ALEC v.

Clean Energy
ALECs Assault On The Future Of Energy

November 1st, 2013

TABLE OF CONTENTS

REPORT HIGHLIGHTS INTRODUCTION TASK FORCE ASSOCIATES OIL INTERESTS COAL INTERESTS ELECTRIC UTILITIES MISCELLANEOUS ADVOCACY ORGANIZATIONS ROLLING BACK RENEWABLE PORTFOLIO STANDARDS IN NORTH CAROLINA IN KANSAS IN OHIO IN MISSOURI HIDING FRACKING FLUIDS IN TEXAS IN PENNSYLVANIA FIGHTING GREENHOUSE GAS ACCORDS DOING THE DIRTY WORK FOR URANIUM MINES THE KEYSTONE XL PIPELINE

2 3 4 4 6 7 9 9 11 14 16 18 20 22 24 26 28 30 32

Report Highlights
ALECs Energy, Environment and Agriculture (EEA) Task Force puts foxes in charge of the henhouse. Buoyed by oil giants, coal conglomerates and electric utilities, the task force is a pantheon to pollution interests. Its agenda is written, funded and supported by fossil fuel interests, and boasts of achievements nationwide. The crony capitalist polices of the EEA Task Force include: In 2013 Renewable Energy Portfolio Standards came under attack across the states. With encouragement from ALEC and various utilities, the attacks came close to rolling back these job-creating policies in various states. While ALECs 2013 attack failed, at its annual convention in Chicago, ALEC regrouped and set its sights again on the standards for 2014. ALEC and its oil interest members promulgate a hollow disclosure bill. The bill was an Exxon Mobil model, giving oil corporations exactly what they asked for on hydraulic fracturing regulations. Based off Texas law, ALECs model bill has been dispersed and enacted as a law in at least five states, with additional states enacting the language by administrative rule. Like Renewable Portfolio Standards in 2013, ALEC had originally failed to stop Greenhouse Gas Accords, and after regrouping in 2010, with the aid of Tea-Party legislators, ALECs agenda killed the accords in the Midwest and West. ALECs EEA Task Force seems willing to work on niche issues, if the price is right. ALECs supposedly nation-wide report on Uranium mining appears to have been, specifically tailored for Virginia, to provide cover for ALEC legislators attempting to pass legislation to benefit an ALEC member. Continuing its tradition of corporate authored legislation, ALECs resolution on the Keystone XL Pipeline is derived directly from the talking points issued by ALECMember TransCanada, the company seeking to build the Keystone XL. From Maine to Hawaii, legislators have proposed the resolution, parroting TransCanadas arguments. TransCanada has used ALEC to promote its interests through unethical and legally suspect scholarship programs.

Introduction
The American Legislative Exchange Council, or ALEC is an Arlington, Virgina based group funded almost entirely by corporations, corporate linked foundations, big business associations, and the super-rich. ALEC was formed in 1973 by a group of conservative activists who came together to advance a national right-wing agenda in state legislatures across the country. ALEC is a 501(c)(3) educational organization but it serves to coordinate and connect corporate special interests, lobbyists, right wing think tanks, and conservative state legislators. Corporate members pay $7,000 to $25,000 to join, plus additional fees of $2,500 to $10,000 for a seat and a vote as equals to legislators on ALEC task forces. ALEC provides other opportunities for greater sponsorship, and even a scholarship system to solicit money from corporations to fund trips for legislators to attend ALEC meetings with corporate lobbyists.1 ALEC maintains it does not lobby, 2 while outside groups have submitted evidence to the IRS alleging ALEC routinely asks legislators to advance its bills.3 ALEC is organized into nine task forces, each dealing with legislation on a broad set of issues seeking new ways to promote right-wing corporate interests. The task forces are bicameral and co-chaired by both a public sector legislator and a private sector corporation or special interest group. Both the public sector and private sector groups of ALEC members must approve a model bill, before ALECs national board officially adopts it as a national model. Giving corporate interests voting power on model bills and access to hundreds of state legislators is a financial boon for corporations. Eli Lilly, Pfizer, AT&T, State Farm, K-12 Inc., UPS, and Altria are given incredible influence in exchange for their financial contributions to ALEC. Because ALECs task forces are under such influence from corporate interests, ALECs model legislation is predictable in its effect to benefit corporate bottom lines. ALECs Health and Human Services Task Force can count on pharmaceutical giants Celgene, Pfizer, and Eli Lilly to support legislation to limit lawsuits over injuries or death caused by pharmaceuticals. ALECs task force dealing with education can count on members like K-12 Inc., and National Heritage Academies to support policies expanding their marketplaces in for-profit education.4 One of the greatest examples of these conflicted interests than ALECs Energy, Environment, and Agriculture (EEA) Task Force. The EEA Task Force puts the fox in charge of the henhouse. Environmental policies are subject to the votes of BP, Exxon Mobil, and Peabody Coal. Energy policies are subject to approval from regional utilities. And the push for the bills is supported by ultra-conservative advocacy organizations. Two trade groups representing wind and solar industries left because fossil fuel interests so completelyt control the task forces agenda.5 This report seeks to analyze the effect of ALECs energy policies in selected states and to shed light on the conflicts of interest, coordinated efforts, and simply bad policy ALEC disseminates.
1 2

CMD, October, 2012 ALEC.org, accessed 10/03/13 3 Common Cause, 04/20/12 4 CMDs ALECExposed.org, accessed 06/04/13 5 E&E News, 01/30/13

Task Force Associates

Oil Interests

British Petroleum,6 commonly known as BP, is the sixth largest oil company in the world. 7 Headquartered in London, BPs North American Headquarters is in Houston Texas. Already famous for its gas station franchise and its Castrol brand, BP received intense worldwide attention for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010.

Chesapeake Energy, based in Oklahoma City, is the second largest producer of natural gas. Selfdescribed as the worlds biggest frackers,8 Chesapeake has land holdings throughout much of the United States. In 2012, Chesapeakes CEO sparked an SEC inquiry into loan practices.9

10

Chevron11 is the ninth largest oil company in the world. 12 Based in San Ramon, California, Chevron has a major interest in oil production and fracking regulations in California and elsewhere.13

CMDs SourceWatch, BP Forbes, 07/14/12 8 Rolling Stone, 03/01/12 9 NPR, 05/29/12 10 CMDs SourceWatch, Chesapeake Energy 11 CMDs SourceWatch, Chevron 12 Forbes, 07/14/12 13 Bloomberg, 03/17/13
6 7

Devon Energy14 is headquartered in Oklahoma City, as a major fracking entity. Devon produces 2.6 billion cubic feet of natural gas per day, from fracking sites in Texas, Oklahoma, Wyoming, and Alberta, Canada.15 Devon Energys CEO is on the board of directors for TransCanada, another ALEC member.16

Exxon Mobil17 is the fourth largest oil company in the world.18 Based in Irving Texas, Exxon is a major fracking corporation, with the company betting on the continued expansion of fracking in the US.19 Exxon Mobil is on ALECs national corporate board.20 In ALEC, Exxon sponsored a bill to prevent fracking fluid disclosure, the topic of a later section of this report.

Marathon Oil21 is an international oil company. Based in Houston, Texas, Marathon has an interest in Colorado, North Dakota, Oklahoma, and Texas fracking operations, as well as the Alberta Oil Sands.22 Marathon takes in roughly $16 billion in revenue. Marathon Oil split from Marathon Petroleum in 2011.23

Occidental Petroleum Corporation24 is the fourth largest oil producer in the United States, and a major natural gas producer in California and Texas.25 Headquartered in Los Angeles, California, Occidental has a vested interest in fracking regulations in California and elsewhere.26
CMDs SourceWatch, Devon Energy Devon Energy, 2012 16 TransCanada.com, accessed 08/27/13 17 CMDs SourceWatch, Exxon Mobil 18 Forbes, 07/14/12 19 CNN, 04/16/12 20 ALEC.org, accessed 08/15/13 21 CMDs SourceWatch, Marathon Oil 22 Marathonoil.com, accessed 08/27/13 23 New York Times, Accessed 08/28/13 24 CMDs SourceWatch, Occidental Petroleum Corporation 25 Occidental, 2013 26 Bloomberg, 03/17/13
14 15

Shell27 is the seventh largest oil company in the world.28 Worldwide, Shell is based in the Netherlands, with its US headquarters based in Houston Texas.

