Ground zero more than a place, it's the poisoned petroleum paradigm by Doug Grandt

Ground Zero Poisoned Petroleum Paradigm

Emails to Rex Tillerson and a Factual Brief

Ground Zero: Poisoned Petroleum Paradigm

Emails to Rex Tillerson

by Douglas Grandt

Table of Contents

Preface To An AH HA Moment Harvest the Hope concert: Nebraska is “Ground Zero” You must never return to the Kara Sea! Strand the damned crude! An AH HA Moment: “GROUND ZERO” is All-Encompassing Ground Zero Ground Zero isn’t just a place. Ground Zero isn’t just a place. It has become ... Ground Zero isn’t just a place. It has become a Poisoned Paradigm Ground Zero isn’t just a place. It has become a Petroleum Paradigm Hydrocarbon hazards in the Heartland are “Ground Zero” The Poisoned Petroleum Paradigm is “Ground Zero” Who cares enough to clean up “Ground Zero”? End the Poisoned Petroleum Paradigm prudently! Ground Rules

GROUND ZERO IS EVERYWHERE AND EVERYTHING Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground

Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero:

Impotence Institutional Icons Petroleum Paradigm Questionable Conduct Abundance Euphoria Transformative Talk Bias or Blindness Bullish on the Gas Boom Typhoon Vongfong Humanitarian Justification Factual Brief Fracturing Fears Deleterious Disposal Creek Water Radiation Ban Gas Fracking Fracking Man Camp Boom Fracking Man Camp Fever Energy = Electricity Relentless Drilling To Ally or Vilify Resource Depletion

PASSIONATE PROTECTION Ground Ground Ground Ground Ground

Zero: Zero: Zero: Zero: Zero:

Protecting Water, Land, Spirits & Future Generations Denton County Court The Next 7 Generations Cowboy & Indian Alliance: Reject and Protect Across the Pond

GLUT AND GREED Ground Ground Ground Ground Ground Ground Ground

Zero: Zero: Zero: Zero: Zero: Zero: Zero:

You Can’t Burn All the Oil Gas Boom Delusion Gas Wind Solar In the Balance The Truth About Gas Gas Boom At Appomattox English New Speak All Carbon Considered

DOWNSIDES AND UPSIDES Ground Ground Ground Ground Ground Ground Ground

Zero: Zero: Zero: Zero: Zero: Zero: Zero:

STD’s in Fracking Truth to Power Hotter Yet for Politicians and Fossil Fuel Corporations Obama’s Promise Fossil Fuel Write-Down The President’s Climate Action Plan Obama’s Recommitment

GREAT EXPECTATIONS Ground Ground Ground Ground Ground Ground

Zero: Zero: Zero: Zero: Zero: Zero:

A Tale of Two Tongues Kerry Calls for Cooperation What About Implementation? What Is Needed Is Coordination FERC and DOE Coordinate LNG Export Approval Process

EXPORTING POISONOUS POLLUTANTS Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground Ground

Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero:

Lifting the ban on Oil Exports, GAO Recommendation Lifting the Ban on Oil Exports - Air Lifting the Ban on Oil Exports - Water Lifting the Ban on Oil Exports - Transportation LNG Exports and Climate Peak-A-Boo Gas Condensate Exports Petroleum Exports U.S. Chamber of Commerce Supports Oil Exports Brookings Weight Oil Export Possibilities Reasons To Keep the Ban on Oil Exports Oil Exports Uncertain Mixed Effects Making Money Is the Objective

ENSLAVING OUR NAFTA NEIGHBORS Ground Zero: Energy Superpower or NAFTA Energy Colony Ground Zero: Energy Proportionality Ground Zero: Tar Sands Becoming Less Profitable

POINT OF VIEW Ground Zero: ExxonMobil Perspectives Ground Zero: Let’s Talk Trade, Cherry Picking Ground Zero: Divestiture Debate GROW OR DIE Ground Ground Ground Ground Ground Ground

Zero: Zero: Zero: Zero: Zero: Zero:

By All Means Portfolio Value For Wealth Winners and Losers, Production Down but Profits Up Buy Back Plan or Boomerang This is What We Know - Technology Petrol Dinosaurs Will Become Extinct

DON’T GO THERE Ground Zero: What’s the Worst That Could Happen Ground Zero: Dire Consequences Ground Zero: Avoid the Train Wreck TRAIN WRECK ALERT Ground Ground Ground Ground Ground Ground

Zero: Zero: Zero: Zero: Zero: Zero:

Clear and Present Danger Stop Now or Plan for More Damage Tarsands Pipe Dreams Are Lost Assets Moral Authority Demands Civil Outrage Averting Train Wrecks Demand Civil Engagement Safety and Equipment Design Failures

Ground Ground Ground Ground Ground Ground Ground Ground

Zero: Zero: Zero: Zero: Zero: Zero: Zero: Zero:

Dilbit Tankers Plying the St. Lawrence River Civil Society Resistance First Nations The Time Has Come To Pay Our Share Hoax, Lies and Subterfuge Frack Bans Are Gaining Momentum Dire Food Outlook Will Not Solve Poverty Talk of a Growing Economy, But Whereâ&#x20AC;&#x2122;s Climate?

A TAX ON CARBON Ground Ground Ground Ground Ground Ground

Zero: Zero: Zero: Zero: Zero: Zero:

We May Be Still In Stalemate In the Wake of the Election Put a Price On Carbon Citizens in the U.S. and Canada Lobby Power Shift in the Senate Changes Nothing Put a Price On Externalized Costs Results of Revenue Neutrality

CONUNDRUMS Conundrum Conundrum Conundrum Conundrum Conundrum Conundrum EPILOGUE

#1: Replace Subsidies with a Carbon Tax for Externalities #2: Synchronize Actions with Resolved Determination #3: Think Carefully About What We Are Asking For #4: Numerators and Denominators Exponentiate #5: Transparent Decision in the Public Interest #6: Make An Offer They Cannot Refuse

Preface To An AH HA Moment

Harvest the Hope concert: Nebraska is â&#x20AC;&#x153;Ground Zeroâ&#x20AC;?

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Heads up! Harvest the Hope concert: Nebraska is "ground zero"

September 28, 2014 12:31 PM

3 Attachments, 1.2 MB

Thousands of concertgoers and pipeline activists attended the Harvest the Hope concert put on by Bold Nebraska. Willie Nelson and Neil Young headlined the event held on a western Nebraska farm.

Willie Nelson, Neil Young play to thousands protesting Keystone XL Nicholas Bergin | Lincoln Journal Star | September 27, 2014 | http://bit.ly/JS27Sept

NELIGH -- Art and Helen Tanderup gazed with amazed smiles at the thousands of cars parked on the

NELIGH -- Art and Helen Tanderup gazed with amazed smiles at the thousands of cars parked on the stubble of their recently harvested cornfield on Saturday, at the stage set up in their rye field and at the ocean of people standing in front of it. “It’s unbelievable. It’s absolutely amazing this is happening,” said Art just before the start of Harvest the Hope. The sun shone in a sky dotted with white clouds, and nearby corn rustled in a southern breeze on the 160-acre farm near Neligh, as fans waited to hear the concert’s headliners, Canadian singer-songwriter Neil Young and country music star Willie Nelson. Between performances by opening acts -- Native American hip-hop artist Frank Waln, and Lukas and Micah Nelson and Promise of the Real (featuring Willie Nelson’s sons) -- politicians and activists spoke to the crowd of about 8,000 about the fight against the proposed Keystone XL pipeline. The Tanderups are two of about 100 landowners refusing to sign easement agreements with TransCanada Corp., the company that wants to build the controversial pipeline capable of transporting 840,000 barrels of crude oil per day, mostly from Canada’s tar sands region destined for refineries on the U.S. Gulf Coast. Fighting the Keystone XL is only a small part of the bigger battle against a changing climate that is threatening the entire planet, Young said during a press conference before the concert. “We’re really just a skirmish on the ground around a disaster that is waiting to happen," he said. "People are panicking and trying to figure out how to get out of this mess. “We’re proud to be here with all of you, whether you agree with us or disagree with us, to have a discourse about what this is.” Young said America must take up the challenge of reducing carbon emissions and turn to renewable energy generation. “Stand up and be creative and have ingenuity and come up with solutions so we’re not just complaining about problems, we’re solving them," he said. "That is what America needs to do.” The development of Canada’s tar sands is far from inevitable, said Susan Casey-Lefkowitz, director of programs at the Natural Resources Defense Council, a New York-based environmental advocacy group sponsoring the event. “Tar sands is not regular oil," she said. "It’s dirtier. It’s nastier. It’s bad for our land and water when it spills, and it is bad for our climate when it is taken out of the ground. What is happening here in Nebraska is ground zero." Brought together by their opposition to the pipeline project, environmentalists, land rights proponents, farmers, ranchers and Native Americans have revived a coalition dubbed the Cowboy Indian Alliance, with origins in protests against uranium mining in the 1970s. Native leaders have pledged to stop the Keystone XL from crossing their sacred ancestral lands. Rosebud Sioux President Cyril Scott and Oglala Lakota President Bryan Brewer, both from South Dakota, and tribal leaders from other nations promised their tribal warriors would physically stop the pipeline. “We are not just going to protest and leave," Brewer said. "We’re going to stop it." *** After Nelson and Young performed hourlong sets, including classic hits such as “Beer for my Horses” by Nelson and “Heart of Gold” by Young, audience members marched into the Tanderups' field and formed a human chain across where TransCanada wants to bury a 36-inch-diameter pipe. Jane Kleeb, director of Bold Nebraska, declined to speculate on how much money the event would raise to be split between her organization, the Indigenous Environmental Network and the Cowboy Indian Alliance, as well as small clean-energy projects on farms and tribal lands, such as putting solar panels on center pivot irrigators.

Maybe more important than the dollars raised, said Ken Winston of the Sierra Club of Nebraska, is the attention the concert brings to continuing efforts to stop development of a 1,179-mile pipeline from Hardisty, Alberta, to Steele City on the Nebraska-Kansas border. The fight against the Keystone XL in Nebraska already has garnered national attention, after a constitutional challenge to a state law approving the route brought the pipeline’s presidential permitting process to a halt. But pipeline-fighters hope the support of two music legends will help spread their message beyond the nightly news, Winston said. “TransCanada may have the money,” he said, “but we have the musicians and the poets.” Ticket sales alone should generate about $385,000. Concertgoers paid $50 per person to attend the show, with the original 7,000 tickets sold out within days of Bold Nebraska announcing the event last month. An additional 500 tickets issued earlier this month sold out in 10 hours, and 200 more tickets were sold locally in Antelope County.

Willie Nelson and Neil Young wait as they are introduced to the media before the Harvest the Hope pipeline protest concert Saturday on a farm near Neligh, Nebr. Joining them and other performers were Native American tribal leaders. MARK DAVIS/THE WORLD-HERALD

Willie Nelson, Neil Young lend their talents to Keystone XL fight Joe Duggan | World-Herald staff writer | September 27,2014 | http://bit.ly/Omaha27Sept

NELIGH, Neb. — Music legends Willie Nelson and Neil Young delivered Saturday on a promise to comfort opponents of the Keystone XL pipeline while also pleasing a few project supporters who ventured into a crowded Nebraska farm field. A familiar duo in the Farm Aid series of benefit concerts, Nelson and Young teamed up to give a musical assist to pipeline fighters. They performed just one number together, incorporating a few anti-pipeline verses into the folk anthem “This Land Is Your Land.”

“That tar-sand oil ain’t good for drinking,” Young sang. Even those who didn’t sing along as the chorus railed against new fossil fuel development and corporate influence said the concert offered an all-around good vibe. Mike Nash of Omaha said it was easier for him to overlook politics that he doesn’t necessarily agree with when the politics come from two music icons in such a unique venue. “Love the people here, love the show, everybody’s getting along,” he said as Nelson strummed the opening of “Mamas, Don’t Let Your Babies Grow Up to Be Cowboys.” During a pre-concert press conference, Young said the fight over the Keystone XL pipeline symbolizes the larger choice that the world faces between fossil fuels and renewable energy. A native of Canada, Young, 68, urged the United States to take decisive action on climate change. “America has a chance to stand up and lead the world like we used to,” Young said to a throng of reporters covering the event. “So we’re not just standing here complaining about problems, but finding solutions.” Jane Kleeb, the lead organizer of the Harvest the Hope concert, said Nelson and Young helped the show sell 8,000 tickets at $50 each. The proceeds, after roughly $100,000 in expenses are deducted, will benefit three pipeline opponents: Bold Nebraska, the Indigenous Environmental Network and the Cowboy and Indian Alliance. “These boots and moccasins are going to stop this pipeline,” said Kleeb, executive director of Bold Nebraska, an environmental advocacy group. The day’s events brought together leaders from several of the seven bands of the Great Sioux Nation in South Dakota and the Ponca Nation of Oklahoma. The proposed path of the pipeline crosses historical tribal lands in South Dakota as well as the Ponca Trail of Tears in Nebraska, the path the Ponca people following during their forced march to Oklahoma’s Indian Territory. Nelson, 81, suggested his participation in the event was motivated by his longstanding advocacy for farmers and his admiration for Native American people. “We’re here for the farmers and ranchers, the cowboys and Indians,” he said. “And we’ve always been there. Thank you for coming out to help us help them.” Sunny skies and a strong southerly breeze settled over the day as thousands made their way down a gravel road north of Neligh to the concert site in a farm field. Art and Helen Tanderup, whose 160-acre farm lies on the path of the pipeline, hosted the event. The Tanderups are among roughly 100 Nebraska landowners who have refused to sign easement agreements with pipeline company TransCanada Corp. About 400 other Nebraska landowners have signed easements. For six years, TransCanada has been seeking approval from the U.S. State Department to build a 36inch-wide pipeline that would carry 830,000 barrels a day of mostly heavy Canadian oil to refineries on the Gulf Coast. The southern part of the project is done, so now the company wants to build a 1,200mile stretch between western Canada’s oil sands region to Steele City, Nebraska. President Barack Obama must approve the project because it crosses international borders. His administration has put the project on hold while the Nebraska Supreme Court reviews the legality of the

state law used to route the pipeline. The court is not expected to issue an opinion until after November’s elections. Pipeline supporters say it will provide well-paying construction jobs as it is built and property tax revenues to counties along the project’s path. And they say it will reduce America’s reliance on offshore oil by tapping into Canada’s vast oil reserves. Opponents argue that a major spill would contaminate water in the continent’s largest underground aquifer and devastate private property. They also say mining and burning the heavy Canadian oil, known as bitumen, adds significantly to the greenhouse gases affecting global climate change. “I think jobs are fine, but jobs are temporary. The environment is permanent,” said Susie Chandler, 66, a rancher who drove to Neligh from her home near the western Nebraska village of Keystone. Michael Whatley of the pro-pipeline Consumer Energy Alliance said last week that Nelson and Young are hurting farmers with opposition to Keystone XL. Whatley said the transportation of oil by trains — oil that could be moved instead by the pipeline — contributes to rail congestion and blocks farmers from getting crops to market. During the roughly 30-minute session with reporters before the show, Young and Nelson did not address the criticism. Robert Johnston, an Antelope County landowner whose property also is crossed by the pipeline, said he backs the project. He said his support is tied to his use of petroleum products on his corn, soybean and alfalfa farm and the property tax benefits that the county would receive if the project were built. Johnston didn’t plan to attend the show, but when his combine broke down while harvesting soybeans, he decided to head down to the Tanderup farm. “I think it’s great, really,” he said. “What the heck. It’s just another example of the economic activity TransCanada has brought to Antelope County.” The Tanderups harvested a good portion of their corn early to provide space for the concert and parking. Crews erected a stage in the corner of a plot of oats, and a stand of towering cottonwoods provided a sweeping backdrop for the stage and a jumbo screen. Out in the field, people sat in bag chairs and on blankets. Some concertgoers sported cowboy hats, while others wore eagle feathers. Some danced in flip-flops while people next to them scooted in knee-high cowboy boots with jeans tucked inside. The audience ranged from infants to grandparents. Performers such as Frank Waln, a Sicangu Lakota hip-hop artist from Rosebud, South Dakota, and Lukas and Micah Nelson, sons of Willie Nelson, warmed up the crowd. Willie Nelson then took the stage and ran through most of his popular titles, such as “On the Road Again” and “You Are Always on My Mind.” He played for about 45 minutes. Young’s set, which extended beyond an hour, included the well-known “Heart of Gold” and a new version of “Who’s Gonna Stand Up,” which he wrote about the Keystone XL pipeline. With his guitar in hand and harmonica around his neck, Young urged Nebraskans not to give up. “This is never going to end, until we get it right.”

Re-energize with clean carbon-free fuels — for life! Re-invent ExxonMobil as an energy company, be more than an oil & gas company. Re-direct capital investments from carbon-based infrastructure to carbon-free infrastructure. Announce a retirement schedule for your refineries — let the end-game begin. ..

Your "leadership by example would usher in a new era...." Please meet me for coffee — Let's talk about the urgency and deadline to protect all life from: ..

Extreme weather - Increasing death/damage from more heat waves, high winds & high water. Hunger and thirst - Increasing drought/famine from natural & anthropogenic water shortages. Disease and pestilence - Harmful critters, parasites and bacteria are already on the move. Social unrest and economic upheaval - We have seen precursors — worse is yet to come.

YOU MUST NEVER return to the Kara Sea! Strand the damned crude!

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> You must never return to the Kara Sea. Strand the damned crude.

September 30, 2014 9:21 AM

2 Attachments, 497 KB

You understand the urgency for reducing CO2 emissions from burning hydrocarbons. It is your moral responsibility to cease the expansion of crude oil supplies. Their continued development and expansion is detriment to human survival as well as other life and ecosystems in our biosphere. .

Abandon the Arctic, deep water, tarsands, fracking. Expanding production is simply immoral.

ExxonMobil suspends cooperation with Rosneft on Arctic oil project Kommersant newspaper Moscow | Tom Hogue | September 29, 2014 | http://bit.ly/Reuters29Sept (Reuters) - U.S. oil giant ExxonMobil is suspending cooperation with Russia's state-owned company Rosneft on offshore drilling in the Arctic due to sanctions, the daily Kommersant reported on Monday, citing unnamed sources. Rosneft and its head Igor Sechin were among the targets of the sanctions, imposed over Moscow's role in the Ukrainian conflict, which has claimed the lives of more than 3,000 people. On Saturday, Rosneft said it had made an oil discovery jointly with ExxonMobil and that the two had successfully completed drilling of a well in the Kara Sea oil province, where oil reserves are estimated to be comparable to those of Saudi Arabia. Exxon said earlier this month that the U.S. Treasury Department had given it a short extension to wind down a rig in the Kara Sea beyond the 14 days outlined in the sanctions targeting Western cooperation in Russia's oil sector.

"Theoretically, there was a possibility to continue the work, but it was necessary to obtain a new permit," Kommersant reported, citing one of the unnamed sources. "But (ExxonMobil) failed to get it. ExxonMobil should stop work and evacuate its personnel by mid-October." Rosneft declined to comment on the report. ExxonMobil was not immediately available for comment.

Your "leadership by example would usher in a new era...." Please meet me for coffee — Let's talk about the urgency and deadline to protect all life from: ..

An AH HA Moment: “GROUND ZERO” is All-Encompassing

Ground Zero

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero

October 1, 2014 6:13 PM

2 Attachments, 434 KB

Ground zero isn't just a place, it has become a

poisoned paradigm Re-energize with clean carbon-free fuels — for life! Re-invent ExxonMobil as an energy company, be more than an oil & gas company. Re-direct capital investments from carbon-based infrastructure to carbon-free infrastructure. Announce a retirement schedule for your refineries — let the end-game begin. ..

Your "leadership by example would usher in a new era...." Please meet me for coffee — Let's talk about the urgency and deadline to protect all life from: ..

Ground Zero isnâ&#x20AC;&#x2122;t just a place

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero isn't just a place

October 2, 2014 6:46 AM

2 Attachments, 397 KB

Ground zero isn't just a place, it has become a

Your "leadership by example would usher in a new era...." Please meet me for coffee — Let's talk about the urgency and deadline to protect all life from: ..

Ground Zero isnâ&#x20AC;&#x2122;t just a place. It has become ...

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero isn't just a place, it has become ...

October 2, 2014 10:34 AM

2 Attachments, 371 KB

Ground zero isn't just a place, it has become a

Your "leadership by example would usher in a new era...." Please meet me for coffee — Let's talk about the urgency and deadline to protect all life from: ..

Ground Zero isnâ&#x20AC;&#x2122;t just a place. It has become a Poisoned Paradigm

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero isn't just a place, it has become a Poisoned Paradigm

October 2, 2014 3:06 PM

2 Attachments, 459 KB

Ground zero isn't just a place, it has become a

Your "leadership by example would usher in a new era...." Please meet me for coffee — Let's talk about the urgency and deadline to protect all life from: ..

Ground Zero isnâ&#x20AC;&#x2122;t just a place. It has become a Petroleum Paradigm

October 2, 2014 4:25 PM

2 Attachments, 391 KB

Ground zero isn't just a place, it has become a

Your "leadership by example would usher in a new era...." Please meet me for coffee — Let's talk about the urgency and deadline to protect all life from: ..

Hydrocarbon hazards in the Heartland are “Ground Zero”

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Hydrocarbon hazards in the Heartland are "Ground Zero"

October 2, 2014 6:40 PM

2 Attachments, 490 KB

Ground zero isn't just a place, it has become a

Your "leadership by example would usher in a new era...." Please meet me for coffee — Let's talk about the urgency and deadline to protect all life from: ..

The Poisoned Petroleum Paradigm is “Ground Zero”

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> The Poisoned Petroleum Paradigm is "Ground Zero"

October 2, 2014 8:43 PM

2 Attachments, 432 KB

Ground zero isn't just a place, it has become a

Your "leadership by example would usher in a new era...." Please meet me for coffee — Let's talk about the urgency and deadline to protect all life from: ..

Who cares enough to clean up “Ground Zero”?

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Who cares enough to clean up Ground Zero?

October 3, 2014 8:26 AM

2 Attachments, 430 KB

Ground zero isn't just a place, it has become a

Your "leadership by example would usher in a new era...." Please meet me for coffee — Let's talk about the urgency and deadline to protect all life from: ..

End the Poisoned Petroleum Paradigm prudently!

Douglas Grandt <answerthecall@icloud.com> To: Douglas Grandt <answerthecall@mac.com> End the Poisoned Petroleum Paradigm prudently

October 4, 2014 4:23 PM

2 Attachments, 498 KB

Ground zero Upcoming emails will be sent to Rex Tillerson laying out what is called a "factual brief" in legal parlance. The objective is to lay out the basis for my worst fear: Oil companies — ExxonMobil being the most likely — will not go along with a managed end-game as we transition from carbonbased fuels and energy to carbon-free fuels and energy technologies. I fear that "prudent" business decisions will lead Boards of Directors to conclude that it is time to "close their doors" before the carbon-free fuels have ramped up to meet total consumer demand, thus leaving us in the lurch. My objective is to put the topic on the table for transparent assessment and responsible engagement of all parties in finding a fitting solution that will avoid or minimize the impacts.

Your "leadership by example would usher in a new era...."

Ground Rules

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Rules

October 5, 2014 5:05 AM

2 Attachments, 382 KB

Ground rules (Vatican Radio) The Holy See has called for “an authentic cultural change” to combat climate change which is man-made and therefore man’s responsibility. That was the focus of an address delivered Tuesday evening to the UN Climate Change Summit in New York by the Vatican Secretary of State Cardinal Pietro Parolin. Listen to Card. Parolin's intervention (http://bit.ly/VaticUN30Sept). 5 Mr Secretary General, I am pleased to convey the cordial greetings of His Holiness Pope Francis to all those here present for this important Summit, which has gathered together high governmental and civil officials, as well as leaders from the private sector and civil society, in order to identify significant initiatives that will address the concerning phenomenon of climate change. It is well known that climate change raises not only scientific, environmental and socio-economic considerations, but also and above all ethical and moral ones, because it affects everyone, in particular the poorest among us, those who are most exposed to its effects. For this reason, the Holy See has often stressed that there is a moral imperative to act, for we all bear the responsibility to protect and to value creation for the good of this and future generations. Pope Francis, from the beginning of his Pontificate, has underlined the importance of “protecting our environment, which all too often, instead of using for the good, we exploit greedily, to one another’s detriment” (Address to the Diplomatic Corps accredited to the Holy See, 22 March 2013).

The scientific consensus is rather consistent and it is that, since the second half of the last century, warming of the climate system is unequivocal. It is a very serious problem which, as I said, has grave consequences for the most vulnerable sectors of society and, clearly, for future generations. Numerous scientific studies, moreover, have emphasized that human inaction in the face of such a problem carries great risks and socio-economic costs. This is due to the fact that its principal cause seems to be the increase of greenhouse gas concentrations in the atmosphere due to human activity. Faced with these risks and costs, prudence must prevail, which requires thoughtful deliberations based on an accurate analysis of the impact our actions will have on the future. This requires a great political and economic commitment on the part of the international community, to which the Holy See wishes to make its own contribution, being aware that “the gift of knowledge helps us not to fall into attitudes of excess or error. The first lies in the risk of considering ourselves the masters of creation. Creation is not some possession that we can lord over for own pleasure; nor, even less, is it the property of only some people, the few: creation is a gift, it is the marvellous gift that God has given us, so that we will take care of it and harness it for the benefit of all, always with great respect and gratitude” (Pope Francis, General Audience, 21 May 2014). Mr Secretary General, The long debate on climate change, which gave rise in 1992 to the United Nations Framework Convention on Climate Change and its subsequent implementation, shows how complex this issue is. Since then until our own day, much has changed: the dynamics of international relations have given life to changing geopolitical contexts, while the scientific and informational technologies have become extremely refined. A principle element which has emerged from the more than thirty years of study on the phenomenon of global warming is the increasing awareness that the entire international community is part of one interdependent human family. The decisions and behaviours of one of the members of this family have profound consequences for the others; there are no political frontiers, barriers or walls behind which we can hide to protect one member from another against the effects of global warming. There is no room for the globalization of indifference, the economy of exclusion or the throwaway culture so often denounced by Pope Francis (cf. Apostolic Exhortation Evangelii Gaudium, 52, 53, 59). In the actions undertaken to counter global warming we have too often seen the predominance of special interests or so-called “free-riders” over the common good; we have too often noted a certain suspicion or lack of trust on the part of States, as well as on the part of other participants. However, if we really wish to be effective, we must implement a collective response based on a culture of solidarity, encounter and dialogue, which should be at the basis of normal interactions within every family and which requires the full, responsible and dedicated collaboration of all, according to their possibilities and circumstances. In this regard, it seems opportune to recall a concept which was also developed within the forum of

the United Nations, that is, the responsibility to protect. States have a common responsibility to protect the world climate by means of mitigation and adaptation measure, as well as by sharing technologies and “know-how”. But above all they have a shared responsibility to protect our planet and the human family, ensuring present and future generations have the possibility of living in a safe and worthy environment. The technological and operational bases needed to facilitate this mutual responsibility are already available or within our reach. We have the capacity to start and strengthen a true and beneficial process which will irrigate, as it were, through adaptation and mitigation activities, the field of economic and technological innovation where it is possible to cultivate two interconnected objectives: combating poverty and easing the effects of climate change. Market forces alone, especially when deprived of a suitable ethical direction, however, cannot resolve the interdependent crisis concerning global warming, poverty and exclusion. The greatest challenge lies in the sphere of human values and human dignity; questions which regard the human dignity of individuals and of peoples are not able to be reduced to mere technical problems. In this sense, climate change becomes a question of justice, respect and equity, a question which must awaken our consciences. Mr Secretary General, The ethical motivations behind every complex political decision must be clear. At present, this means consolidating a profound and far-sighted revision of models of development and lifestyles, in order to correct their numerous dysfunctions and deviations (cf. Benedict XVI, Encyclical Letter Caritas in Veritate, 32). This is also needed due to the many crises which present society is living in economic, financial, social, cultural and ethical contexts. Within this perspective, an authentic cultural shift is needed which reinforces our formative and educational efforts, above all in favour of the young, towards assuming a sense of responsibility for creation and integral human development of all people, present and future. For its part, Vatican City State, though small, is undertaking significant efforts to reduce its consummation of fossil fuels, through diversification and energy efficiency projects. However, as the Holy See’s delegation at the COP-19 in Warsaw indicated, “talking about emission reductions is useless if we are not ready to change our lifestyle and the current dominant models of consumption and production”. The Holy See attaches great importance to the need to promote education in environmental responsibility, which also seeks to protect the moral conditions for an authentic human ecology. There are many Catholic educational institutions, as well as Bishops’ Conferences, dioceses, parishes and Catholic inspired NGOs committed to this work in the conviction that the deterioration of nature is directly linked to the culture which shapes human coexistence. Respect for environmental ecology is a condition of, and conditioned by, respect for human ecology in society. Confronting seriously the problem of global warming requires not only strengthening, deepening and consolidating the political process on a global level, but also intensifying our commitment to a

profound cultural renewal and a rediscovery of the fundamental values upon which a better future for the entire human family can be built. The Holy See commits itself to this end, so that, in this work, the international community may be guided by the ethical imperative to act, inspired by the principles of solidarity and the promotion of the common good, in the knowledge that “the dignity of each human person and the pursuit of the common good are concerns which ought to shape all economic policies” (Evangelii Gaudium, 203). Thank you.

Your "leadership by example would usher in a new era...."

GROUND ZERO IS EVERYWHERE AND EVERYTHING

Ground Zero: Impotence

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - impotence

October 5, 2014 10:05 AM

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Ground zero 193 national governments of the world have been striving unsuccessfully to agree on measures to mitigate the warming biosphere and to quell the warmingâ&#x20AC;&#x201D;and acidificationâ&#x20AC;&#x201D;of the oceans that not only masks the global warming, but is causing the web of sea-life to collapse from the bottom up. 4

Politicians within our governments are locked in stalemate, and civil society is unable to break the gridlock. Financial and business institutions are regulated by rules which prescribe obedience to laws intended to protect the commonweal by dictating specific metrics of development, economic growth and profits continue unfettered, irrespective of their unintended negative consequences. 4

We are actually degrading the commonweal. In spite of our best efforts, we seem unable to stop.

Ground Zero: Institutional Icons

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - institutional icons

October 6, 2014 7:57 AM

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Ground zero The term "too big to fail" has grown out of recent banking disasters. Institutions are considered too important to allow prosecution—let alone investigation—for personal wrong doing. The paradigm that seems to drive decision-makers in deliberations that compromise morality with political and economic "necessity" is the economy and "stability," so the foxes continue to guard the hen house. 5

What has occurred in the banking industry is being mirrored in the energy industry. Government is allowing the industry to run amuck. Lauding clean energy while redefining "clean" impedes progress, e.g., methane leakage gives natural gas a severely higher climate forcing than coal, Mr. President! 8

Given the treatment of banking CEOs, the treatment of energy CEOs will doubtless be benign, also.

Your "leadership by example would usher in a new era...."

Ground Zero: Petroleum Paradigm

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - petroleum paradigm

October 7, 2014 7:30 AM

2 Attachments, 476 KB

Ground zero Executives and Boards of Directors in the oil production and refining industries behave similarly to their counterparts in the financial world. Their world view is maximizing profits in the short term and making strategic moves for market share and financial stability over distant horizons. 4

It is in the interest of investors, superannuation funds, personal savings and pensions of Americans, and global economies that petroleum companies remain viable, and that they are stable in the equity markets. Oil and gas companies do what they believe is best for themselves in the name of Corporate Citizenship. The hubris and self determination of oil is evident in legal and civil affairs.

Re-energize with clean carbon-free fuels â&#x20AC;&#x201D; for life! Re-invent ExxonMobil as an energy company, be more than an oil & gas company. Re-direct capital investments from carbon-based infrastructure to carbon-free infrastructure. Announce a retirement schedule for your refineries â&#x20AC;&#x201D; let the end-game begin. ..

