Clean Energy Gets Dirty
Natural gas billionaire uses green lobby to take out competitors
by CJ Ciaramella
Chesapeake Energy (CHK), one of the biggest natural gas companies in the United States, has funneled millions of dollars to environmental and health groups to attack the coal industry, all under the guise of promoting clean air—and has spent millions more lobbying the Environmental Protection Agency and members of Congress.
The second-largest natural gas producer in the U.S., Chesapeake donated $26 million to the Sierra Club and funded ad campaigns by the American Lung Association to steer public favor toward natural gas energy and the controversial hydraulic fracturing process used to obtain it.
James Lucier, managing director at the Capital Alpha Partners political research firm, said Chesapeake “is one of the big 800-pound gorillas in the natural gas world, and McClendon is one of the biggest personalities, perhaps only second to T. Boone Pickens.”
And for the past few years, Lucier said, the 800-pound gorilla has been throwing its weight around.
“It’s interesting because, as a natural gas producer, Chesapeake is going against an unspoken gentleman’s agreement that different forms of fossil fuel don’t attack each other,” Lucier said. “Two or three years ago there was a sense that the natural gas industry had upped the ante and was going on the offensive.”
The Sierra Club revealed on Feb. 2 that it had received more than $26 million from Chesapeake Energy between 2007 and 2010 to fund the environmental group’s campaign against coal-fired power plants.
According to TIME, the Sierra Club money “mostly” came from Chesapeake CEO Aubrey McClendon. Forbes estimates McClendon’s personal fortune exceeds $1.2 billion, including his 2.5 percent personal stake in nearly every Chesapeake well, real estate, and 19 percent of the NBA’s Oklahoma City Thunder.
To hear the coal industry tell it, natural gas companies couldn’t beat coal in the marketplace, so they turned to other methods.
“They needed a big, new market to lift prices,” said Luke Popovich, a spokesman for the National Mining Association. “The biggest market was electricity, but coal was standing in the way. What better hit man than the Sierra Club?”
Writing on the Sierra Club blog, the goup’s executive director Michael Brune said, “The idea was that we shared at least one common purpose—to move our country away from dirty coal.”
But as environmental concerns grew about the process used to obtain natural gas from shale—hydraulic fracturing, better known as “hydrofracking” or “fracking”— the Sierra Club decided to sever ties with Chesapeake in 2010, turning down an additional $30 million in donations.
“The chapter groups and volunteers depend on the Club to have their back as they fight pollution from any industry, and we need to be unrestrained in our advocacy,” Brune told Time. “The first rule of advocacy is that you shouldn’t take money from industries and companies you’re trying to change.”
In a statement, Chesapeake told a different story, saying the groups “mutually agreed” to end the funding. The company declined to comment further for this article.
Although it’s partnership with the Sierra Club has ended, the natural gas giant still has powerful friends.
In 2011, the American Lung Association (ALA) launched a national ad campaign— television, radio, online, and outdoor advertisements—targeting the coal industry and Republicans for their opposition to the EPA’s clean air regulations.
Chesapeake was a major donor to the ALA campaign. Although exactly how much the company donated is not clear, the ALA’s 2010 annual report said Chesapeake “provided the funds that allowed the American Lung Association to create a new public service campaign based on the Fighting for Air platform. In addition to traditional radio and television advertisements, the campaign includes online components, print, and even outdoor advertising.”
At the time, the Obama administration was battling the coal industry over its air regulations. The ALA was a key ally.
The EPA awarded $2.3 million in grants to the American Lung Association in 2010. Overall, the EPA has given the American Lung Association’s Washington headquarters $7.7 million, as well as $20.4 million in taxpayer money to 61 American Lung Association affiliates.
When Chesapeake spent $2.7 million in 2010 lobbying on natural gas and hydrofracking bills, the EPA was one of its targets. According to its lobbying report, Chesapeake lobbied the EPA on the subject: “Use of Natural Gas as an air emission control technology.”
Chesapeake’s largesse extends to both parties.
The company is listed as a top campaign contributor to 74 members of Congress since 2008, including John Sullivan (R., Okla.), who introduced the House version of the NATGAS Act, and Dan Boren (D., Okla.), the chair of the House Natural Gas Caucus.
It is the 24th largest contributor to outside political spending groups so far in the 2012 election, donating $250,000. It also has its own PAC, which has spent $678,948 so far in this year’s election cycle.
Then there are front groups like the American Clean Skies Foundation, whose chairman and founder is Aubrey McClendon. According to its website, the foundation’s mission is to “advance America’s energy independence and a cleaner, low-carbon environment through expanded use of natural gas, renewables and efficiency.”
The foundation even runs its own TV station, CleanSkies.tv. The station recruited “peer-group partners” to advise it, including Honda USA, Natural Gas Vehicles for America, and Clean Energy Fuels, the natural gas company owned by energy tycoon T. Boone Pickens.
The American Natural Gas Association did not respond to requests for comment.