TransCanada29 is a corporation with interests in natural gas storage, electricity generation, and pipelines.30 Headquartered in Calgary, Canada, TransCanada has strong interests in oil stands production in Alberta. TransCanada is the company behind the controversial Keystone XL pipeline. The CEO of Devon Energy, another ALEC member, is on the board of directors for TransCanada.31

Coal Interests

Cloud Peak Energy32 is the fourth largest coal company in the US.33 Based in Gillette, Wyoming, Cloud Peak has four mines in Wyoming and Montana.

Peabody Energy34 is the worlds largest private sector coal company. Based in St. Louis, Missouri, Peabody has 28 coal operations throughout the US, and Australia.35 Peabody is on ALECs national corporate board.36 Peabody sponsored the Resolution on Best Available Control Technology for Coal Electric Generation in ALEC.37
CMDs SourceWatch, Shell Forbes, 07/14/12 29 CMDs SourceWatch, TransCanada 30 TransCanada.com, accessed 08/27/13 31 TransCanada.com, accessed 08/27/13 32 CMDs SourceWatch, Cloud Peak Energy 33 US Energy Information Administration, 12/12/12 34 CMDs SourceWatch, Peabody Energy 35 peabodyenergy.com, accessed 08/15/13 36 ALEC.org, accessed 08/15/13 37 ALEC 35 Day Mailing as obtained by Common Cause, 10/27/10
27 28

Electric Utilities

American Electric Power38 is major electric utility operating in eleven states. AEP is headquartered in Columbus, Ohio. AEPs energy mix for Ohio is 99.6% from natural gas and coal.39 AEP is the corporate co-chair of ALECs Environment Energy and Agriculture Task Force.40

Ameren41 is a major electric utility based in St. Louis, Missouri. Ameren serves 2.4 million customers throughout much of the Midwest. Coal represents 85 percent of Amerens electric generating mix.42

Dominion43 is one of the largest electric utilities in the United States, and a significant natural gas storage corporation. Based in Richmond, Virginia, the company maintains a large mix of coal, oil, and nuclear power generation facilities.44

Duke Energy45 merged with Progress Energy to create the largest electric utility in the United States.46 Based in Charlotte, North Carolina, the companys operations extend through Indiana, Ohio, Kentucky, North Carolina, South Carolina, and Florida. Duke operates numerous coal, natural gas, nuclear, and hydroelectric power plants.
CMDs SourceWatch, American Electric Power AEP Annual Report, 2012 ALEC.org, accessed 08/08/13 41 CMDs SourceWatch, Ameren 42 Ameren, 2012 43 CMDs SourceWatch, Dominion 44 Dominion, 2009 45 CMDs SourceWatch, Duke Energy 46 Press Release, Duke Energy, no date given
38 39 40

Duke remains a member of ALEC despite publically voicing support for Renewable Portfolio standards. Ohio and North Carolina, where Duke is a major utility saw some of ALECs strongest attacks on renewables. In Florida, Duke Energy charged customers $1.5billion for the future construction of a new nuclear power plant, only to cancel the planned facility. Duke stockholders reaped $150million in benefits, while Floridian consumers still had to pay $1.5billion.47

Energy Future Holdings48 is a member of ALECs national corporate board.49 Energy Future Holdings owns subsidiary electric utilities in Texas, TXU Energy, Luminant and Oncor Electric. Luminant, the largest power generation company in Texas, derives 70% of its energy produced from coal, and Luminant is the largest coal mining company in Texas.50

NV Energy51 is an electric utility based in Las Vegas, Nevada. Serving 2.4million customers, and the tourist hotspots of Reno and Las Vegas, NV Energy generates 86% of its energy from natural gas.52 NV Energy is in the process of being purchased by MidAmerican Energy.53

Xcel Energy54 is a major energy utility of the northern Midwest. Headquartered in Minneapolis, Minnesota, 81% of its energy is produced from coal and natural gas, with 18.6% coming from renewable sources. Xcel Energy has been an associate of ALEC despite being the nations top wind power producer.55 Xcel recently announced a major expansion of wind production and projected a savings to its customers of $180million, and even remarked that wind power was becoming cheaper than natural gas.56

47 48

Tampa Bay Times, 08/01/13 CMDs SourceWatch, Energy Future Holdings 49 ALEC.org, accessed 08/27/13 50 Luminant, March 2013 51 CMDs SourceWatch, NV Energy 52 NVEnergy.com, accessed 08/27/13 53 Bloomberg, 05/30/13 54 CMDs SourceWatch, Xcel Energy 55 Xcelenergy.com, accessed 08/27/13 56 Star Tribune, 08/01/13

Miscellaneous

Koch Industries57 is a multinational conglomerate corporation. Koch Industries is involved in oil refining and chemical production, pipeline operations, coal, fertilizer, cattle, and paper product manufacturing.58 Based in Wichita, Kansas, the company is headed by the Koch brothers. David Koch also chairs Americans for Prosperity; AFP is also an ALEC member.59 Koch Industries is on ALECs national corporate advisory council.60

Virginia Uranium was established in 2007 as a corporation with a singular interest, the development of a uranium deposit in Virginia.61 Virginia Uranium sponsored ALECs December 2012 States and Nation Policy Summit.62

Advocacy Organizations

The Cato Institute63 was founded by Ed Crane and Charles Koch in the 1970s, and has molded itself as a libertarian think tank.64 The Cato Institute has long opposed action on global climate change.65 Catos opposition includes political action. Cato is closely tied to the industries opposing environmental actions.66

CMDs SourceWatch, Koch Industries Koch Industries, 2012 59 Huffington Post, 07/08/13 60 ALEC.org, accessed 08/28/13 61 virginiauranium.com, accessed 08/27/13 62 CMDs PRWatch, 12/03/12 63 CMDs SourceWatch, Cato Institute 64 Cato, 2001 65 Cato.org, accessed 08/27/13 66 New York Times, 03/25/09
57 58

The Heartland Institute67 was founded in Chicago, in 1984. This Koch-funded special interest group advocates a wide array of positions on the far right.68 The Heartland Institute brags about its climate denialism, and actively supports fracking expansion.69

The State Policy Network70 (SPN) is parent organization for 63 state-based right-wing special interest groups.71 SPN has demonstrated strong control over the funding of its affiliates, and a coordinated, and largely homogenous agenda.72 While SPN itself has been a member of ALECs Energy Environment and Agriculture Task Force, and at least eight SPN affiliates have acted as members of the task force, allowing SPN incredible influence over ALECs policies.73 74 SPN and its affiliates receive significant funding from the Koch Brothers and their entities, as well as the Bradley Foundation, the DeVos family, and a wide array of dark-money conduit organizations.75 While often operating under the guise of non-partisan research organizations, SPN and its affiliates support the policies of the extreme right, and are aligned with Tea Party groups, the Ayn Rand Center, and Grover Norquists ATR.76

The Beacon Hill Institute77 (BHI) is an associate member of SPN, and its efforts echo ALECs legislative agenda. BHI partnered with SPN affiliates, and produced reports attacking RPS policies in more than half the states that have them.78 Throughout these states, BHI moved in tandem with SPN affiliates to advance the ALEC agenda. These studies have been thoroughly debunked, for changing the assumptions in federal datasets, incorrectly citing a study to use a number two thousand times higher than reality.79 Whether or not BHI is a member of ALEC, BHI serves to create faulty and outlier studies in aneffort to advance the ALEC agenda.
CMDs SourceWatch, Heartland Institute CMDs Sourcewatch.org, accessed 05/31/13 69 Heartland.org, accessed 08/27/13 70 CMDs SourceWatch, State Policy Network 71 spn.org, accessed 05/14/13 72 CMDs PRWatch, 04/04/13 73 ALEC, 35 Day Mailing as obtained by Common Cause, 06/30/11 74 ALEC, 35 Day Mailing as obtained by Common Cause, 07/01/10 75 CMDs PRWatch, 04/04/13 76 spn.org, accessed 05/14/13 77 CMDs SourceWatch, Beacon Hill Institute 78 beaconhill.org, accessed 09/11/13 79 Synapse Energy Economics Inc., 01/04/13
67 68

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Rolling Back Renewable Portfolio Standards