Your "leadership by example would usher in a new era...."

Ground Zero: Questionable Conduct

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - questionable conduct

October 8, 2014 8:15 AM

2 Attachments, 283 KB

Ground zero President Obama attended the U.N. Climate Summit that was convened by Secretary-General Ban Ki-moon, and he admonished: “For all the immediate challenges that we gather to address this week–terrorism, instability, inequality, disease–there’s one issue that will define the contours of this century more dramatically than any other, and that is the urgent and growing threat of a changing climate.” That was not the first time the President has frankly verbalized same. 6

ExxonMobil CEO Rex Tillerson has been actively engaged in international affairs of another sort: negotiating with Russia and Mexico to explore new virgin petroleum resources at a time when the exploitation/extraction of petroleum to combust should be declining—the Arctic should be banned. 10

ExxonMobil "Corporate Citizenship" will wreak biosphere collapse by its hubristic moral compromise.

Your "leadership by example would usher in a new era...."

Ground Zero: Abundance Euphoria

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - abundance euphoria

October 9, 2014 6:01 AM

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Ground zero Energy abundance was a primary theme of Mr. Rex Tillerson's keynote address at the October 2, 2014, gathering of the Greater Houston Partnership. He stated: For decades now, the United States has pursued energy policies based on the fear of scarcity. The thinking in Washington, D.C. – and even at some energy companies – was that reviving domestic energy production was a dream. That’s the old way of thinking. Now, we need energy policies that are designed for this new era of abundance. Mr. Tillerson went on to say: The most unexpected – and far-reaching – breakthrough in recent years is the advanced integration of hydraulic fracturing and horizontal drilling. These technologies and techniques have made it possible for the industry to economically develop vast quantities of shale gas and tight oil – an idea considered impossible not so long ago. It is clear that a euphoria of abundance as a result of drilling and fracturing tight petroleum rock formations is the underpinning for ExxonMobil's plans for rising production to supply ever increasing demands for carbon-based fuels, even at a time when the reduction of such fuels is warranted. Abundance of hydrocarbon fuels that would satisfy the projected 30% increase in demand over the next few decades flies in the face of what climatologist Dr. James Hansen et al (NASA GISS, retired) admonishment that we must begin reducing CO2 emissions at a rate of about 6% per year. Unfettered exploitation of perceived abundance flies in the face of the 5%-9% annual reduction in CO2 emissions admonished by the German Advisory Council on Global Change and the 7% reduction rate now called for in the most recent IPCC assessment.

Ground Zero: Transformative Talk

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - transformative talk

October 10, 2014 7:43 AM

3 Attachments, 491 KB

Ground zero Mr. Rex Tillerson's keynote address at the October 2, 2014, gathering of the Greater Houston Partnership demonstrates that ExxonMobil Corporation for one, considers the current boom as a transformative, moving the industry into an era of rising production to supply ever increasing demands for carbon-based fuels at a time when the reduction of such fuels is warranted. In his summit speech, President Barack Obama said: "Our citizens keep marching. We cannot pretend we do not hear them. We have to answer the call." Bill McKibben challenges both: Heeding that call would look like transforming our energy system to get it off fossil fuel. ..

I don't know whether we'll see it. So far the Obama administration has been much longer on rhetoric than result. And, really, what's happened in the Obama years is the emergence of the U.S. as an oil and gas superpower surpassing even the Russians and the Saudis in production. That doesn't square with any real commitment to transformative change.

ExxonMobil CEO's keynote address to the Greater Houston Partnership October 2, 2014 | Houston, Texas | http://bit.ly/ExxxMob02Oct It is always a pleasure to come to Houston and experience the vitality and drive that are so unique to this city. Houston is rightly called the Energy Capital of the World – and it is an invigorating experience to be in a place where our industry’s contributions are so well appreciated. Every time I am here, I also come away with a true sense of the positive impact that the Greater Houston Partnership is making on the city and its growth. For the past 25 years, the Partnership has played a vital role in making Houston an ideal choice for living, working, and doing business. The strength of the business community here – and the willingness of corporate leaders to give of their time and talents – is critical to Houston’s success. Thanks to the efforts of the board of directors and staff, along with the many knowledgeable and dedicated people working on committees, the Partnership has become a well-respected voice for not only building a stronger city, but a stronger nation. As you may know, ExxonMobil has made a big commitment to the greater Houston area in the form of our new campus, which is located a few miles north of here. We are consolidating a number of our office locations that have been scattered around the greater Houston area for a number of years, bringing all of our employees from our Upstream, Downstream, and Chemicals businesses, along with a variety of associated service groups to one location. The new campus, which is located about 20 miles north of downtown, will be about the size of Rice University when completed. From the earliest planning, it has been designed to accommodate the needs of not just today’s workforce, but really has been designed and constructed with the view of accommodating the workforce of the future, which we know is ever changing. It was built to encourage collaboration – and to exceed the highest standards of environmental compliance. Our continuing investment in the greater Houston area is evidence that we believe strongly in this community and confirms our belief in the future of energy. The State of Energy is Strong There is no question that energy has been one of the foundations of U.S. economic strength for most of our nation’s history. In recent years the growth in domestic oil and gas production has been an important economic driver that extends far beyond our sector – delivering benefits to a wide range of Americans, businesses, and every level of government. In fact, the U.S. is in the midst of what can only be called a transformative moment in the history of energy. And Houston is at the center of this revolution. Over the past few years, our nation and the world have seen firsthand the extraordinary impact of our industry’s investments and innovations – many of which were developed right here. It is a story that rivals the dramatic exploits and achievements of our industry’s earliest pioneers. And if managed appropriately, it promises to have the same transformative impact on our economy and global competitiveness. This afternoon, I will discuss how North America is creating a new Era of Energy Abundance. And I will share my thoughts on how this energy abundance is transforming our nation – and why we face an urgent need to learn the appropriate policy lessons to fully leverage this historic moment.

The New Era of Abundance In my travels around the world, I have seen a remarkable consistency in questions about the State of Energy. No matter where you are in the world, it has become impossible to discuss the topic without taking into account the revolutionary changes occurring in North America. The oil and gas industry has pioneered a host of new technologies and techniques that have enabled us to unlock new conventional and unconventional sources of energy across North America. In Canada, industry innovations have made it possible to safely and responsibly develop the nation’s vast oil sands. Technology has enabled access to proven oil reserves of approximately 170 billion barrels. In the Gulf of Mexico, advanced technologies have opened up unprecedented opportunities in offshore exploration and production. In less than a generation, we have progressed from engineering concepts hand-drawn on drafting tables – that’s how I had to do them – to sophisticated computer-designed rigs. We have offshore facilities operating in ultra-deepwater depths of more than 10,000 feet – rigs capable of drilling wells that extend five miles below the ocean floor. With each passing year, we see continuous improvement in the offshore technologies and processes we employ. As a result, we project that in the period from 2010 to 2040, deepwater production worldwide will grow 150 percent. The people and companies of Houston will be critical to this effort. Of course, the most unexpected – and far-reaching – breakthrough in recent years is the advanced integration of hydraulic fracturing and horizontal drilling. These technologies and techniques have made it possible for the industry to economically develop vast quantities of shale gas and tight oil – an idea considered impossible not so long ago. Thanks to these innovations, the North American energy market has been changed dramatically in just a few years– and with it, the global energy landscape. Sources of oil and natural gas long dismissed as “uneconomic” and “inaccessible” are being transformed into energy supplies that are accessible, reliable, and competitive. And just as important, new technologies are enabling the development of these resources safely, securely, and responsibly. If you work in the energy industry, you are aware of just how remarkable this shift has been. But for those of you who don’t, I would like to share some facts and figures. Since early 2008, U.S. natural gas production is up 25 percent. Natural gas reserves are up more than 25 percent just in the period from 2008 to 2012, and they continue to increase. What this means is that we have abundant supplies for growing the domestic use of natural gas to meet our energy needs, and even for the export of natural gas to other markets. In fact, industry technologies have now put within reach enough natural gas to help power the U.S. economy at current demand for about a century. The revolution in domestic oil production has been just as striking. Since early 2011 alone – a mere three years ago – U.S. oil production has jumped 50 percent – from 5.4 million barrels per day to the current daily production rate of 8.5 million barrels. That’s an increase of about 3 million barrels produced in the United States – every single day. And the U.S. EIA predicts that U.S. production will continue to expand to approximately 9.5 million barrels per day by the end of next year. Two states in particular are leading this effort. In 2006, North Dakota’s oil production from the Bakken shale was 6,000 barrels per day. In 2012 – six years later – it hit 600,000 barrels per day for the very first time.

By 2013 North Dakota’s oil production surpassed 800,000 barrels per day. And just this April, according to North Dakota’s Department of Mineral Resources, the state’s oilfields were pumping more than a million barrels a day – so, from 6,000 barrels a day in 2006 to more than a million today. Today, North Dakota is the No. 2 producer of oil in the United States. Of course, everything is bigger in Texas – including oil production. Thanks to the growth in production in places like the Eagle Ford Shale and the Permian Basin, Texas is producing in excess of 3 million barrels a day, which represents an astounding 35 percent of daily U.S. production. By itself, Texas ranks as the No. 8 oil producer among the world’s Top Ten producers of crude oil. Of course, the rest of them are countries. I just returned yesterday evening from Mexico, a trip down to Mexico City where, you’re probably aware, they’re undergoing an enormous reform of their own energy laws and regulations. I was with the energy minister and he took note that Texas now has surpassed Mexico in oil production. He said they’re going to fix that. Together, Texas and North Dakota today are producing roughly half of the nation’s oil – much of it from fields that were considered unworthy of investment just a few years ago – producing today now thanks to industry innovation. With such extraordinary production increases, it should be no surprise to learn that our nation is now, according to the Energy Information Administration, the No. 1 producer of total energy coming from oil and natural gas. And in total, the nations of North America – Mexico, Canada, and the United States – now produce more barrels of oil than any other nation or region in the world – 50 percent more than the Russian Federation, which is next. Transformational Energy As I mentioned earlier, the record-setting dynamism of the State of Energy is having an impact far beyond the energy sector. As any citizen of Houston knows, energy carries a tremendous multiplier effect that fuels opportunity and progress. Across America, new supplies of affordable energy are spurring economic growth, creating jobs, and strengthening our international competitiveness. While our economy in general has struggled to regain its footing following the recession that began in 2008, the energy industry has been a true bright spot. According to the Perryman Group, the total economic benefits of oil and gas exploration and development activity (including multiplier effects) are estimated to include almost $1.2 trillion in gross product each year, as well as more than 9.3 million permanent jobs in the United States. The Perryman Group also found that the economic benefits of oil and natural gas production have more than doubled over the past 10 years – even after accounting for the effects of inflation. Although the oil and gas industry, including its spinoff activity, is about 6.7 percent of the U.S. economy, it has accounted for more than 30 percent of the growth since the trough of the recession. Domestic energy production is bringing extraordinary economic benefits in producing states like Texas, Pennsylvania, North Dakota, and Oklahoma. But, as IHS Consulting has found, the positive economic effects are being felt in every one of the lower 48 states, including those that do not produce any oil or natural gas. The benefits of our industry’s investments and innovations have made possible what many are calling

America’s “manufacturing renaissance.” The American Chemistry Council has found that in petrochemical manufacturing alone, there are now more than $100 billion in new domestic investments proposed in the years to come. Each year, the Progressive Policy Institute publishes its list of “investment heroes” – non-financial companies that are investing the most in the U.S. economy. Of the 25 companies that make up the Institute’s “investment heroes” list this year, 10 are involved to some degree in the exploration and production of oil and natural gas or involved in energy distribution and power. Increased energy production is also benefiting government budgets and programs. IHS Consulting studies show that the development of shale gas and tight oil contributed more than $63 billion in federal, state, and local tax receipts in 2012 alone. By 2020, total government revenues from these sources are likely to double. On a cumulative basis, between 2012 and 2035, unconventional oil and natural gas activity is forecast to generate more than $2.5 trillion in tax revenues. And that’s just the contributions of unconventional development. Of course, the contributions from our industry are not limited to economic revitalization. We are also proving that our investment, innovation, and commitment to operational integrity make it possible to safely expand energy supplies and reduce environmental impacts. In fact, abundant and reliable natural gas has been instrumental in reducing our nation’s carbon dioxide emissions to levels not seen since the early 1990s. And these gains come despite the fact that our economy is 50 percent larger and there are 50 million more consumers of energy in our nation today than there were in the early 1990s. North American energy is also providing diversity, flexibility, and reliability to the global energy landscape. As a headline from the National Journal recently announced, “You’re Welcome, World: U.S. Fracking Surge Picks Up Slack for Global Disruptions.” It’s interesting I was looking at a chart just the other day – I mentioned this 3 million barrels a day that has increased in the last three years – so if you plot that U.S. production increase of 3 million barrels a day, there’s a mirror image of 3 million barrels a day of production that has been offline from places like Libya, Iran because of sanctions, disruptions in Iraq and Nigeria and other parts of the world. That’s why we have enjoyed this period of tremendous price stability. So this production on the top only continues to grow. Our industry’s efforts have also put the United States in a position to become an energy exporter, reversing four decades of fear and anxiety about energy scarcity. As we look to the challenges of the future, it is clear that – with bold leadership and sound policymaking – North America’s newfound abundance and energy security could position Canada, Mexico, and the United States to help reduce global price volatility, moderate international tensions, and provide energy flexibility to friends, allies, and trading partners. These benefits can potentially be magnified as our industry’s revolutionary technologies are applied beyond the borders of North America to shale gas and tight oil resources all over the world. With such development, we could see the same economic and environmental benefits that have taken place in the United States repeated around the globe. Even today, there are billions of people around the world who need these advances in safe and responsible energy production to ensure they have access to all the benefits of modern living, such as sanitation, health care, proper nutrition, and education. And as our world grows, the need for affordable energy is going to increase. At ExxonMobil, we project that increases in population, along with growing trade and economic

development, will increase global energy demand by about 30 percent between now and the year 2040. For those outside of the energy industry, putting numbers like that into context can be challenging. So let me try to give you some contextual comparisons of what 30 percent growth means. A level of growth in demand like that will be adding more than the current energy demand of Russia, India, Africa, Latin America, and the Middle East – combined. So it is an enormous challenge that lies in front of this industry. Meeting the global demand for affordable, reliable supplies of energy will require us to develop all sources of energy, wherever they are economically competitive. The world will need wind, solar, nuclear, and geothermal as well as oil, coal, and natural gas. Thus, the successful State of Energy in North America is not just benefiting us here in the U.S. Every barrel of oil we produce, and every cubic foot of natural gas, also increases the world’s overall supply, and supports economic growth and much-needed prosperity for nations around the world. Policy Lessons for America – and the World Despite this positive impact and the potential to do even more, there are reasons to be concerned about the State of Energy in the years to come. For decades now, the United States has pursued energy policies based on the fear of scarcity. The thinking in Washington, D.C. – and even at some energy companies – was that reviving domestic energy production was a dream. That’s the old way of thinking. Now, we need energy policies that are designed for this new era of abundance. This is a critical distinction because the wrong policy choices today can carry heavy consequences – not just for the industry and our ability to expand supplies, but for America’s energy and economic security over the decades to come. It is clear that both government and industry have a role to play in the safe, innovative, and responsible production of energy. First and foremost, we in the industry have a responsibility to uphold the highest standards of performance – from planning and investing to construction and project execution. I believe our work in some of the most challenging regions of the world – and in some of the most delicate ecosystems – has shown ExxonMobil shares the American commitment to safety and responsible environmental stewardship. Second, and just as important, government has a responsibility to promote the rule of law. The rule of law provides the confidence for sustained investment and entrepreneurial risk taking. North America’s energy leadership is not just a function of the continent’s resource endowment. As so many other parts of the world have shown, success in the energy sector depends on the stability and rationality of the tax, legal, and regulatory frameworks put in place by government. Sound energy policy must deliver the clarity and the climate for long-term investment and innovation. Sound policy enables our industry to marshal the expertise, technology, operational experience, as well as the financial capital needed to safely and effectively develop diverse sources of energy. In contrast, short-sighted policies aimed at achieving U.S. energy independence can jeopardize U.S. economic and energy security. By restricting trade or picking winners and losers, government hinders investment and innovation. In pursuing sound energy policies, government also has a responsibility to maintain a clear pathway to

regulatory compliance. Once government officials reach a decision based on our nation’s rigorous processes, it is important for officials at every level to honor these decisions. In a case such as the Keystone XL pipeline, political gamesmanship has delayed a project for more than six years – preventing job creation, undercutting economic growth, and undermining U.S. and Canadian competitiveness. But importantly it also undermines our confidence in the regulatory process. Government is especially well positioned to play a positive role by opening up markets, strengthening international ties, and promoting free trade. At this historic moment, our nation needs far-sighted policies equal to the trade and export opportunities that lie before us. For example, in the current debates about liquefied natural gas, or LNG, and crude oil exports, economists and leaders from across the political spectrum on all sides agree that free trade would lead to increased investment, more jobs, and, importantly, increased production. Allowing the marketplace to determine the viability of energy exports or other infrastructure projects – as opposed to making decisions based on political calculus – is the proper course of action. It is one that can provide significant short- and long-term benefits to the U.S. economy while strengthening our energy security. Only by understanding the respective roles and responsibilities of industry and government can we fully leverage the achievements of the past few years. And in some cases, the window is quickly closing for us to develop policies that can properly position North America for the market realities of the future. The primary lesson from the energy revolution we are experiencing today – and from our industry’s experiences around the globe – is that sound policy leads to wise and disciplined investment, new and revolutionary innovations, and increased trade and economic growth. In turn, these market developments create jobs and expand supplies. They will improve the flexibility and diversity of our energy portfolio. And, together, it can lead to energy security and, over time, prosperity for people the world over. Houston at the Center One city stands at the center of this new era representing the bold and dynamic State of Energy itself. That city, of course, is Houston, rightly called the “Energy Capital of the World.” Houston is home to more than 5,000 energy-related firms. The city is a leading domestic and international center for virtually every segment of the oil and gas industry – exploration, production, transmission, marketing, service, supply, offshore drilling, and technology. As I said earlier, at ExxonMobil, we are proud of our ties to Houston. We have deep roots and a long history here. And we are committed to continuing the legacy of philanthropy, good citizenship, and community involvement that has long been a hallmark of our relationship with this city and its residents. At the beginning of my talk, I mentioned our new campus that is nearing completion. By mid-year of 2015, we will bring another 2,000 ExxonMobil employees and their families to the area from Fairfax, Virginia, as well as other locations. That will deepen our presence in the greater Houston area bringing the total number of ExxonMobil employees to approximately 13,000 – all living and working here with their families. In addition, we are one of the companies investing in the new Era of Energy Abundance, as you heard earlier, and that’s not just our direct investments in shale gas and the development of tight oil. But as was mentioned earlier, we recently broke ground on a multi-billion-dollar expansion of our Baytown chemical manufacturing and refining complex. This expansion will generate 10,000 construction jobs, as we build a new world-class ethylene cracker and units for processing polyethylene. Economists predict that this facility expansion will ultimately lead to approximately 4,000 new,

Economists predict that this facility expansion will ultimately lead to approximately 4,000 new, permanent jobs created throughout the community. ExxonMobil is also working to prepare workers for the 21st century. It is why we have given $1 million to underwrite a technology job-training program at nine community colleges in the greater Houston area. This program, which is now part of the Greater Houston Partnership’s UpSkill Houston initiative, will develop the workers to staff our rapidly expanding petrochemical industry. These investments are important, but they represent just one part of the overall contribution we are proud to make to the greater Houston area. We are proud to provide funding and assistance to a wide range of causes and organizations. Each year our employees volunteer more than 160,000 hours to local non-profit organizations carrying out their chosen missions. To further demonstrate our continuing commitment to Houston, I was pleased to participate in a press conference just prior to this luncheon with senior leaders from three world-class Houston health facilities –University of Texas MD Anderson Cancer Center, Texas Heart Institute, and Texas Children’s Hospital. We announced $18 million in new grants from ExxonMobil to support cancer prevention, cardiovascular research, behavior pediatrics for children with autism, and to enhance pediatric liver-disease research and clinical services. The programs will benefit the citizens of greater Houston by strengthening their world-class hospitals and health care, and will importantly benefit the citizens of the world. These grants will also become part of ExxonMobil’s broader giving and engagement – which ranges from support for the United Way to direct support for schools, universities, museums, and a large number of local non-profit organizations. In the years to come, we will continue to work with the greater Houston area and hope to be part of a stronger community filled with greater opportunity for all. And thanks to the leadership – and example – of this city and region, I believe the energy industry will help create a brighter future for the entire world. Thank you for your kind attention.

Your "leadership by example would usher in a new era...."

Ground Zero: Bias or Blindness

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - bias or blindness

October 11, 2014 8:07 AM

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Ground zero ExxonMobil CEO Rex Tillerson expressed an appeal for the government to step aside and allow free market forces to play with regard to LNG (Liquified Natural Gas) exports. In his keynote address, he promoted a policy that is a contradiction to recent findings that development and production of natural gas wells leak methane to such an extent that normally low-carbon natural gas has a carbon-footprint worse than coal. His suggestion is ill-advised and shows bias or "intentional blindness" guided by self-interest in ExxonMobil profits, personal success and wealth. This is what he stated in his address at the Greater Houston Partnership: Government is especially well positioned to play a positive role by opening up markets, strengthening international ties, and promoting free trade. At this historic moment, our nation needs far-sighted policies equal to the trade and export opportunities that lie before us. For example, in the current debates about liquefied natural gas, or LNG, and crude oil exports, economists and leaders from across the political spectrum on all sides agree that free trade would lead to increased investment, more jobs, and, importantly, increased production. Allowing the marketplace to determine the viability of energy exports or other infrastructure projects â&#x20AC;&#x201C; as opposed to making decisions based on political calculus â&#x20AC;&#x201C; is the proper course of action. It is one that can provide significant short- and long-term benefits to the U.S. economy while strengthening our energy security. Only by understanding the respective roles and responsibilities of industry and government can we fully leverage the achievements of the past few years. And in some cases, the window is quickly closing for us to develop policies that can properly position North America for the market realities of the future.

Ground Zero: Bullish on the Gas Boom

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - bullish on the gas boom

October 12, 2014 9:22 AM

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Ground zero In November, 2012, President of ExxonMobil Chemical Company Stephen Pryor addressed students at Lafayette College, Pennsylvania: "I could have never imagined that I could leave Lafayette and spend my whole career with ExxonMobil trying to bring energy in a responsible way to the needs of the world — and population has grown and energy needs have grown — and that's what I've spent my career doing." Mr. Pryor's enthusiasm for the boom in natural gas is infectious: 1) We have a hundred years' supply of natural gas, 2) exploiting "unconventional" shale gas is an American success story, 3) natural gas produces 60% less CO2 than does coal, 4) ExxonMobil is the largest player in unconventional fuels. That was November 2012. Today, measurements taken in the fracked gas fields have revealed that natural gas releases more carbon — in the form of carbon dioxide and methane leakage — than coal. Plagued by abundance and low price, ExxonMobil needs a means to deliver gas into a market place. Apparently, the least cost option is to store it as a solid, thus ExxonMobil's investment in an ethane steam cracker in Baytown, a multi-billion-dollar facility that turns gas into solid feedstock for the petrochemical industry. Irrespective of the petrochemical market, gas storage will be achieved. In his keynote to the Greater Houston Partnership ExxonMobil CEO Rex Tillerson suggested that restrictions on exporting LNG be lifted in order to allow the gas to be sold on the international market. Allowing exports would remove the glut in the U.S. and result in the domestic price of gas to increase. Not an unexpected desire for the owner of the largest U.S. natural gas producer. Acquired in 2010, XTO Energy Inc. is a subsidiary of ExxonMobil.

Sep. 25, 2013

Shale Insight 2013 Conference Stephen D Pryor, President, ExxonMobil Chemical Company Address to the Shale Insight 2013 Conference, Philadelphia | http://bit.ly/ExxMob25Sept13 Thank you. It is a pleasure to be back in Pennsylvania – and not just because I went to college here so many years ago. This region of the country played a pioneering role in America’s energy history. And the men and women of the Marcellus Shale Coalition continue that legacy today. Over the past 40 years, I’ve seen many advances in energy technology reshape our industry, both here and abroad. But I've never seen anything as powerful as shale energy. In fact, shale development is emerging as the biggest energy breakthrough in this country since the dawning of the age of oil, some 150 years ago right here in Pennsylvania. The milestones are striking. U.S. natural gas production is at its highest level ever, up by more than 30 percent in the last seven years. U.S. oil production rose by 1 million barrels a day last year. This is the largest annual increase in U.S. history. In the downstream, the United States has become the world's largest exporter of refined products, with shipments of gasoline and other fuels doubling over the last five years. In fact, North America is on the road to becoming a net energy exporter by the middle of the next decade. And from the consumers’ standpoint, American households are seeing the benefit, saving an average of 1,200 dollars in energy costs last year, at a time when average household income remains below 2007 levels. It's a remarkable turn of events, considering that just 10 years ago, in 2003, an article in Time magazine declared that the United States was "running out of energy." Clearly, shale and other unconventional resources have transformed America’s energy landscape.

They also have the potential to transform the entire U.S. economy and help lift this country out of its persistent pattern of weak growth and high unemployment. IHS Global Insight projects that by 2025 shale energy could create an additional 1.8 million jobs and contribute more than half-a-trillion dollars to annual GDP. Petrochemicals, LNG are key to growth As producers, you understand this. But what many donâ&#x20AC;&#x2122;t understand, is that in order to take full advantage of this historic opportunity, we must act now. The United States must encourage investment in downstream industries that drive demand for natural gas. While the largest domestic market of natural gas is, of course, power generation, two key markets farther downstream are petrochemicals and liquefied natural gas, which are what I would like to talk to you about today. Petrochemicals and LNG are American-made products that add value to our country's natural gas resources. Demand for these products is strong. Globally, demand for ethylene, a key petrochemical, is growing more than 50 percent faster than natural gas. The market for LNG is growing even faster. And, since most of this demand growth is outside the United States, this presents an outstanding opportunity to boost America's exports. If you as producers, and the nation as a whole, are to make the most of shale resources, investments in petrochemicals and LNG must be allowed to move ahead. The U.S. chemicals renaissance Let me begin with chemicals, one of this countryâ&#x20AC;&#x2122;s largest users of natural gas. The chemical industry together with other industrial sectors account for nearly 30 percent of U.S. natural gas demand. Shale development has given U.S. petrochemical producers a double benefit. In addition to using natural gas as an energy source, they also use the ethane and other liquids from natural gas as a key raw material to make plastics and other essential products. This is in contrast to most of the rest of the world, where petrochemicals are made from oil-based naphtha feedstocks, which today are far more expensive. A good example is ethylene, the world's largest-volume petrochemical building block. Today, manufacturers can make ethylene in the United States for less than half of what it costs in Europe, Asia and Latin America. This cost advantage has reversed the fortunes of the U.S. chemical industry. The total value of shipments from U.S. chemical manufacturers hit an all-time high during the past two years. And, over the last five years, capital spending by the American chemical industry has risen by more than 40 percent. Major capacity additions have been announced for the first time in more than a decade.

And exports have been revived. Just five years ago, the U.S. was losing ground in the export market. In fact, the country was on the verge of becoming a net importer of chemicals. But today, chemicals are once again America’s single biggest export – larger than agriculture, automobiles and aerospace. And this is just the beginning. Global demand for chemicals is expected to rise by 50 percent over the next decade. Most of that growth will happen in Asia Pacific and other developing regions. While history tells us that regional cost differences fluctuate over time with energy prices, the United States is back in the game. Exports can be the springboard for a new era of American chemical growth. The U.S. chemicals export opportunity ExxonMobil, one of the world’s largest chemical companies, is moving quickly to seize this opportunity. We are planning a multi-billion-dollar expansion at our Baytown, Texas, facility, already the country’s largest integrated refining and chemical complex. Industry-wide, some 125 new chemical projects have been announced in the United States. The American Chemistry Council estimates these projects to be worth as much as $84 billion. This is good news for U.S. natural gas producers because petrochemical investments create demand for ethane and other natural gas liquids. The bad news is that, today, U.S. chemical plants are already running at full capacity and therefore cannot absorb the growing surplus of ethane from natural gas. As a result, ethane, in many cases, is being left in the gas stream rather than being extracted and upgraded to chemicals. It is therefore crucial that planned U.S. petrochemical investments be allowed to move ahead quickly. Failure to do so will constrain investment in both natural gas production and infrastructure, thereby limiting economic growth and job creation. The LNG export opportunity The same logic applies to LNG. The United States is poised to play a significant role in the global LNG market, which is expected to triple in size from 2010 to 2040. ExxonMobil projects that LNG exports from North America, which were essentially zero in 2010, will rise to about 15 billion cubic feet per day in 2040. By 2040, we expect North America to account for about 15 percent of global LNG supply. Study after study has concluded that North American LNG exports would benefit the U.S. economy. ICF International estimates that LNG exports could add more than $100 billion annually to U.S. GDP. The expansion of LNG globally would help countries around the world curb their energy-related greenhouse gas emissions as they shift away from coal. Natural gas emits up to 60 percent less CO2 than coal when used for power generation. Of course, how much LNG ultimately gets exported from the United States depends on how quickly the country can build the facilities to liquefy and export the gas.

Just as with petrochemicals, if U.S. LNG capacity is allowed to lag it will constrain investment in natural gas development — and limit U.S. economic growth and job creation. Natural gas equals jobs and renewal Let's talk about jobs for a moment. As gas producers, you know that growing natural gas production creates good-paying jobs. We are already seeing this in my home state, Texas, and here in Pennsylvania, two of the nation’s largest shale producers. Out of the nearly 2 million jobs that are associated with production of unconventional resources, Texas and Pennsylvania have close to 700,000, most of which have been created over the last five years. Similar job creation opportunities exist farther downstream. In addition to our Baytown expansion, ExxonMobil also is part of a joint venture seeking to build an LNG export facility in Texas. ExxonMobil is progressing both of these projects subject to permit approval. Together, these two investments will create 55,000 new direct and indirect jobs nationwide during their construction phase and more than 12,000 permanent jobs once they are operational. This country needs the jobs made possible by shale energy. This was driven home to me a few months ago, when I spoke at a press conference in Houston to announce a grant program to expand vocational training at Houston-area community colleges. The goal is to train thousands of young people for skilled jobs such as technicians and pipefitters, where the average salary in the Texas chemical industry has risen to $95,000 a year. We labeled the program: “Houston + Natural Gas = Jobs.” As I described the program, and introduced some of the young people who are benefitting from it, the public- and private-sector leaders in the audience got really excited. People were bursting into rounds of applause. I can tell you, the atmosphere in the room was as close to a revival meeting as you get in our business. And in a sense, it is a revival, because shale energy, and the opportunities it is enabling in states all over the country, is helping to revive America's confidence, pride and hope for the future. The United States now has nearly a 100-year supply of clean-burning natural gas – clearly enough to satisfy rising demand here at home while also supporting increased exports of American products. And right now, North America is the only region of the world with meaningful shale energy production. Policies for the game-change So, as a nation, how does the United States capture this once-in-a-generation opportunity? How does it achieve the types of numbers that IHS said shale energy can make possible – 1.8 million Americans in new, good-paying jobs by the middle of the next decade?

