move its annual meeting to Wyoming, to avoid the civil disobedience by coal miners in the east. This is just the latest chapter in a long history of deceptive and exploitative practices by Peabody Energy and the coal industry in general. The American Coalition for Clean Coal Electricity (ACCCE), a coal front group funded by Peabody claims “Coal = Jobs.” But Peabody’s callous treatment of pensioners exposes what math the coal industry really cares about.
Most people have never heard of the DC lobbying and public relations firm DCI Group. When DCI Group does it’s job right, most people never do. That’s because DCI is a prime example what a highly effective, professional, and well-funded Public Relations firm can do. Are you a cigarette company that wants grassroots support for cigarette smoking? DCI can do that. Are you an Indonesian timber conglomerate that wants the “freedom” to sell illegal rainforest pulp? DCI can enlist thousands of liberty-lovin Americans to protect that freedom. Do you want people mobilized, in the streets, demanding that the government relax pollution laws and other regulations on your coal or oil corporation? DCI actually did that. It was called the Tea party.
1 DCI Group and Tobacco
Addictive, deadly, and rich, the tobacco industry is the perfect client for a crack PR team like DCI Group.
During the early days of tobacco regulation in the 1980’s, tobacco corporations were spending millions of dollars to convince Americans that tobacco really wasn’t that bad for them, and regulating tobacco was an infringement on the god given rights of every American.
Masterminding that message was DCI Groups founders, Doug Goodyear and Tom Synhorst, who were two of the tobacco PR men involved in the early days of “tobacco control opposition.”
Using a strategy DCI Group would repeat and hone in the coming decades, PR admen like Goodyear and Synhorst pioneered couching a pro-corporate agenda, in this case tobacco’s, in terms of rights, liberties and freedoms. They started “smokers rights groups,” whose anti-regulatory, pro-business bent is right at home in today’s Tea Party messaging. DCI Group has maintained those close ties through the years, and currently lobby for Altria (Philip Morris).
2 DCI Group and the start of the Tea Party
A recently released academic study has traced the origins of the Tea Party back to its roots. The popular creation myth of the Tea Party, in which a news anchor, fed up with the federal governments creeping socialism demands an uprising - a la Network - is only part of the story. In fact, PR agencies working for tobacco, and oil, and coal corporations had been pushing for a Tea Party for decades, and had even registered the websites and domain names under the name Tea Party, 6 years before president Obama’s election.
From the study:
“Rather than being a grassroots movement that spontaneously developed in 2009, the Tea Party organizations have had connections to the tobacco companies since the 1980s. The cigarette companies funded and worked through Citizens for a Sound Economy (CSE), the predecessor of Tea Party organizations, Americans for Prosperity and FreedomWorks, to accomplish their economic and political agenda.”
With the help of the oil billionaire Koch Brothers, DCI Group partner Dan Combs built “Citizens for a Sound Economy,”(CSE) during the 1990’s, right as the tobacco industry was busted for lying about the dangers of smoking. CSE’s self-described mission was "to fight for less government, lower taxes, and less regulation," which included opposing tobacco laws and pollution regulation on the oil industry.
3 DCI Group and Americans For Prosperity/ Freedomworks
In 2004, Citizens for a Sound Economy (CSE) split like a procreative amoebae into Americans for Prosperity and Freedomworks, the two largest and most powerful Tea Party organizations. AfP and Freedomworks employ hundreds of Tea Party organizers all over the country, and pay for rallies, promotional materials, and conventions.
DCI Group, and it’s alias FLS Connect, are currently the highest paid consultants for AFP and Freedomworks. DCI carefully crafts messaging for the Tea Party behemoths, and does extensive polling to make sure their pro-corporate, free-market PR is hitting the mark. Just as they directed anti-tax advocates to do big-tobacco and big-oil’s work through Citizens for a Sound Economy, DCI Group is using the Tea Party in the service of corporate America.
