FOR IMMEDIATE RELEASE
May 18, 2011
3:36 PM
http://www.commondreams.org/newswire/2011/05/18-12

CONTACT: Environmental Groups

Sarah Burt, Earthjustice, (510) 550-6755, sburt@earthjustice.org
Kelly Trout, Friends of the Earth, (202) 222-0722, ktrout@foe.org
Kenny Bruno, Corporate Ethics International, (718) 788-4402, kbruno@corpethics.org
Steve Porter, Center for International Environmental Law, (814) 323-4623, sporter@ciel.org

Groups question what impact the relationship will have on controversial pipeline decision

SAN FRANCISCO – May 18 – Environmental and ethics groups sued the State Department today to gain access to possible communications between a lobbyist for a Canadian oil pipeline company and the State Department, headed by Secretary of State Hillary Clinton.

The lobbyist, Paul Elliott, formerly worked as the national deputy director for Secretary Clinton’s presidential campaign. Elliott was then hired by TransCanada Pipelines, Ltd, the company behind the controversial Keystone XL pipeline, which would run through America’s Great Plains to refineries on the Gulf Coast. Elliott registered as a lobbyist only after news organizations reported on his lobbying activities on behalf of TransCanada in December 2010. TransCanada needs a permit from Secretary Clinton to build the Keystone XL pipeline.

The suit follows a Freedom of Information Act request filed by Friends of the Earth, Corporate Ethics International, and the Center for International Environmental Law late last year seeking to uncover any communications between Elliott and the State Department that would reveal whether Elliott’s former position as campaign director for Secretary Clinton resulted in bias in the permitting process. The State Department initially denied the request for those records on January 5, 2011. A few weeks later, the department reversed its decision to deny the request but has delayed processing the request, and has not indicated whether or when it will release the information.

“Why is the State Department refusing to release these communications?,” asked Erich Pica, president of Friends of the Earth. “This calls into question the agency’s decision to rush the review of the Keystone XL pipeline, despite its massive environmental risks and bipartisan opposition to it.”

Before deciding whether to grant a permit, the State Department must analyze the pipeline’s risks and finalize an Environmental Impact Statement. After the EPA told the State Department its draft environmental impact statement was inadequate, Secretary Clinton nonetheless said, last October, that the State Department was “inclined to approve” the permit. Secretary Clinton’s agency has been criticized by farmers and ranchers in the pipeline’s path for rushing the review process and not holding hearings on the department’s latest draft analysis. The State Department plans to make a final decision about the Presidential Permit before the end of 2011.

“Clearly, TransCanada hired Mr. Elliott to take advantage of his previous service to Hillary Clinton,” said Kenny Bruno with Corporate Ethics International. “We think the public has a right to know in what ways TransCanada and Mr. Elliott have attempted to influence Secretary Clinton’s view of this controversial project.”

Tar sands mining operations destroy forests and wetlands, with vast drilling infrastructure, open pit mines, and toxic wastewater ponds up to three miles wide, permanently damaging the environment. The extraction process involves strip mining and drilling that injects steam into the ground to melt the tar-like crude oil from the sand and requires massive amounts of energy and water. In fact, tar sands oil production emits about three times the amount of greenhouse gas emissions as extraction of conventional oil and uses from two and a half to four times the amount of water. The construction and operation of the Keystone XL pipeline itself poses additional environmental risks, including potential contamination of major freshwater aquifers.

“This raises important questions of transparency and fairness,” said Sarah Burt, an Earthjustice attorney. “If a decision to approve a transcontinental pipeline is made based on relationships and access to Clinton, while completely overlooking the significant environmental and public health dangers posed by the pipeline, the public needs to be aware of it.”

The public interest law firm Earthjustice represents Friends of the Earth, Center for International Environmental Law, and Corporate Ethics International in Friends of the Earth v. State Department.