Most Americans would be relieved to know that it won’t require government programs, subsidies or mandates. What it will require are policies that clear the path for private-sector investment. This path will need to be very, very wide – a superhighway. The United States needs tens of billions of dollars of investments – not just in production, but in the infrastructure and processing facilities that can enable American-made gas and gas liquids to reach markets here and around the world. It needs pipelines and chemical plants and LNG export terminals. The United States needs to unite proudly behind shale gas – the same way other countries do with their energy industries and the same way this country did with automobiles, the Internet or any other revolutionary American innovation. The need for timely permitting So what's holding us back? First and foremost, it's permitting. For example, permits to develop shale resources are on hold in five states amid an endless debate over the safety of hydraulic fracturing. As you know, over the past 50 years, the U.S. energy industry has fractured more than 1 million wells. As ExxonMobil Chairman Rex Tillerson said recently, if hydraulic fracturing were a new drug treatment undergoing clinical trial, it would have been cleared decades ago. Another area of endless debate is LNG permits. Some continue to question whether LNG exports are in the national interest. Yet, the Department of Energy's own study — and many others — concluded months ago that the more LNG this country exports, the more our economy stands to benefit. Although the pace of approvals has picked up lately, we're still awaiting action on 20 proposed LNG projects. The DOE needs to act quickly on these applications. While we don't know how many of these projects ultimately will prove viable, we need to let the competitive market determine which ones get built and which don't. The DOE should adhere to its tradition of embracing free trade and avoid imposing artificial limits on U.S. LNG exports. Bear in mind, too, the nation’s disastrous experience with federal controls over the natural gas market in the 1970s and ‘80s. Those controls were ultimately scrapped by the Reagan administration. Turning to petrochemicals, the permitting picture is somewhat more encouraging. Thus far, one major ethane steam cracker has been fully permitted by the state of Texas and EPA. Those permits came within one year of the company submitting a complete application. That time frame sets an appropriate standard for action on the six other major ethane crackers that

have been announced, including ExxonMobil's Baytown project. So why should anyone outside this room care about how quickly regulators approve permits for chemical and energy projects? Because permit approval times are the leading indicator of how quickly our nation is capturing the benefits of shale energy. Delays could add billions to project costs, restrain job creation and erode America's new competitive advantage. As a nation eager for economic growth, the United States should be monitoring these approval times the same way it monitors other key economic indicators. Free markets and free trade Beyond the issue of permitting, the United States must embrace free-trade policies for the products of natural gas, whether they are chemicals or LNG. Those who would limit LNG exports put this country at risk of shutting in a significant portion of projected natural gas production and forgoing the jobs and economic benefits that come with it. It's the energy-policy equivalent of keeping your money under your mattress. Limiting LNG exports would also likely have a boomerang effect on chemicals. As U.S. petrochemical exports are ramped up, these lower-cost American exports will put pressure on local producers in Latin America, Asia and Europe â&#x20AC;&#x201C; regions that rely on more expensive oil-based feedstocks. As a result, we can anticipate calls for protectionism against U.S. chemical exports. If this nation is to successfully counter those arguments and progress free trade agreements with these regions, it must itself be, as Ronald Reagan said, an unrelenting advocate of free trade. Restricting LNG exports would be an affront to Americaâ&#x20AC;&#x2122;s trading partners and undermine the efforts underway to strengthen our trading ties. For example, why should the EU drop tariffs on U.S. chemicals and other goods made from advantaged natural gas if the U.S. blocks exports of that gas in liquefied form? Likewise, how can the U.S. ask Japan, a close ally suffering from energy shortages, to stop importing oil from Iran if we prevent Japan from importing U.S. gas? The answers are obvious. Limiting LNG exports would have a chilling effect on trade and restrict the ability of U.S. gas producers to reach global markets. It's protectionism â&#x20AC;&#x201D; pure and simple. It flies in the face of fairness, open markets, and free trade. It also ignores the humanitarian and environmental imperative that compels us to provide the cleanerburning energy critical to human progress and economic development around the world. Today, about 1.3 billion people still do not have access to electricity. As an official of the World Bank said recently, "Without energy, there is no economic growth, there is no dynamism, and there is no opportunity."

When will we get it? As a trustee of my alma mater, Lafayette College, about 75 miles from here, I have had many opportunities over the years to talk with student groups about energy. These bright young people all are concerned about the environment and making sure we develop our resources in a responsible way. They also are concerned about their economic futures. When I tell these students the whole story about natural gas development — the facts versus the myths, the opportunity for job creation and economic renewal, and the humanitarian imperative of expanding access to energy — they get it. Whether they major in engineering, economics or English, they get it. I think that if all Americans could hear the whole story, they would get it, too. Our industry has a responsibility to communicate the facts about shale energy development to the American public. And that narrative can’t stop at the wellhead. It must explain the once-in-a-generation opportunity for industrial renewal, job creation and revitalization of the U.S. economy. At the same time, our nation's leaders must not allow energy policy to be dictated by the few who put their economic interests ahead of the nation's and promote fear over facts. The United States must seize the opportunity created by shale energy. We need regulatory and trade policies now that enable industry to safely create millions of new jobs and a new era of prosperity. As John F. Kennedy once said, "The mere absence of recession is not growth. We have made a beginning – but we have only begun." It was my pleasure to speak with you today. Thank you for your kind attention.

Ground Zero: Typhoon Vongfong

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - typhoon vongfong

October 12, 2014 12:34 PM

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A satellite image of Super Typhoon Vongfong on Thursday, October 9.

CREDIT: AP PHOTO / NASA GODDARD MODIS RAPID RESPONSE TEAM

Ground zero October 8, Typhoon Vongfong actually hit Category 5 status, ranking it as both a super typhoon and the strongest typhoon of 2014. [A]t least 31 people were injured by the storm, according to the Japanese News Network NHK, while 53,000 households in Okinawa and over 50,000 in Kagoshima Prefecture were hit by blackouts and officials advised evacuating of 90,000 homes and 2,700 homes in the two areas, respectively. Japan may not be so lucky in the future, however. A paper put out back in July by researchers at the National Bureau of Economic Research found that, if humanityâ&#x20AC;&#x2122;s carbon emissions continue on a business-as-usual path, the resulting uptick in cyclone strength from climate change could cost the world economy $9.7 trillion by 2090. Japan would be hardest hit with $4.4 trillion in losses.

Ground Zero: Humanitarian Justification

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - humanitarian justification

October 12, 2014 1:09 PM

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Oil and Gas Technology reports: ExxonMobil projects that increases in population, along with growing trade and development, will increase global energy demand by about 30 per cent by the year 2040. “To put this number in perspective: It will be like adding more than the combined current energy demand of Russia and India, all of Africa, Latin America, and the Middle East,” he continues. “We must also recognise that the vast majority of this growth in population and energy demand will take place in developing economies. These fundamental facts mean that every discussion of energy and energy policy has a humanitarian dimension.” “Simply put, the global need for energy we see today – and the growth in demand we anticipate in the decades ahead – will require the world to pursue all sources of energy, wherever and whenever they are economically competitive,” Tillerson says. “In addition, there is a second element to every discussion of energy and energy policy: We must pursue strategies that reflect wise environmental stewardship. “This means we must invest, innovate, and relentlessly advance the technologies and techniques that promote energy efficiency, improve environmental performance, and reduce the greenhouse gas and air pollution emissions associated with increased energy use.” The good news, Tillerson reports, is that the oil & gas industry has proven, throughout its history, that it can expand supplies in safe, secure, and environmentally responsible ways.

Ground Zero: Factual Brief

Douglas Grandt <answerthecall@icloud.com> Ground Zero - factual brief

October 12, 2014 10:54 AM

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Factual brief 2014 - Autumnal Equinox (Peoples Climate March, Lincoln NE) On the steps of the state capitol, Nebraska Sierra Club president Ken Winston suggested that I write a "factual brief" in order to document and explain how I envisioned events playing out as the oil companies produce less fuels and retire refineries, as well as the business decisions and impending economic catastrophe that I envision: Costs to dismantle 750 refineries passed on to consumers in an exponential allocation to remaining fuel production volumes, increasing greater than a carbon pollution fee that might be adopted. The price of gasoline, diesel and kerosene will curtail purchases. Boards of Directors will exercise fiduciary duty unwisely to deal with falling profits; failing stock dividends and share price; eroding investor wealth and confidence; bringing on a precipitous sell-off and market-wide panic. For years, Congress and big oil have misled and failed us. Ramifications are not being assessed. 2012 - Vernal Equinox (Sacramento CA) On the first day of Spring, I retired from an ideal job at California Air Resources Board (California EPA) and sprang into new life as a "slow living" activist. 2008 - Senator Boxer's Office (San Francisco CA) - Having worked with 1Sky.org to organize Climate Precinct Captains to support House of Representatives' adoption of the Waxman-Markey cap and trade legislation, I took my 16' long bannerâ&#x20AC;&#x201D;which I had made for a Girl Scout eventâ&#x20AC;&#x201D;to participate in the first 350.org event in San Francisco. A crushing Senate failure to pass a bill! 2004 - Winter Solstice (2:00 AM) - It was a dark and stormy night. The storm was in my head as I worried about the possibility of losing my home. As a distraction from my worries, I tuned in to National Public Radio for some stimulating programming: "It's Your World" with Orville Schell (Dean of the Graduate School of Journalism at UC Berkeley) and Al Gore, presenting his 35mm slides about global warming and climate change. I felt urgency! I wanted to give his presentation!

Ground Zero: Fracturing Fears

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - fracturing fears

October 13, 2014 6:55 AM

2 Attachments, 230 KB

Ground zero Mr. Rex Tillerson addressed to the Council on Foreign Relations on June 27, 2012. It was reported that he said that environmentalists are guilty of manufacturing shale drilling and fracking fears: Fears about climate change, drilling, and energy dependence are overblown. In a speech Wednesday, Tillerson acknowledged that burning of fossil fuels is warming the planet, but said society will be able to adapt. The risks of oil and gas drilling are well understood and can be mitigated, he said. And dependence on other nations for oil is not a concern as long as access to supply is certain, he said. He said environmental advocacy groups that "manufacture fear" have alarmed a public that doesn't understand drilling practices -- or math, science or engineering in general. The industry's biggest challenge, he said, is "taking an illiterate public and try to help them understand why we can manage these risks."

Your "leadership by example would usher in a new era...."

ExxonMobil CEO Delivers Major Speech on U.S. Energy Marcellus Drilling News | June 2012 | http://bit.ly/Marcell14June In a speech delivered at the Council on Foreign Relations on Wednesday, ExxonMobil CEO Rex Tillerson said fears about climate change, drilling and even energy dependence on other countries are all overblown. He said he believes burning fossil fuels does lead to global warming, but it’s no big deal and certainly not an impending cataclysm. He also said the press and environmentalists are manufacturing fear about fracking and fossil fuels. Perhaps the most controversial thing he said is that the general public is “illiterate” when it comes to science and math.

ExxonMobil CEO Rex Tillerson says fears about climate change, drilling, and energy dependence are overblown. In a speech Wednesday, Tillerson acknowledged that burning of fossil fuels is warming the planet, but said society will be able to adapt. The risks of oil and gas drilling are well understood and can be mitigated, he said. And dependence on other nations for oil is not a concern as long as access to supply is certain, he said. Tillerson blamed a public that is "illiterate" in science and math, a "lazy" press, and advocacy groups that "manufacture fear" for energy misconceptions in a speech at the Council on Foreign Relations. He highlighted that huge discoveries of oil and gas in North America have reversed a 20-year decline in U.S. oil production in recent years. He also trumpeted the global oil industry’s ability to deliver fuels during a two-year period of dramatic uncertainty in the Middle East, the world’s most important oil and gas-producing region. "No one, anywhere, any place in the world has not been able to get crude oil to fuel their economies," he said. Tillerson expressed frustration at the level of public concern over new drilling techniques that tap natural gas and oil in shale formations under several states. He said environmental advocacy groups that "manufacture fear" have alarmed a public that doesn’t understand drilling practices — or math, science or engineering in general. He blamed "lazy" journalists for producing stories that scare the public but don’t investigate the claims of advocacy groups. Drilling for oil and gas will always involve risks of spills and accidents, he said. But those risks are manageable and worth taking because they are small given the amount of energy they produce.* *Binghamton (NY) Press & Sun-Bulletin/AP (Jun 27, 2012) – Exxon chief: environmentalists guilty of manufacturing drilling fear Transcript: Council on Foreign Relations | June 27, 2012 | http://bit.ly/CFR27June12 Recording: YouTube | June 27, 2012 | http://bit.ly/CFR27June12YouTube

Ground Zero: Deleterious Disposal

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - deleterious disposal

October 13, 2014 7:13 AM

2 Attachments, 723 KB

Ground zero On October 11, 2014, it was reported that industry illegally injected about 3 billion gallons of fracking wastewater into central California drinking-water and farm-irrigation aquifers, the state found after the US Environmental Protection Agency ordered a review of possible contamination. According to documents obtained by the Center for Biological Diversity, the California State Water Resources Board found that at least nine of the 11 hydraulic fracturing, or fracking, wastewater injection sites that were shut down in July upon suspicion of contamination were in fact riddled with toxic fluids used to unleash energy reserves deep underground. The aquifers, protected by state law and the federal Safe Water Drinking Act, supply quality water in a state currently suffering unprecedented drought. The documents also show that the Central Valley Water Board found high levels of toxic chemicals - including arsenic, thallium, and nitrates - in water-supply wells near the wastewater-disposal sites.

California aquifers contaminated with billions of gallons of fracking wastewater RT News | October 09, 2014 | http://bit.ly/RT11Oct

Industry illegally injected about 3 billion gallons of fracking wastewater into central California drinkingwater and farm-irrigation aquifers, the state found after the US Environmental Protection Agency ordered a review of possible contamination. According to documents obtained by the Center for Biological Diversity, the California State Water Resources Board found that at least nine of the 11 hydraulic fracturing, or fracking, wastewater injection sites that were shut down in July upon suspicion of contamination were in fact riddled with toxic fluids used to unleash energy reserves deep underground. The aquifers, protected by state law and the federal Safe Water Drinking Act, supply quality water in a state currently suffering unprecedented drought. The documents also show that the Central Valley Water Board found high levels of toxic chemicals including arsenic, thallium, and nitrates - in water-supply wells near the wastewater-disposal sites. Arsenic is a carcinogen that weakens the immune system, and thallium is a common component in rat poison. “Arsenic and thallium are extremely dangerous chemicals,” said Timothy Krantz, a professor of environmental studies at the University of Redlands, according to the Center for Biological Diversity. “The fact that high concentrations are showing up in multiple water wells close to wastewater injection sites raises major concerns about the health and safety of nearby residents.” The Center for Biological Diversity obtained a letter from the state Water Board to the US Environmental Protection Agency (EPA) that said the Central Valley Regional Water Board discovered the health violations. Following the July suspension of the 11 injection sites, the EPA ordered a review of aquifers in the area to be completed within 60 days. The state Water Board also said that 19 more injection wells may have also contaminated sensitive, protected aquifers, while dozens more wells have been the source of wastewater dumped into aquifers of unknown quality. Despite these damning findings, the extent of wastewater pollution is still undetermined, as the Central Valley Water Board has thus far only tested eight water wells of the more than 100 in the area, according to the documents. Half of those tested came up positive for containing an excessive amount of toxic chemicals. To unleash oil or natural gas, fracking requires blasting large volumes of highly pressurized water, sand, and other chemicals into layers of rock. The contents of fracking fluid include chemicals that the energy industry and many government officials will not name, yet they insist the chemicals do not endanger human health, contradicting findings by scientists and environmentalists. Toxic fracking wastewater is then either stored in deep underground wells, disposed of in open pits for evaporation, sprayed into waste fields, or used over again. Fracking has been linked to groundwater contamination, an uptick in earthquakes, exacerbation of drought conditions and a host of health concerns for humans and the local environment. A recent study by the US Drought Monitor noted that 58 percent of California is experiencing “exceptional drought,” which is the most serious category on the agency’s five-level scale. Meanwhile, a fracking job can require as much as 140,000 to 150,000 gallons of water per day, water that then cannot be consumed or used in farming operations. The Center for Biological Diversity noted that the contamination of water sources could be much worse in another regard, as flowback water that comes from oil wells in the state can contain levels of benzene, toluene, and other toxic chemicals that are hundreds of times higher than legally allowed.

benzene, toluene, and other toxic chemicals that are hundreds of times higher than legally allowed. Flowback fluid is then released back into wastewater storage wells. Chemicals like benzene can take years to eventually find their way to water sources. “Clean water is one of California’s most crucial resources, and these documents make it clear that state regulators have utterly failed to protect our water from oil industry pollution,” said Hollin Kretzmann, an attorney for the Center for Biological Diversity. “Much more testing is needed to gauge the full extent of water pollution and the threat to public health. But Governor [Jerry] Brown should move quickly to halt fracking to ward off a surge in oil industry wastewater that California simply isn’t prepared to dispose of safely.”

Your "leadership by example would usher in a new era...."

Ground Zero: Creek Water Radiation

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - creek water radiation

October 13, 2014 11:32 AM

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Ground zero Residents near the Marcellus Shale Gas Field have long been wondering whether their water is safe to drink. Duke University geochemists have found dangerous levels of radioactivity and salinity at a fracking disposal site near Blacklick Creek, which feeds into water sources for Pittsburgh and other western Pennsylvania cities. The Duke scientists spent two years, from 2010 to 2012, taking soil samples upstream and downstream from the Josephine Brine Treatment Facility in Indiana County, PA. What they found was striking. Even after waste water was treated at the plant to remove dangerous chemicals, radiation was detected far above regulated levels. The treated water had Radium levels 200 times greater than control water from the area, said Avner Vengosh, professor of geochemistry and water quality at Duke Universityâ&#x20AC;&#x2122;s Nicholas School of the Environment.

Ground Zero: Ban Gas Fracking

Douglas Grandt <answerthecall@me.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - ban gas fracking

October 13, 2014 2:14 PM

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Food and Water Watch published "The Case for a Ban on Gas Fracking" which says in part: Accidents and leaks have polluted rivers, streams and drinking water supplies. Regions peppered with drilling rigs have high levels of smog as well as other airborne pollutants, including potential carcinogens. Rural communities face an onslaught of heavy truck traffic — often laden with dangerous chemicals used in drilling — and declining property values. The “bridge fuel” of fracking could well be a bridge to nowhere. Over the past 18 months, at least 10 studies by scientists, Congress, investigative journalists and public interest groups have documented environmental problems with fracking. Findings include: Toxic chemicals present in fracking fluid could cause cancer and other health problems. Fracking wastewater contains high levels of radioactivity and other contaminants that wastewater treatment plants have had difficulty removing; this potentially contaminated wastewater can then be discharged into local rivers. In Pennsylvania, more than 3,000 gas fracking wells and permitted well sites are located within two miles of 320 day care centers, 67 schools and nine hospitals. Fracking is exempt from key federal water protections, and federal and state regulators have allowed unchecked expansion of fracking, creating widespread environmental degradation. Overwhelmed state regulators largely oversee the practice. Even if the laws on the books were strengthened, fracking poses too severe a risk to public health and the environment to entrust effective and rigorous regulatory oversight to these officials. Both state and federal regulators have a poor track record of protecting the public from the impacts of fracking. Congress, state legislators and local governmental bodies need to ban shale gas fracking.

The Case for a

Ban on

Gas Fracking

About Food & Water Watch

Food & Water Watch

The Case for a Ban on Gas Fracking

Executive Summary

Recommendations

Food & Water Watch

Introduction

The Case for a Ban on Gas Fracking

Top 10 Natural Gas Producers, 2010 Company

Millions of Cubic Feet/Day

Source: National Gas Supply Association, Top 40 Producers. March 23, 2011. *Does not include Exxonâ&#x20AC;&#x2122;s 2010 acquisition of XTO Energy.

Food & Water Watch

Ten Studies and Investigations, January 2010 to May 2011 New York Times (February 2011)

PennEnvironment Research and Policy Center (May 2011):

Duke University (April 2011):

Endocrine Disruption Exchange (September 2010): House Energy and Commerce Committee (January 2011, April 2011):

the

Riverkeeper (September 2010):

Associated Press (January 2011):

Cornell University (March 2011):

ProPublica (2011):

Environmental Working Group (January 2010):

The Case for a Ban on Gas Fracking

The History and Next Wave of Fracking

Food & Water Watch

Fracking America: Coming to a Rock Formation Near You

Fracked Natural Gas Production Surges, in Trillions of Cubic Feet 5 2.75

Shale Gas

2.36

Coalbed Methane 1.49

1.15 1.00 0.69

0.44 1.51

0.47

0.55

0.80

0.59

1.60

1.66

1.71

2001

2002

2003

2.19 1.81

1.75

2004

2005

1.84

1.91

1.97

2007

2008

2.07

2000

2006

2009

2010

Source: U.S. Energy Information Administration.

But the

Asleep at the Switch, Cops off the Beat

The Case for a Ban on Gas Fracking

A family in Albany, New York, protests fracking in their community. Photo courtesy of April Hawthorne.

Food & Water Watch

Airborne Pollution

111

Gasland 116

Gasland shows homeowners setting contaminated water Gasland.

The Case for a Ban on Gas Fracking

Water Pollution from Fracked Gas Wells

Food & Water Watch

Pavillion, Wyoming:

Fracking Routes of Water Contamination

Dimock, Pennsylvania:

Leaks and Blowouts

161

Parker County, Texas:

The Case for a Ban on Gas Fracking

166

Aquifer Migration

For ex

Fracking Wastewater Pollutes Waterways

180

Food & Water Watch

Economic Costs

The Case for a Ban on Gas Fracking

Conclusion and Recommendations: Fracking Is a Step in the Wrong Direction

Activists in New York protest fracking in their state, including (from left to right) actor Mark Ruffalo, Sane Energy Project Co-Founder Denise Katzman, Food & Water Watch Executive Director Wenonah Hauter and Frack Action Executive Director Claire Sandberg. Photo by Food & Water Watch.

Guardian

But

Recommendations

Food & Water Watch Endnotes

, ac

.â&#x20AC;?

The Case for a Ban on Gas Fracking

Christian

Food & Water Watch

Ground Zero: Fracking Man Camp Boom

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - fracking man camp boom

October 13, 2014 4:56 PM

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Photograph by Eugene Richards

What happens when you put too many men in too small a place, with too little to do ... and pay them too much money for too long shifts? At 9 p.m. on that August night, when I arrived for my first shift as a cocktail waitress at Whispers, one of the two strip clubs in downtown Williston, I didn’t expect a 25year-old man to get beaten to death outside the joint. Then again, I didn’t really expect most of the things I encountered reporting on the oil boom in western North Dakota this past summer. It was only later, after the clientele was herded out to Red Peters’s catchy “The Closing Song” and the dancers had emerged from the dressing room in sweatshirts, that I realized everyone was on edge. “What’s wrong?” I asked the scraggly bearded bouncer walking me to my dusty sedan, whose backseat would soon double as my motel room. “The kid’s going to die,” he replied. Turned out one of the brothers had gotten his head bashed in by a man wielding a metal pipe. He’d been airlifted to the nearby city of Minot where he would pass away a few days later.

Tomgram: Laura Gottesdiener, Adrift in Oil Country Laura Gottesdiener | October 12, 2014 | http://bit.ly/Tom12Oct [Note for TomDispatch Readers: Small tip for next spring. I just saw Robert Kenner’s documentary film “Merchants of Doubt” (inspired by a remarkable book of the same name) that exposes the way a tiny group of scientists were used first by Big Tobacco and then by Big Oil to sow doubt and uncertainty on subjects ranging from the dangers of cigarettes to global warming. The book was written by TomDispatch author Naomi Oreskes and Erik Conway (and she's a major figure in the film). As a tale of scientific flim-flam artists and grifters, the movie manages to be both shocking and thoroughly enjoyable, with a cast of characters ranging from a magician to a right-wing congressman who came to accept the reality of climate change -- and lost his seat. It’s a tale of our time, grim yet sometimes quite funny and a must-see when it hits your neighborhood in perhaps March of 2015. Tom] Think of it as a Walrusgram written on the sand of a northwest Alaskan beach and sent to the planet. The National Oceanic and Atmospheric Administration’s Arctic marine mammal aerial survey noticed them first, those 35,000 walruses that had come ashore in unheard of numbers because their usual sea ice has simply melted away. The photos are dramatic. You couldn’t ask for a clearer message from a species that normally doesn’t write out its thoughts on the subject of our changing, warming planet. For those who prefer their science not from the walrus’s mouth (so to speak), there has been equally relevant news on the same subject lately from another species. Think of them as scientists clambering ashore from a wounded world. Only weeks ago, it was reported that carbon dioxide and other greenhouse gas concentrations in the atmosphere had reached record levels in 2013 and, perhaps even more unsettlingly, that oceans and terrestrial plant life, both major “carbon sinks,” were absorbing less CO2 than in the past. Now, we have news that the oceans have actually been warming significantly faster than anyone previously imagined. The latest figures indicate that “the upper 2,300 feet of the Southern Hemisphere’s oceans may have warmed twice as quickly after 1970 than had previously been thought... [and that] the upper levels of the planet’s oceans -- those of the northern and southern hemispheres combined -- had been warming during several decades prior to 2005 at rates that were 24 to 58 percent faster than had previously been realized.” None of this is good news, of course, not if you have any sort of investment in future generations living on a planet anywhere near as hospitable as the one we’ve been on for so long. But talk about dissociation. While those walruses were climbing out of the water and the scientists were reporting their latest grim numbers, in the American heartland thousands of workers shaken loose from other worlds have been heading for boom times in North Dakota and elsewhere in our fracklands. There, the exploitation of previously unrecoverable oil shale and natural gas deposits via hydro-fracking has pundits bragging about this country as “Saudi America” and the president aggressively planning to make “the oil weapon” a central feature in American foreign policy. Between the two worlds, the one producing ever more fossil fuels amid a let-the-good-times-roll spirit of triumphalism and the one slowly melting down under the impact of what those fossil fuels release into the atmosphere, there sometimes seems no connection at all. Clear as the link may be, each of these worlds often might as well be located on a different planet. TomDispatch’s Laura Gottesdiener had the rare urge to land on that other planet, the one most of us never experience that produces fossil fuels with such exuberance, and see just what we’re all missing. Here's her vivid report from the front lines of American fossil-fuel extraction. Tom A Trip to Kuwait (on the Prairie) Life Inside the Boom By Laura Gottesdiener At 9 p.m. on that August night, when I arrived for my first shift as a cocktail waitress at Whispers, one of the two strip clubs in downtown Williston, I didn’t expect a 25-year-old man to get beaten to death outside the joint. Then again, I didn’t really expect most of the things I encountered reporting on the oil boom in western North Dakota this past summer.

“Can you cover the floor?” the other waitress yelled around 11 p.m. as she and her crop-top sweater sidled behind the bar to take over for the bouncers and bartenders. They had rushed outside to deal with a commotion. I resolved to shuttle Miller Lites and Fireball shots with extra vigor. I didn’t know who was fighting, but assumed it involved my least favorite customers of the night: two young brothers who had been jumping up and down in front of the stage, their hands cupping their crotches the way white boys, whose role models are Eminem, often do when they drink too much. One sported a buzz cut, the other had hair like soft lamb’s wool. The rest of the night was a blur of beer bottles and customer commands to smile more. It was only later, after the clientele was herded out to Red Peters’s catchy “The Closing Song” -- “get the fuck out of here, finish up that beer” -- and the dancers had emerged from the dressing room in sweatshirts, that I realized everyone was on edge. “What’s wrong?” I asked the scraggly bearded bouncer walking me to my dusty sedan, whose backseat would soon double as my motel room. “The kid’s going to die,” he replied. Turned out one of the brothers had gotten his head bashed in by a man wielding a metal pipe. He’d been airlifted to the nearby city of Minot where he would pass away a few days later. Catalysts for Instability I hadn’t driven nearly 2,000 miles from Brooklyn to work as a cocktail waitress in a strip club. (That only happened after I ran out of money.) I had set off with the intention of reporting on the domestic oil boom that was reshaping North Dakota’s prairie towns as well as the balance of both global power and the earth’s atmosphere. This spring, production in North Dakota surged past one million barrels of oil a day. The source of this liquid gold, as it is locally known, is the Bakken Shale: a layered, energy-rich rock formation that stretches across western North Dakota, the corner of Montana, and into Canada. It had been considered inaccessible until breakthroughs in drilling and hydraulic fracturing made the extraction of oil from it economically feasible. In 2008, the United States Geological Survey (USGS) announced that the Bakken Shale contained 25 times more recoverable oil than previously thought, sparking the biggest oil rush in state history. Now, six years later, the region displays all the classic contemporary markers of hell: toxic flames that burn around the clock; ink-black smoke billowing from 18-wheelers; intermittent explosions caused by lightning striking the super-conductive wastewater tanks that hydraulic fracturing makes a necessity; a massive Walmart; an abundance of meth, crack, and liquor; freezing winters; rents higher than Manhattan; and far, far too many men. To oil companies, however, the field is hallowed ground, one of the few in history to break the million-barrel-a-day benchmark, earning it “a place in the small pantheon of truly elite oil fields,” as one Reuters market analyst wrote. This summer, driven partially by North Dakota’s boom, the United States surpassed Saudi Arabia in total oil and gas production, making the nation not only the number one consumer of fossil fuels but also the number one producer. (China is currently leading when it comes to annual carbon emissions, although this country still has higher emissions per capita.) Around the same time, the Pentagon issued a warning that climate change, caused by unchecked fossil-fuel extraction, “will aggravate stressors abroad such as poverty, environmental degradation, political instability, and social tensions -conditions that can enable terrorist activity and other forms of violence.” A subsequent report issued by the CNA Corporation Military Advisory Board, a government-funded military research organization, went even further, stating that the effects of climate change -- food insecurity and massive forced displacement, just to name two -- “will serve as catalysts for instability and conflict.” And so, when I arrived in Williston this summer, easing my sedan past the fiery flare offs and the welcome sign exclaiming “Boomtown U.S.A.!,” my

fiery flare offs and the welcome sign exclaiming “Boomtown U.S.A.!,” my plan was to report on some of the less discussed aspects of the domestic energy revival, such as farmland pollution and the oil industry’s increasing militarization. But I had also come to Williston just to be, to explore the existential question of what it’s like to live amid a frenzy of activities that, as scientists have assured us, are likely to threaten the very existence humanity has known for the last few thousand years. Truths and Lies On my first night in town, I landed in the unfinished, wood-walled cabin of a local bartender and his friend, a flat-faced, 230-pound hulk of a man who worked on an oil rig and reminded me of Fred Flintstone. As we prepared pork chops stewed in Campbell’s mushroom soup and sipped cherryflavored Southern Comfort, the two traded stories about Williston -- the kind, they said, that don’t make the newspapers. There was the time a man threatened to kill the bartender, and when the cops arrived, they let him go, arguing, “Well, he’s driving a company truck...” Plenty of companies here issue their employees trucks, although by far the most common branded vehicles in Williston are white Ford Super Duty pick-ups with “Halliburton” stenciled on the front passenger door. They recycled rumors about secret fights in rooms with padded walls and padded doors, where a winner can walk away with $50,000 to $60,000 in cash, and home poker games with buy-ins of more than $1,000. I quickly began learning the challenge of reporting from the oilfields: rumors are rampant -- there is not, for example, a cache of weapons and explosives stashed in a bunker behind Scenic Sports and Liquor, despite claims that it’s so -- yet the most insane-sounding things have actually happened. To mention just three that turned out to be all too true: during the winter, a long-time resident rented out an ice house for $5 a night to newly arrived workers struggling to find lodging; members of the Black Hawk private security company (no relation to the mercenary firm formerly known as Blackwater, although the founder enjoys the “intimidation factor” caused by the confusion) once set its men, armed with M-4 assault rifles, to guard 30,000 pounds of fracking-related explosives in the middle of the badlands; oil companies here have burned billions of dollars worth of natural gas straight into the atmosphere because it was less hassle than building pipelines to transport it. Whether or not any of the stories those two men told that night were accurate, I was struck by their generosity and the kindness of others. That first day alone, I’d been lent a shirt by a woman working at the front desk of the Aspen Lodge & Suites, offered ideas for stories, and fed a home-cooked meal. Perhaps the deep social ties and steadfast humility of pre-boom North Dakota continued to permeate oilfield culture, as one lifelong resident optimistically suggested. Then again, sometimes generosity can shade over into other things entirely. That bartender, for example, would later try to lure me into the underground sex industry by promising no-participation-required journalistic access. I only had to pass one test, which involved being on my knees. “I wish you could have followed through so i could of helped your story...” he texted me after I walked out. Cruising The next time I saw Fred Flintstone, he was tired of his haphazard schedule with Key Energy, an oilfield service company, so we spent the afternoon cruising in his Ford Mercury, visiting the offices of its competitors as he looked for a new job. He wore baby blue surfboard shorts and his lower lip was embroidered with a line of black stitches from a recent bar brawl. He was a lover, not a fighter, he assured me, although he also mentioned that the other guy had a broken jaw and a few staples in his head. According to residents and oilfield workers, including Fred, there are only two things to do in Williston: work and drink. The reasons are simple enough. Unlike in significant parts of the country, well-paying jobs are easy to acquire in the oil fields. As a result, North Dakota boasts the lowest unemployment rate in the nation, an eye-popping 2.8%. To access these jobs, however, the majority of workers had to leave their families and relocate to this remote region, where you often end up