State CA CO CT CT CT CT HI KS KS MD MD ME MN MN MN MN MO MT NC Bill AB762 SB13-003 HB5475 HB6086 HB6532 SB1138 HB1107 HB2241 SB82 SB974 SB976 LD646 HF1640 HF306 SF1488 SF97 HB44 SB31 HB298 Author (Total ALEC Sponsors) Asm. Patterson (0) Sen. Baumgardner (1) Rep. Miller (1) Rep. Piscopo (1) Committee (N/A) Committee (N/A) Rep. Hashem (0) Committee (N/A) Committee (N/A) Sen. Pipkin (0) Sen. Pipkin (0) Sen. Youngblood (0) Rep. Scott (1) Rep. Beard (2) Sen. Benson (0) Sen. Ingebrigtsen (0) Rep. Korman (1) Sen. Barrett (0) Rep. Hager (10) Result Introduced Introduced Introduced Introduced Introduced Enacted into Law Passed Committee Passed Committee Failed to pass Senate Introduced Introduced Introduced Introduced Introduced Introduced Introduced Passed the House Vetoed by Governor Failed in Committee State NC NH OH OH OR OR OR PA PA PA TX WA WA WA WI WI WV WV Bill SB365 SB148 SB34 SB58 HB2713 HB2925 SB121 HB1062 HB1073 HB208 HB2026 SB5294 SB5400 SB5431 AB34 SB47 HB2564 HB2609 Author (Total ALEC Sponsors) Sen. Brock (0) Sen. Bradley (0) Sen. Jordan (1) Sen. Seitz (1) Rep. Smith (3) Rep. Hanna (2) Sen. Olsen (0) Rep. Moul (6) Rep. Moul (7) Rep. Godshall (5) Rep. Sanford (0) Sen. Ericksen (7) Sen. Honeyford (2) Sen. Ericksen (3) Rep. Jacque (4) Sen. Grothman (2) Del. Nelson (1) Del. Gearheart (1) Result Passed Committee Enacted into Law Introduced Introduced Introduced Introduced Introduced Introduced Introduced Introduced Introduced Introduced Enacted into Law Introduced Introduced Introduced Introduced Introduced

Bold and Italicized names indicates the primary sponsor is known to have ties to ALEC.

In Salt Lake City in 2012, ALEC hosted the top echelon of fossil fuel interests and alternative energy opponents. At the Energy, Environment and Agriculture Task Force (EEA) meeting, the groups helped set ALECs 2013 agenda. ALECs top priority on energy became the rollback of renewable portfolio standards.80 The ALEC model was written by the Heartland Institute, and presented to a welcoming audience at the task force meeting.81 After passing the model to rollback renewable portfolio standards, ALEC urged its members to pass similar bills in 2013.82 In response to climate changes and consumer demand, as well as the economic benefits of clean energy, 29 states previously established renewable portfolio standards, in various forms. The policies greatly vary in form, with some states requiring that a certain percentage of energy be produced from renewable sources, other states requiring a set wattage, and other variations on the types of applicable energy, applicability to different utilities, and credit variance. 83 ALEC opposes the idea of states having renewable energy portfolios. ALECs model bill is more of a
80 81

ALEC, Nov. 2012 Washington Post, 12/24/12 82 Wall Street Journal, 08/07/13 83 DSIRE, March, 2013

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rhetorical piece than legislative language. Much like previous statements on energy, electricity transmission, alternative fuels, sustainable resource development, among others, ALECs Electricity Freedom Act is largely a tirade against renewable portfolio standards, and a demand to eliminate them. The ALEC effort was spearheaded by the people working for fossil fuel industries to benefit the fossil fuel industries. If renewable portfolio standards were repealed, Peabody Coal would benefit through greater coal usage for electric production, and Exxon would benefit through higher consumption of natural gas. If renewable portfolio standards were repealed, the general public would suffer through more health problems and higher government healthcare costs, with fewer jobs. The cost of fossil fuels is not reflected solely in market pricing. The unaccounted external costs of coal, and oil use borne by third parties are estimated to be hundreds of billions. The National Research Council reported that the external damages from burning coal in 2005 for electric generation was $62 billion, without taking into account climate change or other environmental damages. A more recent 2011 Harvard study concluded the best estimate of the total economically quantiable costs of coal was $345.3 billion.84 The Harvard study attempted to take into account the costs of elevated rates of cancer and illness, as well as the economic damages of lost tourism due to mountaintop mining. The studys author, Paul Epstein, noted the external cost, "is not borne by the coal industry, this is borne by us, in our taxes."85 ALECs goal of protecting the coal industry from competition forces the nation to bear the cost. While coal burdens the nation with billions in external costs, green goods and services are a large and growing area of the economy. According to the federal Bureau of Labor Statistics, green goods and services accounted for 3.4 million jobs nationwide in 2011, while growing quickly in the global recession.86 Even some ALEC members have been publically supportive of renewable energy, despite their support of ALEC and its extreme agenda. Xcel energy is the ALEC co-chair of Wisconsin,87 and its CEO acknowledged that new wind power was priced so low that it was cheaper over the long run than natural gas, We are seeing phenomenal pricing on wind, he said.88 NV Energy, another ALEC member, 89 called for a huge expansion of renewable energy to create thousands of jobs in 2013.90 In 2013 ALEC, its members, and its allies sought to undo RPS laws throughout the nation. In contrast to economic rationality, and in defense of its corporate benefactors, ALEC attacked RPS throughout the states. 37 bills throughout the nation sought to roll back the nations varied RPS policies. ALECs bill failed to eliminate any standard, while four states even increased their standard.91
84 85

New York Academy of Sciences, 2011 Reuters, 02/16/11 86 Press Release, BLS, 03/19/13 87 CMDs Sourcewatch.org, accessed 08/06/13 88 Star Tribune, 08/01/13 89 CMDs Sourcewatch.org, accessed 08/06/13 90 Las Vegas Sun, 04/02/13 91 Center for the New Energy Economy, 06/26/13

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Regrouping at its 2013 annual convention after most state legislative sessions had ended, ALEC dedicated significant discussion to exploring new options to roll back RPS.92 The proposals ALEC discussed included two new ways to rollback RPS policies, and propose hollow replacements. Outright repeal is not ALECs sole goal; rollback or dilution by any means is in line with ALECs objectives. Todd Wynn, who was then the staff director of ALECs EEA Task Force, declared, I expect that North Carolina and Kansas will probably pick up this issue again in 2014 and lead the charge across the country once again.93

92 93

ALEC 35 Day Mailing, as posted by Greenpeace, 07/03/13 Midwest Energy News, 06/14/13

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In North Carolina
Duke Energy, the largest electric utility in America,94 supported North Carolinas Renewable Portfolio Standard when it passed in 2007.95 Duke was part of the negotiations leading to the law,96 and Dukes lobbyists succeeded in sweetening the bill with provisions allowing Duke to recoup construction costs.97 The bills development provided an impetus for Duke Energy to develop renewable sources, with CEO Jim Rogers noting, Our interest for now is driven mainly by the renewable portfolio standards in North Carolina.98 As Duke began to solicit bids, it was inundated by the positive response.99 Green industries are booming in North Carolina. Green goods and services accounted for more than 108,000 jobs in North Carolina in 2011.100 That figure does not count the benefit to certain landowners and farmers. Renewable energy alone has been estimated to account for 15,200 jobs in North Carolina, with $3.7billion in gross revenue.101 In a state where unemployment was 9.2% as of March 2013, renewable energy and green industries are a standout sector. North Carolinas RPS has widely been attributed credit.102 Duke Energy is a member of ALECs Energy, Environment and Agriculture Task Force,103 Duke sponsored the 2012 ALEC convention in Charlotte, where Duke is based, and where ALECs model Electricity Freedom Act was originally to come before the EEA Task Force.104 Duke denied supporting the ALEC model, and continued to publically maintain its support of North Carolinas renewable portfolio standard, while in private its money was spent funding the groups working to destroy the RPS. 105 In March, 2013, Rep. Mike Hager introduced H298, a bill to repeal North Carolinas RPS. Rep. Hager was a Duke Energy engineer and an ALEC member106, as well as the Majority Whip for Speaker Thom Tillis, a member of ALECs national board.107 Rep. Hagers bill would have repealed the RPS, but would have left the provisions Duke obtained in the original bill allowing Duke to pass construction costs to its ratepayers. Joining Rep. Hager in his effort was the Koch apparatus Americans for Prosperity, and other Koch groups like Americans for Tax Reform, and The Heartland Institute, all ALEC members.108 North Carolinas SPN affiliates, the John Locke Foundation and the Civitas Institute testified against the law, and pressed for its repeal. 109 ALEC itself specifically focused on the North
94 95 96

New York Times, 07/03/12 Press Release, National Center for Public Policy Research, 05/02/13 Charlotte Business Journal, 05/11/12 97 News & Observer, 07/28/07 98 Triangle Business Journal, 11/19/07 99 News & Observer, 11/03/07 100 Press Release, BLS, 03/19/13 101 North Carolina Clean Energy Industries Census, 2012 102 Sustainable Business, 04/16/13 103 ALEC, 35 Day Mailing as obtained by Common Cause, 03/31/11 104 ALEC, 35 Day mailing as obtained by Common Cause, 04/06/12 105 Charlotte Business Journal, 05/11/12 106 News & Observer, 08/05/11 107 ALEC.org, accessed 08/06/13 108 CMDs Sourcewatch.org, accessed 08/06/13 109 Institute for Southern Studies, 4/25/13