The complaint filed against the State Department today is available at: http://www.foe.org/sites/default/files/FriendsoftheEarthvStateDepartment-11-05-18-Complaint.pdf

More information and documents detailing the history of the Freedom of Information Act request at the center of the lawsuit are available at: http://www.foe.org/groups-question-role-oil-lobbyist-state-departments-review-tar-sands-oil-pipeline

More information on the proposed Keystone XL pipeline is available at: http://www.foe.org/keystone-xl-pipeline

http://news.yahoo.com/s/nm/20110518/us_nm/us_cuba_usa_rig_1

It will be interesting to see if they actually deploy the rig in the fast moving Gulfstream–a real technological challenge–beyond the obvious problem that this is where all the hurricanes volley through going north all summer. Then there’s the history of no serious oil reserves in this area. This whole deal sounds fishy to me…..dv

By Daniel Wallis – Tue May 17, 11:54 pm ET

LA JOLLA, Calif. , May 17 (Reuters) – The arrival of a unique oil rig off communist Cuba is set to cause waves in Washington, raising questions about U.S. drilling permits and the response to any disaster, a conference heard on Tuesday.

Spanish giant Repsol YPF is due to bring the Chinese-built Scarabeo 9 rig to the Caribbean island later this year to drill at least one well in partnership with Norway’s Statoil and a unit of India’s ONGC.

“I think it’s going to have a much bigger impact on U.S. domestic policy than it is on Cuba,” said Jorge Pinon, visiting research fellow with Florida International University Latin American and Caribbean Center’s Cuban Research Institute.

The main reason is that Repsol plans to use the high-tech semi-submersible Scarabeo 9 for a deepwater drilling bid in Cuba’s Gulf of Mexico zone, parts of which are within 50 miles of the Florida coast.

That puts the planned drill site close to areas where the Obama administration blocked U.S. drilling in the eastern Gulf of Mexico after BP’s massive Deepwater Horizon oil spill last year.

“A lot of people are going to be knocking on doors in Washington, saying ‘How come the Cubans are drilling and we’re not allowed to drill in the eastern Gulf?’,” Pinon told a Latin American energy conference in La Jolla, California.

U.S. EMBARGO

The Scarabeo 9 is unique because Repsol had to find an oil rig that met the terms of the 49-year-old U.S. embargo on Cuba, which limits the amount of U.S. technology that can be used in equipment used there. The embargo also prevents U.S. companies from operating on the island.

Pinon said the $750 million rig, which can drill in 12,000 feet of water, was due to leave Singapore next month and should arrive in Cuba in September or October.

He said the only U.S.-made part on the Scarabeo 9 was the blow out preventer — one of the pieces of equipment that failed during the Deepwater Horizon disaster.

And that raises the other issue likely to make waves when the rig, owned by Italian service company Saipem and being prepared in Singapore, arrives off Cuba: what happens if there is a similar accident to the one off Louisiana?

“The U.S. embargo means Repsol can’t pick up the phone to Washington,” Pinon said. “Any equipment to help in a problem would have to come from the UK or Norway or somewhere else.”

He said the U.S. government should formulate a “One Gulf” strategy with the international oil companies working in Cuba, as it is trying to do with Mexico, so that in the case of any emergency they could turn to the United States for help.

The U.S. government has said it would let U.S. companies that handle accidental oil spills operate in Cuban waters if the need arose. Pinon said that should be formalised.

Repsol drilled an offshore well in Cuba in 2004 and said it found oil, but described it as “non-commercial.”

After drilling at least one well, Repsol is due to pass the Scarabeo 9 to Malaysia’s state oil firm Petronas. Venezuela’s PDVSA may also be in line to get the rig for its Cuban blocks.

The oil industry is watching the Repsol project very closely and if it finds significant reserves, more companies are likely to want to explore in Cuban waters.

Cuba has said it may have 20 billion barrels of oil offshore, although the U.S. Geological Survey has estimated 5 billion barrels.