of workers had to leave their families and relocate to this remote region, where you often end up living in company-provided housing in steel shipping containers and the number of men vastly, sometimes dangerously, exceeds that of women. Many of these men, in turn, experience feelings of loneliness and alienation, which is where the drinking comes in. Fred was so confident he’d have a new employer by the end of the week that he suspended the day’s job-hunting when the remotest possibility of picking up a woman arose. (“I know this is crazy,” he asked the secretary at Nabors, a drilling contractor, “but are you all married up?... No?... Well, when do you get off?”) Soon enough, we parked at R. Rooster BBQ Co. to down some pulled pork, then stopped to check out a '98 Honda Accord. He swore that he’s bought and sold 68 cars over the years. To end our day, for reasons that passed me by, we stopped and checked out a butcher’s shop. To my surprise, as we drove, he explained that he wasn’t a big fan of the whole oil extraction thing; he’d spent much time watching the National Geographic Channel and was concerned about the deforestation of the rainforest and the warming of the atmosphere. “When they say polar bears could be extinct in the next few years, you’re obviously doing something very, very wrong.” He wasn’t the first oilfield worker I’d met who wondered just what he was involved in and exhibited concern about climate change. Many proved surprisingly aware of the way that flaring off the natural gas that surges out of the drilled wells contributes to global warming or how spilled wastewater from the hydro-fracking process can sterilize land. I’d even met one former river guide turned oilfield worker who texted me an entire Terry Tempest Williams poem upon my departure. Despite such genuine concerns, most agreed with Fred’s assessment: “I, one man alone... I can’t do a fucking thing about it. So I’ll just get rich and I’ll move away, find my acreage back in Iowa or Nebraska or Kansas or whatever, and live my life accordingly.” When I ran into him again about a week later at Williston’s recently opened $70 million recreation center, sure enough, he had a new gig. Of course, there are a slew of sites in the United States where residents are mounting serious resistance to fossil fuel extraction. To name just three: in P.R. Springs, Utah, land defenders are attempting to stop the construction of the nation’s first commercial tar sands mine; on a reservation on the Black Mesa plateau in Arizona, the Diné (often called Navajo, the name imposed by Spanish conquistadors) are fighting to permanently shut down a coal mine; in Nebraska, indigenous leaders and local ranchers have joined forces to try to block the final leg of the Keystone XL pipeline slated to bring carbon-dirty tar sands from Alberta, Canada, to the U.S. Gulf Coast. But Williston is not one of those places. Lost in the Wild West It’s hard to know whether Williston, for all its technological prowess in extracting fossil fuels from the earth, is a window into the nation’s future -- or a last gasp from its past. Certainly, the sharply divergent opinions of what to make of the oil boom catch something of the country’s increasing polarization over what the coming years ought to hold. On one side, supporters of the boom see a domestic energy revival as exactly what America needs: more places where anyone who wants a job can work, where technological superiority carries the day, and where riches (never mind whose) are there for the taking -- especially if you are a man, or white, or both. On the other side, opponents of the oil frenzy consider it the latest methane-gas-flaring incarnation of the worst American traditions: unbridled greed, resource plunder, and violent machismo. The latter is becoming an increasing problem as non-native oilfield workers flock to the local reservations of the Three Affiliated Tribes, where they are immune from prosecution by tribal governments. As one told the Atlantic,“You can do anything short of killing somebody.” In Williston, a single term catches both views: workers here overwhelming call this place “the Wild West.” Just beneath the sense of giddiness and possibility in this frontier outpost of America’s new energy empire lurks loneliness of an almost indescribable sort. Since the boom began, at least 15,000 workers -- mostly men -- have descended on Williston alone. When you meet them, it’s clear that most carry the residue of half-lives from someplace else: photographs of their children, memories of ex-wives,

the residue of half-lives from someplace else: photographs of their children, memories of ex-wives, accents bred in Minnesota or Liberia. “You can almost see the lost-ness, the desperation in their faces,” Marc Laurent told me. He’s the manager of the Aspen Lodge & Suites where I first stayed, before the cost of housing got the best of me and, like almost all newcomers to Williston at one point or another, I resigned myself to living in my car. Buck was one of Laurent’s guests and exactly the type of man he was describing. A house framer, I first met him wandering around the Aspen’s dirt courtyard looking hangover-haggard. He had once had a wife -- “back home” -- but it didn’t work out. Within minutes of meeting, he invited me out to lunch -- and then to be his roommate. Just to save money, he clarified. (I declined the offer.) We spoke on the unfurnished wooden walkway that connected a series of row-house motel rooms that had arrived pre-assembled on a tractor-trailer less than six months before. He explained that he’d been here about eight months, mostly framing the single-family houses that companies were putting up as fast as possible. A jowly man of sagging posture, Buck said, “I’m just trying to rebuild myself.” His words conjured up for me an image of him attempting to frame himself, measuring the length of his arms, the angle of his shoulders until, finally, he hammered himself back into shape. There was something desperate about the way he and others like him had come here. So many, after all, flocked to this town because they needed the work, because their local economies had collapsed in 2008 and had never really come back. They weren’t, however, looking to pour themselves a new foundation in Williston. Instead, as so many reassured me, after a few years, after the money was made, they would leave. A sense of rootlessness gripped me as the weeks stretched on. Sometimes what I was learning left me feeling dizzy -- like the commonplace estimates I heard that the Bakken boom could easily last another 20 years. Or that energy companies were now developing plans for deepwater fracking in the Gulf of Mexico. Or that the county of Tulare, California, had run out of tap water in that state’s neverending mega-drought. But most of time I just felt numb. When one of the bouncers at the strip joint where I worked later told me that the dead boy’s head had cracked open “like a cantaloupe,” I found myself not caring all that much because he hadn’t left me a tip. “I’ve been thinking maybe I’ll just stay in North Dakota for a while,” I told my best friend’s answering machine before walking into a waitressing shift about a month into my trip. I was making good money at Whispers. I had made at least a few friends I knew were not pimps and I’d gotten the hang of living out of my car. I spoke to my parents less and less frequently and my memories of the East Coast seemed to be fading. I had, it seemed, become part of oil country -- and it was becoming part of me. My friend, however, was not impressed. “No, don’t do that,” he said on the phone the next day. “You need to come home.” So, about a week later, I stuffed my glove compartment with my Staples spiral notebooks and headed east, past orange flares licking the black night, past the tangled-metal refineries of Indiana and Ohio, past fracking-well pumps pecking at the fields of Pennsylvania, burning gasoline the whole way, the memory of Williston never quite receding.

Ground Zero: Fracking Man Camp Fever

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - fracking man camp fever

October 13, 2014 4:56 PM

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North Dakota Legendary has an imaginative eye-catching campaign http://LegendaryND.com Harmful to young white girls and the many young men lured by the promise of fame and fortune, and a travesty perpetrated upon indigenous women who suffer rape and violence at the hands of oil men.

Ground Zero: Energy = Electricity

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - energy = electricity

October 14, 2014 7:47 AM

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Ground zero Think "electricity" when Rex Tillerson talks about "energy" as he did in Moscow in May, 2014: Increases in population, along with growing trade and development, will increase global energy demand by about 30 per cent by the year 2040 (the projection is from the EIA Outlook 2014). There is nothing in that statement related in any way to oil, he is talking about natural gas: According to the latest figures on global energy poverty, about one in five human beings still has no access to electricity. The key to lifting people out of this poverty – and to increasing hope and opportunity for billions, including those yet to be born – is to expand the supplies and availability of modern sources of energy. “The global need for energy we see today—and the growth in demand we anticipate in the decades ahead—will require the world to pursue all sources of energy, wherever and whenever they are economically competitive. This means we must invest, innovate, and relentlessly advance the technologies and techniques that promote energy efficiency, improve environmental performance, and reduce the greenhouse gas and air pollution emissions associated with increased energy use.” Acquired in 2010, XTO Energy Inc. is a subsidiary of ExxonMobil—anticipating gas to overtake oil? Ironically, during the time period to 2040, carbon-based fuel use must decline to nearly zero.

Ground Zero: Relentless Drilling

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - drilling relentlessly

October 15, 2014 6:54 AM

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Ground zero On oil, Rex Tillerson addressed the 21st World Petroleum Congress in Moscow in May, 2014: “With each passing year, our industry continues to advance the technologies and processes we employ – enabling us to go deeper, more quickly, more accurately, and more safely than ever before. As a result, we project that in the period from 2010 to 2040, deepwater oil production worldwide will grow 150 per cent. And deepwater contributions to global liquids supply will rise from 6 to 12 per cent.” “Our industry’s integration of hydraulic fracturing and horizontal drilling has made it possible to develop North America’s shale gas and tight oil – bountiful resources found in dense rock formations. Consider that between 2005 and 2014 alone, US production of crude oil and natural gas has risen by close to 70 per cent and 45 per cent respectively, which reflects growing tight oil and shale gas production. .

“Our industry is still in the exploratory stages of applying our recent breakthrough technologies and riskmanagement techniques to regions outside North America. Government and industry continue to assess the size of the global endowment of unconventional natural gas. At ExxonMobil we are optimistic about areas for potential development in Asia, Latin America, Northern Africa, parts of Europe – and in Russia, in Western Siberia. “These industry achievements – deepwater, unconventionals, and the Arctic – provide lessons on how to construct and maintain ‘energy strategies for a growing world’. The strategies of the future must reward long-term planning, sustained investment, and constant innovation.

Ground Zero: To Ally or Vilify

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - to ally or vilify

October 16, 2014 7:07 AM

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Ground zero Joe Romm posted the following guest blog on ClimateProgress on September 10, 2014: .

Hard-core deniers assert that the current warming is just part of a natural cycle. Joe Bastardi, for instance, in a Climate Progress comment, absurdly predicted that “the earth will cool back … to levels we saw in the late 70s, and the [Arctic sea] ice will increase back to those levels in the N hemisphere.” Not. . The cynical, climate-destroyers at Exxon, however, are placing a massive bet that global warming is real and that the Arctic will keep warming — even as they keep funding deniers to obfuscate the science and block action (after they publicly stated they would stop such funding). Below is a guest post by Christopher Jones on this subject. .

Tempting as it is to vilify Rex Tillerson, ExxonMobil and the petroleum (aka "Oil") industry, it is in the interest of all inhabitants on earth to form alliances and to guide "Oil" in partnerships toward responsible solutions. It is apparent from all observations that "Oil" will not make right choices keeping the best interests of humanity and all living species forefront in its selfish consciousness. .

If humanity is to survive, we must ally, not vilify.

Exxon’s Climate Admission by Christopher Jones

http://bit.ly/TP10Sept

This just in: Exxon Mobil has made a multi-billion dollar acknowledgement that climate change is real and is happening now. Don’t hold your breath waiting for them to admit this, though. Exxon would like you to believe that climate change is neither real nor urgent. That is why they have spent millions of dollars over the last several years funding climate skeptics and fighting legislation that would regulate the emissions of greenhouse gases. When you hear climate skeptics speak, there’s a good chance that Exxon money is in their pocket. Actions, however, speak louder than words. And Exxon’s most recent action was a thunderclap. According to reports, Exxon has just signed an extensive deal with Rosneft, the Russian state oil company, to develop promising offshore oil and gas deposits in the Arctic Ocean. The companies will begin by investing $3.2 billion to explore in the Kara Sea, with the potential of increasing the investment to $500 billion in the future. Exxon is so convinced of the potential of these sites that it is giving Rosneft ownership rights in several of its global properties to complete the deal. Large deposits of gas and oil have been known to exist in the Arctic Ocean for decades. So why did they make this deal now? One key thing has changed: the arctic ice is melting rapidly. The Kara Sea has typically been covered by ice floes nine months of the year or more, making commercial development of its resources unprofitable. But for the last several years, the extent and duration of the arctic ice has been diminishing, a phenomenon the vast majority of scientists believe to be caused by climate change. Suddenly, oil and gas exploration in the Arctic Ocean is looking far more attractive. Exxon has realized that a warming planet offers some new opportunities for profit and is adjusting its strategic decisions accordingly. Exxon is not the only big oil company whose actions show it believes climate change to be real. British Petroleum made a major play for developing the same resources several months ago, but the proposed deal was rejected by a coalition of BP’s other Russian business partners. Not only does big oil know climate change is happening, it is planning its future around it. That does not mean Exxon is likely to publicize this knowledge. Despite issuing a tepid statement acknowledging anthropogenic climate change in 2007 and promising to cease funding anti-climate change groups in 2008, Exxon remains up to its old tricks. Freedom of Information Act requests have revealed a continued pattern of funding for climate skeptics as well as collaborations with the conservative Koch Industries to support legislation that removes any restrictions on carbon emissions. We should no longer be distracted by these words. Exxon is a smart and savvy company, and even if its actions are reprehensible, they make sense in a political system that allows corporations to pay millions of dollars to avoid costly regulations. Blaming Exxon for these activities is like blaming a raccoon for going through your trash. They’re simply responding to available opportunities. This is exactly why we should focus on actions, not words. This deal is a multi-billion dollar investment predicated on Exxon’s belief that the planet is warming. It is one of the most powerful admissions of the reality of climate change imaginable. Michele Bachmann and the other Republican presidential candidates cannot blame this on disconnected academic scientists or members of a liberal conspiracy. This is the embodiment of free market American capitalism saying climate change is real. All this begs the question: If Exxon Mobil believes climate change is worth acting on now, isn’t it time for the rest of us to follow suit?

Exxon’s Climate Admission by Christopher Jones

http://bit.ly/TP10Sept

Ground Zero: Resource Depletion

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - resource depletion

October 16, 2014 10:16 AM

1 Attachment, 611 KB

October 13, 2014, Naomi Klein's essay adapted from "This Changes Everything" opened with: Brad Werner—a complex systems researcher—made his way through the throng of 24,000 earth and space scientists at the fall meeting of the American Geophysical Union in San Francisco. Standing at the front of the conference room, the University of California, San Diego professor took the crowd through the advanced computer model he was using to answer that rather direct question. He talked about a whole bunch of other stuff largely incomprehensible to those of us uninitiated in complex systems theory. But the bottom line was clear enough: Global capitalism has made the depletion of resources so rapid, convenient and barrier-free that “earth-human systems” are becoming dangerously unstable in response. When a journalist pressed Werner for a clear answer on the “Is earth fucked?” question, he set the jargon aside and replied, “More or less.” ... There is one dynamic in the model, however, that offered some hope. Werner described it as “resistance”... History tells us that past social movements have “had tremendous influence on … how the dominant culture evolved.” It stands to reason, therefore, that “if we’re thinking about the future of the earth, and the future of our coupling to the environment, we have to include resistance as part of that dynamic.” And that, Werner said, is not a matter of opinion, but “really a geophysics problem.” Put another way, only mass social movements can save us now. Because we know where the current system, left unchecked, is headed. We also know, I would add, how that system will deal with the reality of serial climate-related disasters: with profiteering, and escalating barbarism to segregate the losers from the winners. To arrive at that dystopia, all we need to do is keep barreling down the road we are on. The only remaining variable is whether some countervailing power will emerge to block the road, and simultaneously clear some alternate pathways to destinations that are safer. If that happens, well, it changes everything.

Can Climate Change Unite the Left? To avoid catastrophe, we must seize corporate polluters’ wealth. And to do that, we must change everything. BY NAOMI KLEIN | OCTOBER 13, 2014 | http://bit.ly/InTimes13OctKlein

In December 2012, Brad Werner—a complex systems researcher with pink hair and a serious expression— made his way through the throng of 24,000 earth and space scientists at the fall meeting of the American Geophysical Union in San Francisco. But it was Werner’s session that was attracting much of the buzz. It was titled “Is Earth F**ked?” (Full title: “Is Earth F**ked? Dynamical Futility of Global Environmental Management and Possibilities for Sustainability via Direct Action Activism”). Standing at the front of the conference room, the University of California, San Diego professor took the crowd through the advanced computer model he was using to answer that rather direct question. He talked about a whole bunch of other stuff largely incomprehensible to those of us uninitiated in complex systems theory. But the bottom line was clear enough: Global capitalism has made the depletion of resources so rapid, convenient and barrier-free that “earth-human systems” are becoming dangerously unstable in response. When a journalist pressed Werner for a clear answer on the “Is earth fucked?” question, he set the jargon aside and replied, “More or less.” There was one dynamic in the model, however, that offered some hope. Werner described it as “resistance”—movements of “people or groups of people” who “adopt a certain set of dynamics that does not fit within the capitalist culture.” According to the abstract for his presentation, this includes “environmental direct action, resistance taken from outside the dominant culture, as in protests, blockades and sabotage by Indigenous peoples, workers, anarchists and other activist groups.” Such mass uprisings of people—along the lines of the abolition movement and the Civil Rights Movement—represent the likeliest source of “friction” to slow down an economic machine that is careening out of control. This, he argued, is clear from history, which tells us that past social movements have “had tremendous influence on … how the dominant culture evolved.” It stands to reason, therefore, that “if we’re thinking about the future of the earth, and the future of our coupling to the environment, we have to include resistance as part of that dynamic.” And that, Werner said, is not a matter of opinion, but “really a geophysics problem.” Put another way, only mass social movements can save us now. Because we know where the current system, left unchecked, is headed. We also know, I would add, how that system will deal with the reality of serial climate-related disasters: with profiteering, and escalating barbarism to segregate the losers from the winners. To arrive at that dystopia, all we need to do is keep barreling down the road we are on. The only remaining variable is whether some countervailing power will emerge to block the road, and simultaneously clear some alternate pathways to destinations that are safer. If that happens, well, it changes everything. Social movements, such as the fossil fuel divestment/reinvestment movement, local laws barring high-risk extraction, bold court challenges by Indigenous groups and others, are early manifestations of this resistance. They have not only located various choke points to slow the expansion plans of the fossil fuel companies, but the economic alternatives these movements are proposing and building are mapping ways of living within planetary boundaries, ones based on intricate reciprocal relationships rather than brute extraction. This is the “friction” to which Werner referred, the kind that is needed to put the brakes on the forces of destruction and destabilization. Just as many climate change deniers I met fear, making swift progress on climate change requires breaking fossilized free market rules. That is why, if we are to collectively meet the enormous challenges of this crisis, a robust social movement will need to demand (and create) political leadership that is not only committed to

making polluters pay for a climate-ready public sphere, but willing to revive two lost arts: longterm public planning, and saying no to powerful corporations. There are many important debates to be had about the best way to respond to climate change—stormwalls or ecosystem restoration? Decentralized renewables, industrial scale wind power combined with natural gas, or nuclear power? Small-scale organic farms or industrial food systems? There is, however, no scenario in which we can avoid wartime levels of spending in the public sector—not if we are serious about preventing catastrophic levels of warming, and minimizing the destructive potential of the coming storms. Public money needs to be spent on ambitious emission-reducing projects—the smart grids, the light rail, the citywide composting systems, the building retrofits, the visionary transit systems, the urban redesigns to keep us from spending half our lives in traffic jams. The private sector is ill-suited to taking on most of these large infrastructure investments. If the services are to be accessible, which they must be in order to be effective, the profit margins that attract private players simply aren’t there. The polluter pays So how on earth are we going to pay for all this? In North America and Europe, the economic crisis that began in 2008 is still being used as a pretext to slash aid abroad and cut climate programs at home. All over Southern Europe, environmental policies and regulations have been clawed back, most tragically in Spain, which, facing fierce austerity pressure, drastically cut subsidies for renewables projects, sending solar projects and wind farms spiraling toward default and closure. The U.K. under David Cameron has also cut supports for renewable energy. If we accept that governments are broke, and they’re not likely to introduce “quantitative easing” (aka printing money) for the climate system as they have for the banks, where is the money supposed to come from? Since we have only a few short years to dramatically lower our emissions, the only rational way forward is to fully embrace the principle already well established in Western law: the polluter pays. Oil and gas companies remain some of the most profitable corporations in history, with the top five oil companies pulling in $900 billion in profits from 2001 to 2010. These companies are rich, quite simply, because they have dumped the cost of cleaning up their mess onto regular people around the world. It is this situation that, most fundamentally, needs to change. And it will not change without strong action. For well over a decade, several of the oil majors have claimed to be voluntarily using their profits to invest in a shift to renewable energy. But according to a study by the Center for American Progress, just 4 percent of the Big Five’s $100 billion in combined profits in 2008 went to “renewable and alternative energy ventures.” Instead, they continue to pour their profits into shareholder pockets, outrageous executive pay (Exxon CEO Rex Tillerson makes more than $100,000 a day), and new technologies designed to extract even dirtier and more dangerous fossil fuels. As oil industry watcher Antonia Juhasz has observed, “You wouldn’t know it from their advertising, but the world’s major oil companies have either entirely divested from alternative energy or significantly reduced their investments in favor of doubling down on ever-more risky and destructive sources of oil and natural gas.” Given this track record, it’s safe to assume that if fossil fuel companies are going to help pay for the shift to renewable energy, and for the broader costs of a climate destabilized by their pollution, it will be because they are forced to do so by law. It is high time for the industry to at least split the bill for the climate crisis. And there is mounting evidence that the financial world understands that this is coming. In its 2013 annual report on “Global Risks,” the World Economic Forum (host of the annual super-elite gathering in Davos, Switzerland), stated plainly, “Although the Alaskan village of Kivalina—which faces being ‘wiped out’ by the changing climate— was unsuccessful in its attempts to file a $400 million lawsuit against oil and coal companies, future plaintiffs may be more successful.”

The question is: How do we stop fossil fuel profits from continuing to hemorrhage into executive paychecks and shareholder pockets—and how do we do it soon, before the companies are significantly less profitable or out of business because we have moved to a new energy system? A steep carbon tax would be a straightforward way to get a piece of the profits, as long as it contained a generous redistributive mechanism—a tax cut or income credit—that compensated poor and middle-class consumers for increased fuel and heating prices. As Canadian economist Marc Lee points out, designed properly, “It is possible to have a progressive carbon tax system that reduces inequality as it raises the price of emitting greenhouse gases.” An even more direct route to getting a piece of those pollution profits would be for governments to negotiate much higher royalty rates on oil, gas and coal extraction, with the revenues going to “heritage trust funds” that would be dedicated to building the post–fossil fuel future, as well as to helping communities and workers adapt to these new realities. Fossil fuel corporations can be counted on to resist any new rules that cut into their profits, so harsh penalties, including revoking corporate charters, would need to be on the table. But the extractive industries shouldn’t be the only targets of the “polluter pays” principle. The car companies have plenty to answer for, too, as do the shipping industry and the airlines. Moreover, there is a simple, direct correlation between wealth and emissions—more money generally means more flying, driving, boating and powering of multiple homes. One case study of German consumers indicates that the travel habits of the most affluent class have an impact on climate 250 percent greater than that of their lowest-earning neighbors. That means any attempt to tax the extraordinary concentration of wealth at the very top of the economic pyramid would—if partially channeled into climate financing—effectively make the polluters pay. Journalist and climate and energy policy expert Gar Lipow puts it this way: “We should tax the rich more because it is the fair thing to do, and because it will provide a better life for most of us, and a more prosperous economy. However, providing money to save civilization and reduce the risk of human extinction is another good reason to bill the rich for their fair share of taxes.” There is no shortage of options for equitably coming up with the cash to prepare for the coming storms while radically lowering our emissions to prevent catastrophic warming. Consider the following: A “low-rate” financial transaction tax—which would hit trades of stocks, derivatives and other financial instruments—could bring in nearly $650 billion at the global level each year, according to a 2011 resolution of the European Parliament (and it would have the added bonus of slowing down financial speculation). Closing tax havens would yield another windfall. The U.K.-based Tax Justice Network estimates that in 2010, the private financial wealth of individuals stowed unreported in tax havens around the globe was somewhere between $21 trillion and $32 trillion. If that money were brought into the light and its earnings taxed at a 30 percent rate, it would yield at least $190 billion in income tax revenue each year. A 1 percent “billionaire’s tax,” floated by the U.N., could raise $46 billion annually. A $50 tax per metric ton of CO2 emitted in developed countries would raise an estimated $450 billion annually, while a more modest $25 carbon tax would still yield $250 billion per year, according to a 2011 report by the World Bank, the International Monetary Fund, and the Organisation for Economic Cooperation and Development (OECD), among others. Phasing out fossil fuel subsidies globally would conservatively save governments a total $775 billion in a single year, according to a 2012 estimate by Oil Change International and the Natural Resources Defense Council. These various measures, taken together, would certainly raise enough for a very healthy start to finance a Great Transition (and avoid a Great Depression). Of course, for any of these tax crackdowns to work, key governments would have to coordinate their responses so that corporations had nowhere to hide—a difficult task, though far from impossible, and one frequently bandied about at G20 summits.

To state the obvious: it would be incredibly difficult to persuade governments in almost every country in the world to implement the kinds of redistributive climate mechanisms I have outlined. But we should be clear about the nature of the challenge: It is not that “we” are broke or that we lack options. It is that our political class is utterly unwilling to go where the money is (unless it’s for a campaign contribution), and the corporate class is dead set against paying its fair share. Battle for the planet Seen in this light, it’s hardly surprising that our leaders have so far failed to act to avert climate chaos. Indeed, even if aggressive “polluter pays” measures were introduced, it isn’t at all clear that the current political class would know what to do with the money. After all, changing the building blocks of our societies— the energy that powers our economies, how we move around, the designs of our major cities—is not about writing a few checks. It requires bold long-term planning at every level of government, and a willingness to stand up to polluters whose actions put us all in danger. And that won’t happen until the corporate liberation project that has shaped our political culture for three and a half decades is buried for good. All of this is why any attempt to rise to the climate challenge will be fruitless unless it is understood as part of a much broader battle of worldviews, a process of rebuilding and reinventing the very idea of the collective, the communal, the commons, the civil, and the civic after so many decades of attack and neglect. Because what is overwhelming about the climate challenge is that it requires breaking so many rules at once—rules emerged out of the same, coherent worldview. If that worldview is delegitimized, then all of the rules within it become much weaker and more vulnerable. This is another lesson from social movement history across the political spectrum: When fundamental change does come, it’s generally not in legislative dribs and drabs spread out evenly over decades. Rather it comes in spasms of rapid-fire lawmaking, with one breakthrough after another. The Right calls this “shock therapy”; the Left calls it “populism” because it requires so much popular support and mobilization to occur. So how do you change a worldview, an unquestioned ideology? Part of it involves choosing the right early policy battles—game-changing ones that don’t merely aim to change laws but change patterns of thought. That means that a fight for a minimal carbon tax might do a lot less good than, for instance, forming a grand coalition to demand a guaranteed minimum income. That’s not only because a minimum income, as discussed, makes it possible for workers to say no to dirty energy jobs but also because the very process of arguing for a universal social safety net opens up a space for a full-throated debate about values— about what we owe to one another based on our shared humanity, and what it is that we collectively value more than economic growth and corporate profits. Indeed, a great deal of the work of deep social change involves having debates during which new stories can be told to replace the ones that have failed us. Because if we are to have any hope of making the kind of civilizational leap required of this fateful decade, we will need to start believing, once again, that humanity is not hopelessly selfish and greedy—the image ceaselessly sold to us by everything from reality shows to neoclassical economics. Fundamentally, the task is to articulate not just an alternative set of policy proposals but an alternative worldview to rival the one at the heart of the ecological crisis. A worldview embedded in interdependence rather than hyperindividualism, reciprocity rather than dominance, and cooperation rather than hierarchy. This is required not only to create a political context to dramatically lower emissions, but also to help us cope with the disasters we can no longer afford to avoid. Because in the hot and stormy future we have already made inevitable through our past emissions, an unshakable belief in the equal rights of all people and a capacity for deep compassion will be the only things standing between civilization and barbarism. This essay was adapted from This Changes Everything: Capitalism vs. the Climate by Naomi Klein. Copyright © 2014 by Naomi Klein. Reprinted by permission of Simon & Schuster, Inc.

PASSIONATE PROTECTION

Ground Zero: Protecting Water, Land, Spirits & Future Generations

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - protecting water, land, spirits & future generations

October 16, 2014 11:11 AM

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Ground zero Indigenous women are leading the pushback against a wave of aggressive mining and drilling operations on Canada's west coast. The Secwepemc Women Warriors Society is calling for action to shut down Imperial Metals after the mine disaster that spilled billions of gallons of toxic tailings into two salmon rivers. In BC, indigenous mothers and grandmothers are on the frontlines on blockades to shut down mining, logging, and development. They are arrested, roughed up, spat on, and disrespected for standing up for their land. They sacrifice their freedom and comfort, and sometimes they win. . We are honored to help the Secwepemc Women Warriors and the Sacred Fire with their crowdfunding campaign. https://fundrazr.com/campaigns/fqBgb/ab/a2BcQb .

"How many more Elders need to go to jail to stop this destruction of our water, our land, our spirits, our future generations? We must stand up. We must walk with them. We must not stand aside while more of our Elders go to prison. This is when we act in solidarity. This is when we make every act one of resisting. This is when we reach critical mass. This is how we make and break things."

Ground Zero: Denton County Court

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - Denton County Court

October 16, 2014 1:50 PM

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Ground zero June 11, 2014, I met with Rex Tillerson's attorney, ExxonMobil staff attorney Reid Grayson Gettys in the chambers of Judge J. W. Hand, Denton County Justice of the Peace, Precinct 4, Texas. Judge Hand allowed me speak before considering defendant's Motion to Dismiss. He explained that the motion would normally be considered and ruled upon first, and if he granted it, I would not get to address the Court. I spoke about my concerns and why I was suing Mr. Tillerson, concisely but comprehensively. That was my only opportunity to enlighten Judge Hand and Mr. Tillerson by way of his attorney. I know his attorney Reid Gettys understands my position, and in brief conversation after the trial, he validated my inquiry as to whether Mr. Tillerson understands my concerns.

Ground Zero: The Next 7 Generations

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - the next 7 generations

October 16, 2014 6:25 PM

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In 2004, thirteen Indigenous Grandmothers from all four corners, moved by their concern for our planet, came together at a historic gathering, where they decided to form an alliance: The International Council of Thirteen Indigenous Grandmothers. .

This is their story. Four years in-the-making and shot on location in the Amazon rainforest, the mountains of Mexico, North America, and at a private meeting with the Dalai Lama in India, For the Next 7 Generations follows what happens when these wise women unite. .

Facing a world in crisis, they share with us their visions of healing and a call for change now, before itâ&#x20AC;&#x2122;s too late. This film documents their unparalleled journey and timely perspectives on a timeless wisdom. .

Grandmother's Mission Statement: .

"We, the International Council of 13 Indigenous Grandmothers, represent a global alliance of prayer, education and healing for our Mother Earth, all her inhabitants, all the children, and for the next seven generations to come. We are deeply concerned with the unprecedented destruction of our Mother Earth and the destruction of indigenous ways of life. .