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Carolina law, calling on states to Repeal Renewable Energy Mandates,110 and publishing an article specifically attacking North Carolinas law.111 The bill took a strange trip through the legislature. Rep. Hager led the bill into the House Committee on Public Utilities and Energy, the committee Rep. Hager chaired, and failed 18-13. The next week, Rep. Hager brought the bill up for another vote, noting his intent to continue to push the bill in the face of rejection.112 Rep. Hager then advanced a companion bill through the Senate Finance Committee, with the Committees Chairman refusing to count the votes.113 Finally, the bills died, unable to advance cleanly through any committee or either body. Governor Pat McCrory, another former Duke employee, said he halted the rollback effort for 2013, but declared in the future policy would come to an end.114 ALECs then-spokesman on the legislation declared, I expect that North Carolina and Kansas will probably pick up this issue again in 2014 and lead the charge across the country once again.115

110 111 112

MasterResource, 11/01/12 American Legislator, 04/19/13 News & Observer, 04/30/13 113 News & Observer, 05/01/13 114 Watauga Democrat, 07/22/13 115 Midwest Energy News, 06/14/13

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In Kansas
In the Sunflower State, that is home to Koch Industries, Representative Dennis Hedke spearheaded the effort to rollback the states renewable energy portfolio standard. Rep. Hedke is a consultant for the oil and gas industry by profession,116 is an ALEC member and sits on ALECs Energy, Environment and Agriculture Task Force. 117 Rep. Hedke also chairs the Kansas Houses Energy and Environment Committee, which introduced the bill to repeal Kansas standard of 20% of renewable energy by 2020, and to rollback the other standards.118 The Renewable Portfolio Standards in Kansas were the product of a 2009 compromise between Governor Mark Parkinson and conservative legislators. Some legislators were stunned, suggesting that the standards would be repealed shortly after Gov. Parkinsons term ended.119 Kansas is a deep red state, with Republican supermajorities in both houses, and a conservative governor, who even led successful efforts to challenge GOP moderates in primaries.120 Yet between the House Bill, and the Senate Bill, in four days of hearings on the effort to rollback the RPS, only four groups, all SPN associates, came to testify in support of the bill, including the ALEC member Kansas Policy Institute, 121 the Massachusetts-based Beacon Hill Institute, 122 and the ALEC member who wrote ALECs bill to repeal RPS, the Illinois-based Heartland Institute.123 David Kochs Americans for Prosperity worked behind the scenes opposing RPS.124 Two out of state climate denying scientists, Dr. Willie Soon and Dr. John Christy did come to testify,125 both doctors have extensive ties to fossil fuels and the Kochs.126 127 In contrast to the extreme national groups marshaled to support ALECs effort, the supporters of the Renewable Portfolio Standards formed a broad coalition of business interests and environmentalists. In addition to environmental groups like the Sierra Club, and the Natural Resources Defense Council, business groups like Siemens, NextEra Energy Resources, and even subsidiaries of ALEC members BP and Duke Energy testified in opposition to the bill.128 The Wichita, Kansas City, and Hutchinson Chambers of Commerce also opposed the bill.129 Local business interests coalesced around the issue because the renewable standards provide incredible benefits to the Kansas economy. In May 2013, Clean Line Energy Partners announced it would be creating 5,000 jobs in the Kansas City region developing a wind power transmission line.130 12,000 jobs have been created through the development of wind power, and provides landowner lease payments to the benefit of farmers and ranchers, improving the
116 117

AP, 08/13/13 AP, 08/13/13 118 HB2241, 2013 119 Witchita Eagle, 08/08/13 120 Washington Post, 08/08/12 121 Senate Utilities Committee, 02/06/13 122 House Energy and Environment Committee, 02/14/13 123 House Energy and Environment Committee, 02/14/13 124 Topeka Capital-Journal, 02/26/13 125 KHI News Service, 02/11/13 126 Greenpeace, February, 2013 127 Greenpeace, 03/11/13 128 House Energy and Environment Committee, 02/14/13 129 House Energy and Environment Committee, 03/19/13 130 KMBC, 05/09/13

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economic vitality of family farms.131 Even Governor Brownback seemed to support the renewable standard saying, Investment in the renewable energy economy is creating jobs across all employment sectors. 132 And when Rep. Hedke and other opponents of wind power attacked the RPS for electric rates,133 Kansas began to measure the effect of RPS on rates in the state, the results were that meeting the RES requires less than 2% of the revenue requirement of the utilities while supplying more than 10% of the generation capacity in the state.134 Even in deep red Kansas, renewable portfolio standards have proven to be bipartisan economic drivers. Rep. Hedkes bill never received a vote in the Kansas House, and the Senate rejected its companion with a vote of 17-23 in February. In August 2013, 600 legislators from around the country attended ALECs 40th Annual Convention in Chicago.135 No fewer than 28 Kansas Legislators attended that convention, representing one out of every twenty legislators in attendance.136 137 Rep. Dennis Hedke was among those hanging out with corporate lobbyists at the ALEC meeting. He came to regroup and reload. At the convention, ALEC proposed two new ways to repeal the RPS, and Rep. Hedke suggested that they might provide the basis for a bill in 2014.138

131 132

Polsinelli Shughart, 11/19/12 Forbes, 03/19/13 133 Wichita Eagle, 03/24/12 134 Kansas Corporation Commission, 2013 135 Wall Street Journal, 08/12/13 136 Shawnee Dispatch, 08/12/13 137 ALEC, 08/12/13 138 Topeka Capital-Journal, 08/13/13

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In Ohio
Ohios RPS was enacted into law with a single dissenting vote in 2008. The bill, SB 221, established that 12.5% of Ohios retail power comes from renewable sources, and 12.5% come from advanced sources by 2024. It seems long-time ALEC member Senator Bill Seitz regretted voting for Ohios renewable portfolio standard, saying the renewable portfolio standard reminded him of "Joseph Stalin's five-year plan."139 ALEC is particularly powerful in Ohio, claiming half the General Assembly as members.140 Governor Kasich was an enthusiastic supporter of ALEC in its formative years.141 Sen. Seitz is a national board member of ALEC,142 and the chair of the Ohio Senates Public Utilities Committee. Sen. Seitz had sponsored a bill to repeal the RPS in 2011.143 And in 2013 Sen. Seitz used his committee to ostensibly review the Stalinist law. Sen. Seitzs review suggested a laundry list of possibilities and criticisms of the law.144 The private-sector chair of ALECs EEA Task Force is American Electric Power, headquartered in Columbus. 145 AEPs Ohio subsidiary has a mix of energy coming 99.6% from natural gas and coal, meaning AEP has an incredible stake in any changes to the Ohio RPS. 146 Commercial groups like the Ohio Manufacturers Association saw it differently. OMA commissioned a study, which showed a billion dollars in net savings for consumers had already been achieved, with an additional $5.6billion in net savings for consumers by 2020.147 According to the powerful trade lobby, repealing SB 221 would be catastrophic and increase costs on Ohioan consumers. The Buckeye State has benefited greatly from the growing green economy, spurred by SB221. Ohio is second in the nation for manufacturing solar panels.148 Ohio is one of the states with over a hundred thousand green jobs.149 Even American Electric Power, the chair of ALECs Energy Environment and Agriculture Task Force noted that Ohios SB 221 had saved its customers a billion dollars.150 Senator Seitz received a mountain of input on his bill, criticism from groups like the OMA, and support from groups like the Heartland Institute.151 The voluminous testimony prompted multiple hearings, and left Sen. Seitz searching for what could be done against his Stalinist foe, if anything.152

139 140

Wall Street Journal, 08/07/13 Press Release, Sen. Seitz, 05/13/13 141 ALEC.org, accessed 08/08/13 142 ALEC.org, accessed 08/07/13 143 SB 216 As Introduced 144 SB58 As Introduced 145 ALEC.org, accessed 08/08/13 146 AEP Annual Report, 2012 147 ACEEE, April 2013 148 Toledo Blade, 07/19/11 149 Press Release, BLS, 03/19/13 150 Toldeo Blade, 04/06/13 151 Heartland, 03/21/13 152 Sen. Seitz, 02/25/13

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Then Sen. Seitz proceeded to attend ALECs spring,153 and summer meetings.154 At ALECs annual meeting, the EEA Task Force devoted significant time to the discussion of various ideas on how to dismantle and end RPS policies. Shortly thereafter, Senator Seitz announced new plans to attack Ohios RPS. Senator Seitz outlined that his bill would allow coal as an advanced energy, and like the bills proposed at ALECs conference, include expanding ability of utilities to purchase credit for renewable energy, rather than the utilities investing in their own renewables.155 Senator Seitz unveiled his substitute language for SB 58 on September 25th, 2013.156 The newer version of the bill would eliminate the requirement that at least half of the renewable energy come from Ohio, and would include energy from more than 20 states.157 The bill would incorporate hydroelectric power from Ontario and Quebec as a renewable resource for Ohio. 158 The bill would cap the amount utilities spend on efficiency programs, while expanding the efficiency definitions to include various things which do not reduce the demand for electricity. 159 In Ohio, where the legislature meets nearly year-round, ALECs assault on renewable energy portfolio standards continues.

