Natural gas proponents powered by industry donations

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An investigation by the New York Times this week raised questions about whether the natural gas industry has had too much influence on policymaking by federal agencies, and whether that sway has led investors, members of Congress and others to be overly bullish about the energy source.

The article focused on the Energy Information Agency, the research arm of the Department of Energy, which writes annual reports on the industry that are considered authoritative. Ian Urbina wrote that, in its reports, the EIA has:

[S]teadily increased its estimates of domestic supplies of natural gas, and investors and the oil and gas industry have repeated them widely to make their case about a prosperous future.

In response to the article, four members of Congress wrote to the EIA yesterday asking whether the office’s procedures amounted to a conflict of interest and why agency scientists’ doubts about shale gas had not been heeded.

The Times quoted leaked emails showing senior EIA officials concerned with the ‘euphoria’ surrounding the shale gas boom. At least one senior scientist wrote that the EIA relied too heavily on outside contractors using “incomplete/selective” data. The contractors, some of who have natural gas clients, supply shale gas estimates for the agency’s annual reports, Urbina wrote.

EIA’s reports not only inform investors but also legislators, Urbina noted. Rep. John Sullivan, R-Okla., a favorite of the gas industry, authored the New Alternative Transportation to Give Americans Solutions Act in April, which provides tax credits for vehicles fueled by natural gas. The bill has garnered over 180 co-sponsors.

Sullivan has touted natural gas as a savior from energy dependence. “We have over 120-year reserves of natural gas…it is absolutely asinine not to use that," he said on cable TV in April.

Sullivan and the bill’s lead Democratic co-sponsor Dan Boren, D-Okla., are two of the three members of Congress who received the most campaign donations from the natural gas pipeline industry for the 2010 election, according to the Center for Responsive Politics. As a whole, the oil and gas industry gave more to Boren—about $225,000—than all but two House colleagues for the election. Sullivan was not too far behind.

The bill’s early success may speak to the power of the energy lobby pushing for government intervention in the natural gas market. At least 23 companies have disclosed lobbying on the bill this year, according to a search for H.R. 1380 on Opensecrets.org. There are likely many more companies lobbying on the bill but not listing its number on their disclosure forms. For instance, natural gas company Chesapeake Energy reported lobbying on “natural gas vehicles.”

But some companies, led by the oil refining conglomerate owned by the politically influential Koch brothers, have campaigned against the legislation, according to a report in The Hill newspaper. Their efforts have resulted in 14 members of Congress withdrawing their support for the bill. 

It was another natural gas industry campaign—this one under the Bush Administration—that allowed the industry to increase their estimates of shale oil reserves and thereby please investors, Urbina reported. The S.E.C. adjusted the way it allowed companies to count their shale gas reserves in 2008, permitting them to include previously uncountable reserves that are harder to obtain.

One of the companies that pushed for that rule change is natural gas champion Chesapeake Energy. Election after election, Sullivan and Boren are among the biggest recipients of campaign donations from that company’s political action committee.

In total, Chesapeake Energy’s executives and PAC have given over $40,000 to each Oklahoma congressman over the past decade, according to the CRP.