We believe the teachings of our ancestors will light the way through an uncertain future. We look to further our vision through the realization of projects that protect our diverse cultures: lands, medicines, language and ceremonial ways of prayer and through projects that educate and nurture our children."

Ground Zero: Cowboy & Indian Alliance: Reject and Protect

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - Cowboy & Indian Alliance: Reject and Protect

October 17, 2014 7:37 AM

2 Attachments, 1.7 MB

Ground zero

Thousands joined the farmers, ranchers, and tribal leaders of the Cowboy and Indian Alliance for a ceremonial procession along the National Mall to protest the Keystone XL pipeline April 26, 2014. The procession was the largest event yet of the five-day “Reject and Protect” encampment. “Today, boots and moccasins showed President Obama an unlikely alliance has his back to reject Keystone XL to protect our land and water,” said Jane Kleeb, Executive Director of Bold Nebraska. Legendary musician Neil Young and actress Daryl Hannah were amongst the crowd of thousands who rallied on the National Mall and then marched past the Capitol building. “We need to end the age of fossil fuels and move on to something better,” Mr. Young told the crowd. Reject and Protect has helped shine a spotlight on the strengthening opposition to Keystone XL amongst ranchers, farmers, and Native American tribes along the pipeline route. Buoyed by the State Department’s recent delay of the project, the Cowboy and Indian Alliance has pledged to intensify efforts to convince the President to “reject” the pipeline and “protect” their families, land, water, treaty rights, and climate.

Thousands March with Cowboy and Indian Alliance at “Reject and Protect” to Protest Keystone XL Pipeline Cowboy and Indian Alliance Present a Painted Tipi to the Smithsonian National Museum of the American Indian as a Gift to President Obama Musician Neil Young and Actress Daryl Hannah join the protests Washington, DC — Thousands of people joined the farmers, ranchers, and tribal leaders of the Cowboy and Indian Alliance for a ceremonial procession along the National Mall to protest the Keystone XL pipeline this afternoon. The procession was the largest event yet of the five-day “Reject and Protect” encampment. “Today, boots and moccasins showed President Obama an unlikely alliance has his back to reject Keystone XL to protect our land and water,” said Jane Kleeb, Executive Director of Bold Nebraska, one of the key organizers of Reject and Protect. Legendary musician Neil Young and actress Daryl Hannah were amongst the crowd of thousands who rallied on the National Mall and then marched past the Capitol building. “We need to end the age of fossil fuels and move on to something better,” Mr. Young told the crowd. The day’s procession included the presentation of a hand-painted tipi to the Smithsonian National Museum of the American Indian as a gift to President Obama. The tipi represented the Cowboy and Indian Alliance’s hopes for protected land and clean water. The formal name of the tipi is “Awe Kooda Bilaxpak Kuuxshish” and “Oyate Wookiye,” two names given to President Obama by the Lakota and the Crow Nations upon his visit to those Nations in 2008. The title translates from the Lakota and Crow languages, respectively, as “Man Who Helps the People” and “One Who Helps People throughout the Land.” “Keystone XL is a death warrant for our people,” said Oglala Sioux Tribal President Bryan Brewer, who helped lead the presentation of the tipi to the Smithsonian. “President Obama must reject this pipeline and protect our sacred land and water. The United States needs to respect our treaty rights and say no to Keystone XL.” Reject and Protect has helped shine a spotlight on the strengthening opposition to Keystone XL amongst ranchers, farmers, and Native American tribes along the pipeline route. Buoyed by the State Department’s recent delay of the project, the Cowboy and Indian Alliance has pledged to intensify their efforts to convince President Obama to “reject” the pipeline and “protect” their families, land, water, treaty rights, and climate. “Every time Keystone XL gets delayed it just gives us more time to speak up and tell the truth about this dangerous pipeline,” Meghan Hammond, a sixth-generation Nebraska rancher told the crowd of thousands. Ms. Hammond worked with her family to build a crowd-funded, clean-energy powered barn on her property, directly on the proposed route of Keystone XL. The five-day Reject and Protect encampment began with a march and opening ceremony on Earth Day, April 22. On Wednesday, members of the Cowboy and Indian Alliance met with the White House to

voice their concerns about Keystone XL and tar sands expansion. On Thursday, the Alliance hosted a protest at the Lincoln Memorial where Rosebud Sioux member Wizipan Little Elk and Nebraska farmer Art Tanderup risked arrest by walking into the reflecting pool with a sign that read, “Standing in the water could get me arrested, TransCanada pollutes drinking water and nothing happens.” On Friday, the Alliance hosted an interfaith prayer ceremony outside Secretary of State John Kerry’s house, before marching through Georgetown and holding a round dance in the middle of the M St. and Wisconsin Ave. intersection. “The proposed pipeline is going to be coming through our backyard,” said Robert Allpress, a rancher from North-Central Nebraska. “We live in an area that is very slide-prone and TransCanada has never checked that out. They’re in the wrong place at the wrong time and we don’t need them because they’re not beneficial for the United States.” Reject and Protect also included representatives from First Nations communities living in Alberta, Canada, where tar sands production is devastating tribal land, water, and health. First Nations are increasingly fighting back by demanding the Canadian government honor their treaty rights. “We have come to a point where we have no choice left but to lift up our inherent treaty rights – our birthrights,” said Crystal Lameman, a member of the Beaver Lake Cree Nation, Treaty No. 6. “The Crown and this Government do not get to pick the pieces of their law it likes and which ones it does not. They made their laws thus they have to abide by them. As First Nations people, we abide by natural law, and there is nothing natural about a people dying from cancer and suffering from respiratory illnesses caused by tar sands production.” On Friday, Senator Barbara Boxer offered her support for the encampment, “I commend all of the ranchers, farmers and indigenous leaders from throughout our nation’s heartland who have come to Washington, D.C. this week. Although I cannot be with you in person, I want you to know that your presence sends a strong signal to Congress and the administration about the need to protect our communities and families from the impacts of dirty tar sands oil.” Reject and Protect will end with an interfaith ceremony at the encampment on Sunday morning, but according to lead organizers, the Cowboy and Indian Alliance will continue to build its ground campaign against the Keystone XL pipeline until President Obama rejects it once and for all. “This is just the beginning. The Cowboy and Indian Alliance will ride again,” said Bold Nebraska’s Jane Kleeb. ### Additional information about the tipi delivery: The tipi is a gift to the Smithsonian’s National Museum of the American Indian (NMAI) from the Native Nations’ Leaders with the Cowboy and Indian Alliance. A spiritual object of historical importance, the tipi represents their hopes for protected land and clean water. The title of the tipi is, “Oyate Owicakiye Wicasa /Awe Kooda Bilaxpak Kuuxshish,” which are the two names given to President Obama by the Lakota and the Crow Nations upon his visit to those Nations in 2008. The title translates from the Lakota and Crow languages, respectively, as “Man Who Helps the People”

and “One Who Helps People throughout the Land.” Oyate Wahacanka Woecun, a community of the Rosebud Sioux Tribe of South Dakota, provided the theme and narrative for the tipi. “Oyate Owicakiye Wicasa /Awe Kooda Bilaxpak Kuuxshish,” is presented to the museum by: Bryan Brewer, President of the Oglala Sioux Tribe, Oglala Lakota Nation; Tom Poor Bear, Vice President of the Oglala Sioux Tribe, Oglala Lakota Nation; Cyril Scott, President of the Rosebud Sioux Tribe, Upper Brule Sioux Nation; Phyllis Young, At Large, Standing Rock Sioux Tribe, Dakota and Lakota Nations. in attendance with, Chief Reuben George, Tsleil-Waututh First Nation, British Colombia Robin Lebeau, Council Representative, Cheyenne River Sioux Tribe, Lakota Nation Justin Song Hawk, Councilman, Yankton Sioux Nation and received by the museum’s curators and historian: Emil Her Many Horses, Oglala Lakota Nation, NMAI Associate Curator; Dr. Gabrielle Tayac, Piscataway Indian Nation, NMAI Historian; Joe D. Horse Capture, A’aninin (Gros Ventre) Indian Nation, NMAI Associate Curator; Sharyl Pahe, Navajo Nation/San Carlos Apache, NMAI Interpretive Services Manager, Steve Tamayo, a distinguished traditional Sicangu Lakota artist, whose family is originally from Milk’s Camp community on the Rosebud Reservation in South Dakota, designed and painted the tipi. The images on the tipi are: Water = Blue line around the base. Representing the Ogallala Aquifer and it is also the foundation that unites all living beings. Earth= Green line around the base. This represents the land and the second foundational element that unifies us. Cedar Tree up the spine of the tipi= The roots of the tree represent Oceti Sakowin (Seven Council Fires). The cedar tree was the first tree created and has a relationship to the Thunder Beings. The Thunders represent balance and protection. In the trunk of the tree is a large turtle with its shell representing the earth and also represents the connection and responsibility we have to the entire world. The cedar tree is always green and represents long life. The long life is for our future generations, the earth, the water and for the Cowboy and Indian Alliance. The horses running toward the opening of the tipi signify the unification of the alliance. The painted horses represent sovereign Native Nations; the solid colored-horses represent the States’ Farmers and Ranchers. Images on the horses depict regions and affiliations. The top of the tipi is black signifying the night sky and the stars of the Big Dipper that are placed there represent our Ancestors. The stars are also significant because they provide direction and even in the dark of night, they are consistent.

The liner of the tipi, also gifted to the museum as part of the historical record, is marked by the palm and thumb prints of “the people, standing together to protect the land and the water.” Their message to the President being, “Leave your mark on history, as we leave our marks on this tipi.” The tipi was blessed on the Ponca Trail of Tears in Neligh, Nebraska on the land of Art and Helen Tanderup. The land could be crossed by the Keystone XL pipeline. A spirit camp was held in November, 2013 with the un-painted tipi with the Ponca Tribe, Yankton Sioux Tribe, and Rosebud Sioux Tribe, along with allied citizen group Bold Nebraska. The tipi was blessed again on the same land in early April, 2014 after the Cowboy and Indian Alliance used a tractor to create an image of a Cowboy and an Indian Warrior with a symbol of water under both of them. The crop art image created was the size of over 80 football fields. The tipi was blessed for the last time before gifting to the museum at the Cowboy and Indian Alliance’s event called Reject and Protect to symbolize the farmers, ranchers, and tribal communities’ shared love for the land and water.

Ground Zero: Across the Pond

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - across the pond

October 17, 2014 7:47 AM

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UK fracking protest; photo credit: ÂŠ Jacques-Jean Tiziou

Ground zero Civil protests are increasing in size and frequency around the world against fracking, coal trains and oil trains, gas and "dilbit" pipelines, LNG and coal terminals; in cities, corn fields and Indian Reservations. Public mobilization grows with news reports of spills, explosions, derailments, and unjust City Councils, Prime Ministers, Presidents, Parliaments, Congress and Federal Agencies.

Fracking for shale gas continues to fail in winning the public’s heart Ione Bingley | April 15, 2014 | http://bit.ly/Frack15AprUK

Despite David Cameron’s push for the exploitation of shale gas reserves, fracking fails to charm the public. The public perception of fracking has been tracked over the last two years using a series of surveys conducted by Nottingham University through the website YouGov. The surveys involved over 25,000 respondents and indicate a downward spiral of public support since 2012. The question remains whether the rejection of fracking springs from the “ignorant and the uninformed making a big noise”, as NuTech’s Chris Hughes speaking at Appex’s 2014 oil and gas summit put it, or whether there is a real cause for concern.

The hydraulic fracturing process Reserves of natural gas trapped deep underground between layers of shale rock have been know about for many years, but it is only recently that engineers have developed cost-effective extraction technology. Shale gas is the same as gas found in traditional reserves, it is the unconventional extraction method that is novel. It involves drilling vertically down and horizontally along the shale bed that in the UK is very deep, below conventional gas reserves and below the coal beds. To release the gas, water mixed with sand and other chemicals is pumped into the shale which causes the rock to fracture releasing the gas into the borehole where it can be pumped out. Cuadrilla are the only energy company in the UK to have used hydraulic fracturing, but in the US the method has become commonplace.

Environmental Concerns The researchers cite what they term ‘The Balcombe Effect’ as a turning point for the decline of public support following the high profile protests at Cuadrilla’s Balcombe site in 2013. Managing Director of Global Energy Consultants Ltd, Ted Clutterbuck, outlined two types of environmental issues at the Appex conference; ‘real’ and ‘conceived’. He believes: “the shale [issues], which have got a lot of media attention, and a lot of activist attention [are] focussing on things which are extremely unlikely to happen”. In Mr Clutterbuck’s opinion, the public are against fracking because “inaccurate information has been fed to them by activists” which is proving “a major hurdle for operators and governments”.

Earthquakes The report found that the majority of respondents who had heard of shale gas associated it with earthquakes. The researchers suggested that this was due to the intense media coverage surrounding two tremors near Cuadrilla’s exploratory well in April and May 2011. Subsequent investigation found the tremors to have been caused by a combination of complicated geology and a distortion of the well casing. Following the tremors, Secretary of state for Energy, Ed Davey, announced new regulations to minimise the earthquake risk. According to Chief Operating Officer Peter Bird of Celtique Energie, the earthquake risk is negligible provided that the machinery is in perfect condition and best practice is followed.

Water Another worry that activists have raised is the contamination of freshwater aquifers by methane gas and other chemicals from the fracturing process. Water flows through this rock and ends up as our drinking supply. This water-containing rock is found near the surface and, due to the deep nature of the British shale, the contaminants would have to seep up through several layers of impermeable rock to reach the water supply. Experts say this is very unlikely, provided the well is not damaged. With regard to leaks at the surface, Exploration Manager, Simon Barkham, of Celtique Energie insists that the imposed regulations mean that a one hundred millilitre – less than a small glass of wine – leak of any kind would result in immediate well shutdown. While there have been reports of surface water contamination through leaks and poor practice in the US, there have been no confirmed cases of aquifer contamination from chemicals permeating up through fracked rock. Unavoidably, the process uses vast amounts of clean water which is then dirtied with chemicals and dissolved minerals from the rock, some of which are radioactive. However, energy companies need to provide a clear water usage and disposal plan to be granted a licence by the government. With only one fracked well in the UK to date, most of the anti-ammo comes from reports of malpractice in the States. Environmentally, fracking is a “non-issue” for Bob Ward of the Grantham Research Institute on Climate Change and the Environment. He says: “The EU regulations are far more stringent than in the US.” The Royal Academy of Engineering and the Royal Society concluded in their 2012 review that the risks from fracking are manageable as long as best practice is followed.

Wildlife The Royal Society for the Protection of Birds (RSPB) along with several other UK conservation charities are concerned about habitat loss and fragmentation and are calling for frack-free zones in “sensitive areas for wildlife”. These areas include Morecambe Bay in Lancashire that is on the Bowland shale shelf, where many

fracking licences have already been granted. They consider it to be “one of the most important wildlife sites in Europe, which hosts hundreds and thousands of wintering birds”. Drilling of any kind on a commercial scale will to some degree disturb the surrounding wildlife and alter their habitat. Hughes says that, at the moment, “lack of data” is a key limiting factor for fracking in the UK and to accurately estimate the size of gas reserves within the shale bed, many more exploratory wells need to be drilled.

Climate worries With half the carbon footprint of coal, natural gas provides cleaner energy than other fossil fuels. Bird claims that fracking for shale gas is the only way to provide cheap energy in a low hydrocarbon future and will bridge the energy gap between fossil fuels and renewables. He believes that is it uneconomical and unrealistic to skip from the heavy reliance on fossil fuels to renewable energy in the face of climate change. Ward says: “[Gas] is far cleaner and less dangerous than burning coal in the way that we do now”. He hopes that “at some point we will replace coal with natural gas from fracking”. However, concerns have been raised that the focus will be taken off investment in alternative green energy options with the Government’s peaked interest in shale gas. The Department for Energy and Climate Change (DECC) claim that the legally binding commitment to cut emissions by 80 per cent by 2050 will stop this from happening. Despite hanging around in the atmosphere for a shorter time, methane gas is more efficient at trapping heat than carbon dioxide, making it a worse offending greenhouse gas. According to the International Panel on Climate Change (IPCC), the leakage of methane from the fossil fuel industry accounts for 30 per cent of global methane emissions. A report compiled by the RSPB suggests that the low hydrocarbon benefits provided by gas can only be warranted if methane leakage is kept to a minimum.

Financial gains Cuadrilla claims that the exploitation of Britain’s shale gas reserves has the potential to “reduce the UK’s dependency on expensive foreign energy sources and to lower gas prices” as it has done in the US. However, the Energy and Climate Change Select Committee (ECCC) concluded that fracking was unlikely to be the “gamechanger” that it was in the US with regard to energy prices. Barkham concurred with this view explaining that being part of the European energy market meant that potential decreases in energy bills would be diluted unless fracking became commonplace across Europe. Prime minister David Cameron claims that the shale gas industry will create 74,000 jobs and reduce Britain’s reliance on Russia for gas. Local communities are also set to benefit as local governments will receive all of the tax from fracking businesses in their authority instead of the usual 50 per cent. However, the public perception report suggests that this is generally believed to be the Government buying support rather than actively helping

the community. Clutterbuck suggests that: “there is a case for unconventional development from the point of view of the national economy, but if the local community is not getting a fair share of the benefit they will object strongly to any kind of proposed development.”

Fracking Future The public’s rejection of fracking may be a result of the industry’s poor PR attempts, with Cuadrilla having recently dropped their associated PR company. Fracking protesters outside London’s Armoury House called for “a sensible scientific conversation not a PR man telling [them] the things [they] want to hear”. According to Barkham, as geologists, they don’t want to ruin the environment and they know a good deal more than activists about it. However, the portrayal of fracking by the media still appears to be at odds with its presentation by energy companies and the Government. The shale gas industry in the UK is still in the exploratory phase and, according to DECC, far more drilling is required to assess whether the vast reserves estimated are “practically and commercially producible”.

GLUT AND GREED

Ground Zero: You Canâ&#x20AC;&#x2122;t Burn All the Oil

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - you can't burn all the oil

October 17, 2014 7:57 AM

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Ground zero Bank of England governor Mark Carney admonished on October 12, 2014: Climate science indicates that if the world is to cut CO2 emissions enough to avoid disastrous global warming, all the world’s already discovered oil reserves cannot be burnt. Yet such reserves still constitute a big part of the value of companies like ExxonMobil and BP. Companies and public bodies should include in their annual reports, not just statutory financial information, but a holistic account of their business strategy and how it relates to stakeholders of all kinds, now and in the future. He referred to a “tragedy of horizons”, the failure by which investors, companies and governments are not looking far enough ahead to coming problems like the environment, even though these are known to them. .

Carney raises the heat on climate: you can’t burn all the oil 12/10/2014 | Jon Hay | http://bit.ly/Emerg12Oct A public call by Bank of England governor Mark Carney that the vast majority of oil reserves should be considered “unburnable” if the world wants to avoid catastrophic climate change makes him stand out among mainstream figures. “The vast majority of reserves are unburnable,” the Bank of England governor said – if the world is to avoid catastrophic climate change.Mark Carney has re-emphasised his support for the idea that oil companies’ reserves could be stranded assets – still valued by investors, but ultimately going to embody losses. Thinking of hydrocarbon deposits as stranded assets has gained prominence in recent years, helped by movements like the US student drive to persuade university endowments to disinvest from fossil fuel companies. Climate science indicates that if the world is to cut CO2 emissions enough to avoid disastrous global warming, all the world’s already discovered oil reserves cannot be burnt. Yet such reserves still constitute a big part of the value of companies like ExxonMobil and BP – and few large investment firms have yet accepted the stranded cost analysis. That makes Carney’s stance – which he has aired in public before – unusual and bold among leading, mainstream financial figures. Carney was speaking at a World Bank seminar on Friday on integrated reporting. This is the idea – backed by the World Bank – that companies and public bodies should include in their annual reports, not just statutory financial information, but a holistic account of their business strategy and how it relates to stakeholders of all kinds, now and in the future. “With the right information [for example, on how a company’s business interacts with environmental needs], all groups can express their view, and influence the allocation of capital and credit today,” Carney said. The value of integrated reporting, he argued, was to help investors think about “not just things that can be managed in the short term” but also “costs companies are likely to be exposed to as policy responds to challenges” like climate change. He referred to a “tragedy of horizons” – the market failure by which actors including some investors, companies and governments are not looking far enough ahead to coming problems like the environment, even though these are known to them. Carney became interested in integrated reporting partly because of an initiative called the Enhanced Disclosure Task Force. This private sector venture, begun in 2011 by the Financial Stability Board, was a collaboration between banks, investors and rating agencies to “do the right thing”, in the words of Russell Picot, group chief accounting officer at HSBC – by providing higher quality and more relevant information about banks, in a bid to restore trust in them. The EDTF made 32 recommendations, most of which have now been implemented by the world’s biggest banks. And HSBC has become enthusiastic about integrated reporting.

Paul Druckman, CEO of the International Integrated Reporting Council, said: “I like to describe integrated reporting as looking at an organisation through the doorway of its strategy rather than the weeds of its data.” Financial statements would always be necessary, agreed Mark Vassen, global head of International Financial Reporting Standards, the accounting norms used in 110 countries, but: “We have come to a realisation that IFRS has created benefits, but that is only one dimension of what is needed. We need something on top to assess the sustainability of business models.” Druckman said integrated reporting should address six kinds of capital: financial and manufactured – the usual domain of accounting; natural and social – often covered in corporate social responsibility reports; but also intellectual and human. BNDES, the Brazilian development bank, is promoting the idea too – the first meeting it held a year ago attracted 17 companies. One this August drew 216.

Ground Zero: Gas Boom Delusion

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - gas boom delusion

October 18, 2014 7:28 AM

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Ground zero A global natural gas boom alone won't slow climate change October 15, 2014 - A new analysis of global energy use, economics and the climate shows that without new climate policies, expanding the current bounty of inexpensive natural gas alone would not slow the growth of global greenhouse gas emissions worldwide over the long term, according to a study appearing today in Nature Advanced Online Publication.

Ground Zero: Gas Wind Solar In the Balance

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - gas wind solar in the balance

October 18, 2014 7:37 PM

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A global natural gas boom alone won't slow climate change

Ground Zero: The Truth About Gas

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - the truth about gas

October 19, 2014 7:37 AM

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Ground zero A global natural gas boom alone won't slow climate change Mary Beckman | October 15, 2015 | http://bit.ly/PNNL15Oct Pacific Northwest National Laboratory – A new analysis of global energy use, economics and the climate shows that without new climate policies, expanding the current bounty of inexpensive natural gas alone would not slow the growth of global greenhouse gas emissions worldwide over the long term, according to a study appearing today in Nature Advanced Online Publication. Because natural gas emits half the carbon dioxide of coal, many people hoped the recent natural gas boom could help slow climate change — and according to government analyses, natural gas did contribute partially to a decline in U.S. carbon dioxide emissions between 2007 and 2012. But, in the long run, according to this study, a global abundance of inexpensive natural gas would compete with all energy sources — not just higher-emitting coal, but also lower-emitting nuclear and renewable energy technologies such as wind and solar. Inexpensive natural gas would also accelerate economic growth and expand overall energy use. "The effect is that abundant natural gas alone will do little to slow climate change," said lead author Haewon McJeon, an economist at the Department of Energy's Pacific Northwest National Laboratory. "Global deployment of advanced natural gas production technology could double or triple the global natural gas production by 2050, but greenhouse gas emissions will continue to grow in the absence of climate policies that promote lower carbon energy sources."

Ground Zero: Gas Boom At Appomattox

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - 2008 gas boom at Appomattox

October 19, 2014 7:37 AM

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Ground zero How long must we put up with gas booms? TeamstersOnline.com on September 14, 2008 - At 7:47 a.m. on Sunday morning, a gas pipeline ruptured causing an explosion along Oakville Road (Highway 26), approximately two miles outside of Appomattox. The explosion demolished two brick homes, strewed rubble on Oakville Road, and singed the grass in a nearby field. Ronnie D. Lankford, normally Appomattox Newsâ&#x20AC;&#x2122; arts writer, was available to attend the scene and the subsequent press conference. The photos below were taken on Sunday afternoon, about 2:00 pm. http://bit.ly/Teamsters14Sept08

Ground Zero: English New Speak

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - English new speak

October 20, 2014 7:37 AM

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Ground zero Appearances of tallying and reporting greenhouse gases counts more than truth and accuracy. Reported in Huffington Post on October 17, 2014: The Carbon Disclosure Project, or CDP, is a United Kingdom-based nonprofit that works with companies to tally and report their greenhouse gas emissions. TransCanada was one of five energy sector companies included on the "A List" in this year's report. The report notes that the company has set targets for emission reductions, and includes a quote from TransCanada: "Our business strategy is informed by the risks and opportunities from climate change regulations, physical climate parameters and other climate-related developments such as uncertainty in social drivers ... we anticipate that most of our facilities will be subject to future regulations to manage industrial [greenhouse gas] emissions." The report notes that the company has set targets for emission reductions, and includes a quote from TransCanada: "Our business strategy is informed by the risks and opportunities from climate change regulations, physical climate parameters and other climate-related developments such as uncertainty in social drivers ... we anticipate that most of our facilities will be subject to future regulations to manage industrial [greenhouse gas] emissions." They consider only the installation process and not the carbon content the pipeline would deliver to markets to burn. Subterfuge, obfuscation and the missing elephant in the room are more than just annoying, they are dishonest in the least, and immoral when the future of humanity is at stake.

Keystone XL Oil Pipeline Owner Wins Climate Leadership Award Kate Sheppard | October 17, 2014 | http://bit.ly/HuffPo17Oct

WASHINGTON -– The company that wants to build the Keystone XL pipeline was recognized this week for leadership on climate change -– to the shock of environmental activists. Alberta-based TransCanada, which has been seeking permission to build the 1,660-mile pipeline from Canada's oil sands to refineries in Texas, was included as a corporate climate leader on the Carbon Disclosure Project's Climate Performance Leadership Index 2014. The Carbon Disclosure Project, or CDP, is a United Kingdom-based nonprofit that works with companies to tally and report their greenhouse gas emissions. TransCanada was one of five energy sector companies included on the "A List" in this year's report. The report notes that the company has set targets for emission reductions, and includes a quote from TransCanada: "Our business strategy is informed by the risks and opportunities from climate change regulations, physical climate parameters and other climate-related developments such as uncertainty in social drivers ... we anticipate that most of our facilities will be subject to future regulations to manage industrial [greenhouse gas] emissions." In a blog post, TransCanada said the listing "presents those companies identified as demonstrating a superior approach to climate change mitigation." "Recognition at the highest level by the CDP -- the international NGO that drives sustainable economies -- is very significant to us," TransCanada president and CEO Russ Girling said in a statement Thursday. "For us, our CDP ranking helps us continue to challenge ourselves in terms of protecting the environment at every level of our organization." But environmental groups, which have raised concerns about the pipeline's potential contributions to climate change, deplored the listing for a company whose primary business is building energy infrastructure for fossil fuels. "The only thing TransCanada is a leader in is exploiting the world’s dirtiest oil," Friends of the Earth's Luísa Abbott Galvão said in a statement Friday sent by The Sierra Club, Friends of the Earth, and the state-based group Bold Nebraska. TransCanada has made a "relentless push to foul our land, water, and climate," said Bold Nebraska's Jane Kleeb. Final approval for the pipeline would have to come from the State Department, because it crosses an international border. A decision is on hold while a legal dispute over the proposed route through Nebraska is resolved. The State Department released an environmental analysis earlier this year that found that the greenhouse gas emissions directly tied to the pipeline would be negligible, as the oil would still likely be developed without Keystone XL. But others have questioned that logic, arguing that emissions linked to the pipeline would be significant and that its construction would facilitate greater development of the tar sands. Environmental groups also have pointed to the fact that other proposed pipelines have generated opposition in Canada, potentially limiting options for exporting the crude.

For Immediate Release: October 17, 2014 http://bit.ly/Bold17Oct

TransCanada Rewarded for Reckless Tar Sands Development with Bizarre Climate Action Award In press release that reads like satire, TransCanada announced yesterday that they’ve been “recognized as world leader for corporate action on climate change” by an organization called CDP, apparently as a reward for fighting tooth and nail to build the Keystone XL tar sands pipeline and recklessly expand development of the dirtiest, most carbon-heavy fuel source on the planet with no regard for the impact on the climate or the land and water along risky pipeline routes. That’s not to mention their history of misleading and bullying landowners along their pipeline routes and their egregious safety record. Jane Kleeb, who has led the fight to stop the Keystone pipeline and protect Nebraska landowners from TransCanada’s shameless and destructive business practices, commented on their award: “It’s fascinating to learn that TransCanada’s relentless push to foul our land, water, and climate has earned them the title of ‘world leader’ on climate, and that they actually have a vice-president dedicated to ‘Community and Sustainability.’ I’m very curious to know where that person was when TransCanada was threating landowners with seizure of their land through eminent domain the first day they rode into town, or when they were asking landowners to pray with a fake preacher before offering them a fraction of what their land was worth. I wonder where they were when inspectors found hundreds of dangerous defects in Keystone’s southern leg. Were they being ‘world leaders’ on climate and the environment then?” “The only thing TransCanada is a leader in is exploiting the world’s dirtiest oil,” said Luísa Abbott Galvão, of Friends of the Earth. “Tar sands are the dirtiest, most carbon intensive oil on earth, releasing up to 22% more carbon pollution than conventional oil. TransCanada, as a company that seeks to expand market access for this climate-polluting fuel, is a climate laggard,” said Kate Colarulli of Sierra Club’s Beyond Oil campaign. “The State Department, the U.S. EPA, climate scientists, and even Wall Street and industry analysts agree that TransCanada’s Keystone XL tar sands pipeline will create massive amounts of carbon pollution and TransCanada’s new proposed pipeline, Energy East, is a climate disaster. Rejecting TransCanada’s tar sands pipelines are some of the most important decisions we can make to protect our kids from a future filled with wildfires, droughts, floods and super storms caused by climate change.”

Contact: Jane Kleeb, Jane@boldnebraska.org, 402-705-3622 Mark Westlund, mark.westlund@sierraclub.org, 415-977-5719 Luísa Abbott Galvão, labbottgalvao@foe.org, 202-222-0716 Josh Mogerman, jmogerman@nrdc.org, 312-651-7909

Ground Zero: All Carbon Considered

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - all carbon considered

October 20, 2014 8:24 AM

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Bold Nebraska, Friends of the Earth and Sierra Club responded to the Carbon Disclosure Project: In a press release that reads like satire, TransCanada announced yesterday that they’ve been “recognized as world leader for corporate action on climate change” by an organization called CDP, apparently as a reward for fighting tooth and nail to build the Keystone XL tar sands pipeline and recklessly expand development of the dirtiest, most carbon-heavy fuel source on the planet with no regard for the impact on the climate or the land and water along risky pipeline routes. That’s not to mention their history of misleading and bullying landowners along their pipeline routes and their egregious safety record. Jane Kleeb, who has led the fight to stop the Keystone pipeline and protect Nebraska landowners from TransCanada’s shameless and destructive business practices, commented on their award: “It’s fascinating to learn that TransCanada’s relentless push to foul our land, water, and climate has earned them the title of ‘world leader’ on climate, and that they actually have a vice-president dedicated to ‘Community and Sustainability.’ I’m very curious to know where that person was when TransCanada was threating landowners with seizure of their land through eminent domain the first day they rode into town, or when they were asking landowners to pray with a fake preacher before offering them a fraction of what their land was worth. I wonder where they were when inspectors found hundreds of dangerous defects in Keystone’s southern leg. Were they being ‘world leaders’ on climate and the environment then?” “The only thing TransCanada is a leader in is exploiting the world’s dirtiest oil,” said Luísa Abbott Galvão, of Friends of the Earth. “Tar sands are the dirtiest, most carbon intensive oil on earth, releasing up to 22% more carbon pollution than conventional oil. TransCanada, as a company that seeks to expand market access for this climatepolluting fuel, is a climate laggard,” said Kate Colarulli of Sierra Club’s Beyond Oil campaign. “The State Department, the U.S. EPA, climate scientists, and even Wall Street and industry analysts agree that TransCanada’s Keystone XL tar sands pipeline will create massive amounts of carbon pollution and TransCanada’s new proposed pipeline, Energy East, is a climate disaster. Rejecting TransCanada’s tar sands pipelines are some of the most important decisions we can make to protect our kids from a future filled with wildfires, droughts, floods and super storms caused by climate change.”