(Editing by Ron Popeski)
Special thanks to Richard Charter

http://www.cnn.com/2011/POLITICS/05/17/senate.oil.subsidies/

By Ted Barrett and Rachel Streitfeld, CNN
May 17, 2011 8:39 p.m. EDT

STORY HIGHLIGHTS
The measure fails on a mostly party-line vote
The White House calls the vote disappointing
The Senate will take up a Republican measure to expand drilling Wednesday

Washington (CNN) — On a mostly party-line vote, the Senate on Tuesday defeated a Democratic measure to strip major oil companies of about $20 billion in tax subsidies over the next 10 years and use the savings to pay down the deficit.

Three Democrats and two Republicans crossed sides in the 52-48 vote, preventing the bill from reaching a required 60-vote threshold for passage.

Republicans opposed the measure, arguing the big five oil companies would pass any tax increases to consumers in the form of higher gas prices.

Senate Minority Leader Mitch McConnell, R-Kentucky, said the Democratic bill would “raise the price of gasoline at the pump, export American jobs and make us more dependent on people like (Venezuelan President) Hugo Chavez because the amount of oil we’ll have to import will go up.”

Senate Majority Leader Harry Reid, D-Nevada, accused Republicans of preferring to “continue subsidizing these wealthy oil executives and oil companies” rather than pay for health and education programs and reduce the debt.

A White House statement called Tuesday’s vote “disappointing” and said efforts to end the subsidies would continue.

“The bottom line is that there are more responsible ways to spend tens of billions of federal dollars, including investments that will help protect American consumers from high gas prices,” said the statement by White House Press Secretary Jay Carney. “The vote today — with support from over half the U.S. Senate — is an important step towards repealing these unwarranted subsidies for the oil and gas industry.”

The vote was largely symbolic because Democrats knew they had no chance of passing the measure without support from at least seven Republicans.

In the end, Democrats from oil-producing states, including Sens. Mary Landrieu of Louisiana and Mark Begich of Alaska, opposed the bill, along with Democratic Sen. Ben Nelson of Nebraska.

A handful of Republicans — including conservative Sens. John McCain of Arizona and Mark Kirk of Illinois — previously expressed openness to the bill but ended up opposing it. The two Republicans who supported the measure were Maine’s Olympia Snowe and Susan Collins.

Snowe, who is up for re-election in 2012, said in a statement that it was “difficult to justify oil development incentives given the current level of crude oil prices, and the fact that the U.S. government has to borrow money to pay for these incentives.”

If Snowe had joined most of her GOP colleagues in opposing the measure, Democrats were prepared to accuse her of protecting big oil companies while consumers are feeling pain at the pump.

Collins, who also supported the measure, said she had concerns that Democrats pushed the proposal for political reasons.

“I do think that the Democrats are being disingenuous in implying that this is somehow going to have an impact on prices at the pump, because it won’t,” Collins said. “But it might be good tax policy to reduce the subsidies and use the money for deficit reductions.”
Despite the legislative defeat, Reid vowed Tuesday to get the measure included in any debt reduction package Congress is expected to consider in the weeks ahead.

The Senate will vote Wednesday on a Republican proposal to increase the domestic oil supply through new exploration and drilling. It is not expected to get the 60 votes needed to pass, aides from both parties predicted.

______________________

http://www.washingtonpost.com/blogs/2chambers/post/senate-rejects-measure-to-end-subsidies-for-big-oil-companies/2011/05/17/AF6HI35G_blog.html

Washington Post

Posted at 07:32 PM ET, 05/17/2011
Senate rejects measure to end subsidies for big oil companies
By Felicia Sonmez

((AP))
A Democratic measure that would have repealed tax subsidies for the five biggest oil companies failed to clear the Senate on Tuesday, falling short of the 60-vote threshold needed to advance in a near-party-line vote.

The Senate rejected S.940, or the “Close Big Oil Tax Loopholes Act,” in a 52-to-48 vote. Three Democrats – Sens. Ben Nelson (Neb.), Mary Landrieu (La.) and Mark Begich (Alaska) – joined nearly all Republican in voting against the measure, while two Republicans – Sens. Susan Collins (Maine) and Olympia Snowe (Maine) – voted “yes.”