153 154

Sen. Seitz, 05/13/13 Gongwer, 08/14/13 155 Gongwer, 08/21/13 156 The Plain Dealer, 09/26/13 157 Midwest Energy News, 10/01/13 158 Sub. SB58, 09/25/13 159 Midwest Energy News, 10/01/13

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In Missouri
In 2008, the people of Missouri took to the polls and voted overwhelmingly for renewable energy. Two-thirds of Missourians supported the measure, nearly 1.8million in total.160 The overwhelming voice of the people affirmed the initiative to enact Missouris RPS, and to require that 2% of energy come from renewable sources in 2011, and 15% by 2021.161 In 2010, the Missouri Joint Commission on Administrative Rules withheld two paragraphs in the administrative rules implementing the RPS. These paragraphs would have restricted the purchase of renewable energy credits to Missouri or its adjacent states. By withholding these paragraphs, utilities are able to purchase renewable energy credits from anywhere in the US. 162 This would allow utilities to resist changes in Missouri, by buying credits from states like Georgia or Utah. This tactic of weakening renewable standards was embraced for discussion by ALEC at its 2013 annual convention. 163 The Missouri changes are currently being litigated in the courts. 164 Ameren, through its subsidiary Ameren Missouri, reported to the Missouri Public Service Commission on its compliance with the law. Ameren reported its dam near Keokuk Iowa for its renewable sources, which in fact was 75 percent of the renewable energy Ameren Missouri produced.165 Using the dam would allow Ameren to not need to develop any additional renewable energy until 2018. 166 Keokuk was built in 1913.167 Using the century old dam to account for so much of its renewable energy needs violated the intent of the law, according to the man who wrote the law.168 Amerens use of Keokuk was challenged by an environmental group on the interpretation of a technical designation in 2011 and 2012.169 The state sided with Ameren. 170 By using the damn as renewable energy, Ameren did not need to change at all to meet the 2011 standard, but would have had to adopt renewable energy to meet the standard after 2018. That is, unless the law changed. In 2013, Representative Bart Korman, an ALEC associate,171 sponsored HB 44, to expand the definition of renewable energy to all hydro-electric generation.172 Rep. Kormans language would allow electricity generated at any sized hydroelectric plant as renewable.173 This would allow Ameren energy to use its Osage Energy Center, a dam with a 240MW capacity, 100MW
160 161

sos.mo.gov, accessed 08/07/13 sos.mo.gov, accessed 08/07/13 162 Great Rivers, 08/20/13 163 ALEC 35 Day Mailing, as posted by Greenpeace, 07/03/13 164 Great Rivers, 08/20/13 165 Ameren, 04/16/12 166 St. Louis Dispatch, 06/04/11 167 Ameren, March, 2013 168 St. Louis Dispatch, 06/04/11 169 Renew Missouri, 05/31/11 170 St. Louis Dispatch, 06/04/11 171 Progress Missouri, April 2013 172 HB 44 as Perfected 173 KBIA, 02/08/13

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more than Keokuk. 174 Rep. Korman explained his reasoning for the bill, We dont have very much renewable energy out there. To get to a 15 percent by 2021, were going to have to do a few things, or purchase renewable energy credits.175 Contrary to the reactionary opinion of Representative Korman, change can be good. In May, 2013, Clean Line Energy Partners announced it would be creating 5,000 jobs in the Kansas City region developing a wind power transmission line.176 In neighboring Kansas, 12,000 jobs have been created through the development of wind power, and provides landowner lease payments to the benefit of farmers and ranchers, improving the economic vitality of family farms.177 Illinois, Missouris neighbor to the east benefits in nearly the same ways, with 1,450 jobs coming from the development of a wind power transmission line, announced in 2012.178 Illinois had the 6th most green jobs in the nation, with more than 130,000.179 Rep. Kormans bill passed the Missouri House, but stagnated in the Senate. 180 Like other ALEC bills, resolutions, and principles that ALEC adopts, its Electricity Freedom Act is a statement of opposition to renewables, and support of their diminution. Despite their legislative defeats in 2013, ALEC continued to discuss ideas on how to rollback renewable energy standards at its 40th Annual Convention in Chicago in August.181 With powerful ALEC members like Lt. Gov. Kinder, Speaker Tim Jones, Speaker-Designate John Diehl, and Senate Majority Floor Leader Ron Richard, well as Corporate Members like Peabody Coal and Ameren, ALEC inspired attacks on renewable energy like Rep. Kormans will continue.

174 175

Ameren, March, 2013 KBIA, 02/08/13 176 KMBC, 05/09/13 177 Polsinelli Shughart, 11/19/12 178 CBS Market Watch, 03/07/12 179 Press Release, BLS, 03/19/13 180 NRDC, 05/20/13 181 ALEC 35 Day Mailing, as posted by Greenpeace, 07/03/13

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Hiding Fracking Fluids

State FL FL IL IL MI NM WV WY LA NC NE OH PA Year 2013 2013 2013 2013 2013 2013 2013 2013 2012 2012 2012 2012 2012 Bill H745 SB1776 SB1715 HB 2615 HB 4061 HB 136 SB243 SF 157 HB957 S820 LB877 SB315 HB1950 Author Rep. Rodrigues Sen. Clemens Sen. Frerichs Rep. Bradley Rep. Irwin Rep. Egolf Sen. Snyder Sen. Esquibel Rep. Edwards Sen. Rucho Sen. Wallman Sen. Jones Rep. Ellis Result Passed Committee Introduced Enacted Passed Committee Introduced Introduced Enacted Sponsored Enacted Enacted Introduced Enacted Enacted

Bold and Italicized names indicate legislators with known ties to ALEC.

Hydraulic Fracturing, commonly known as fracking, is a process by which water, sand, and chemicals are pumped into a well to break up rock formations in order to enhance the production of the well. The chemicals used vary significantly, but frequently include known carcinogens. Much of the chemical fluids used in fracking are left underground after the process has ended.182 Because the process breaks naturally formed rock formations at depths, and injects chemicals into the ground, it poses potential risk from accidental contamination of drinking water. Risks to drinking water come from many stages of the fracking process. Between two and ten million gallons of water are contaminated with fracking fluid for every fracturing job, and each well can be fractured multiple times. This water, contaminated both with the toxic chemicals that comprise frack fluid and the hazardous substances found naturally in the shale, can leak into aquifers underground. Portions of the water contaminated by fracking returns to the surface, where it can be spilled or dumped into drinking water sources.183 At ALECs December, 2011 meeting, the Energy, Environment and Agriculture Task Force discussed and approved the The Disclosure Of Hydraulic Fracturing Fluid Composition Act. The act calls for fracking companies to report to a state agency each chemical ingredient, on a form to be publically displayed on a website. Except, the act allows the exclusion of all chemical ingredients declared to be trade secrets. This bill is a Trojan horse. Using the guise of disclosure, the bill creates a loophole. Instead of the companies actually being required to disclose the chemicals, it effectively allows fracking corporations to disclose the information they want to disclose. And because the bill is not retroactive, and 1.1million wells have been fracked since 1949,184 many operators will never have to disclose anything about what is present due to the fracking process. ALEC worked diligently to hide the author of the bill, listing no authors on bills on its agenda,185 but it has been revealed that fracking giant Exxon Mobil
182 183

Propublica, 04/18/11 Greenpeace Fracking report, Environmental Impacts: Water 184 Heartlander Magazine, 04/11/11 185 ALEC 35 Day Mailing, 10/27/11