4 DCI Group and Climate Change Denial
DCI Group was a pioneer of brazen denial of scientific evidence while working for tobacco giants. They applied the same technique of creating fake science, misrepresenting impacts, and attacking legitimate scientists to their campaign denying the existence of climate change.
At the behest of major oil corporation and DCI Group client ExxonMobil, DCI became a hotbed of climate change science attacks, training and funding outspoken climate change deniers. DCI Group created and ran Tech Central Station, a platform for climate science denial. Tech Central Station was so egregiously disingenuous about climate science that a Senatorial committee asked ExxonMobil to stop funding it, which Exxon did in 2006.
However, a slap from the Senate did not stop DCI Group from continuing to specialize in anti-climate science messaging. DCI Group continues to hire and train professional climate change deniers. One such DCI Group alumnus, Andrea Saul, became candidate Mitt Romney’s press secretary during the 2012 presidential election, and helped push Romney’s anti-climate science positions. While at DCI, she wrote and distributed pres releases attacking legitimate climate science. Another DCI Group alumnus, Bob Paduchik, is now a Vice President of the coal front group called Americans for Clean Coal Electricity (ACCCE).
5 DCI Group and Foreign Criminal Entities
DCI specializes in manipulating America’s white, conservative class, using loaded buzzwords like “freedom,” and “liberty,” and couching a corporate agenda of reduced regulation as “small government.” As it turns out, this type of manipulation is an old shtick, predating the Tea Party.
And DCI Group does this for many clients, including an Indonesian timber company responsible for illegal deforestation of rainforests in southeast Asia. DCI helped create a front group for Asia Pulp and Paper, which has destroyed millions of miles of endangered rainforest in Indonesia. They found a self described “tea party patriot” to lead the effort, who made tea party themed speeches that advocated for the Indonesian paper corporation, APP.
Chart Source: New York Times
A new Greenpeace analysis released today shows that Donors Trust, a shadowy funding vehicle, has laundered $146 million in climate denial funding from 2002 to 2011. Yesterday’s article in the Guardian referenced part of the Greenpeace analysis. Today’s report is now up to date with the latest available funding from 2011.
In addition, a Center for Public Integrity report released yesterday illustrates the efforts of Donors Trust to set up conservative media megaphones in state capitals. Today, the Guardian reported that these ideological media outlets have been instrumental in anti-climate fights at the state level. These include state and regional attacks against wind power, solar power, and carbon pollution reduction programs.
As climate denial funding from traceable Big Oil sources like Exxon and the Koch brothers is declining, the anonymous money funneled through Donors Trust is skyrocketing.
This interesting coincidence is illustrated in a graph from the Greenpeace report:
The key findings of the Greenpeace analysis on Donors Trust:
- Donors Trust and its associated organization, Donors Capital Fund, have funded 102 climate-denial organizations since 2002.
- From 2002 to 2011, Donors Trust and Donors Capital Fund have provided $146 million to climate denial groups.
- In 2010, a dozen climate denial groups received between 30% to 70% of their funding from Donors Trust, including the Koch-founded Americans for Prosperity, as well as Committee for a Constructive Tomorrow (CFACT)
- Additional climate denial organizations that have received major funding in recent years by Donors Trust include the Heartland Institute, Competitive Enterprise Institute, Cato Institute and the James Partnership (Cornwall Alliance).
Wait, so what is Donors Trust, exactly? It’s a shadowy funding operation for anti-government extremists and climate deniers. The mission of Donors Trust is to provide ultra-conservative funders a way to support their controversial pet-causes without leaving fingerprints on the grants.
But don’t take our word for it – here’s an excerpt from the Donors Trust FAQ webpage:
Who is behind this untraceable money? It’s impossible to track all of the big-pockets hiding behind Donors Trust. One notable individual is Charles Koch, the secretive oil billionaire who was discovered to have funneled $8 million through Donors Trust from two of his foundations. And that’s only the amount that we can track – we don’t know the full extent of the Koch’s account with Donors Trust.
