The Message and the Messengers

Connecting the Dots: Marcellus Shale Players

Presented by Dory Hippauf April 30, 2013

 Why Do I Connect the Dots?

Understanding the Message Connecting the Messengers Gauging the Message Impact

Why I Connect the Dots

The Natural Gas Industry knows who we are.

We should know who THEY are.

Understanding the Message

http://www.philly.com/philly/opinion/20130424_Dispel_myths_about_fracking.html

Consider Karnes County, Texas. A few years ago, the community was plagued by poverty. Today, it's not uncommon for local residents to collect $70 million each month in royalties for allowing energy companies to drill on their land. The wealth has increased the county's tax base almost six-fold in two years. Last year, more than $15 billion in royalty checks was paid to private landowners by energy companies in Texas alone. Aside from Texas, many other areas of the country including Pennsylvania - are also benefiting from fracking.

Shale play turns Karnes County around, but not without trouble By John MacCormack | February 23, 2013 | Houston Chronicle County Judge Barbara Shaw said the boom has bailed the county out of its chronic financial woes, but has also brought two huge headaches: The ongoing destruction of roads by heavy equipment and dangerous highways. "My problem is I have $18 million sitting in the bank but I have at least $100 million in road damage," said the judge. Karnes has joined forces with other Eagle Ford counties and hired an Austin lobbyist to press for legislation that would provide financial relief. Presently, the state keeps the tens of millions collected from energy companies in oil and gas taxes.

"You have a lot of people making a lot of money, but basically, it's the people who had money to begin with - people with land, cattle, crops and government subsidies," said Ken Riley, a Kenedy City Council member. Just about every morning, Homer Lott, the former mayor of Runge, makes the 15-mile drive to eat tacos with the coffee crowd at Becky's Caf in Karnes City. He passes the Bordovsky place on each trip down FM 81. "There used to be cattle in that pasture. Now it looks like refinery city. It won't be long before FM 81 becomes the refinery corridor," said Lott.

http://www.chron.com/news/houston-texas/houston/article/Shale-play-turns-Karnes-County-around-but-not-4303201.php

Claim 1: Fracking will contaminate the underground water supply. Subsurface contamination from fracking is almost impossible. Fracking involves the injection of liquid 7,000 to 15,000 feet underground - far deeper than drinking water aquifers, which are often about 300 feet below the surface.

Per dictionary.com:
hydraulic fracturing noun a process in which fractures in rocks below the earth's surface are opened and widened by injecting chemicals and liquids at high pressure: used especially to extract natural gas or oil.

Technical Report The Modern Practices of Hydraulic Fracturing: A Focus on Canadian Resources The Petroleum Technology Alliance of Canada March 2013 Journal of Canadian Petroleum Technology Tech_Report_313.pdf

www.spe.org/ejournals/spe/JCPT/2013/03/Tech_Report_0313.pdf

Last year, an exhaustive University of Texas study done by the former head of the U.S. Geological Survey looked into alleged incidents of fracking contamination. "None of the water-well claims involve hydraulic fracturing fluid additives, and none of these constituents has been found by chemical testing of water wells," the study concluded.

While the study found no direct link between water contamination and fracking itself, it did cite surface spills of fracturing chemicals as a risk to groundwater. It also found blowouts underground during fracking operations have been underreported.
Reading Beyond the Headlines: Fracking and Water Contamination | February 17, 2012 | By Mose Buchele | StateImpact.npr.org

Message: 100 years of Natural Gas Reserves: An estimate of the amount of oil or natural gas reserves that may be available for extraction. Recoverable Reserves: A term used in natural resource industries to describe the amount of resources identified in a reserve that is technologically or economically feasible to extract. Recoverable reserves is also often called proved reserves.