Democrats had contended that the bill, which would have repealed $21 billion in tax subsidies for the top five oil companies over the next decade, represented a step toward addressing the country’s soaring deficit and rising gas prices. The White House issued an official statement of administration policy earlier Tuesday saying that it strongly backed the bill.

But even as Democratic leaders had been strongly pushing the measure, it was expected that the bill would fall short. That’s the case, too, with a separate energy-related measure that will be on the Senate floor Wednesday – a Republican-sponsored bill aimed at increasing domestic energy production.

The end result: the congressional debate over addressing rising gas prices will have little changed by week’s end.

Senate Majority Leader Harry Reid (D-Nev.) maintained Tuesday that the subsidy issue will continue to play a role in the debate over raising the debt ceiling. Asked what he expected to come from the vote on the Democratic measure, Reid told reporters that he expected that a final deal on the debt ceiling would include a repeal of tax subsidies for the top five oil companies.

Special thanks to Richard Charter

http://www.nytimes.com/gwire/2011/05/16/16greenwire-oil-spill-panels-chairman-says-his-push-for-cu-50005.html

By KATIE HOWELL of Greenwire
Published: May 16, 2011

The Obama administration is pushing back against plans by its oil spill commission co-chairman to spread his message about offshore drilling reforms to Cuba, the panel leader said today.

William Reilly, the co-chairman of the presidential panel that made a series of recommendations earlier this year to improve offshore drilling safety and regulation after the BP PLC oil spill in the Gulf of Mexico last summer, has already helped convinced Mexican drilling regulators to adopt U.S. regulatory structures.

But he said he has had his “wrist slapped” by the Obama administration for his plans to discuss reform with Cuba, with which the United States has had no diplomatic relations since 1961.

“I have been causing grief to the State Department,” Reilly, a former U.S. EPA chief under President George H.W. Bush, said during an event hosted by Resources for the Future in Washington, D.C.
Cuba is developing plans to drill 16 oil and gas wells in waters 50 miles from Key West, Fla., using Spanish oil and gas giant Repsol YPF and Russian natural gas producer Gazprom.

“That’s something that’s very important to us, I think, given that they’re drilling 50 miles off Key West, so I’ve asked to be invited to Cuba to talk about the report and have had my wrist slapped by the administration for raising the sensitive Cuban issue,” Reilly said. “I had to say, ‘I don’t work for you.'”

Reilly said spreading the message to nations interested in drilling in Gulf waters is constructive and important. And he said if such plans do go forward, it is imperative for a company with an established safety record, like Repsol, to do the work.

“I asked one CEO of a major oil company, ‘What’s Gazprom like?’ And he said, ‘I don’t think they’ve ever drilled an oil well — they’re a gas company,'” Reilly said. “Let’s hope Repsol does all the work.”

Reilly also blasted legislative proposals from Sen. Bill Nelson (D-Fla.) and Rep. Vern Buchanan (R-Fla.) that would penalize international oil companies that operate in Cuban waters, calling it “counterproductive.”

“What you want is a company like Repsol, which has its own interest in the United States, has rigs in the Gulf, applies for permits from the United States government,” Reilly said. “I don’t know who we would get — maybe [Venezuelan President Hugo] Chávez — if it were so limited that we couldn’t have a responsible company doing that drilling.”

Reilly said he is also negotiating a meeting with Russian Prime Minister Vladimir Putin to discuss offshore drilling safety in the Arctic.

Reilly’s international efforts come as talks have come to a virtual standstill on reforming domestic offshore drilling safety. Only a handful of the panel’s extensive recommendations have been implemented. And partisan bickering in the House and Senate could keep any legislative proposals to codify the recommendations from advancing this year.

But Reilly said he is not giving up on seeing some of the panel’s strongest recommendations — to create an independent industry-funded safety watchdog institute and to create a separate regulatory director within the Interior Department — come to fruition.

“Yeah, I’m going to continue to pop up. I mean, I’m trying to go to Cuba,” he said.

Special thanks to Richard Charter

Menendez support group sign-on letter_5.16.11 1