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adapted the Texas language to ALECs purposes, and sponsored its passage to become an ALEC model bill.186 The status of being deemed a trade secret does nothing to prevent the carcinogens from causing cancer. The Texas law passed in 2011 was the first state fracking disclosure bill passed in the nation. The Texas law was not the first fracking disclosure requirement however, Wyoming had enacted a requirement through administrative rule in 2010. The Wyoming rule required corporations to apply to a state agency and justify the use of trade secret status; as such the designation of trade secrets is much lower in Wyoming.187 But that was not the model Exxon Mobil wanted. As the national debate over fracking continues, and research continues to shed light on just how much risk fracking poses to public health, ALEC has approved of the Exxon Mobil bill to prevent disclosure. Rather than foster public debate, and reap the rewards of an educated populace, ALEC and Exxon have crafted a measure to hide what is occurring in states. What you dont know can hurt you. Fracking has been linked by scientific journals and the federal government to an increase in earthquakes, in places that are not prone to seismic activity.188 Arkansas, Texas, Oklahoma Ohio, and Colorado, have seen increased incidence of earthquakes attributed to fracking.189 Recent earthquake swarms in Texas have also been attributed to fracking.190 While most earthquakes were not of a magnitude strong enough to threaten public safety, they were eight times as frequent as previously thought.191 192 Some have been of a noticeable magnitude. The most powerful earthquake recorded in Oklahoma, with a magnitude of 5.7 on the Richter scale, was caused by nearby fracking. 193 194 Major oil and fracking chemical spills resulting from the recent disastrous floods in Colorado demonstrate how natural disasters, increasingly bolstered by underlying force of climate change, create further consequences that are made worse by the failure to disclose chemicals used in fracking.195 Fracking fluids can include toxic chemicals and carcinogens, so contamination of drinking water is undeniably a threat to public health. 196 Whether or not the fracking process itself is a hazard to drinking water is subject to much debate. What is undeniable is that the inevitable accidents in relation to fracking and drilling activity have contaminated streams, fields, and lakes. Flawed well casings provide further risk to water supplies.197 Further, the debate on the risk of water contamination by fracking fluids would be bolstered by true disclosure of fluids, not the flawed disclosure ALEC promulgates.

CMDs PRWatch, 09/27/12 Bloomberg, 11/29/12 188 Los Angeles Times, 05/26/13 189 Bloomberg Business, 04/01/13 190 Wall Street Journal, 08/27/13 191 University of Texas, 08/06/12 192 NPR, 08/06/12 193 Bloomberg, 03/26/13 194 Geological Society of America, 03/26/13 195 The Guardian, 9/23/13 196 Propublica, 04/18/11 197 New York Times, 11/17/11
186 187

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In Texas
In 2011, Texas became the first state in the union to require the disclosure of fracking fluids.198 A coalition of environmental groups and fracking corporation lobbyists proposed the bill, advocating disclosure of the composition of the fluid; the bill was modified through the legislative process, adding the trade secrets loophole. The industry has generally refused to disclose the composition of their fluids, arguing they would be giving up trade secrets. The Texas bill gave the industry exactly what it wanted, requiring disclosure of everything except the chemicals deemed by the corporations as trade secrets. 199 The bill quickly passed through the Texas House, and the Senate voted down amendments from Sen. Wendy Davis to study the effects of fracking, and enhance accountability through the use of chemical tracers.200 The bill was signed into law by Governor Rick Perry, an ALEC award winner.201 The bills authors noted that the bill might become a model for the nation. 202 Exxon Mobil agreed, and proposed the bill to ALEC, which promptly adopted the bill as a model.203 The Texas experience with this law illustrates the real world flaws of the model. The Dallas Morning News analyzed a single well, and found that 38 million pounds of material was injected into the earth to break up naturally formed rock formations. While the majority of the material was water and sand, up to 55,000 pounds of chemicals could have been injected; it was impossible to determine the precise amount because of the loopholes in the law. The chemicals included possibly 33,000 pounds of hydrochloric acid. The Dallas Morning News found that many of the chemicals that were disclosed were potentially harmful, and potentially damaging to the ecosystem. 55,000 pounds of chemicals may not seem like a lot, and when extrapolated to the approximate18,000 fracking wells in Texas, the number may approach a billion pounds of chemicals injected into the earth.204 According to a study by Bloomberg, the trade secrets loophole was used to cover-up an average of five chemical ingredients for every well, one out of every seven ingredients used. The use of the trade secrets loophole varied heavily by corporate choice, with some operators using the loophole to conceal an average of 0.1 chemicals per well, while others concealed an average of ten chemicals.205 The University of Texas studied the seismological effects of fracking, and found a striking correlation between fracking in the Barnett Shale formation and the frequency of earthquakes.
198 199

Texas Public Radio, 05/25/11 Texas Public Radio, 05/25/11 200 Senate Journal, 05/25/11 201 Governor Perrys Office, 08/05/10 202 Texas Public Radio, 05/25/11 203 New York Times, 04/21/12 204 Dallas Morning News, 08/06/12 205 Bloomberg, 11/29/12

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While usually not of a magnitude strong enough to threaten public safety, the earthquakes were eight times as frequent as previously thought.206 207 In 2011, Texas used 632 million barrels of water, depleting the amount of water available for agriculture, even as Texas faced severe drought conditions.208 While there is no definitive study on groundwater contamination, studies in Wyoming, Pennsylvania, and Texas have suggested elevated levels of arsenic in groundwater.209 Although the law is demonstrably inadequate, it has powerful defenders. ALEC continues to promulgate the flawed law as a model nationwide. Reform efforts in the state have been stymied by leaders like Governor Perry. And Texas Attorney General Gregg Abbott has attacked the federal government over even potential negotiations on regulating fracking.210 Passing Exxon Mobils ideal bill has continued to obscure the reality of the risks of fracking. The Democratic co-author of the Texas law warned, Texas state government has been a wholly owned subsidiary of national oil and gas interests for a century Do not look at it for guidance on anything related to protecting public health and safety. 211

206 207 208

University of Texas, 08/06/12 NPR, 08/06/12 New York Times, 03/07/13 209 Scientific American, 08/08/13 210 Attorney General E. Scott Pruitt, 05/02/13 211 Bloomberg, 11/29/12

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In Pennsylvania
In February 2011, Pennsylvania enacted administrative rules regarding fracking fluid disclosure. Echoing the provisions being enacted in states around the nation, the rules allowed for companies to withhold the identification of chemicals as trade secrets, giving essentially the same loophole as the ALEC model.212 With fracking as a raging debate in Pennsylvania, in March 2011 Governor Corbett appointed a Marcellus Shale Advisory Commission, to advise the Governor on regulations on fracking in Pennsylvania. Gov. Corbetts appointees included representatives from ALEC members Chesapeake Energy, Chevron, and Randy Smith of Exxon Mobil.213 Mr. Smith was the same person who would sponsor ALECs model bill. 214 The commissions recommendations would come in July, just before Mr. Smith would propose his model bill to ALEC.215 Unsurprisingly, the commissions recommendations on disclosure would mirror the ALEC model. The recommendations of the commission were incorporated into legislation for the 2012 session known as Act 13.216 Act 13 codified the trade secret loophole into Pennsylvania law.217 Pennsylvania is central to the debate on the health effects of fracking. In Dimock, Pennsylvania, fifteen families sued Cabot Oil and Gas over methane contamination of their homes drinking water. The safety of the water has been controversial and the cause has been even more so. The EPA found the water to be safe in 2011, yet in 2012 found elevated levels of barium and arsenic, without assigning a cause.218 While the EPA did not denote a cause of the problems, the Los Angeles Times acquired internal EPA documents arguing that the contamination was due to fracking.219 Later in 2012, local residents settled with Cabot including confidentiality agreements.220 Fracking poses concrete threats to public health from inevitable mistakes in the use of the fluids. Pipelines used to transport fluids have been known to leak, and trucks carrying fluid have been known to spill. Spills inevitably will occur. Numerous wells have been found to have flawed concrete casings which can result in leaks.221 Yet the public is left in the dark as to what chemicals are spilling. Nationwide, fracking fluids are commonly disposed by injecting them very far into the earth and leaving them. In Pennsylvania this is not geologically possible. Waters are recycled, and treated, which relies on a larger amount of transportation. The spills are inevitable, and

212 213

PA Code, 78.122 PR Newswire 03/08/11 214 CMDs PRWatch, 09/27/12 215 Governors Marcellus Shale Advisory Commission, 07/22/11 216 state.pa.us, accessed 08/21/13 217 Act 13, 2012 218 NPR.org, accessed 08/21/13 219 LA Times, 07/27/13 220 Christian Science Monitor, 08/15/12 221 New York Times, 11/17/11

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ecologically destructive. Some water treatment plants have been incapable of removing salts and have damaged rivers.222 Threats to water and public health spurred the City of Pittsburgh to ban fracking within the city limits in 2010.223 Other localities followed suit with regulations on fracking. Act 13 superseded local ordinances, and gave the Public Utility Commission oversight of local ordinances. The PUC promptly attempted to overturn Pittsburghs regulations on fracking.224 These provisions have been debated in court ever since.225 Some legislatures hadnt finished trying to assist the fracking industry, and in 2013 suggested adding natural gas to Pennsylvanias renewable standards.226 At ALECs 40th annual convention in August, 2013, the Energy, Environment and Agriculture task force devoted a discussion to Local Bans on Hydraulic Fracturing: Coming Soon to Your District. We shall soon see whether the discussion will lead to those parts of Act 13 becoming an ALEC model.

