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Why Is Obama Cuddling Up to Karl Rove and His Gas Drilling Friends?

Rove pronounced the movement for clean energy dead at a natural gas drilling conference. But a massive protest outside reveals just the opposite.

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"Poor fracking execs" -- that was the joke that made its way among the high-spirited protesters who considered themselves blessed with a perfect sunny fall day while the conference attendees were stuck inside in viewless rooms with recycled air, boring speakers and a smirking Rove, whose Crossroads Grassroots group, through contributions of hundreds of thousands of dollars, had just handed the Pennsylvania Senate and gubernatorial seat to drill-now Republicans.

Inside, governor-elect Tom Corbett was the hero of the day. Rich Weber, president of Appalachia-based Atlas Energy said, "Operators in Pennsylvania will find thoughtful leadership at the state capital ... With Corbett, I know we're going to get it right." Atlas is among the companies that has gotten much wrong in their Marcellus drilling, racking up 13 violations and an $85,000 fine from Pennsylvania's DEP for, among other things, dumping industrial waste, including diesel fuel and production fluids, onto the ground at seven of the 13 well sites, not to mention the large fire at Atlas drill site in Hopewell Township PA in March, when toxic-ridden fracking waste burst into flame.

The consensus of the day was that the Marcellus is the most important shale in the country and Pennsylvania is the most important part of the Marcellus.  Others, like John Pinkerton, President and CEO of Range Resources, who announced in October it would be selling off most of its Barnett Shale holdings in Texas to invest in the Marcellus, talked about the new frontier of the Marcellus. Tom Sherman, an analyst for Bentek LLC, an energy industry analysis firm, said, of Marcellus development, "It's not that we don't think West Virginia and New York are important. The point is that Pennsylvania's production and acreage is prolific and ample enough to drive the forecast on its own, regardless of what happens in West Virginia and New York."

Some sessions dealt with technology ("Visualizing the Many Black Shales and Tight Sand Reservoirs of Appalachia," "Regional Petrophysical Analysis of the Marcellus Shale") but most dealt with the financials, with speakers giving talks titled "Appalachian Gas Price Premiums," "Market Effects of the Marcellus" and "The Economic Impacts of the Marcellus Shale." All in all, fracking was praised as the biggest boom for Pennsylvania since steel. 

In a speech called "Lessons Learned," David Porges, president and CEO of Pittsburgh-based EQT Corp., addressed the industry's poor reputation. The problem was just a few "bad actors," but the industry was made up of "good guys" who cared about the environment, he said. They just had to show it more through more transparency such as disclosure of fracking chemicals. EQT, however, has yet to agree to chemical disclosure. Only one session, a two-hour "Roundtable of Stakeholders" included an environmentalist (from Trout International), but the session was dominated by industry heavies and moderated by Leslie Haines, editor-in-chief of Oil and Gas Investor and Kathryn Klaber, president and executive director of the Marcellus Shale Coalition.

Rove's luncheon keynote reflected the bold self-congratulation of the event. Flushed with victories of his pro-drilling candidates in Pennsylvania, he announced that the election meant America will get it "right" as far as energy and climate legislation. "They sure as heck won't be able to pass it," he said referring to climate-change legislation. In a thoughtless but perhaps revealing choice of words, he announced, "Climate's gone." The Frac Act in the Senate, which would require more regulation and disclosure of chemicals, was history too, according to Rove. "The Waxman-Markey legislation will be dropped ...You can bet on Markey's special committee being disbanded ... we're back to a period of sensible regulations."