U.S. shale gas reserve estimates plummet January 26, 2013 | PennEnergy
Estimates of 2012 shale natural gas reserves in the U.S. represent a shocking step backward for the rapidly growing industry, according to Bloomberg. The projections released by the U.S. Department of Energy estimate that the country holds around 482 trillion cubic feet of recoverable natural gas from shale basins. That represents a 42 percent decline from 2011 when estimates of shale gas reserves were placed at around 827 trillion cubic feet. The declines stemmed from more detailed information available because of the dramatic uptick in natural gas exploration in shale deposits over the past year. Probably the most substantial impact of the updated estimates, however, was the 66 percent reduction in recoverable reserves in the Marcellus shale formation in Pennsylvania, New York, Ohio and West Virginia. In 2011 that basin was estimated to hold 410 trillion cubic feet of gas, enough to fill U.S. gas demand for 17 years at 2010 levels. Now that number has been reduced to 141 trillion cubic feet, or around 6 years.

http://www.pennenergy.com/articles/pennenergy/2012/01/u-s--shale-gas-reserve.html

Message: Natural Gas is a BRIDGE FUEL

The Center for American Progress - Natural Gas: A Bridge Fuel for the 21st Century" By John Podesta and Timothy E. Wirth | August 10, 2009 Natural gas is the cleanest fossil fuelit produces less than half as much carbon pollution as coal. Recent technology advancements make affordable the development of unconventional natural gas resources. This creates an unprecedented opportunity to use gas as a bridge fuel to a 21st-century energy economy that relies on efficiency, renewable sources, and low-carbon fossil fuels such as natural gas.

American Gas Association (AGA) | December 2012: DOE Report Affirms Role of Natural Gas as a Foundation Fuel Washington, D.C. A recent report commissioned by the U.S. Department of Energy (DOE) entitled Macroeconomic Impacts of LNG Exports from the United States affirms the position of natural gas as a foundation fuel for the United States and the nations energy future. The American Gas Association (AGA) is encouraged to see DOE examining the important role that natural gas will serve in our nations energy and economic future.

Message: Creates Jobs IHS Global Insights has produced 4 reports from 2009-2012 dealing with the economic benefits of Natural Gas Drilling.

2009: Measuring the Economic and Energy Impacts of Proposals to Regulate Hydraulic Fracturing Task 1 Report. Prepared for the American Petroleum Institute (API) April 2011: The Economic Contribution of the Onshore Independent Oil and Natural Gas Producers to the U.S. Economy Final Report. Prepared for the Independent Petroleum Association of America (IPAA) December 2011: The Economic and Employment Contributions of Shale Gas in the United States. Prepared for the American Natural Gas Alliance (ANGA)

October 2012: Americas New Energy Future: The Unconventional Oil and Gas Revolution and the US Economy Volume 1:National Economic Contributions. Supported by American Petroleum Institute, Institute for 21st Century Energy, the American Chemistry Council, and Natural Gas Supply Association.

SHALE AND WALL STREET: WAS THE DECLINE IN NATURAL GAS PRICES ORCHESTRATED? FEBRUARY 2013 by Deborah Rogers

Shale development is not about job creation. Optimistic job estimates by industry have relied heavily on unrealistic multipliers to claim vast numbers of indirect jobs. Such job estimates in industry studies often include professions such as strippers and prostitutes in the overall job gains not the sort of jobs that most people think of when they hear optimistic numbers from the oil and gas industry. Moreover, direct industry jobs (for onshore and offshore oil and gas) have accounted for less than 1/20 of 1% of the overall U.S. labor market since 2003, according to the Bureau of Labor Statistics. This cannot be construed as game changing job creation.

Drilling into Big Oil's big job claims | By Chris Isidore @CNNMoney April 25, 2012
Parsing the job numbers: The jobs Felmy is citing are based on research by energy industry consulting firm IHS CERA, which earlier this year estimated that the industry produced 150,000 jobs in 2011. Another 150,000 jobs a year over seven years would create the million additional jobs the industry promises.

But that job count comes from the broadest possible estimate of oil jobs.
It includes everyone from the roughneck in North Dakota drilling a new oil well, to a trucker driving equipment to that oil job site, to jobs created by the spending of those oil workers, such as a clerk at a WalMart or a stripper serving the workers drawn to one of those North Dakota oil boomtowns.
http://money.cnn.com/2012/04/25/news/economy/oil-jobs/index.htm

Question: What happens to jobs when the Gas/Oil Corporations leave town?

Connecting the Messengers

DEFINING TERMS - Trade Association: an association of organizations in the same trade formed to further their collective interests, especially in negotiating with governments, trade unions, etc. - Front Group: organizations that appear to be independent voluntary associations or charitable organizations. Front groups can act for the parent group without the actions being attributed to the parent group.