222 223

New York Times, 11/17/11 CBS, 12/08/10 224 Pittsburgh Post-Gazette, 08/21/13 225 NPR, 08/15/13 226 Pennsylvania House Bill 1073, 04/02/13

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Fighting Greenhouse Gas Accords

As early as 2007, ALEC provided a hub of resistance to the emerging regional climate initiatives. In the late 2000s, three regional agreements had taken shape, among states in the Northeast, Midwest, and West. The agreements between the states sought to reduce greenhouse gas emissions to combat global climate change. ALEC set itself to the task of opposing these agreements, denying climate change, and protecting their corporate clients interests.227 ALECs initial effort proved futile, as 23 states joined the regional accords. Non-partisan analysis of the accords suggested a modest economic benefit of these accords. A study commissioned by the state of Washington suggested a modest increase in jobs due to the Western Climate Initiative.228 A study by the WCI suggested $102 billion in savings.229 Analyses by the University of New Hampshire,230 and the Analysis Group231 predicted a modest economic benefit of the Northeastern Regional Greenhouse Gas Initiative. And a businessfunded study suggested that inaction could cost New Mexico billions in damages over decades.232 These modest economic benefits would occur side by side with modest reductions in greenhouse emissions. While non-partisan analysis predicted modest economic benefits, the analysis by ALECs allies spelled economic doom. The Beacon Hill Institute (BHI) predicted an extreme scenario, with up to 250,000 private sector jobs lost due to the Western Climate Initiative.233 BHI is a member of the State Policy Network, which has deep ties to ALEC,234 and has strong financial ties to the fossil fuel industry.235 ALEC and its allies doomsday prophecies were extreme outliers. But through a well-financed and well-coordinated effort, ALEC persevered to kill the Western Climate Initiative. In 2010, ALEC and its allies regrouped. ALEC endorsed a model calling for governors to withdraw from the initiatives.236 The response was overwhelming, with the Midwestern and Western accords essentially ending. In the west, New Mexico provided the death knell of the Western Climate Initiative. ALECs fossil fuel allies spent great sums in the 2010 election in New Mexico, including support for Gov. Martinez.237 Contributors to Gov. Martinez asked the administration to pull out of the initiative.238 Promptly after the election, Gov. Martinez removed every member of the board that oversaw the states involvement with the accord, and blocked the administrative rules.239 In a matter of weeks, the New Mexico Supreme Court

227 228

ALEC, June 2007 ECONorthwest, 02/15/10 229 WCI, July 2010 230 University of New Hampshire Whittemore School of Business and Economics, Jan. 2008 231 Analysis Group, 11/15/11 232 ECONorthwest, 02/17/09 233 Beacon Hill Institute, March, 2009 234 CMDs Sourcewatch.org, accessed 08/26/13 235 Portland Press Herald, 11/27/12 236 ALEC.org, accessed 08/26/13 237 Progress New Mexico, accessed 08/26/13 238 Santa Fe Reporter, 06/08/11 239 Los Angeles Times, 01/05/11

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unanimously rules Gov. Martinez had acted unconstitutionally.240 And the very next day, a legislator in New Mexico introduced an almost entirely verbatim copy of ALECs resolution.241 By November, New Mexico had withdrawn from the Western Climate Initiative.242 In the Northeast, ALECs sights were set on the Regional Greenhouse Gas Initiative. Legislators introduced ALEC model bills in Delaware, Connecticut, Maine, New Jersey, and New Hampshire, where Grantite State Governor John Lynch vetoed such a measure. In New Jersey, Americans for Prosperity ran a television ad campaign against RGGI. 243 New Jerseys Governor, Chris Christie ended New Jerseys participation in RGGI shortly after meeting with AFPs founding chairman, David Koch. 244 At a Koch Brothers secret political strategy meeting, Governor Christie was greeted with applause for ending New Jerseys participation in RGGI. 245 ALECs resolution, and its role as a secretive forum, created a hub for opposition to regional climate initiatives. Its role is not widely known but it has been widely effective. While ALECs initial efforts failed, it was able to regroup, change the debate, and obliterate the beneficial coalitions.

240 241 242

New York Times, 01/26/11 HJM 24, 01/27/11 Sydney Morning Herald, 11/19/11 243 Americans for Prosperity NJ blog, archived 7/6/2011 244 Grist, 9/9/11 245 Mother Jones and BradBlog, 9/7/2011

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Doing The Dirty Work For Uranium Mines

Since ALECexposed launched in 2011, the number of corporations funding ALEC has fallen dramatically.246 One of the few corporations joining ALEC is Virginia Uranium Inc. (VUI).247 VUI was formed to operate a uranium mine in Coles Hill, Virginia. However, Virginia has a 30year-old moratorium on uranium mining so the companys primary goal has been overturning the ban.248 VUI has spent more than $600,000 on campaign donations and lobbying in an attempt to influence legislators to repeal the ban; VUI even paid $122,000 to fly lawmakers to France to visit uranium-mining facilities.249 Joining ALEC was a continuation of this wine and dine strategy. The results were almost immediate. VUI sponsored ALECs 2012 States and Nation Policy Summit in Washington DC, which ended Friday, November 30th. The next business day, ALEC member and State Senator John Watkins announced he would be sponsoring legislation to repeal the ban, and had commissioned a bill.250 About two weeks later, ALEC released a study on uranium mining. Dig It! Rare Earth and Uranium Mining Potential in the States was a short treatise advocating mining for uranium, with a specific focus on Virginia, concluding, Virginia, with one of the worlds largest untapped uranium resources, should eliminate prohibitions on uranium mining. 251 Tom Tanton wrote the essay. Tanton achieved notoriety for arguing, shortly before the Deepwater Horizon disaster in the Gulf of Mexico, that environmental risks posed by offshore oil production were a myth.252 Tantons essay goes to great lengths to attempt to unravel a study pointing to the environmental risk of mining uranium at the Coles Hill site specifically, and assures the reader that such a mine would be safe. The essay even points to the environmental disasters similar mines created in Arizona, and suggests they should provide learning opportunities not, as some interest groups argue, to further delay or prohibit mining.253 ALECs viewpoint differs significantly from the study previously commissioned by VUI. VUI spent $1.4 million for the National Academy of Sciences to study the feasibility and risks of a uranium mine at the Coles Hill site. The report differed starkly from the rosy ALEC essay: Uranium mining and processing carries with it a range of potential health risks to the people who work in or live near uranium mining and processing facilities It is questionable whether currently-engineered tailings repositories could be expected to prevent erosion and surface and groundwater contamination for as long as 1,000 years.
CMDs PRWatch, 06/25/13 ALEC, 11/28/12 248 virginiauranium.com, accessed 07/18/13 249 New York Times, 01/19/03 250 Washington Post, 12/03/12 251 ALEC, 12/17/12 252 E&P Magazine, 11/04/09 253 ALEC, 12/17/12
246 247

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 If the Commonwealth of Virginia removes the moratorium on uranium mining there are steep hurdles to be surmounted before mining and processing could be established in a way that is appropriately protective of the health and safety of workers, the public and the environment. There is only limited experience with modern underground and open pit uranium mining and processing in the United States, and no such experience in Virginia.254 ALEC was a new tool for Virginia Uranium in its effort to open a mine at Coles Hill. VUI had spent hundreds of thousands on lobbying and campaigns and spent $1.4 million on a study that produced results VUI didnt like. Now, by sponsoring ALECs convention, they received almost immediate results. ALEC produced a study saying exactly what VUI wanted to hear, and ALECs membership pushed the bill in the legislature following closely on the heels of the convention. This push was defeated in Virginias 2013 session.