DOWNSIDES AND UPSIDES

Ground Zero: STDs in Fracking

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - STDs in fracking

October 20, 2014 9:40 AM

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This poignant April 12, 2013, unearthed.com report which summarizes historical petroleum drilling companies' experimentation to improve technology and gain confidence in fracking shines light on the dark secrets of the substantial technological differences ("STD") between conventional drilling and Slickwater high volume hydraulic fracturing. My professor of petroleum at the University of California back in 1969-1970 actually explained to us Petroleum Engineering students the potential developments in fracing with atomic bombs, tarsands excavation, SAGD (steam-assisted gravity drainage) which were in the experimental stages. Fracking experimentation is not done cautiously. .

It is no wonder there are recent scientific observations and anecdotal reports about: Earthquakes Toxic air pollution Contaminated drinking water Abnormally high cancer and death rates Methane leakage and increased CH4 concentration "hot spots" As reported: .

[Drilling] companies are stretching down deeper and then out horizontally to the shale gas that is trapped in its original formation – a flat, relatively impermeable layer of rock. Figuring out how to achieve this has certainly been a bumpy road. At one stage, nitroglycerine was used to try and explode shale formations. Think Acme Corporation and the Road Runner. And, right up until the 70s, the US government, under the Energy Research and Development Administration, tried to frack shale wells with atomic bombs. Colorado’s Western Slope was the testing ground for a 43-kiloton “Project Rullison” nuke in 1969 and the triple 30-megaton series that followed in 1972. Think atom bombs more than twice as powerful as the one that destroyed Hiroshima in 1945. These experiments did more than obliterate the shale, the gas was far too radioactive to use and now the Department of Energy has to babysit those wells for the next thousand years. The point is, how can one claim that the technology has been time-tested since the 1940s, when the US – the origin of fracking – was still experimenting with underground Hiroshimas up until the 1970s?

About that “We’ve been fracking for 60 years” thing. Jolynn Minnaar | April 12, 2013 |

UNEARTHED

If you have been following the fracking debate, odds are, that at some point, either during a glitzy television commercial or in an energy industry press statement, you were reassured that hydraulic fracturing is “an old, time-tested technology” or a process that “has been used for over 60 years”. These claims instill a confidence in the industry and this method of energy production because, by now, it would mean that best practice is in place to limit any possible environmental degradation whilst pursuing energy security. I fell for it too. When I first started researching unconventional gas development, Mr Bonang Mohale, the chairman of Shell South Africa repeatedly assured audiences that his company has been fracking “for 60 years, in over 1.1 million wells, in the USA alone”. In support of economic stimulation, job creation and a response to South Africa’s energy crisis, I welcomed this news and repeatedly boasted the fine track record to concerned farmers in the Karoo: “These companies have been fracking for three times as long as I’ve been alive, I think you’ll be okay Oom.”

But soon after I arrived in the United States, the origin of fracking and the main country currently carrying out the process, I realized how the Karoo community and many others had been duped. Truth is, we’re talking about an entirely different drilling destination and a new type of technology to take us there. Since the 1800s, conventional drilling would simply drill down into existing pockets of gas. These deposits had been formed after hydrocarbons had moved from the original formation, up towards the subsurface and become trapped against an impermeable layer of rock. With hardly any stimulation, these pockets produce a constant supply of gas for 20 to 30 years. Now, with dwindling resources and expanding demand, we’ve reached what Michael Klare has called “the era of extreme energy” whereby traditional energy production moves into hard-to-reach reserves revealing inadequacies in technology as companies encounter unexpected hazards and all the while increase the risk for greater environmental damage. Case in point: unconventional gas drilling. Now companies are stretching down deeper and then out horizontally to the shale gas that is trapped in its original formation – a flat, relatively impermeable layer of rock. Figuring out how to achieve this has certainly been a bumpy road. At one stage, nitroglycerine was used to try and explode shale formations. Think Acme Corporation and the Road Runner. And, right up until the 70s, the US government, under the Energy Research and Development Administration, tried to frack shale wells with atomic bombs. Colorado’s Western Slope was the testing ground for a 43-kiloton “Project Rullison” nuke

in 1969 and the triple 30-megaton series that followed in 1972. Think atom bombs more than twice as powerful as the one that destroyed Hiroshima in 1945. These experiments did more than obliterate the shale, the gas was far too radioactive to use and now the Department of Energy has to babysit those wells for the next thousand years. The point is, how can one claim that the technology has been time-tested since the 1940s, when the US – the origin of fracking – was still experimenting with underground Hiroshimas up until the 1970s? Again, as with the confusion around the true definition of ‘fracking’, it comes down to clever wordplay. It is true that hydraulic fracturing has been used since the 1940s to develop gas or oil in conventional sources. But, there’s “hydraulic fracturing” and then, there’s “multi-stage, slickwater, high volume hydraulic fracturing from subhorizontal wells in an unconventional source”. According to Anthony Ingraffea, Professor of Engineering from Cornell University, this shift in technology started in the 1990s and only once it became viable in the early 2000s did it take off. Slickwater high volume hydraulic fracturing is distinguished from conventional drilling by substantial technological differences and an increased risk of encountering technological shortcomings and causing environmental damage. Underground, this is a far more aggressive technique with laterals extending in various directions from the vertical well. It requires up to 100x times more fluid which in turn requires more fresh water and chemicals which in turn requires a much larger surface area to accommodate this multi-pad drilling, which then, in order to break even and meet energy forecasts, requires substantial tracts of land that were once natural ecosystems to make way for the swift drilling advancement. So, to return to Mr Mohale’s claims, we are no longer looking at 60 years nor millions of wells worth of experience. Instead, with roughly a decade’s experience in around 20,000 shale gas wells in only 4 or 5 major shale plays, most would argue that the technology is still in its nascency. Even the former Vice President for Mobil Oil Corporation expressed his fears around this nascent technology to me. In an interview for Unearthed, Lou Allstadt admits “it seems as though the processes and chemicals being used were done pretty hastily, it was rushed and does not seem well thought out. You dont just take something and increase it by 100 times and hope that it works.” His concerns are shared. In 2011, the chief marketing operator for Schlumberger, one of the largest companies performing the fracking operations in the US, acknowledged that “the process being used in North America cannot be used overseas” because “they first have to find a better way to do it”. Sorry Oom. I guess my early optimism had the better of me. Jolynn Minnaar is the director of the upcoming South African fracking documentary Unearthed. She has spent over 18 months researching fracking and has interviewed close to 400 people on all sides of the debate – from the heads of multinational energy companies and US Senators to hydrogeologists and specialized engineers; from workers in the field to communities living in the gas drilling areas. After filming throughout South Africa, in the US, Canada and the UK, she is at the forefront of information on shale gas extraction and has already presented her findings at various conferences both locally and abroad.

Ground Zero: Truth to Power

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - truth to power

October 21, 2014 8:12 AM

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Ground zero Dr. James Hansen wrote an essay October 12, 2014, titled "Iowa Roots: Speaking Truth to Power" .

The truth is that present energy and climate policies of the United States and the United Nations are dishonest and tragic. .

Out of one side of their mouths our leaders profess to understand that we have a planet in peril and that we must rapidly phase down CO2 emissions. At the same time they encourage pursuit of almost every fossil fuel that can be found, while knowing that such policies make achievement of climate goals impossible. .

The fundamental reason that fossil fuel emissions continue to increase is that they appear to the consumer to provide the cheapest energy. This apparent cheapness is a mirage. Why? (1) We subsidize fossil fuels directly, and indirectly by protecting supply lines. (2) Impacts of air and water pollution are borne by the public; e.g., if your child gets asthma, you pay the costs, not the fossil fuel company. (3) Costs of climate catastrophes are borne by the victims and taxpayers. .

[M]ore warming is â&#x20AC;&#x153;in the pipelineâ&#x20AC;?, without additional increase of atmospheric CO2. In turn, it follows that CO2 emissions must be reduced rapidly or young people in coming decades will face unacceptable consequences: continually retreating shorelines, shifting climate zones with extermination of many species, increasing occurrence of climate extremes with widespread disruption to food and water supplies, more severe droughts and heat waves, more damaging forest fires, stronger storms, and greater flooding. .

Implications for energy policy are crystal clear. Most remaining fossil fuels must be left in the ground, unless the CO2 is captured and buried. There is no serious scientific debate about this.

Iowa Roots: Speaking Truth to Power 12 October 2014 James Hansen I was lucky to be born in Iowa. The nature of my childhood and later education at the State University of Iowa, odd as it seems, have relevance to fundamental political matters that I hope Iowans will think about. I will argue that Iowa could alter our nation’s course on energy and climate, matters of monumental importance to our children and indeed to all life on Earth. I was born in 1941 in a small farmhouse in western Iowa, the fifth of seven children. My father was an itinerant tenant farmer, moving from one farm to another, sharing crops with the owner. By 1945 small farms were disappearing. My father took a job as bartender and we moved a small house to a lot in Denison Iowa. Our life then seems hard by today’s standards. There were three bedrooms for nine of us. Even after we got a septic system the toilet was in the cellar, which required going outdoors. The only sink was in the kitchen, which was also the dining room. Washing up was done in turn, quickly. Our parents quarreled vehemently when our mother took a job as a waitress. I shrank in fear from our father’s angry voice. Yet it was a good life to grow up in small town Iowa in a time of rising expectations. Today’s young people face a harder situation, with diminishing opportunities. That hurts deeply because, as I will explain, it is unnecessary, a result of tragic political machinations for which we adults must accept responsibility. Politics back then was simpler. My father shouted “give ‘em Hell, Harry!” and slapped the table while listening to President Truman on the radio. My father called the Republican Party “the rich man’s party.” But shortly before my parents divorced he took me to listen to General Eisenhower speaking from the back of a train, as he came through Denison on a whistle-stop campaign trip in 1952. My father decided that he “liked Ike”, so he voted Republican. Politicians were more honest regarding fundamental situations. Truman was blunt, with courage to remove war-hero MacArthur, thus maintaining civilian control of policy. Eisenhower warned us about the rising military-industrial complex. Below I contrast this with today’s situation. It was easier in those days for young people to get ahead. I had a paper route from 3rd grade and by high school was the distributor of the Omaha World Herald for Denison (competing with the Des Moines Register for customers). From such a job I could save enough for college, where costs were within reach of all. Costs today have exploded. With our federal government in cahoots with banks, many college students look forward to decades of debt, not a better life. My good fortune was to go to the University of Iowa. Professor James Van Allen was building instruments in the basement of the physics building, including the one on the first U.S. satellite, which discovered Earth’s radiation belts. In an exciting research environment Prof. Van Allen taught us how science works. The only “authority” was the rigorous objectivity of science. Prof. Van Allen did not shirk from speaking truth to power and the public. When microwave ovens were introduced and fear of microwave radiation began to spread, Prof. Van Allen offered to sit on a microwave oven while it cooked his dinner. He helped quell irrational fear. Prof. Van Allen told me about new data on the planet Venus. It led me to study why Venus was so hot and to propose an instrument for a mission to Venus after I joined NASA. The extreme heat on Venus turned out to be caused by the large amount of CO2 in the planet’s atmosphere.

CO2 was known to be increasing rapidly on Earth, because of our burning of fossil fuels – coal, oil and gas. What would it mean for life on our planet? I formed a small team at the NASA Goddard Institute for Space Studies to study the problem. We showed that Earth was warming by the amount expected due to the CO2 increase. Later we showed that Earth was out of energy balance: Earth is absorbing more energy from the sun than it is radiating to space as heat. This confirms the most fundamental physics, as it is the added CO2 that reduces heat radiation to space. The conclusion is based on data, not models. One implication: more warming is “in the pipeline”, without additional increase of atmospheric CO2. In turn, it follows that CO2 emissions must be reduced rapidly or young people in coming decades will face unacceptable consequences: continually retreating shorelines, shifting climate zones with extermination of many species, increasing occurrence of climate extremes with widespread disruption to food and water supplies, more severe droughts and heat waves, more damaging forest fires, stronger storms, and greater flooding. Implications for energy policy are crystal clear. Most remaining fossil fuels must be left in the ground, unless the CO2 is captured and buried. There is no serious scientific debate about this. Remarkably, scientific analysis also shows that the policies needed to achieve fossil fuel phasedown would also address problems such as underemployment and growing income disparities. Why are such policies not pursued, if they are in the best interests of the public? I learned why when I worked for the government. I was repeatedly warned not to connect the dots in the climate problem all the way to policy implications. End steps must be left to “policymakers” and, it turns out, to special interests. NASA did not want to annoy the powers that be. Scientists are trained to analyze complex problems and connect all the dots. If we fail to tell the whole story clearly, if we shirk speaking truth to power, we fail our children and grandchildren. The truth is that present energy and climate policies of the United States and the United Nations are dishonest and tragic. Out of one side of their mouths our leaders profess to understand that we have a planet in peril and that we must rapidly phase down CO2 emissions. At the same time they encourage pursuit of almost every fossil fuel that can be found, while knowing that such policies make achievement of climate goals impossible. The fundamental reason that fossil fuel emissions continue to increase is that they appear to the consumer to provide the cheapest energy. This apparent cheapness is a mirage. Why? (1) We subsidize fossil fuels directly, and indirectly by protecting supply lines. (2) Impacts of air and water pollution are borne by the public; e.g., if your child gets asthma, you pay the costs, not the fossil fuel company. (3) Costs of climate catastrophes are borne by the victims and taxpayers. We should make the price of fossil fuels honest by collecting a gradually rising carbon fee from fossil fuel companies. It is easy to collect, at domestic mines and ports of entry. 100% of the collected money should be given to the public, an equal amount to each legal resident, distributed electronically to bank accounts or debit cards. Not one dime to the government. The person doing better than average in limiting his “carbon footprint” will make money. He will have an incentive to reduce fossil fuel use via future purchases. Entrepreneurs will have an incentive to develop no-carbon products. Businesses will be able to plan energy investments.

Detailed economic studies show that a carbon fee of $10 per ton of CO2, increasing $10 each year, will reduce U.S. CO2 emissions 33% in 10 years. That is 12 times more than the amount of carbon in the oil that would be carried by the Keystone XL pipeline. While a tax would depress the economy, a fee with 100% of the money distributed to the public spurs the economy. After 10 years national employment increases 2.1 million jobs! The simple explanation is that honest pricing of energy makes the economy more efficient. I should explain why I say that our governments’ policies are “dishonest and tragic.” They are dishonest because they pretend that policies that try to “cap” emissions could actually phase down emissions rapidly, for example the “cap-and-trade” of the Kyoto Protocol or Democratic bills in Congress. These amount to tax increases, they depress the economy, and they reduce emissions very little. And what “cap” would India accept – three times that of the U.S.? This is why governments allow all fossil fuel development, fracking, deep-ocean and Arctic drilling, mountaintop removal – because they know that their carbon policies are ineffectual. Why tragic? Because policies that would actually work, fee-and-dividend in particular, do not cost the economy anything. They would spur the economy, create jobs, and modernize our infrastructure as we move to clean energies and energy efficiency. Is it possible that Iowa, perhaps in cooperation with one or more neighboring states, such as Nebraska, Minnesota or Wisconsin, could help avert the tragedy? I believe it is conceivable that Midwest common sense could affect national and international policies by providing an example. A regional carbon fee cannot rise too high without disadvantaging local industry, because states do not have the practical ability to impose border tax adjustments. However, up to a reasonable level the net effect of a carbon fee would be beneficial, if the proceeds went to the public. There is a conservative tendency in the Midwest. But conservatives are not the enemy of the planet. Historically conservatives have been the environments best friend. Conservation and creation care should be in the blood of conservatives. A political divide has developed because conservatives fear that liberals will use the climate issue to increase taxes and government intrusion into their lives. These concerns provide fertile ground for anti-science nut-cases (global warming is a hoax!) to flourish. Most conservatives I know are thoughtful. They do not want to go down in history as being responsible for blocking effective action to stabilize climate. Gaining their support for a rising revenue-neutral carbon fee, which is in fact a conservative approach, is possible. A rigorously nonpartisan organization, Citizens Climate Lobby, has grown rapidly in the past several years. Their objective is to promote fee-and-dividend. They are unfailingly polite and respectful, but also knowledgeable and determined. They have met with legislators in almost all states. They could be a valuable resource in helping to organize a Midwest climate initiative. Finally, I point out that, although a gradually rising carbon fee is the essential foundation for a successful policy to rapidly phase down our fossil fuel addiction, there are other requirements. The crucial technical need is abundant affordable carbon-free electricity generation. Today, except for limited hydroelectric and biomass power plants, there are two options for baseload electricity: fossil fuels and nuclear power. We will not be able to phase out fossil fuel power plants without major contributions from nuclear power.

Most nuclear power plants in operation today are of a 40-50 year-old technology, yet they have saved millions of lives by displacing fossil fuel power plants. Fossil fuel air pollution kills more than 3.7 million people per year globally. Pollution is much less in the U.S. than in China or India, yet thousands of people are killed by it every year in the U.S. In contrast the one major nuclear accident in the U.S., at Three Mile Island, Pennsylvania, may result in the death of 1-2 people, which is undetectable among the 40,000 cancer deaths that will occur from other causes among the Pennsylvania residents exposed to radiation. Modern nuclear technology has major improvements including passive shutdown in case of emergency and an ability to cool the nuclear fuel without external power. It is also possible to include reactors in the nuclear fleet that “burn” nuclear waste and utilize 99% of the energy in the nuclear fuel, compared with less than 1% in the older technology. Thus the nuclear waste problem can be solved and, if we choose, we can stop mining uranium because we have shown that an inexhaustible amount of nuclear fuel can be sieved from the ocean. There is an analogy between the nuclear and aircraft industries. At the time of the earliest airplanes, who would have imagined that we would fly huge aircraft with more than 100 people at altitudes of 10 miles without parachutes! If a window broke at that altitude, everyone could die! So we worked on the technology. Now the chance you will lose your life by flying from New York to LA is much smaller than if you drove your car. Yes, there is still danger, especially due to human error, and we must be vigilant and develop control systems to minimize danger. President Clinton in his State-of-the-Union message in 1993 made the chilling announcement that he was eliminating unnecessary programs such as nuclear power research and development. However, nuclear technology is not disappearing from Earth, on the contrary, and if the U.S. drifts further toward technical mediocrity, leaving nuclear leadership to nations such as Russia, the world will be a more dangerous place. If the United States chooses to focus on being a petrostate, the economic well-being of our children eventually will decline further. Fortunately, all clean energy technologies would be spurred by the carbon fee-and-dividend approach, providing a broad revival of our technology leadership in many areas, especially clean energies which should all be free to compete rather than specified by politicians. The result would be greatly improved economic well-being for future generations. It is not always easy to speak truth to power, but all citizens have the opportunity if they choose. I have one minor, easy suggestion for you to consider, and another requiring more effort. The first concerns “Big Green”, the large ~$100M per year environmental organizations, which have become one of the biggest obstacles to solving the climate problem. After I joined other scientists in requesting the leaders of Big Green to reconsider their adamant opposition to nuclear power, and was rebuffed, I learned from discussions with them the major reason: they feared losing donor support. Money, it seems, is the language they understand. Thus my suggestion: the next time you receive a donation request, doubtless accompanied with a photo of a cuddly bear or the like, toss it in the waste bin and return a note saying that you will consider a donation in the future, if they objectively evaluate the best interests of young people and nature. The other suggestion is to donate time to Citizens Climate Lobby. They need people to write letters-to-the-editor and op-eds, and to visit Congress people. The aim is to make the price of energy honest, in a way that spurs our economy, creates good jobs, and enhances the future of young people and nature. To be sure, our democracy has developed flaws, especially the inordinate role of money in Washington, but we still have the opportunity to make it work.

Ground Zero: Hotter Yet for Politicians and Fossil Fuel Corporations

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - too hot for corporations

October 21, 2014 7:21 PM

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Today, Bill McKibben sent out an email: The “People’s Climate Roar” ... symbolized two things: 1) We are sounding the alarm on climate change, the greatest problem the world has ever faced. 2) We are demonstrating the tide of anger, joy, and resolve that is going to do something about it. In the 30 days since the march: - We’ve seen the greatest fossil fuel fortune on earth commit to divest from coal, oil, and gas -the Rockefellers, with their action, laid down a profound challenge to everyone else on the planet. If the family that built Exxon thinks it's unwise and immoral to invest in fossil fuels, what excuse does anyone else have? - We’ve watched divestment spread around the world: from Glasgow University to Australia’s National University, this movement has new beachheads -- and new pushback from a scared and peevish fossil fuel industry. (If you ever wondered if divestment mattered, read this, right to the last sentence.) - We’ve witnessed a rising pitch of action against the dirtiest fossil fuel projects on earth. In Canada they’re battling the Energy East pipeline with wit and savvy. And at the largest coal port on earth in Newcastle Australia, our friends from 12 low-lying Pacific nations used their traditional canoes to block massive coal ships. Check out this incredible picture of the action. The only way to fight that is to make 2015 hotter still -- for the politicians and the corporations that will wreck our world if we let them.

Dear friends, For those of us lucky enough to be in Manhattan exactly one month ago today, perhaps the greatest moment of a great day was the surge of sound that followed our moment of silence. The “People’s Climate Roar” began on Central Park West and then pulsed down Sixth Avenue and crashed through Times Square. That wave of sound symbolized two things: 1) We are sounding the alarm on climate change, the greatest problem the world has ever faced. 2) We are demonstrating the tide of anger, joy, and resolve that is going to do something about it. And it wasn't just us who thought it was so important. Here's what other folks had to say: - “Taking a Call for Climate Change to the Streets”, the front page New York Times story - “Into the Streets”, a gorgeous 9-minute video about the march from our friends at Meerkat Media - “Inside the ginormous, huge-tastic climate march”, a 24-minute radio program from Ben Wikler at The Good Fight - “The Wisdom of the Crowd”, by Hendrik Hertzberg in The New Yorker - “Why you should be hopeful about the climate movement” by Todd Gitlin on Grist - “People’s Climate March”, a short audio story by Bianca Giaever and friends on Cowbird In the 30 days since the march: - We’ve seen the greatest fossil fuel fortune on earth commit to divest from coal, oil, and gas -- the Rockefellers, with their action, laid down a profound challenge to everyone else on the planet. If the family that built Exxon thinks it's unwise and immoral to invest in fossil fuels, what excuse does anyone else have? - We’ve watched divestment spread around the world: from Glasgow University to Australia’s National University, this movement has new beachheads -- and new pushback from a scared and peevish fossil fuel industry. (If you ever wondered if divestment mattered, read this, right to the last sentence.) - We’ve witnessed a rising pitch of action against the dirtiest fossil fuel projects on earth. In Canada they’re battling the Energy East pipeline with wit and savvy. And at the largest coal port on earth in Newcastle Australia, our friends from 12 low-lying Pacific nations used their traditional canoes to block massive coal ships. Check out this incredible picture of the action. That picture from Australia joins the one from Sixth Avenue among the classic images of this explosive movement. But there are plenty of others, and we’re pretty sure some of them are on your phones and computers. This is a chance to share some of the great picturesfrom the People's Climate March before you forget about them. We all need the inspiration, because this fight is for real. September was the hottest September ever recorded; it looks like 2014 may be the hottest year in history. The only way to fight that is to make 2015 hotter still -- for the politicians and the corporations that will wreck our world if we let them. Thanks to you, and to the 400,000 in the streets of New York: game on! Bill McKibben for the team at 350.org

Ground Zero: Obamaâ&#x20AC;&#x2122;s Promise

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - Obama's promise

October 22, 2014 6:49 AM

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Ground zero In 2013, President Obama made a promise on which he is yet to deliver completely. According to Bloomberg's March 15, 2013 report "Obama Will Use Nixon-Era Law to Fight Climate Change": .

"President Barack Obama is preparing to tell all federal agencies for the first time that they should consider the impact on global warming before approving major projects, from pipelines to highways. .

“It’s got us very freaked out,” said Ross Eisenberg, vice president of the National Association of Manufacturers, a Washington-based group that represents 11,000 companies such as Exxon Mobil Corp. (XOM) and Southern Co. (SO)The standards, which constitute guidance for agencies and not new regulations, are set to be issued in the coming weeks, according to lawyers briefed by administration officials. .

In taking the step, Obama would be fulfilling a vow to act alone in the face of a Republican-run House of Representatives unwilling to pass measures limiting greenhouse gases. He’d expand the scope of a Nixon-era law that was first intended to force agencies to assess the effect of projects on air, water and soil pollution. .

“If Congress won’t act soon to protect future generations, I will,” Obama said last month during his State of the Union address. He pledged executive actions “to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”

Ground Zero: Fossil Fuel Write-Down

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - fossil fuel writedown

October 22, 2014 8:08 AM

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Ground zero Giving Up Fossil Fuels to Save the Climate: The $28 Trillion Writedown By Mark Hertsgaard

June 26, 2014

BloombergBusinessweek reported: “We’re not going to be able to burn it all.” With those 10 words, Barack Obama uttered one of the most stunning, far-reaching statements ever made by a U.S. president. He also completely contradicted his own energy policy. Yet no one seemed to notice. In an interview that Showtime television’s climate documentary series Years of Living Dangerously aired on June 9—which also ran in the New York Times—Obama was asked about the international goal of limiting global temperature rise to 2 degrees Celsius (3.6F) since the start of the industrial era. Going past 2 degrees, noted the interviewer, columnist Thomas Friedman, would “cross into some really dangerous, unstable territory: Arctic melting, massive sea-level rise, disruptive storms.” The International Energy Agency has concluded that meeting the 2C target will require leaving two-thirds of the earth’s known reserves of oil, gas, and coal underground, unburned, Friedman said. Did Obama agree with that conclusion? “Well, science is science,” the president replied. “And there is no doubt that if we burned all the fossil fuel that’s in the ground right now, that the planet’s going to get too hot and the consequences could be dire.”

$28 trillion

Ground Zero: The Presidentâ&#x20AC;&#x2122;s Climate Action Plan

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - The President's Climate Action Plan

October 23, 2014 8:02 AM

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Obligations June, 2013 - The President's Climate Action Plan opens with a clear vision from the President: “We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity. We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms. The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition, we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries, we must claim its promise. That’s how we will maintain our economic vitality and our national treasure -- our forests and waterways, our croplands and snow-capped peaks. That is how we will preserve our planet, commanded to our care by God. That’s what will lend meaning to the creed our fathers once declared.” — President Obama, Second Inaugural Address, January 2013

THE CASE FOR ACTION While no single step can reverse the effects of climate change, we have a moral obligation to future generations to leave them a planet that is not polluted and damaged. Through steady, responsible action to cut carbon pollution, we can protect our children’s health and begin to slow the effects of climate change so that we leave behind a cleaner, more stable environment.

THE PRESIDENT’S CLIMATE ACTION PLAN

Executive Office of the President

June 2013

Table of Contents CUT CARBON POLLUTION IN AMERICA ........................................................................................................................ 6 I.

Deploying Clean Energy ........................................................................................................................................ 6 Cutting Carbon Pollution from Power Plants ........................................................................................... 6 Promoting American Leadership in Renewable Energy...................................................................... 6 Unlocking Long-Term Investment in Clean Energy Innovation ....................................................... 7

II.

Building a 21st-Century Transportation Sector ........................................................................................... 8 Increasing Fuel Economy Standards ........................................................................................................... 8 Developing and Deploying Advanced Transportation Technologies ............................................. 8

III.

Cutting Energy Waste in Homes, Businesses, and Factories ................................................................. 9 Reducing Energy Bills for American Families and Businesses ......................................................... 9

IV.

Reducing Other Greenhouse Gas Emissions ............................................................................................... 10 Curbing Emissions of Hydrofluorocarbons ............................................................................................. 10 Reducing Methane Emissions ....................................................................................................................... 10 Preserving the Role of Forests in Mitigating Climate Change ......................................................... 11

Leading at the Federal Level ............................................................................................................................. 11 Leading in Clean Energy.................................................................................................................................. 11

PREPARE THE UNITED STATES FOR THE IMPACTS OF CLIMATE CHANGE ............................................... 12 I. Building Stronger and Safer Communities and Infrastructure ........................................................... 12 Directing Agencies to Support Climate-Resilient Investment ......................................................... 12 Establishing a State, Local, and Tribal Leaders Task Force on Climate Preparedness ......... 13 Supporting Communities as they Prepare for Climate Impacts ..................................................... 13 Boosting the Resilience of Buildings and Infrastructure................................................................... 13 Rebuilding and Learning from Hurricane Sandy .................................................................................. 13 II.

Protecting our Economy and Natural Resources ..................................................................................... 14 Identifying Vulnerabilities of Key Sectors to Climate Change ......................................................... 14 Promoting Resilience in the Health Sector .............................................................................................. 14 Promoting Insurance Leadership for Climate Safety .......................................................................... 14 Conserving Land and Water Resources .................................................................................................... 15 Maintaining Agricultural Sustainability ................................................................................................... 15 Managing Drought ............................................................................................................................................. 15 Reducing Wildfire Risks .................................................................................................................................. 15 Preparing for Future Floods .......................................................................................................................... 15

III.

Using Sound Science to Manage Climate Impacts .................................................................................... 16 2

Developing Actionable Climate Science .................................................................................................... 16 Assessing Climate-Change Impacts in the United States ................................................................... 16 Launching a Climate Data Initiative ........................................................................................................... 16 Providing a Toolkit for Climate Resilience:............................................................................................. 16 LEAD INTERNATIONAL EFFORTS TO ADDRESS GLOBAL CLIMATE CHANGE............................................ 17 I.

Working with Other Countries to Take Action to Address Climate Change .................................. 17 Enhancing Multilateral Engagement with Major Economies .......................................................... 17 Expanding Bilateral Cooperation with Major Emerging Economies ............................................ 17 Combatting Short-Lived Climate Pollutants ........................................................................................... 17 Reducing Emissions from Deforestation and Forest Degradation ................................................ 18 Expanding Clean Energy Use and Cut Energy Waste .......................................................................... 18 Negotiating Global Free Trade in Environmental Goods and Services ........................................ 19 Phasing Out Subsidies that Encourage Wasteful Consumption of Fossil Fuels ....................... 20 Leading Global Sector Public Financing Towards Cleaner Energy ............................................... 20 Strengthening Global Resilience to Climate Change ............................................................................ 20 Mobilizing Climate Finance ........................................................................................................................... 20

II.