As posted yesterday on our blog and detailed in another great Guardian article, several climate denial organizations rely on Donors Trust for a large share of their budgets. The Heartland Institute, creator of the famously reviled “Unabomber billboard” and coordinators of the annual Denial-palooza conference, relies heavily on a single anonymous donor that sends money through Donors Trust. According to internal Heartland plans leaked to the public, this Anonymous Donor has been responsible for up to 60% of the organization’s annual revenue, with the majority of fund earmarked to “global warming programs.” Even though the leaked documents prove this money is specific for climate projects, the Donors Trust tax forms only disclose the funding’s purpose as “general operations.”
The deep dependence on Donors Trust by climate deniers goes far beyond the Heartland Institute. Marc Morano’s organization, the Committee for a Constructive Tomorrow, has received between 40% and 46% of its budget through Donors Trust in recent years. Morano was named 2012 “Climate Misinformer of the Year,” often found as a talking head on Fox News or CNN denying that human activity is affecting the climate. In response to the President’s 2013 State of the Union address, Morano published a point by point rebuttal to the section on climate change.
CFACT is among over a dozen organizations that get 30% to 70% of their total budgets from Donors Trust and Donors Capital Fund. Other noteworthy groups include Americans for Prosperity Foundation, the Cornwall Alliance (James Partnership), and the State Policy Network.
A new report in the peer-reviewed academic journal Tobacco Control offers a deeper look at the history of the Tea Party. Commonly thought to be a grassroots uprising spurred by a TV rant in 2009, the report documents how tobacco companies and a front group established by Charles and David Koch were attempting to begin the revolt years earlier.
The study, titled "‘To quarterback behind the scenes, third-party efforts’: the tobacco industry and the Tea Party," shows that the Koch front, Citizens for a Sound Economy, set up a website in 2002 for the "U.S. Tea Party." Here is an archived image from that website, which is now owned by FreedomWorks.
As previously reported by DeSmogBlog's Brendan DeMelle on Huffington Post:
The two main organizations identified in the UCSF Quarterback study are Americans for Prosperity and Freedomworks. Both groups are now "supporting the tobacco companies' political agenda by mobilizing local Tea Party opposition to tobacco taxes and smoke-free laws." Freedomworks and Americans for Prosperity were once a single organization called Citizens for a Sound Economy (CSE). CSE was founded in 1984 by the infamous Koch Brothers, David and Charles Koch, and received over $5.3 million from tobacco companies, mainly Philip Morris, between 1991 and 2004.
The ties between the Koch brothers' Citizens for a Sound Economy and tobacco are extensive, with Charles Koch's right hand man, Richard Fink, getting direct praise from the Tobacco Institute for his leadership in urging the U.S. Surgeon General to avoid foreign trade restrictions on tobacco products. The Checks and Balances Project has a report on Koch Industries executive Richard Fink and tobacco:
In 1988, Fink wrote to the Surgeon General to express concern about the Interagency Committee on Smoking and Health’s inquiries into the subject of tobacco and U.S. trade policy. He warned that it would be unwise to suggest any foreign trade barriers, ending, “we hope that you will keep these thoughts in mind as your department discusses U.S. trade policy toward tobacco.” This letter was tracked down by the Checks & Balances Project in the Tobacco Archives, with an addendum from Samuel Chilcote – President of The Tobacco Institute – urging others to follow Fink’s lead and support.
For Fink’s efforts, Chilcote thanked Fink in a hand-signed letter on behalf of the tobacco industry, writing, “When an advisory body such as the Interagency Committee on Smoking and Health ventures into the field of U.S. trade policy, it is vitally important that the public record be balanced by the sound economic views and sensible business judgments that you provided.”