254

NAS, 2011

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The Keystone XL Pipeline

State Illinois Indiana Kansas Kentucky Louisiana Michigan Minnesota Mississippi Missouri Ohio South Dakota 2013 Bill(s) HR877 SR 41, HR47 HCR5014 SCR273, HR122 SCR115, SCR125 SCR6 HF987, SF479 SR3, SC543 HCR19, SCR 7 SCR7, HCR9 HCR1006 State Alaska Hawaii Iowa Maine Missouri New Jersey Oklahoma Tennessee Washington 2012 Bill(s) HJR37 HCR215, HR166 HR109, SR103 SP676 SCR21, HCR37 AR92, SR65 SCR16, SCR15 HR195 SJM8018

In 2012 and 2013 at least 32 resolutions in 19 states called on the federal government to permit the construction of the Keystone XL pipeline. The states spanned the entire country, from Maine to Hawaii, legislators even in states with seemingly little or no interest in the proposed pipeline rushed to support TransCanadas efforts for the permit. This national effort was spearheaded through ALEC and illustrates several disturbing flaws of ALEC, the promulgation of purely corporate legislation in a coordinated national effort bought and paid for by corporations in an ethically suspect manner. TransCanada is a funder of ALEC, and has sat on ALECs Energy, Environment and Agriculture Task Force.255 At ALECs 2011 States and Nation Policy Summit in Scottsdale, Arizona the task force passed a Resolution in Support of the Keystone XL Pipeline.256 It is unsurprising that a corporate advocacy group would promulgate support for TransCanadas efforts. The Center for Media and Democracy revealed the truly disturbing fact that the model resolution simply parrots TransCanadas talking points.257 Because of ALEC, legislators in states around the nation are replacing legislation with corporate talking points. ALECs veil of secrecy prevents the public from knowing who wrote the model bills, bills can be written by corporate members of the task forces, and TransCanada has sat on the applicable task force. Below is a comparison of some of the resolutions to the TransCanada talking points.

255 256

ALEC 35 Day Mailing, as obtained by Common Cause, 07/01/10 ALEC 35 Day Mailing, as obtained by Common Cause, 04/06/11 257 CMDs PRWatch, 02/15/13

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TransCanada Talking Points The Keystone XL project will support the creation of more than 20,000 jobs in the U.S. more than 13,000 construction jobs and 7,000 manufacturing jobs representing work for pipefitters, welders, electricians, heavy equipment operators and other sectors in virtually every state in the U.S. The combined Keystone XL and Gulf Coast projects will inject $20 billion into the U.S. economy and pay over $5 billion in taxes to local counties over their lifetimes. Pipelines are the safest method for the transportation of petroleum products when compared to other methods of transportation, 40 times safer than moving crude oil by rail and 100 times safer than transporting by truck. Keystone XL will replace the equivalent of a tanker train 25 miles long, or 200 ocean tankers per year. This will reduce greenhouse gas emissions by as much as 19 million tons, or the equivalent of taking almost 4 million cars off the road.

ALEC Model WHEREAS, construction of the project will create 120,000 jobs nationwide including 20,000 in construction and manufacturing, create $20 billion in economic growth and generate millions of dollars worth of government receipts; and

Minnesota HF987 WHEREAS, pipelines are the safest method for the transportation of petroleum products when compared to other methods of transportation. Pipelines are 40 times safer than moving crude oil by rail and 100 times safer than transporting by truck. Keystone XL will replace the equivalent of a tanker train 25 miles long, or 200 ocean tankers per year. This will reduce greenhouse gas emissions by as much as 19 million tons, or the equivalent of taking almost four million cars off the road; and

Louisiana SCR125 The United States accounts for 20 per cent of world WHEREAS, the United States of America accounts for energy consumption and is the worlds largest nearly nineteen percent of the world energy consumption petroleum consumer. The U.S. consumes 14 to 15 and is the world's largest petroleum consumer with a daily million barrels of oil each day. Current imports amount consumption of almost nineteen million barrels of oil; and to eight to nine million barrels each day, WHEREAS, current imports amount to more than eight approximately 60 per cent of the United States million barrels each day that represents approximately requirements. fifty percent of this country's requirements; and Kentucky HCR 5014 Furthermore, 75% of the pipe used to build Keystone XL in the United States will come from North American mills, with half being made by workers in the United States, and goods for the pipeline valued at approximately $800 million have already been sourced from United States manufacturers: Ohio SCR7 WHEREAS, The growing production of conflict-free oil from the Canadian oil sands and the Bakken formation in Saskatchewan, Montana, and North Dakota can replace crude oil imported from countries that do not share American values and therefore additional pipeline capacity to refineries in the United States Midwest and Gulf Coast regions is required; and

Goods for the pipeline valued at approximately $800 million have already been sourced from U.S. manufacturers.

Conflict-free oil from Canada is the largest source of crude for American refineries.

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TransCanadas efforts are part of a highly coordinated national effort. The pipeline has received extensive backing from ALEC, as well as the Koch Brothers Americans For Prosperity, the State Policy Network and its affiliates. Americans for Prosperity, an ALEC member, is the major political group for the Koch Brothers.258 In addition to spending millions on elections around the country, AFP has undertaken a publicity campaign for Keystone XL in Nebraska, 259 and around the country.260 Koch Exploration Canada even has a pending permit to extract from the Alberta Tar Sands.261 SPN, which is also a member of ALEC and has close ties to the Kochs, coordinates so-called think-tanks nationwide, and in Nebraska through the Platte Institute.262 The Platte Institute has led a media campaign for the pipeline for years,263 as have SPN affiliates around the country.264265 One of the great draws of ALEC for legislators is the corporate-funded Scholarship Funds, which pay for legislators to travel to meet lobbyists at ALEC events. TransCanada has provided funding for these scholarships in the past.266 More recently, TransCanada sponsored an ALEC Academy. The Academy was a small, private junket to Alberta, Canada, for the purpose of seeing tar sand operations, and meeting with lobbyists from Shell, Devon Energy, and of course TransCanada. The price ALEC has stated for sponsoring an ALEC Academy is $80,000, with lobbyists possibly picking up further costs for legislators. 267 For legislators, the trip was extravagant. Legislators were met at the airport by TransCanada lobbyists, and flown in chartered flights around Alberta to visit facilities. Dinners at Ruths Chris Steakhouse, and the Petroleum Club were (for at least some legislators) paid for by lobbyists. The trip was as close to all expenses paid as possible, a fun jaunt with oil lobbyists. At the end, legislators were asked to thank the lobbyists that paid for segments of the trips.268 ALECs corporate financed lavish trips are a major draw for legislators, and a boon to the lobbyists and TransCanada efforts. On this trip to Alberta was Nebraska Senator Jim Smith. The Center for Media and Democracy filed a complaint with the Nebraska Accountability and Disclosure Commission, asking the commission to investigate whether or not Sen. Smith took illegal gifts on the trip.269 CMD asked whether costs of chartered flights and luxurious dinners may have exceeded the $50 per month limit of Nebraska law.

258 259

nytimes.com, accessed 07/26/13 americansforprosperity.org, 11/28/12 260 americansforprosperity.org, accessed 07/26/13 261 CMDs PRWatch, 07/01/13 262 CMDs PRWatch, 04/04/13 263 Platte Institute, Sept. 2011 264 Mackinac Center, 11/07/11 265 Bluegrass Institute, 02/12/12 266 CMD, Oct. 2012 267 CMDs PRWatch, 07/01/13 268 CMDs PRWatch, 07/01/13 269 CMDs PRWatch, 07/03/13

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At the release of this report, this issue is still outstanding. This was not the first of TransCanadas actions to come under legal scrutiny. In 2010, TransCanda faced controversy over campaign donations to Governor Heineman and Attorney General Brunning. The donations were potentially illegal as TransCanada is foreign-based, leading the Attorney General and Governor to return the contributions. 270 Even setting aside the fact that this corporate legislation promulgated by a nationally coordinated apparatus used unethical and legally questionable tactics, its just bad policy. TransCanada uses false estimates of job creation to push for approval of the pipeline.271 The pipeline would dangerously pass close to the Sandhills and over the Ogallala aquifer risking spills into a primary water source for agriculture and human consumption for the entire region.272 The risk is real, as the recently constructed Keystone 1 pipeline spilled 12 times in 12 months. 273 Through ALEC, this risky corporate agenda has been taken nationwide.

270 271

Omaha World-Herald 10/05/10 Politifact, 04/11/12 272 Bold Nebraska Map, accessed 07/29/13 273 St. Louis Post-Dispatch, 06/04/11

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