Leading Efforts to Address Climate Change through International Negotiations ...................... 21

PRESIDENT OBAMA’S CLIMATE ACTION PLAN “We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity. We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms. The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition, we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries, we must claim its promise. That’s how we will maintain our economic vitality and our national treasure -- our forests and waterways, our croplands and snow-capped peaks. That is how we will preserve our planet, commanded to our care by God. That’s what will lend meaning to the creed our fathers once declared.” -- President Obama, Second Inaugural Address, January 2013 THE CASE FOR ACTION While no single step can reverse the effects of climate change, we have a moral obligation to future generations to leave them a planet that is not polluted and damaged. Through steady, responsible action to cut carbon pollution, we can protect our children’s health and begin to slow the effects of climate change so that we leave behind a cleaner, more stable environment. In 2009, President Obama made a pledge that by 2020, America would reduce its greenhouse gas emissions in the range of 17 percent below 2005 levels if all other major economies agreed to limit their emissions as well. Today, the President remains firmly committed to that goal and to building on the progress of his first term to help put us and the world on a sustainable long-term trajectory. Thanks in part to the Administration’s success in doubling America’s use of wind, solar, and geothermal energy and in establishing the toughest fuel economy standards in our history, we are creating new jobs, building new industries, and reducing dangerous carbon pollution which contributes to climate change. In fact, last year, carbon emissions from the energy sector fell to the lowest level in two decades. At the same time, while there is more work to do, we are more energy secure than at any time in recent history. In 2012, America’s net oil imports fell to the lowest level in 20 years and we have become the world’s leading producer of natural gas – the cleanest-burning fossil fuel. While this progress is encouraging, climate change is no longer a distant threat – we are already feeling its impacts across the country and the world. Last year was the warmest year ever in the contiguous United States and about one-third of all Americans experienced 10 days or more of 100-degree heat. The 12 hottest years on record have all come in the last 15 years. Asthma rates have doubled in the past 30 years and our children will suffer more asthma attacks as air pollution gets worse. And increasing floods, heat waves, and droughts have put farmers out of business, which is already raising food prices dramatically. These changes come with far-reaching consequences and real economic costs. Last year alone, there were 11 different weather and climate disaster events with estimated losses exceeding $1 billion each across the United States. Taken together, these 11 events resulted in over $110 billion in estimated damages, which would make it the second-costliest year on record. 4

In short, America stands at a critical juncture. Today, President Obama is putting forward a broad-based plan to cut the carbon pollution that causes climate change and affects public health. Cutting carbon pollution will help spark business innovation to modernize our power plants, resulting in cleaner forms of American-made energy that will create good jobs and cut our dependence on foreign oil. Combined with the Administration’s other actions to increase the efficiency of our cars and household appliances, the President’s plan will reduce the amount of energy consumed by American families, cutting down on their gas and utility bills. The plan, which consists of a wide variety of executive actions, has three key pillars: 1) Cut Carbon Pollution in America: In 2012, U.S. carbon emissions fell to the lowest level in two decades even as the economy continued to grow. To build on this progress, the Obama Administration is putting in place tough new rules to cut carbon pollution – just like we have for other toxins like mercury and arsenic – so we protect the health of our children and move our economy toward American-made clean energy sources that will create good jobs and lower home energy bills. 2) Prepare the United States for the Impacts of Climate Change: Even as we take new steps to reduce carbon pollution, we must also prepare for the impacts of a changing climate that are already being felt across the country. Moving forward, the Obama Administration will help state and local governments strengthen our roads, bridges, and shorelines so we can better protect people’s homes, businesses and way of life from severe weather. 3) Lead International Efforts to Combat Global Climate Change and Prepare for its Impacts: Just as no country is immune from the impacts of climate change, no country can meet this challenge alone. That is why it is imperative for the United States to couple action at home with leadership internationally. America must help forge a truly global solution to this global challenge by galvanizing international action to significantly reduce emissions (particularly among the major emitting countries), prepare for climate impacts, and drive progress through the international negotiations. Climate change represents one of our greatest challenges of our time, but it is a challenge uniquely suited to America’s strengths. Our scientists will design new fuels, and our farmers will grow them. Our engineers to devise new sources of energy, our workers will build them, and our businesses will sell them. All of us will need to do our part. If we embrace this challenge, we will not just create new jobs and new industries and keep America on the cutting edge; we will save lives, protect and preserve our treasured natural resources, cities, and coastlines for future generations. What follows is a blueprint for steady, responsible national and international action to slow the effects of climate change so we leave a cleaner, more stable environment for future generations. It highlights progress already set in motion by the Obama Administration to advance these goals and sets forth new steps to achieve them.

CUT CARBON POLLUTION IN AMERICA In 2009, President Obama made a commitment to reduce U.S. greenhouse gas emissions in the range of 17 percent below 2005 levels by 2020. The President remains firmly committed to achieving that goal. While there is more work to do, the Obama Administration has already made significant progress by doubling generation of electricity from wind, solar, and geothermal, and by establishing historic new fuel economy standards. Building on these achievements, this document outlines additional steps the Administration will take – in partnership with states, local communities, and the private sector – to continue on a path to meeting the President’s 2020 goal. I.

Deploying Clean Energy

Cutting Carbon Pollution from Power Plants: Power plants are the largest concentrated source of emissions in the United States, together accounting for roughly one-third of all domestic greenhouse gas emissions. We have already set limits for arsenic, mercury, and lead, but there is no federal rule to prevent power plants from releasing as much carbon pollution as they want. Many states, local governments, and companies have taken steps to move to cleaner electricity sources. More than 35 states have renewable energy targets in place, and more than 25 have set energy efficiency targets. Despite this progress at the state level, there are no federal standards in place to reduce carbon pollution from power plants. In April 2012, as part of a continued effort to modernize our electric power sector, the Obama Administration proposed a carbon pollution standard for new power plants. The Environmental Protection Agency’s proposal reflects and reinforces the ongoing trend towards cleaner technologies, with natural gas increasing its share of electricity generation in recent years, principally through market forces and renewables deployment growing rapidly to account for roughly half of new generation capacity installed in 2012. With abundant clean energy solutions available, and building on the leadership of states and local governments, we can make continued progress in reducing power plant pollution to improve public health and the environment while supplying the reliable, affordable power needed for economic growth. By doing so, we will continue to drive American leadership in clean energy technologies, such as efficient natural gas, nuclear, renewables, and clean coal technology. To accomplish these goals, President Obama is issuing a Presidential Memorandum directing the Environmental Protection Agency to work expeditiously to complete carbon pollution standards for both new and existing power plants. This work will build on the successful first-term effort to develop greenhouse gas and fuel economy standards for cars and trucks. In developing the standards, the President has asked the Environmental Protection Agency to build on state leadership, provide flexibility, and take advantage of a wide range of energy sources and technologies including many actions in this plan. Promoting American Leadership in Renewable Energy: During the President’s first term, the United States more than doubled generation of electricity from wind, solar, and geothermal sources. To ensure America’s continued leadership position in clean energy, President Obama has set a goal to double renewable electricity generation once again by 2020. In order to meet 6

this ambitious target, the Administration is announcing a number of new efforts in the following key areas: •

Accelerating Clean Energy Permitting: In 2012 the President set a goal to issue permits for 10 gigawatts of renewables on public lands by the end of the year. The Department of the Interior achieved this goal ahead of schedule and the President has directed it to permit an additional 10 gigawatts by 2020. Since 2009, the Department of Interior has approved 25 utility-scale solar facilities, nine wind farms, and 11 geothermal plants, which will provide enough electricity to power 4.4 million homes and support an estimated 17,000 jobs. The Administration is also taking steps to encourage the development of hydroelectric power at existing dams. To develop and demonstrate improved permitting procedures for such projects, the Administration will designate the Red Rock Hydroelectric Plant on the Des Moines River in Iowa to participate in its Infrastructure Permitting Dashboard for high-priority projects. Also, the Department of Defense – the single largest consumer of energy in the United States – is committed to deploying 3 gigawatts of renewable energy on military installations, including solar, wind, biomass, and geothermal, by 2025. In addition, federal agencies are setting a new goal of reaching 100 megawatts of installed renewable capacity across the federally subsidized housing stock by 2020. This effort will include conducting a survey of current projects in order to track progress and facilitate the sharing of best practices.

•

Expanding and Modernizing the Electric Grid: Upgrading the country’s electric grid is critical to our efforts to make electricity more reliable, save consumers money on their energy bills, and promote clean energy sources. To advance these important goals, President Obama signed a Presidential Memorandum this month that directs federal agencies to streamline the siting, permitting and review process for transmission projects across federal, state, and tribal governments.

Unlocking Long-Term Investment in Clean Energy Innovation: The Fiscal Year 2014 Budget continues the President’s commitment to keeping the United States at the forefront of clean energy research, development, and deployment by increasing funding for clean energy technology across all agencies by 30 percent, to approximately $7.9 billion. This includes investment in a range of energy technologies, from advanced biofuels and emerging nuclear technologies – including small modular reactors – to clean coal. To continue America’s leadership in clean energy innovation, the Administration will also take the following steps: •

Spurring Investment in Advanced Fossil Energy Projects: In the coming weeks, the Department of Energy will issue a Federal Register Notice announcing a draft of a solicitation that would make up to $8 billion in (self-pay) loan guarantee authority available for a wide array of advanced fossil energy projects under its Section 1703 loan guarantee program. This solicitation is designed to support investments in innovative technologies that can cost-effectively meet financial and policy goals, including the avoidance, reduction, or sequestration of anthropogenic emissions of greenhouse gases. The proposed solicitation will cover a broad range of advanced fossil energy projects. Reflecting the Department’s commitment to continuous improvement in program management, it will take comment on the draft solicitation, with a plan to issue a final solicitation by the fall of 2013.

•

Instituting a Federal Quadrennial Energy Review: Innovation and new sources of domestic energy supply are transforming the nation’s energy marketplace, creating economic 7

opportunities at the same time they raise environmental challenges. To ensure that federal energy policy meets our economic, environmental, and security goals in this changing landscape, the Administration will conduct a Quadrennial Energy Review which will be led by the White House Domestic Policy Council and Office of Science and Technology Policy, supported by a Secretariat established at the Department of Energy, and involving the robust engagement of federal agencies and outside stakeholders. This first-ever review will focus on infrastructure challenges, and will identify the threats, risks, and opportunities for U.S. energy and climate security, enabling the federal government to translate policy goals into a set of analytically based, clearly articulated, sequenced and integrated actions, and proposed investments over a four-year planning horizon. II.

Building a 21st-Century Transportation Sector

Increasing Fuel Economy Standards: Heavy-duty vehicles are currently the second largest source of greenhouse gas emissions within the transportation sector. In 2011, the Obama Administration finalized the first-ever fuel economy standards for Model Year 2014-2018 for heavy-duty trucks, buses, and vans. These standards will reduce greenhouse gas emissions by approximately 270 million metric tons and save 530 million barrels of oil. During the President’s second term, the Administration will once again partner with industry leaders and other key stakeholders to develop post-2018 fuel economy standards for heavy-duty vehicles to further reduce fuel consumption through the application of advanced cost-effective technologies and continue efforts to improve the efficiency of moving goods across the United States. The Obama Administration has already established the toughest fuel economy standards for passenger vehicles in U.S. history. These standards require an average performance equivalent of 54.5 miles per gallon by 2025, which will save the average driver more than $8,000 in fuel costs over the lifetime of the vehicle and eliminate six billion metric tons of carbon pollution – more than the United States emits in an entire year. Developing and Deploying Advanced Transportation Technologies: Biofuels have an important role to play in increasing our energy security, fostering rural economic development, and reducing greenhouse gas emissions from the transportation sector. That is why the Administration supports the Renewable Fuels Standard, and is investing in research and development to help bring next-generation biofuels on line. For example, the United States Navy and Departments of Energy and Agriculture are working with the private sector to accelerate the development of cost-competitive advanced biofuels for use by the military and commercial sectors. More broadly, the Administration will continue to leverage partnerships between the private and public sectors to deploy cleaner fuels, including advanced batteries and fuel cell technologies, in every transportation mode. The Department of Energy’s eGallon informs drivers about electric car operating costs in their state – the national average is only $1.14 per gallon of gasoline equivalent, showing the promise for consumer pocketbooks of electric-powered vehicles. In addition, in the coming months, the Department of Transportation will work with other agencies to further explore strategies for integrating alternative fuel vessels into the U.S. flag fleet. Further, the Administration will continue to work with states, cities and towns through the Department of Transportation, the Department of Housing and Urban Development, and the Environmental Protection Agency to improve transportation options, and lower transportation costs while protecting the environment in communities nationwide.

III.

Cutting Energy Waste in Homes, Businesses, and Factories

Reducing Energy Bills for American Families and Businesses: Energy efficiency is one of the clearest and most cost-effective opportunities to save families money, make our businesses more competitive, and reduce greenhouse gas emissions. In the President’s first term, the Department of Energy and the Department of Housing and Urban Development completed efficiency upgrades in more than one million homes, saving many families more than $400 on their heating and cooling bills in the first year alone. The Administration will take a range of new steps geared towards achieving President Obama’s goal of doubling energy productivity by 2030 relative to 2010 levels: •

Establishing a New Goal for Energy Efficiency Standards: In President Obama’s first term, the Department of Energy established new minimum efficiency standards for dishwashers, refrigerators, and many other products. Through 2030, these standards will cut consumers’ electricity bills by hundreds of billions of dollars and save enough electricity to power more than 85 million homes for two years. To build on this success, the Administration is setting a new goal: Efficiency standards for appliances and federal buildings set in the first and second terms combined will reduce carbon pollution by at least 3 billion metric tons cumulatively by 2030 – equivalent to nearly one-half of the carbon pollution from the entire U.S. energy sector for one year – while continuing to cut families’ energy bills.

•

Reducing Barriers to Investment in Energy Efficiency: Energy efficiency upgrades bring significant cost savings, but upfront costs act as a barrier to more widespread investment. In response, the Administration is committing to a number of new executive actions. As soon as this fall, the Department of Agriculture’s Rural Utilities Service will finalize a proposed update to its Energy Efficiency and Conservation Loan Program to provide up to $250 million for rural utilities to finance efficiency investments by businesses and homeowners across rural America. The Department is also streamlining its Rural Energy for America program to provide grants and loan guarantees directly to agricultural producers and rural small businesses for energy efficiency and renewable energy systems. In addition, the Department of Housing and Urban Development’s efforts include a $23 million Multifamily Energy Innovation Fund designed to enable affordable housing providers, technology firms, academic institutions, and philanthropic organizations to test new approaches to deliver cost-effective residential energy. In order to advance ongoing efforts and bring stakeholders together, the Federal Housing Administration will convene representatives of the lending community and other key stakeholders for a mortgage roundtable in July to identify options for factoring energy efficiency into the mortgage underwriting and appraisal process upon sale or refinancing of new or existing homes.

• Expanding the President’s Better Buildings Challenge: The Better Buildings Challenge, focused on helping American commercial and industrial buildings become at least 20 percent more energy efficient by 2020, is already showing results. More than 120 diverse organizations, representing over 2 billion square feet are on track to meet the 2020 goal: cutting energy use by an average 2.5 percent annually, equivalent to about $58 million in energy savings per year. To continue this success, the Administration will expand the program to multifamily housing – partnering both with private and affordable 9

building owners and public housing agencies to cut energy waste. In addition, the Administration is launching the Better Buildings Accelerators, a new track that will support and encourage adoption of State and local policies to cut energy waste, building on the momentum of ongoing efforts at that level. IV.

Reducing Other Greenhouse Gas Emissions

Curbing Emissions of Hydrofluorocarbons: Hydrofluorocarbons (HFCs), which are primarily used for refrigeration and air conditioning, are potent greenhouse gases. In the United States, emissions of HFCs are expected to nearly triple by 2030, and double from current levels of 1.5 percent of greenhouse gas emissions to 3 percent by 2020. To reduce emissions of HFCs, the United States can and will lead both through international diplomacy as well as domestic actions. In fact, the Administration has already acted by including a flexible and powerful incentive in the fuel economy and carbon pollution standards for cars and trucks to encourage automakers to reduce HFC leakage and transition away from the most potent HFCs in vehicle air conditioning systems. Moving forward, the Environmental Protection Agency will use its authority through the Significant New Alternatives Policy Program to encourage private sector investment in low-emissions technology by identifying and approving climate-friendly chemicals while prohibiting certain uses of the most harmful chemical alternatives. In addition, the President has directed his Administration to purchase cleaner alternatives to HFCs whenever feasible and transition over time to equipment that uses safer and more sustainable alternatives. Reducing Methane Emissions: Curbing emissions of methane is critical to our overall effort to address global climate change. Methane currently accounts for roughly 9 percent of domestic greenhouse gas emissions and has a global warming potential that is more than 20 times greater than carbon dioxide. Notably, since 1990, methane emissions in the United States have decreased by 8 percent. This has occurred in part through partnerships with industry, both at home and abroad, in which we have demonstrated that we have the technology to deliver emissions reductions that benefit both our economy and the environment. To achieve additional progress, the Administration will: â&#x20AC;˘

Developing an Interagency Methane Strategy: The Environmental Protection Agency and the Departments of Agriculture, Energy, Interior, Labor, and Transportation will develop a comprehensive, interagency methane strategy. The group will focus on assessing current emissions data, addressing data gaps, identifying technologies and best practices for reducing emissions, and identifying existing authorities and incentive-based opportunities to reduce methane emissions.

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Pursuing a Collaborative Approach to Reducing Emissions: Across the economy, there are multiple sectors in which methane emissions can be reduced, from coal mines and landfills to agriculture and oil and gas development. For example, in the agricultural sector, over the last three years, the Environmental Protection Agency and the Department of Agriculture have worked with the dairy industry to increase the adoption of methane digesters through loans, incentives, and other assistance. In addition, when it comes to the oil and gas sector, investments to build and upgrade gas pipelines will not only put more Americans to work, but also reduce emissions and enhance economic productivity. For example, as part of the Administrationâ&#x20AC;&#x2122;s effort to improve federal 10

permitting for infrastructure projects, the interagency Bakken Federal Executive Group is working with industry, as well as state and tribal agencies, to advance the production of oil and gas in the Bakken while helping to reduce venting and flaring. Moving forward, as part of the effort to develop an interagency methane strategy, the Obama Administration will work collaboratively with state governments, as well as the private sector, to reduce emissions across multiple sectors, improve air quality, and achieve public health and economic benefits. Preserving the Role of Forests in Mitigating Climate Change: America’s forests play a critical role in addressing carbon pollution, removing nearly 12 percent of total U.S. greenhouse gas emissions each year. In the face of a changing climate and increased risk of wildfire, drought, and pests, the capacity of our forests to absorb carbon is diminishing. Pressures to develop forest lands for urban or agricultural uses also contribute to the decline of forest carbon sequestration. Conservation and sustainable management can help to ensure our forests continue to remove carbon from the atmosphere while also improving soil and water quality, reducing wildfire risk, and otherwise managing forests to be more resilient in the fact of climate change. The Administration is working to identify new approaches to protect and restore our forests, as well as other critical landscapes including grasslands and wetlands, in the face of a changing climate. V.

Leading at the Federal Level

Leading in Clean Energy: President Obama believes that the federal government must be a leader in clean energy and energy efficiency. Under the Obama Administration, federal agencies have reduced greenhouse gas emissions by more than 15 percent – the equivalent of permanently taking 1.5 million cars off the road. To build on this record, the Administration is establishing a new goal: The federal government will consume 20 percent of its electricity from renewable sources by 2020 – more than double the current goal of 7.5 percent. In addition, the federal government will continue to pursue greater energy efficiency that reduces greenhouse gas emissions and saves taxpayer dollars. Federal Government Leadership in Energy Efficiency: On December 2, 2011, President Obama signed a memorandum entitled “Implementation of Energy Savings Projects and Performance-Based Contracting for Energy Savings,” challenging federal agencies, in support of the Better Buildings Challenge, to enter into $2 billion worth of performance-based contracts within two years. Performance contracts drive economic development, utilize private sector innovation, and increase efficiency at minimum costs to the taxpayer, while also providing longterm savings in energy costs. Federal agencies have committed to a pipeline of nearly $2.3 billion from over 300 reported projects. In coming months, the Administration will take a number of actions to strengthen efforts to promote energy efficiency, including through performance contracting. For example, in order to increase access to capital markets for investments in energy efficiency, the Administration will initiate a partnership with the private sector to work towards a standardized contract to finance federal investments in energy efficiency. Going forward, agencies will also work together to synchronize building codes – leveraging those policies to improve the efficiency of federally owned and supported building stock. Finally, the Administration will leverage the “Green Button” standard – which aggregates energy data in a secure, easy to use format – within federal facilities to increase their ability to manage energy consumption, reduce greenhouse gas emissions, and meet sustainability goals. 11

PREPARE THE UNITED STATES FOR THE IMPACTS OF CLIMATE CHANGE As we act to curb the greenhouse gas pollution that is driving climate change, we must also prepare for the impacts that are too late to avoid. Across America, states, cities, and communities are taking steps to protect themselves by updating building codes, adjusting the way they manage natural resources, investing in more resilient infrastructure, and planning for rapid recovery from damages that nonetheless occur. The federal government has an important role to play in supporting community-based preparedness and resilience efforts, establishing policies that promote preparedness, protecting critical infrastructure and public resources, supporting science and research germane to preparedness and resilience, and ensuring that federal operations and facilities continue to protect and serve citizens in a changing climate. The Obama Administration has been working to strengthen America’s climate resilience since its earliest days. Shortly after coming into office, President Obama established an Interagency Climate Change Adaptation Task Force and, in October 2009, the President signed an Executive Order directing it to recommend ways federal policies and programs can better prepare the Nation for change. In May 2010, the Task Force hosted the first National Climate Adaptation Summit, convening local and regional stakeholders and decision-makers to identify challenges and opportunities for collaborative action. In February 2013, federal agencies released Climate Change Adaptation Plans for the first time, outlining strategies to protect their operations, missions, and programs from the effects of climate change. The Department of Transportation, for example, is developing guidance for incorporating climate change and extreme weather event considerations into coastal highway projects, and the Department of Homeland Security is evaluating the challenges of changing conditions in the Arctic and along our Nation’s borders. Agencies have also partnered with communities through targeted grant and technical-assistance programs—for example, the Environmental Protection Agency is working with low-lying communities in North Carolina to assess the vulnerability of infrastructure investments to sea level rise and identify solutions to reduce risks. And the Administration has continued, through the U.S. Global Change Research Program, to support science and monitoring to expand our understanding of climate change and its impacts. Going forward, the Administration will expand these efforts into three major, interrelated initiatives to better prepare America for the impacts of climate change: I.

Building Stronger and Safer Communities and Infrastructure

By necessity, many states, cities, and communities are already planning and preparing for the impacts of climate change. Hospitals must build capacity to serve patients during more frequent heat waves, and urban planners must plan for the severe storms that infrastructure will need to withstand. Promoting on-the-ground planning and resilient infrastructure will be at the core of our work to strengthen America’s communities. Specific actions will include: Directing Agencies to Support Climate-Resilient Investment: The President will direct federal agencies to identify and remove barriers to making climate-resilient investments; identify and remove counterproductive policies that increase vulnerabilities; and encourage and support smarter, more resilient investments, including through agency grants, technical assistance, and other programs, in sectors from transportation and water management to conservation and 12

disaster relief. Agencies will also be directed to ensure that climate risk-management considerations are fully integrated into federal infrastructure and natural resource management planning. To begin meeting this challenge, the Environmental Protection Agency is committing to integrate considerations of climate change impacts and adaptive measures into major programs, including its Clean Water and Drinking Water State Revolving Funds and grants for brownfields cleanup, and the Department of Housing and Urban Development is already requiring grant recipients in the Hurricane Sandy–affected region to take sea-level rise into account. Establishing a State, Local, and Tribal Leaders Task Force on Climate Preparedness: To help agencies meet the above directive and to enhance local efforts to protect communities, the President will establish a short-term task force of state, local, and tribal officials to advise on key actions the federal government can take to better support local preparedness and resiliencebuilding efforts. The task force will provide recommendations on removing barriers to resilient investments, modernizing grant and loan programs to better support local efforts, and developing information and tools to better serve communities. Supporting Communities as they Prepare for Climate Impacts: Federal agencies will continue to provide targeted support and assistance to help communities prepare for climatechange impacts. For example, throughout 2013, the Department of Transportation’s Federal Highway Administration is working with 19 state and regional partners and other federal agencies to test approaches for assessing local transportation infrastructure vulnerability to climate change and extreme weather and for improving resilience. The Administration will continue to assist tribal communities on preparedness through the Bureau of Indian Affairs, including through pilot projects and by supporting participation in federal initiatives that assess climate change vulnerabilities and develop regional solutions. Through annual federal agency “Environmental Justice Progress Reports,” the Administration will continue to identify innovative ways to help our most vulnerable communities prepare for and recover from the impacts of climate change. The importance of critical infrastructure independence was brought home in the Sandy response. The Federal Emergency Management Agency and the Department of Energy are working with the private sector to address simultaneous restoration of electricity and fuels supply. Boosting the Resilience of Buildings and Infrastructure: The National Institute of Standards and Technology will convene a panel on disaster-resilience standards to develop a comprehensive, community-based resilience framework and provide guidelines for consistently safe buildings and infrastructure – products that can inform the development of private-sector standards and codes. In addition, building on federal agencies’ “Climate Change Adaptation Plans,” the Administration will continue efforts to increase the resilience of federal facilities and infrastructure. The Department of Defense, for example, is assessing the relative vulnerability of its coastal facilities to climate change. In addition, the President’s FY 2014 Budget proposes $200 million through the Transportation Leadership Awards program for Climate Ready Infrastructure in communities that build enhanced preparedness into their planning efforts, and that have proposed or are ready to break ground on infrastructure projects, including transit and rail, to improve resilience. Rebuilding and Learning from Hurricane Sandy: In August 2013, President Obama’s Hurricane Sandy Rebuilding Task Force will deliver to the President a rebuilding strategy to be implemented in Sandy-affected regions and establishing precedents that can be followed 13

elsewhere. The Task Force and federal agencies are also piloting new ways to support resilience in the Sandy-affected region; the Task Force, for example, is hosting a regional “Rebuilding by Design” competition to generate innovative solutions to enhance resilience. In the transportation sector, the Department of Transportation’s Federal Transit Administration (FTA) is dedicating $5.7 billion to four of the area’s most impacted transit agencies, of which $1.3 billion will be allocated to locally prioritized projects to make transit systems more resilient to future disasters. FTA will also develop a competitive process for additional funding to identify and support larger, stand-alone resilience projects in the impacted region. To build coastal resilience, the Department of the Interior will launch a $100 million competitive grant program to foster partnerships and promote resilient natural systems while enhancing green spaces and wildlife habitat near urban populations. An additional $250 million will be allocated to support projects for coastal restoration and resilience across the region. Finally, with partners, the U.S. Army Corps of Engineers is conducting a $20 million study to identify strategies to reduce the vulnerability of Sandy-affected coastal communities to future large-scale flood and storm events, and the National Oceanic and Atmospheric Administration will strengthen long-term coastal observations and provide technical assistance to coastal communities. II.

Protecting our Economy and Natural Resources

Climate change is affecting nearly every aspect of our society, from agriculture and tourism to the health and safety of our citizens and natural resources. To help protect critical sectors, while also targeting hazards that cut across sectors and regions, the Administration will mount a set of sector- and hazard-specific efforts to protect our country’s vital assets, to include: Identifying Vulnerabilities of Key Sectors to Climate Change: The Department of Energy will soon release an assessment of climate-change impacts on the energy sector, including power-plant disruptions due to drought and the disruption of fuel supplies during severe storms, as well as potential opportunities to make our energy infrastructure more resilient to these risks. In 2013, the Department of Agriculture and Department of the Interior released several studies outlining the challenges a changing climate poses for America’s agricultural enterprise, forests, water supply, wildlife, and public lands. This year and next, federal agencies will report on the impacts of climate change on other key sectors and strategies to address them, with priority efforts focusing on health, transportation, food supplies, oceans, and coastal communities. Promoting Resilience in the Health Sector: The Department of Health and Human Services will launch an effort to create sustainable and resilient hospitals in the face of climate change. Through a public-private partnership with the healthcare industry, it will identify best practices and provide guidance on affordable measures to ensure that our medical system is resilient to climate impacts. It will also collaborate with partner agencies to share best practices among federal health facilities. And, building on lessons from pilot projects underway in 16 states, it will help train public-health professionals and community leaders to prepare their communities for the health consequences of climate change, including through effective communication of health risks and resilience measures. Promoting Insurance Leadership for Climate Safety: Recognizing the critical role that the private sector plays in insuring assets and enabling rapid recovery after disasters, the Administration will convene representatives from the insurance industry and other stakeholders to explore best practices for private and public insurers to manage their own processes and 14

investments to account for climate change risks and incentivize policy holders to take steps to reduce their exposure to these risks. Conserving Land and Water Resources: America’s ecosystems are critical to our nation’s economy and the lives and health of our citizens. These natural resources can also help ameliorate the impacts of climate change, if they are properly protected. The Administration has invested significantly in conserving relevant ecosystems, including working with Gulf State partners after the Deepwater Horizon spill to enhance barrier islands and marshes that protect communities from severe storms. The Administration is also implementing climate-adaptation strategies that promote resilience in fish and wildlife populations, forests and other plant communities, freshwater resources, and the ocean. Building on these efforts, the President is also directing federal agencies to identify and evaluate additional approaches to improve our natural defenses against extreme weather, protect biodiversity and conserve natural resources in the face of a changing climate, and manage our public lands and natural systems to store more carbon. Maintaining Agricultural Sustainability: Building on the existing network of federal climatescience research and action centers, the Department of Agriculture is creating seven new Regional Climate Hubs to deliver tailored, science-based knowledge to farmers, ranchers, and forest landowners. These hubs will work with universities and other partners, including the Department of the Interior and the National Oceanic and Atmospheric Administration, to support climate resilience. Its Natural Resources Conservation Service and the Department of the Interior’s Bureau of Reclamation are also providing grants and technical support to agricultural water users for more water-efficient practices in the face of drought and long-term climate change. Managing Drought: Leveraging the work of the National Disaster Recovery Framework for drought, the Administration will launch a cross-agency National Drought Resilience Partnership as a “front door” for communities seeking help to prepare for future droughts and reduce drought impacts. By linking information (monitoring, forecasts, outlooks, and early warnings) with drought preparedness and longer-term resilience strategies in critical sectors, this effort will help communities manage drought-related risks. Reducing Wildfire Risks: With tribes, states, and local governments as partners, the Administration has worked to make landscapes more resistant to wildfires, which are exacerbated by heat and drought conditions resulting from climate change. Federal agencies will expand and prioritize forest and rangeland restoration efforts in order to make natural areas and communities less vulnerable to catastrophic fire. The Department of the Interior and Department of Agriculture, for example, are launching a Western Watershed Enhancement Partnership – a pilot effort in five western states to reduce wildfire risk by removing extra brush and other flammable vegetation around critical areas such as water reservoirs. Preparing for Future Floods: To ensure that projects funded with taxpayer dollars last as long as intended, federal agencies will update their flood-risk reduction standards for federally funded projects to reflect a consistent approach that accounts for sea-level rise and other factors affecting flood risks. This effort will incorporate the most recent science on expected rates of sea-level rise (which vary by region) and build on work done by the Hurricane Sandy Rebuilding Task Force, which announced in April 2013 that all federally funded Sandy-related rebuilding projects must meet a consistent flood risk reduction standard that takes into account increased risk from extreme weather events, sea-level rise, and other impacts of climate change. 15

III.