In summarizing the significance of the Koch-Tobacco-Tea Party insight from the report, DeSmogBlog's DeMelle hits the nail on the head:
Finally, this report might serve as a wake-up call to some people in the Tea Party itself, who would find it a little disturbing that the "grassroots" movement they are so emotionally attached to, is in fact a pawn created by billionaires and large corporations with little interest in fighting for the rights of the common person, but instead using the common person to fight for their own unfettered profits.
Americans for Prosperity and FreedomWorks have been successful in co-opting the Tea Party, directing millions in corporate and wealthy donor funding to steer the "grassroots" agenda of Tea Party activists.
Grassroots? Try astroturf.
Duke Energy Ties to Gov. McCrory Increase Concerns over SB10 Proposal to Fire NC Utilities Commission
This guess post was written by Sue Sturgis for the Institute for Southern Studies' online magazine, Facing South.
This is a critical moment for North Carolina's energy future, as a packed public hearing held in Raleigh this week showed -- and there are growing concerns that the politician who might get to make key decisions about it has significant conflicts of interest.
On Monday, Feb. 11, about 180 people attended a N.C. Utilities Commission (NCUC) hearing on Duke Energy's plan for meeting its customers' power needs over the next two decades. Dozens of citizens testified against Duke's proposed Integrated Resource Plan, which calls for generating most of its energy from polluting sources: dirty coal plants (24 percent), natural gas plants (29 percent), and risky nuclear plants (29 percent). Efficiency would account for only 4.5 percent of Duke's generation mix, while wind and solar would make up only 2.25 percent. The plan would cost Duke's customers dearly, as the company -- which supplies electricity to over 95 percent of North Carolina customers since its merger with Progress Energy -- would quadruple rates within a decade.
Speaker after speaker called on commissioners to require Duke to increase its generation from renewable sources such as solar and to encourage greater efficiency. Many of those who testified cited the urgency of acting now, pointing to mounting signs that the climate has already been dangerously disrupted by unchecked greenhouse gas pollution.
"What are we waiting for, the next tragic super storm to strike?" asked Avram Friedman, executive director of the Canary Coalition, a nonprofit that advocates for clean air in western North Carolina. "What is it going to take for you to act in the public interest?"
But there are mounting concerns that the public interest will get even less consideration if North Carolina's legislature gets its way and gives Gov. Pat McCrory (R) sole control over the commission's membership.
A controversial bill recently introduced in the General Assembly would sweep out the current members of key state regulatory commissions including the NCUC and replace them with members appointed by the governor and/or the legislature. In the case of the NCUC, Senate Bill 10 specifies that the new appointments would be made by the governor and confirmed by the legislature. It would also downsize the commission from seven members to five. The bill has already passed the Senate and is now advancing through the House, both of which are controlled by veto-proof Republican super-majorities.
State Sen. Bill Rabon (R-New Hanover), one of the bill's primary sponsors along with Sens. Tom Apodaca (R-Buncombe) and Neal Hunt (R-Wake), told the Senate Rules Committee that the bill streamlines state government and allows key boards to be run by appointees who "are more like-minded and willing to carry out the philosophy of the new administration," as The News & Observer reported.
However, some watchdogs are protesting what they call "an unprecedented conflict of interest" created by the legislation because of McCrory's unusually close ties to Duke Energy.
In addition to having received generous campaign contributions from Duke Energy (the company, its political action committee, employees, and their families donated over $240,000 to McCrory's 2008 and 2012 gubernatorial campaigns and to the state Republican Party since he became the party's nominee, according to a recent report by the liberal advocacy group Progress NC), McCrory worked for the company for 28 years, starting out digging ditches and eventually making his way to a position as senior adviser with Duke's Business and Economic Development Group before retiring in 2007 to run for governor.
Because of that employment history, the clean-energy advocacy group NC WARN last month joined with the state AARP to ask the governor to recuse himself from making appointments to the commission and from appointing a new Public Staff director to represent consumers in utility cases because of his longtime association with Duke. This week NC WARN sent a letter to McCrory raising concerns about the commission overhaul proposal.