- Astroturf Group: front groups pretending to be Grassroots, while actually being operated by a discreet sponsor.
- Grassroots Group: the common people as a fundamental group with common interests, volunteers working together for common purpose. - Echo Chamber: Use of multiple media outlets to repeat or echo the same message The echo chamber is also used among the various front and astroturf groups as amplification.

Front Group
Independent Petroleum Association of America (IPAA)

Front Group Oil & Gas Corporations State Trade Groups

American Petroleum Institute (API)

Front Group

Front Group

Front Group

http://www.nxtbook.com/nxtbooks/naylor/PAAB0210/index.php?startid=41#/54

IPAA is described as a trade association organized under 501(c)(6) of the Internal Revenue Code. It shares space and staff with its "IPAA Educational Foundation" (IPAAEF), a 501(c)(3) non-profit organization, which means that in general contributions to the latter can be counted as a charitable tax deduction by its donors.

http://www.prwatch.org/news/2012/12/11921/%E2%80%9Cenergy-depth%E2%80%9D-%E2%80%93-reporters%E2%80%99-guide-its-founding-funding-and-flacks

http://www.ipaa.org/education/about/history.php

For months, IPAA's government relations and communications teams have been working around-the-clock on a new industry-wide campaign known as "Energy In Depth" (www.energyindepth.org) to combat new environmental regulations, especially with regard to hydraulic fracturing. And, we're seeing some outstanding results. IPAA Vice President of Government Relations Lee Fuller and Vice President of Public Affairs Jeff Eshelman are working on the Energy In Depth" campaign that has garnered the attention of national news outlets, including The Wall Street Journal, The New York Times, The Washington Post, Reuters, the Associated Press, National Public Radio and more. The cooperating regional and state associations have been an integral part of this national campaign and they are working closely with their news media and policymakers using coordinated messages.

Texas Eagle Ford Mountain States DenverJulesberg Basin Michigan Niagra Reef Illinois New Albany

California Miocene Monterey

Website Registered to Dittus Communications

Purchased by FTI

PR Firm

Project of CEA

Website Registered to Dittus Communications Executive Director

Lee Fuller
Vice President Government Relations Vice President Public Affairs/Communications

Affiliate

Executive Vice-President Affiliate

Jeff Eshelman

Client

Travis Windle

Website Registered to Dittus Communications Website Registered to Dittus Communications PR Firm

Project of CEA

Executive Director

Lee Fuller
Vice President Government Relations

Researcher

Public Affairs & Communications Coordinator

Julia Bell
Vice President Public Affairs / Communications Press Contact Executive Vice-President

Jeff Eshelman
Senior Vice President

Research Director Partner Organization

Simon Lomax
Former Editorial Director Funding Source

Brian Kennedy
Co-Founder

Front Group

Chesapeake Energy

Benjamin Cole, a spokesman for American Energy Alliance told Politico in October 2012 that, "Our [American Energy Alliance] goal is to make the United States Wind Energy Policy and Wind Production Tax Credit so toxic that it makes it impossible for John Boehner to sit at a table with Harry Reid and say, Yeah, I can bend on this one.

29 [ insert state name ] Energy Forums

The Ohio Energy Resource Alliance | Saturday, September 29th, 2012 The Ohio Energy Resource Alliance (OERA) was formed to help provide answers to Ohioans who have questions about shale development, and how it will benefit Ohio and their communities. The OERA is comprised of Energy In Depth Ohio; the Ohio Petroleum Council, a division of the American Petroleum Institute (API); the Ohio Oil & Gas Association; the Ohio Oil & Gas Energy Education Program; the Buckeye Energy Forum; and Americas Natural Gas Alliance.

http://www.eidohio.org/tag/buckeye-energy-forum/

Michael Zehr
Vice President of Federal Affairs

2009: Minority Staff Director, US Senate Subcommittee on Aging 2009-2010: Legislative Director, Former Senator George S LeMieux (R-FL). LeMieux appointed on September 9, 2009, to the United States Senate to fill the vacancy caused by the resignation of Melquiades R. Martinez; took the oath of office and served from September 10, 2009, to January 3, 2011; did not seek election in 2010. 2006-2009: Legislative Director, Former Senator Mel Martinez (R-FL) Martinez resigned stating he was homesick, however he had his share of controversy which included the Terry Schiavo memo. In 2005 amid the right-to-life case involving Terri Schiavo, the brain-damaged Pinellas County woman who ultimately was removed from a feeding tube. Martinez, who sought federal review of the case, accidentally handed a Democratic senator a memo detailing why the Schiavo bill was good for Republicans. And there was also the problem of illegal campaign contributions, and Campaign Finance irregularities. 2003-2006: Legislative Assistant, Senator Mitch McConnell (R-KY) 1999-2003: Legislative Assistant, Senator Tim Hutchinson (R-AR)

