New Report Highlights “Revolving Door” Between Government and LNG Firms
By hiring former lawmakers and officials from both parties, LNG firms are able to gain more contracts to expand production and, potentially, sell their product overseas in emerging markets such as in Asia, which is noted as harmful for the rest of society:
The climate and ecological consequences of such a pursuit are unquestionably dangerous. But most policymakers in Washington have ignored that element of the debate. Instead of conducting a sober analysis of the costs and benefits of expanding LNG exports, regulators and lawmakers have followed the lead of a multi-tentacled lobbying campaign managed by the shale gas industry.
Hydraulic fracturing, more commonly known as “fracking,” is an issue in which both parties attempt to accommodate the industry to gain more power. This did not happen suddenly, but occurred for many years without any major investigations by mainstream media outlets. As a result, industry interests were victorious without any major opposition in any of the three branches of government:
Corporate lobbyists have helped to engineer a transformative shift with little scrutiny or meaningful debate: plans to extract U.S. natural gas and export the gas overseas to more lucrative markets,
Steve Horn, a journalist with DeSmogBlog and a co-author of the report along with Republic Report journalist Lee Fang, highlighted how, in spite of the incessant talk of gridlock in Washington, the issue of LNG exports was one with support from both parties without any significant opposition.
“Yes, there is a bipartisan consensus on these issues. That’s why you hear little debate about them on the Congressional floor, in Congressional hearings or anywhere else in the public sphere. We hear so often about ‘partisan gridlock,’ but on some of the most monumental issues of the day, [such as] war, peace, energy, there’s a bipartisan consensus on these issues,” Horn said.
In their “hiring spree,” LNG companies were able to recruit former Obama administration officials such as Heather Zichal, who was the deputy assistant to the President for Energy and Climate Change. Zichal is now with Cheniere Energy, which the report notes received the first approval by the Obama administration for LNG exports. The authors note Zichal’s relationship with the company started during her tenure in the White House:
White House meeting logs reveal that Zichal met several times with Cheniere lobbyists and executives while working for the Obama Administration. Now, Zichal earns $180,000 annually from the company, not including stock options.
Moreover, as a result of hiring former government officials, LNG firms succeeded in avoiding regulation by the Department of Energy and Federal Energy Regulatory Commission. Despite pledging in the beginning of his first term to prevent any former officials from lobbying the White House (this comically does not exist on its “Ethics” page), the Obama administration championed the interests of its former staffers.
In addition, the Koch brothers, the libertarian billionaire behemoths, were referenced as big winners of the LNG market. Even with their control of many conservative think-tanks, groups and politicians, the benefits they attained under the Democrats only fueled more of their political power.
Aside from the revolving door between federal government and private energy companies, the report mentions instances where firms pushed their agenda in states across the U.S. Moreover, the America’s Natural Gas Alliance, a natural gas lobbying group, received $100,000 from the U.S. Conference of Mayors in a grant, which Horn noted as “petro-politics in a nutshell”:
I haven’t looked at that funding, but my guess is its geared toward either mayors in fracking states or Gulf-area states that have LNG terminals. [The] perks [are] you get ‘educated’ by the industry. And maybe a nice, well-paying job with the industry in the future. Also, maybe campaign finance cash if you need it. The drawback is you become a subsidiary of the industry by selling your soul.
Even international events are mentioned, such as the crisis in Ukraine, were used by LNG companies to promote their agenda.
As a result of Russia’s threat to cut off natural gas to Europe over political developments in Ukraine, LNG firms found an opportunity to expand production and make more profits:
Within days of these developments, LNG lobbyists flooded the media and Capitol Hill, demanding that the U.S. streamline more LNG exports to relieve Europe from its dependence on Russian gas,
The LNG export lobbying machine, as this report demonstrates, is well mobilized and well organized — and highly dependent on operatives moving through the government-lobbying revolving door. What remains to be seen is whether this juggernaut will advance unimpeded, or whether voices for environmental protection and lower U.S. energy prices will eventually force a real debate.
With the Intergovernmental Panel on Climate Change warning in its most recent report about the dramatic and harsh effects of global warming should no major plan develop, this report also warns the growing success of LNG firms fuels climate change.
While the focus of the report is on LNG companies, Horn emphasized investments firms could not be ignored for the environmental movement.
At its core, it’s really about who’s calling the shots and dictating all the drilling, extraction, etc. That means capital investment firms such as hedge funds, private equity firms, Wall Street, with the state acting in service to capital. Drilling/fracking is capital intensive, as is LNG. We can’t really have a reasonable conversation about one without the other.
This is the first of many investigations by Fang and Horn on the relationship between LNG interests and the Obama administration. However, as Horn notes, the material presented in this report is enough for activists to mobilize and act against a system designed to promote profits over people. Instead of activists focusing on reforming the system, he said they should focus on building a new one:
This is an issue where there’s bipartisan consensus to turn the US into a resource colony for exports, akin to a banana republic. That means it’s time to educate, agitate and then organize. I hope the report is distributed in energy justice activist circles and serves as the education part of the ‘educate, agitate, organize’ process. But it’s not enough just to read it, it has to serve as ‘actionable intelligence.’
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