"If the bill passes, you would be required to appoint all the members of the Utilities Commission," NC WARN Executive Director Jim Warren wrote in the Feb. 11 letter. "The public perception would be inescapable that Duke Energy had captured its regulator, and had done so with the Governor's assistance."
But the governor's financial ties to the utility giant are not merely historic: Though he's no longer employed by Duke Energy, McCrory continues to hold a significant financial stake in the company. His latest statement of economic interest filed with the N.C. Ethics Commission and posted to the Indyweek.com website discloses that he holds stock in Duke valued at a minimum of $10,000. North Carolina ethics rules do not require reporting the exact value of the investment.
Notified of the holdings, Warren said they are "just more evidence that the governor has an unprecedented conflict of interest."
McCrory's history of conflicts
This is not the first time concerns have arisen over potential conflicts of interest related to McCrory's close ties to Duke Energy, as Facing South reported back in 2008.
In 1994, while working for Duke and serving as an at-large city councilman and mayor pro tem in the company's hometown of Charlotte, McCrory chaired a council meeting and voted on a matter that directly affected Duke's finances. City of Charlotte v. Cook involved Charlotte's efforts to condemn private farmland to build an underground water pipe for a project that would enable the city to purchase power from Duke instead of the electric membership corporation that was the authorized provider for that location.
The case eventually ended up in state Supreme Court. Though the court majority ultimately ruled there was no wrongdoing by the city, a dissenting opinion by Justice Beverly Lake Jr., a Republican, pointed to a conflict of interest on McCrory's part:
The record evidences multiple Duke Power internal e-mail messages and memoranda reflecting that Duke Power and the City collaborated to have the City acquire a fee simple title to the property in order that Duke Power could provide the power to the plant. These e-mail messages indicate that the mayor pro tempore of the City, an employee of Duke Power, as well as the project director had contact with Duke Power officials and discussed condemning a fee simple interest for the project. The mayor pro tempore chaired the 12 September 1994 City Council meeting where the subject of condemning a fee simple was discussed, and he voted in favor of a fee simple condemnation.
McCrory filed an affidavit saying he would not have participated in the meeting if he had known Duke was involved. However, the court pointed to evidence that McCrory did in fact know Duke was involved -- though it ruled that "an ethical problem involving the Council has to rise to a much higher level than this one for us to upset a decision by the Council."
In another action that raised conflict of interest concerns, McCrory went to Washington, D.C. in 1997 to testify as Charlotte mayor against federal clean air regulations for the city that would have cost his employer Duke Energy an estimated $600 million. As a local paper reported at the time:
When asked about a possible conflict of interest arising from his appearance on Capitol Hill as Charlotte's mayor to testify about a matter that would directly affect his employer, Duke Power (where he serves as manager of business relations), McCrory replied, "No, in fact it's quite beneficial because I'm very knowledgeable on the subject."
In the letter it sent to McCrory this week about the latest conflict of interest concern, NC WARN asked the governor to oppose the NCUC provision in the commission overhaul bill and to call for it to be removed from the House version of the legislation. It also asked McCrory to state that, should the section pass in spite of his opposition, he would appoint an independent panel to recommend candidates for the NCUC and abide by its recommendations.
If he fails to do so, NC WARN's Warren wrote, McCrory risks further alienating the people from the government that's supposed to serve them:
The Utilities Commission provisions of the bill would set the precedent that whenever legislative leadership and the governor changes party, the seated commissioners would be thrown out and replaced. It would do away with the Commission's institutional legitimacy as well as its knowledge base and continuity gained by handling its highly complex legal, technical, and policy issues. The public, already skeptical that utility regulation is in the public's interest, would see the Commission as just a rubber stamp wielded by politicians and their utility industry backers. Instead of bolstering faith in the integrity and effectiveness of state government, the bill would take cynicism to a new level.