Salon.com: Big Oil and Canada thwarted U.S. carbon standards

Consumer Energy Alliances Echo Chamber is a strategy where any message created by that group or its supporters would be echoed across many different blogs and websites, creating the impression of a large-scale movement.

http://www.salon.com/2011/12/15/big_oil_and_canada_thwarted_u_s_carbon_standards/

Gauging the Message Impact

The Natural Gas Industry has MONEY to spend on: Advertising Lobbying Campaign Donations Political Action Committees (PACs) Front Groups

Trade Organizations

Fractivists have: PEOPLE

The Control Risks Group Limited is a subsidiary of Control Risks Holdings Limited, with headquarters in London, UK.

CRG describes itself as: ....an independent, global risk consultancy specializing in helping organizations manage political, integrity and security risks in complex and hostile environments. We support clients by providing strategic consultancy, expert analysis and in-depth investigations, handling sensitive political issues and providing practical on-the-ground protection and support.

THE GLOBAL ANTI-FRACKING MOVEMENT - What it wants, how it operates and what s next

Excerpt: As shown by local bans in the US and Canada, national moratoriums in France and Bulgaria, and tighter regulation in Australia and the UK, the global antifracking movement has mounted an effective campaign against the extraction of unconventional gas through hydraulic fracturing (fracking). Meanwhile, the oil and gas industry has largely failed to appreciate social and political risks, and has repeatedly been caught off guard by the sophistication, speed and influence of anti-fracking activists.

Key Areas to Target

Acknowledge Grievances Engaging Communities Reduce Impacts Create More Winners

Shale Gas Industry Insider: We Are Losing the Messaging War on Fracking Sep 13th, 2011 Excerpts: Today, she [Tisha Conoly-Schuller] explained, those opposed to hydraulic fracturing can no longer be characterized as environmental extremists because the movement has gone mainstream. The public is skeptical of anything we say, she said. The favorable perception of the oil and gas industry polls at seven percent thats lower than Congress. The public does not believe us. We need someone else delivering our message for us. reposition the industry to appeal more broadly to young people The issue is serious, but we shouldnt take ourselves so seriously. We need to become much more clever. Our industry is going to have to become hipper. In that respect, Conoly-Schuller said, industry executives and communicators are going to have to become well versed in the use of social media and online tools.

People that like South Park are our audience, she said, and we need to figure out how to talk to them. We need to figure out what works and how to get it out to them.

Coloring Books

The shale gas industry has had its collective ass kicked, and kicked hard, by Gasland and others opposed to hydraulic fracturing and needs to redefine its core messages to defuse a burgeoning negative public perception of the controversial drilling technique, the President and Chief Executive Officer of the Colorado Oil & Gas Association (COGA) said today. ~ September 2011 - http://www.naturalgaswatch.org/?p=939

Marcellusmoney.org

http://www.opensecrets.org/lobby/indusclient.php?id=E01

2012 Top 10 Oil & Gas lobbying spenders Federal level

http://www.opensecrets.org/lobby/indusclient.php?id=E01

#1: WHAT THE ANTI-FRACKING MOVEMENT WANTS

A better deal

Parts of the anti-fracking movement are not opposed to hydraulic fracturing per se, but want to extract a better deal from the industry in terms of economic opportunity, taxation, and compensation.

Recommended Reading

Trust Us, Were Experts by Sheldon Rampton and John Stauber Drill Baby Drill: Can Unconventional Fuels Usher in a New Era of Energy Independence? by J. David Hughes Shale & Wall Street: Was the Decline in Natural Gas Orchestrated? by Deborah Rogers Fracking Pennsylvania: Flirting with Disaster by Walter Brasch No Fracking Way: A blog for New York and Pennsylvania (blog.shaleshockmedia.org/)