Using Sound Science to Manage Climate Impacts

Scientific data and insights are essential to help government officials, communities, and businesses better understand and manage the risks associated with climate change. The Administration will continue to lead in advancing the science of climate measurement and adaptation and the development of tools for climate-relevant decision-making by focusing on increasing the availability, accessibility, and utility of relevant scientific tools and information. Specific actions will include: Developing Actionable Climate Science: The President’s Fiscal Year 2014 Budget provides more than $2.7 billion, largely through the 13-agency U.S. Global Change Research Program, to increase understanding of climate-change impacts, establish a public-private partnership to explore risk and catastrophe modeling, and develop the information and tools needed by decision-makers to respond to both long-term climate change impacts and near-term effects of extreme weather. Assessing Climate-Change Impacts in the United States: In the spring of 2014, the Obama Administration will release the third U.S. National Climate Assessment, highlighting new advances in our understanding of climate-change impacts across all regions of the United States and on critical sectors of the economy, including transportation, energy, agriculture, and ecosystems and biodiversity. For the first time, the National Climate Assessment will focus not only on dissemination of scientific information but also on translating scientific insights into practical, useable knowledge that can help decision-makers anticipate and prepare for specific climate-change impacts. Launching a Climate Data Initiative: Consistent with the President’s May 2013 Executive Order on Open Data – and recognizing that freely available open government data can fuel entrepreneurship, innovation, scientific discovery, and public benefits – the Administration is launching a Climate Data Initiative to leverage extensive federal climate-relevant data to stimulate innovation and private-sector entrepreneurship in support of national climate-change preparedness. Providing a Toolkit for Climate Resilience: Federal agencies will create a virtual climateresilience toolkit that centralizes access to data-driven resilience tools, services, and best practices, including those developed through the Climate Data Initiative. The toolkit will provide easy access to existing resources as well as new tools, including: interactive sea-level rise maps and a sea-level-rise calculator to aid post-Sandy rebuilding in New York and New Jersey, new NOAA storm surge models and interactive maps from the National Oceanic and Atmospheric Administration that provide risk information by combining tidal data, projected sea levels and storm wave heights, a web-based tool that will allow developers to integrate NASA climate imagery into websites and mobile apps, access to the U.S. Geological Survey’s “visualization tool” to assess the amount of carbon absorbed by landscapes, and a Stormwater Calculator and Climate Assessment Tool developed to help local governments assess stormwater-control measures under different precipitation and temperature scenarios.

LEAD INTERNATIONAL EFFORTS TO ADDRESS GLOBAL CLIMATE CHANGE The Obama Administration is working to build on the actions that it is taking domestically to achieve significant global greenhouse gas emission reductions and enhance climate preparedness through major international initiatives focused on spurring concrete action, including bilateral initiatives with China, India, and other major emitting countries. These initiatives not only serve to support the efforts of the United States and others to achieve our goals for 2020, but also will help us move beyond those and bend the post-2020 global emissions trajectory further. As a key part of this effort, we are also working intensively to forge global responses to climate change through a number of important international negotiations, including the United Nations Framework Convention on Climate Change. I.

Working with Other Countries to Take Action to Address Climate Change

Enhancing Multilateral Engagement with Major Economies: In 2009, President Obama launched the Major Economies Forum on Energy and Climate, a high-level forum that brings together 17 countries that account for approximately 75 percent of global greenhouse gas emissions, in order to support the international climate negotiations and spur cooperative action to combat climate change. The Forum has been successful on both fronts â&#x20AC;&#x201C; having contributed significantly to progress in the broader negotiations while also launching the Clean Energy Ministerial to catalyze the development and deployment of clean energy and efficiency solutions. We are proposing that the Forum build on these efforts by launching a major initiative this year focused on further accelerating efficiency gains in the buildings sector, which accounts for approximately one-third of global carbon pollutions from the energy sector. Expanding Bilateral Cooperation with Major Emerging Economies: From the outset, the Obama Administration has sought to intensify bilateral climate cooperation with key major emerging economies, through initiatives like the U.S.-China Clean Energy Research Center, the U.S.-India Partnership to Advance Clean Energy, and the Strategic Energy Dialogue with Brazil. We will be building on these successes and finding new areas for cooperation in the second term, and we are already making progress: Just this month, President Obama and President Xi Jinping of China reached an historic agreement at their first summit to work to use the expertise and institutions of the Montreal Protocol to phase down the consumption and production of HFCs, a highly potent greenhouse gas. The impact of phasing out HFCs by 2050 would be equivalent to the elimination of two yearsâ&#x20AC;&#x2122; worth of greenhouse gas emissions from all sources. Combatting Short-Lived Climate Pollutants: Pollutants such as methane, black carbon, and many HFCs are relatively short-lived in the atmosphere, but have more potent greenhouse effects than carbon dioxide. In February 2012, the United States launched the Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollution, which has grown to include more than 30 country partners and other key partners such as the World Bank and the U.N. Environment Programme. Major efforts include reducing methane and black carbon from waste and landfills. We are also leading through the Global Methane Initiative, which works with 42 partner countries and an extensive network of over 1,100 private sector participants to reduce methane emissions.

Reducing Emissions from Deforestation and Forest Degradation: Greenhouse gas emissions from deforestation, agriculture, and other land use constitute approximately one-third of global emissions. In some developing countries, as much as 80 percent of these emissions come from the land sector. To meet this challenge, the Obama Administration is working with partner countries to put in place the systems and institutions necessary to significantly reduce global land-use-related emissions, creating new models for rural development that generate climate benefits, while conserving biodiversity, protecting watersheds, and improving livelihoods. In 2012 alone, the U.S. Agency for International Development’s bilateral and regional forestry programs contributed to reducing more than 140 million tons of carbon dioxide emissions, including through support for multilateral initiatives such as the Forest Investment Program and the Forest Carbon Partnership Facility. In Indonesia, the Millennium Challenge Corporation is funding a five-year “Green Prosperity” program that supports environmentally sustainable, low carbon economic development in select districts. The Obama Administration is also working to address agriculture-driven deforestation through initiatives such as the Tropical Forest Alliance 2020, which brings together governments, the private sector, and civil society to reduce tropical deforestation related to key agricultural commodities, which we will build upon. Expanding Clean Energy Use and Cut Energy Waste: Roughly 84 percent of current carbon dioxide emissions are energy-related and about 65 percent of all greenhouse gas emissions can be attributed to energy supply and energy use. The Obama Administration has promoted the expansion of renewable, clean, and efficient energy sources and technologies worldwide through: • • • • •

Financing and regulatory support for renewable and clean energy projects Actions to promote fuel switching from oil and coal to natural gas or renewables Support for the safe and secure use of nuclear power Cooperation on clean coal technologies Programs to improve and disseminate energy efficient technologies

In the past three years we have reached agreements with more than 20 countries around the world, including Mexico, South Africa, and Indonesia, to support low emission development strategies that help countries to identify the best ways to reduce greenhouse gas emissions while growing their economies. Among the many initiatives that we have launched are: •

The U.S. Africa Clean Energy Finance Initiative, which aligns grant-based assistance with project planning expertise from the U.S. Trade and Development Agency and financing and risk mitigation tools from the U.S. Overseas Private Investment Corporation to unlock up to $1 billion in clean energy financing.

•

The U.S.-Asia Pacific Comprehensive Energy Partnership, which has identified $6 billion in U.S. export credit and government financing to promote clean energy development in the Asia-Pacific region.

Looking ahead, we will target these and other resources towards greater penetration of renewables in the global energy mix on both a small and large scale, including through our 18

participation in the Sustainable Energy for All Initiative and accelerating the commercialization of renewable mini-grids. These efforts include: •

Natural Gas. Burning natural gas is about one-half as carbon-intensive as coal, which can make it a critical “bridge fuel” for many countries as the world transitions to even cleaner sources of energy. Toward that end, the Obama Administration is partnering with states and private companies to exchange lessons learned with our international partners on responsible development of natural gas resources. We have launched the Unconventional Gas Technical Engagement Program to share best practices on issues such as water management, methane emissions, air quality, permitting, contracting, and pricing to help increase global gas supplies and facilitate development of the associated infrastructure that brings them to market. Going forward, we will promote fuel-switching from coal to gas for electricity production and encourage the development of a global market for gas. Since heavy-duty vehicles are expected to account for 40 percent of increased oil use through 2030, we will encourage the adoption of heavy duty natural gas vehicles as well.

•

Nuclear Power. The United States will continue to promote the safe and secure use of nuclear power worldwide through a variety of bilateral and multilateral engagements. For example, the U.S. Nuclear Regulatory Commission advises international partners on safety and regulatory best practices, and the Department of Energy works with international partners on research and development, nuclear waste and storage, training, regulations, quality control, and comprehensive fuel leasing options. Going forward, we will expand these efforts to promote nuclear energy generation consistent with maximizing safety and nonproliferation goals.

•

Clean Coal. The United States works with China, India, and other countries that currently rely heavily on coal for power generation to advance the development and deployment of clean coal technologies. In addition, the U.S. leads the Carbon Sequestration Leadership Forum, which engages 23 other countries and economies on carbon capture and sequestration technologies. Going forward, we will continue to use these bilateral and multilateral efforts to promote clean coal technologies.

•

Energy Efficiency. The Obama Administration has aggressively promoted energy efficiency through the Clean Energy Ministerial and key bilateral programs. The costeffective opportunities are enormous: The Ministerial’ s Super-Efficient Equipment and Appliance Deployment Initiative and its Global Superior Energy Performance Partnership are helping to accelerate the global adoption of standards and practices that would cut energy waste equivalent to more than 650 mid-size power plants by 2030. We will work to expand these efforts focusing on several critical areas, including: improving building efficiency, reducing energy consumption at water and wastewater treatment facilities, and expanding global appliance standards.

Negotiating Global Free Trade in Environmental Goods and Services: The U.S. will work with trading partners to launch negotiations at the World Trade Organization towards global free trade in environmental goods, including clean energy technologies such as solar, wind, hydro and geothermal. The U.S. will build on the consensus it recently forged among the 21 Asia-Pacific Economic Cooperation (APEC) economies in this area. In 2011, APEC economies agreed to reduce tariffs to 5 percent or less by 2015 on a negotiated list of 54 environmental goods. The 19

APEC list will serve as a foundation for a global agreement in the WTO, with participating countries expanding the scope by adding products of interest. Over the next year, we will work towards securing participation of countries which account for 90 percent of global trade in environmental goods, representing roughly $481 billion in annual environmental goods trade. We will also work in the Trade in Services Agreement negotiations towards achieving free trade in environmental services. Phasing Out Subsidies that Encourage Wasteful Consumption of Fossil Fuels: The International Energy Agency estimates that the phase-out of fossil fuel subsidies – which amount to more than $500 billion annually – would lead to a 10 percent reduction in greenhouse gas emissions below business as usual by 2050. At the 2009 G-20 meeting in Pittsburgh, the United States successfully advocated for a commitment to phase out these subsidies, and we have since won similar commitments in other fora such as APEC. President Obama is calling for the elimination of U.S. fossil fuel tax subsidies in his Fiscal Year (FY) 2014 budget, and we will continue to collaborate with partners around the world toward this goal. Leading Global Sector Public Financing Towards Cleaner Energy: Under this Administration, the United States has successfully mobilized billions of dollars for clean energy investments in developing countries, helping to accelerate their transition to a green, low-carbon economy. Building on these successes, the President calls for an end to U.S. government support for public financing of new coal plants overseas, except for (a) the most efficient coal technology available in the world’s poorest countries in cases where no other economically feasible alternative exists, or (b) facilities deploying carbon capture and sequestration technologies. As part of this new commitment, we will work actively to secure the agreement of other countries and the multilateral development banks to adopt similar policies as soon as possible. Strengthening Global Resilience to Climate Change: Failing to prepare adequately for the impacts of climate change that can no longer be avoided will put millions of people at risk, jeopardizing important development gains, and increasing the security risks that stem from climate change. That is why the Obama Administration has made historic investments in bolstering the capacity of countries to respond to climate-change risks. Going forward, we will continue to: •

Strengthen government and local community planning and response capacities, such as by increasing water storage and water use efficiency to cope with the increased variability in water supply

•

Develop innovative financial risk management tools such as index insurance to help smallholder farmers and pastoralists manage risk associated with changing rainfall patterns and drought

•

Distribute drought-resistant seeds and promote management practices that increase farmers' ability to cope with climate impacts.

Mobilizing Climate Finance: International climate finance is an important tool in our efforts to promote low-emissions, climate-resilient development. We have fulfilled our joint developed country commitment from the Copenhagen Accord to provide approximately $30 billion of climate assistance to developing countries over FY 2010-FY 2012. The United States contributed approximately $7.5 billion to this effort over the three year period. Going forward, we will seek 20

to build on this progress as well as focus our efforts on combining our public resources with smart policies to mobilize much larger flows of private investment in low-emissions and climate resilient infrastructure. II.

Leading Efforts to Address Climate Change through International Negotiations

The United States has made historic progress in the international climate negotiations during the past four years. At the Copenhagen Conference of the United Nations Framework Convention on Climate Change (UNFCCC) in 2009, President Obama and other world leaders agreed for the first time that all major countries, whether developed or developing, would implement targets or actions to limit greenhouse emissions, and do so under a new regime of international transparency. And in 2011, at the year-end climate meeting in Durban, we achieved another breakthrough: Countries agreed to negotiate a new agreement by the end of 2015 that would have equal legal force and be applicable to all countries in the period after 2020. This was an important step beyond the previous legal agreement, the Kyoto Protocol, whose core obligations applied to developed countries, not to China, India, Brazil or other emerging countries. The 2015 climate conference is slated to play a critical role in defining a post-2020 trajectory. We will be seeking an agreement that is ambitious, inclusive and flexible. It needs to be ambitious to meet the scale of the challenge facing us. It needs to be inclusive because there is no way to meet that challenge unless all countries step up and play their part. And it needs to be flexible because there are many differently situated parties with their own needs and imperatives, and those differences will have to be accommodated in smart, practical ways. At the same time as we work toward this outcome in the UNFCCC context, we are making progress in a variety of other important negotiations as well. At the Montreal Protocol, we are leading efforts in support of an amendment that would phase down HFCs; at the International Maritime Organization, we have agreed to and are now implementing the first-ever sector-wide, internationally applicable energy efficiency standards; and at the International Civil Aviation Organization, we have ambitious aspirational emissions and energy efficiency targets and are working towards agreement to develop a comprehensive global approach.

Ground Zero: Obamaâ&#x20AC;&#x2122;s Recommitment

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - Obama's recommitment

October 23, 2014 8:38 AM

1 Attachment, 600 KB

Ground zero In his September 23, 2014, address to the United Nations Climate Summit President Obama renewed his commitment to engage federal agencies to begin urgently addressing climate: .

Today, Iâ&#x20AC;&#x2122;m directing our federal agencies to begin factoring climate resilience into our international development programmes and investments. And Iâ&#x20AC;&#x2122;m announcing a new effort to deploy the unique scientific and technological capabilities of the United States, from climate data to early-warning systems â&#x20AC;Ś to help vulnerable nations better prepare for weatherrelated disasters, and better plan for long-term threats like steadily rising seas. .

The climate is changing faster than our efforts to address it. The alarm bells keep ringing. Our citizens keep marching. We cannot pretend we do not hear them. We have to answer the call. We know what we have to do to avoid irreparable harm. We have to cut carbon pollution in our own countries to prevent the worst effects of climate change.

Remarks by the President at U.N. Climate Change Summit United Nations Headquarters New York, New York http://bit.ly/Obama23Sept 1:03 P.M. EDT THE PRESIDENT: Mr. President, Mr. Secretary General, fellow leaders: For all the immediate challenges that we gather to address this week -- terrorism, instability, inequality, disease -- thereâ&#x20AC;&#x2122;s one issue that will define the contours of this century more dramatically than any other, and that is the urgent and growing threat of a changing climate. Five years have passed since many of us met in Copenhagen. And since then, our understanding of climate change has advanced -- both in the deepening science that says this once-distant threat has moved â&#x20AC;&#x153;firmly into the present,â&#x20AC;? and into the sting of more frequent extreme weather events that show us exactly what these changes may mean for future generations. No nation is immune. In America, the past decade has been our hottest on record. Along our eastern coast, the city of Miami now floods at high tide. In our west, wildfire season now stretches most of the year. In our heartland, farms have been parched by the worst drought in generations, and drenched by the wettest spring in our history. A hurricane left parts of this great city dark and underwater. And some nations already live with far worse. Worldwide, this summer was the hottest ever recorded -- with global carbon emissions still on the rise. So the climate is changing faster than our efforts to address it. The alarm bells keep ringing. Our citizens keep marching. We cannot pretend we do not hear them. We have to answer the call. We know what we have to do to avoid irreparable harm. We have to cut carbon pollution in our own countries to prevent the worst effects of climate change. We have to adapt to the impacts that, unfortunately, we can no longer avoid. And we have to work together as a global community to tackle this global threat before it is too late. We cannot condemn our children, and their children, to a future that is beyond their capacity to repair. Not when we have the means -- the technological innovation and the scientific imagination -- to begin the work of repairing it right now.

As one of America’s governors has said, “We are the first generation to feel the impact of climate change and the last generation that can do something about it.” So today, I’m here personally, as the leader of the world’s largest economy and its second largest emitter, to say that we have begun to do something about it. The United States has made ambitious investments in clean energy, and ambitious reductions in our carbon emissions. We now harness three times as much electricity from the wind and 10 times as much from the sun as we did when I came into office. Within a decade, our cars will go twice as far on a gallon of gas, and already, every major automaker offers electric vehicles. We’ve made unprecedented investments to cut energy waste in our homes and our buildings and our appliances, all of which will save consumers billions of dollars. And we are committed to helping communities build climate-resilient infrastructure. So, all told, these advances have helped create jobs, grow our economy, and drive our carbon pollution to its lowest levels in nearly two decades -- proving that there does not have to be a conflict between a sound environment and strong economic growth. Over the past eight years, the United States has reduced our total carbon pollution by more than any other nation on Earth. But we have to do more. Last year, I issued America’s first Climate Action Plan to double down on our efforts. Under that plan, my administration is working with states and utilities to set first-ever standards to cut the amount of carbon pollution our power plants can dump into the air. And when completed, this will mark the single most important and significant step the United States has ever taken to reduce our carbon emissions. Last week alone, we announced an array of new actions in renewable energy and energy efficiency that will save consumers more than $10 billion on their energy bills and cut carbon pollution by nearly 300 million metric tons through 2030. That's the equivalent of taking more than 60 million cars off the road for one year. I also convened a group of private sector leaders who’ve agreed to do their part to slash consumption of dangerous greenhouse gases known as HFCs -- slash them 80 percent by 2050. And already, more than 100 nations have agreed to launch talks to phase down HFCs under the Montreal Protocol -- the same agreement the world used successfully to phase out ozone-depleting chemicals. This is something that President Xi of China and I have worked on together. Just a few minutes ago, I met with Chinese Vice Premier Zhang Gaoli, and reiterated my belief that as the two largest economies and emitters in the world, we have a special responsibility to lead. That’s what big nations have to do. (Applause.)

And today, I call on all countries to join us -– not next year, or the year after, but right now, because no nation can meet this global threat alone. The United States has also engaged more allies and partners to cut carbon pollution and prepare for the impacts we cannot avoid. All told, American climate assistance now reaches more than 120 nations around the world. We’re helping more nations skip past the dirty phase of development, using current technologies, not duplicating the same mistakes and environmental degradation that took place previously. We’re partnering with African entrepreneurs to launch clean energy projects. We’re helping farmers practice climate-smart agriculture and plant more durable crops. We’re building international coalitions to drive action, from reducing methane emissions from pipelines to launching a free trade agreement for environmental goods. And we have been working shoulder-to-shoulder with many of you to make the Green Climate Fund a reality. But let me be honest. None of this is without controversy. In each of our countries, there are interests that will be resistant to action. And in each country, there is a suspicion that if we act and other countries don't that we will be at an economic disadvantage. But we have to lead. That is what the United Nations and this General Assembly is about. Now, the truth is, is that no matter what we do, some populations will still be at risk. The nations that contribute the least to climate change often stand to lose the most. And that’s why, since I took office, the United States has expanded our direct adaptation assistance eightfold, and we’re going to do more. Today, I’m directing our federal agencies to begin factoring climate resilience into our international development programs and investments. And I’m announcing a new effort to deploy the unique scientific and technological capabilities of the United States, from climate data to early-warning systems. So this effort includes a new partnership that will draw on the resources and expertise of our leading private sector companies and philanthropies to help vulnerable nations better prepare for weather-related disasters, and better plan for long-term threats like steadily rising seas. Yes, this is hard. But there should be no question that the United States of America is stepping up to the plate. We recognize our role in creating this problem; we embrace our responsibility to combat it. We will do our part, and we will help developing nations do theirs. But we can only succeed in combating climate change if we are joined in this effort by every nation –- developed and developing alike. Nobody gets a pass. The emerging economies that have experienced some of the most dynamic growth in recent years have also emitted rising levels of carbon pollution. It is those emerging economies that are likely to produce more and more carbon emissions in the years to come. So nobody can stand on the sidelines on this issues. We have to set aside the old divides. We have to raise our collective ambition, each of us doing what we can to confront this global challenge.

doing what we can to confront this global challenge. This time, we need an agreement that reflects economic realities in the next decade and beyond. It must be ambitious –- because that’s what the scale of this challenge demands. It must be inclusive –because every country must play its part. And, yes, it must be flexible –- because different nations have different circumstances. Five years ago, I pledged America would reduce our carbon emissions in the range of 17 percent below 2005 levels by the year 2020. America will meet that target. And by early next year, we will put forward our next emission target, reflecting our confidence in the ability of our technological entrepreneurs and scientific innovators to lead the way. So today, I call on all major economies to do the same. For I believe, in the words of Dr. King, that there is such a thing as being too late. And for the sake of future generations, our generation must move toward a global compact to confront a changing climate while we still can. This challenge demands our ambition. Our children deserve such ambition. And if we act now, if we can look beyond the swarm of current events and some of the economic challenges and political challenges involved, if we place the air that our children will breathe and the food that they will eat and the hopes and dreams of all posterity above our own short-term interests, we may not be too late for them. While you and I may not live to see all the fruits of our labor, we can act to see that the century ahead is marked not by conflict, but by cooperation; not by human suffering, but by human progress; and that the world we leave to our children, and our children’s children, will be cleaner and healthier, and more prosperous and secure. Thank you very much. Thank you. (Applause.)

GREAT EXPECTATIONS

Ground Zero: A Tale of Two Tongues

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - a tale of two tongues

October 23, 2014 10:10 AM

3 Attachments, 327 KB

Ground zero What happened to "Change you can count on"? The Executive Branch appears to be as much in stalemate as is Congress ... both are bogged down legal maneuvering that results in no results. .

February 12, 2013, in his State of the Union address, the President announced: “If Congress won’t act soon to protect future generations, I will. I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy." .

March 15, 2013, Bloomberg reported President Barack Obama is preparing to tell all federal agencies for the first time that they should consider the impact on global warming before approving major projects, from pipelines to highways. .

September 23, 2013, at the United Nations Climate Summit, he recommitted: "[T]here should be no question that the United States of America is stepping up to the plate. We recognize our role in creating this problem; we embrace our responsibility to combat it. We will do our part, and we will help developing nations do theirs. But we can only succeed in combating climate change if we are joined in this effort by every nation –- developed and developing alike. Nobody gets a pass.” .

August 31, 2014, contrary to the popularly understood expectations, DeSmogBlog reported "Obama White House Council on Environmental Quality (CEQ) argued it does not have to offer guidance to federal agencies it coordinates with to consider climate change impacts for energy decisions." .

“Strong guidance from CEQ might have improved clarity and consistency in agencies’ analysis, and helped shine a bright spotlight on the federal government’s significant contribution to climate pollution. 'CEQ’s washing its hands of the issue is a big missed opportunity.”

SUN AUG 31, 2014 AT 09:25 AM PDT

Legal Case: White House Argues Against Considering Climate Change on Energy Projects by Steve Horn

Cross-Posted from DeSmogBlog Just over a month before the United Nations convenes on September 23 in New York City to discuss climate change and activists gather for a week of action, the Obama White House Council on Environmental Quality (CEQ) argued it does not have to offer guidance to federal agencies it coordinates with to consider climate change impacts for energy decisions. It came just a few weeks before a leaked draft copy of the Intergovernmental Panel on Climate Change’s (IPCC) latest assessment said climate disruption could cause “severe, pervasive and irreversible impacts for people and ecosystems.” Initially filed as a February 2008 petition to CEQ by the International Center for Technology Assessment, the Sierra Club and the Natural Resources Defense Council (NRDC) when George W. Bush still served as President, it had been stalled for years. Six and a half years later and another term into the Obama Administration, however, things have finally moved forward. Or backwards, depending on who you ask.

NEPA and CEQ The initial February 2008 legal petition issued by the plaintiffs was rather simple: the White House’s Council for Environmental Quality (CEQ) should provide guidance to federal agencies it coordinates with to weigh climate change impacts when utilizing the National Environmental Policy Act (NEPA) on energy policy decisions.

A legal process completely skirted in recent prominent tar sands pipeline cases by both TransCanada and Enbridge, NEPA is referred to by legal scholars as the “Magna Carta” of environmental law. CEQ oversees major tenets of environmental, energy and climate policy. It often serves as the final arbiter on many major legislative pushes proposed by Congress and federal agencies much in the same way the White House’s Office of Information and Regulatory Affairs (OIRA) does for regulatory policy. In February 2010, Obama’s CEQ showed signs it would utilize NEPA in its policy decisionmaking process with regards to climate change, issuing a “Draft Guidance for Greenhouse Gas Emissions and Climate Change Impacts” and opening up a 90-day public comment period. “CEQ is releasing draft guidance for public comment on when and how Federal agencies must consider greenhouse gas emissions and climate change in their proposed actions,” the White House said in a press release announcing the Draft. “The draft guidance explains how Federal agencies should analyze the environmental impacts of greenhouse gas emissions and climate change when they describe the environmental impacts of a proposed action under NEPA.” Industry Backlash A review of the public comments issued on the White House’s draft show a barrage of industry backlash against the February 2010 draft proposal. Those weighing in included the U.S. Chamber of Commerce, the American Gas Association, the National Mining Association, Pacific Gas and Electric, Edison Electric Institute, BP, Shell, the American Petroleum Institute, Devon Energy, ConocoPhillips, and Dominion Resources, among others. The Chamber was perhaps the most blunt in making its viewpoint known. “The Chamber opposes incorporation of climate change into the NEPA analysis,”wrote the Chamber in comment to the White House. “[A]pplying NEPA to greenhouse gases in the manner discussed in CEQ’s draft guidance could open the floodgates to lawsuits by environmental groups and other Not In My Back Yard (NIMBY) activists to delay or stop projects.” And the National Mining Association (NMA) argued for the opposite of what the CEQ proposal called for: fast-track reviews and time limits on them. “A lengthy and unpredictable permitting process discourages the capital investments required for mineral exploration and mine development – destroying US job opportunities

and contributing to our increased reliance on foreign supplies of minerals to supply US manufacturing and technology companies,” the NMA opined in its letter. The industry push-back paid off. After waiting for over four years for the final CEQ rules to be published, the International Center for Technology Assessment and the Center for Food Safety filed a legal complaint in May 2014 about the length of time it had taken CEQ to respond to their initial 2008 petition and issue final rules. That complaint, it appears, served as the beginning of the end of the lengthy legal standoff — for now. CEQ Responds, Case Reaches Intermission In the midst of the procedural lawsuit filed against it, CEQ finally responded to the 2008 petition for the first time on August 7, writing a ten-page denial letter to the plaintiffs. CEQ followed up its denial letter with an August 8 legal motion to dismiss the May procedural-related lawsuit and an accompanying memorandum in support of dismissal. A federal judge accepted the motion to dismiss and the plaintiffs for the case — International Center for Technology Assessment and Center for Food Safety — agreed to voluntarily dismiss their procedural-ralated lawsuit on August 20. “However, should they so decide, Plaintiffs preserve their right to challenge CEQ’s petition denial on its merits,” they wrote in concluding their notice of voluntary dismissal. In other words, this case has reached an intermission. CEQ Cites Climate Action Plan The August 7 CEQ letter argued there is no need for CEQ to coordinate NEPA reviews across federal agencies because the Obama Administration proposed a Climate Action Plan in June 2013 and has made other policy moves on climate during his years dwelling at 1600 Pennsylvania Avenue. “We appreciate and share your concern about the impacts of climate change on the environment,” wrote CEQ in the letter. “CEQ and this Administration have taken seriously the urgency of addressing cliamte (sic) change and we are actively moving forward on a comprehensive Climate Action Plan focused on reducing greenhouse gas emissions…In light of these actions…CEQ does not believe that revising its existing NEPA regulations is necessary.” Yet at the same time — and unmentioned in the August 7 letter — CEQ has also played an

integral role in pushing coal exports abroad even as it coordinates coal-fired power plant regulations at home as part of Obama’s Climate Action Plan. Export Abroad, Regulate at Home CEQ’s legal argument presented on August 7 offers a glimpse into the Obama Administration’s energy policy on coal: export it abroad, regulate it at home, which CEQ has facilitated. “Much of the policy is being carried out behind closed doors,” explained Bloomberg BNA reporter Paul Shukovsky in a December 2013 investigative piece. “The CEQ exercises oversight, in secret, over the ways that permitting agencies…implement the National Environmental Policy Act.” Shukovsky explained that as CEQ carries out a policy of promoting coal exports, it has completely negated weighing the climate change impacts. CEQ and the agencies it coordinates with decided not to “consider the climate-change impact of burning hundreds of millions of tons of U.S. coal in Asia in its environmental analysis of export terminals being proposed in the Pacific Northwest,” he wrote. Greenpeace USA recently published a report that crunched the numbers and concluded that the Obama Administration is exporting climate change by exporting coal, with the U.S. Bureau of Land Management (BLM) coal leasing program serving as the key enabler. Climate change risk assessment, Greenpeace pointed out, has been totally off the table. “Hard Look” at Climate Change The conclusion of this legal battle royale, at least for now, occurred just over a month after Judge R. Brooke Jackson struck down a coal mining expansion plan proposed in Colorado at the West Elk coal mine owned by Arch Coal. Jackson cited climate change in his judgment, saying several federal agencies that originally permitted the mine expansion proposal did not consider climate impacts when they did their NEPA analysis and accompanying environmental impact statement (EIS). He argued NEPA legally binds them to do so. “The specific issue is whether the agencies took a ‘hard look’ at the rule’s contribution to climate change,” wrote Jackson. “I find that the [agencies] failed to take a hard look at these effects.” Jackson also argued there is a tool to measure future climate change impacts: the “social cost of carbon.” Greenpeace USA used this tool to measure the climate impacts of BLM’s coal leasing program.

“The carbon pollution from publicly owned coal leased during the Obama administration will cause damages estimated at between $52 billion and $530 billion, using the federal government’s social cost of carbon estimates,” wrote Greenpeace. “Bury Their Heads in the Sand” Some praised the Jackson ruling as a key precedent-setting one with major implications in its immediate aftermath. “This decision means that these agencies can’t bury their heads in the sand when confronting the very real impacts of climate change,” Ted Zukoski, an attorney who litigated the case on behalf of Earthjustice, said in a press release reacting to the ruling. But at least one agency — the one coordinating with every other agency on energy and climate policy issues — has decided to “bury their heads in the sand” on climate change: the Council on Environmental Quality. “Strong guidance from CEQ might have improved clarity and consistency in agencies’ analysis, and helped shine a bright spotlight on the federal government’s significant contribution to climate pollution,” Zukoski told DeSmogBlog via email. “CEQ’s washing its hands of the issue is a big missed opportunity.”

Ground Zero: Kerry Calls for Cooperation

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - Kerry calls for cooperation

October 23, 2014 12:00 PM

2 Attachments, 1.2 MB

Cooperation Secretary of State John Kerry wrote a commentary "The Gathering Storm" in Huffington Post on October 9, 2014 (http://bit.ly/Kerry09Oct). Here are some excerpts: Now is the time for voices calling for climate action to get even louder. Speak out. Make your message echo in every city on Earth. Make this an issue that no public official can ignore another day. Make a transition toward clean energy -- through smart investments -- the inevitable, not the impossible. Shame on all of us if we don't act now to confront this "gathering storm." .

After all, there aren't many big global challenges accompanied by decades-long "heads-ups." .

It's even less often that the warnings you receive are verifiable -- rooted in scientific evidence. .

Whether we're able to address this threat will be a real test of global cooperation -- and global leadership. But we couldn't have a stronger stake in the outcome. If we put the future of the planet that unites us ahead of the issues that divide us, we can meet this challenge, and leave future generations the healthy, sustainable planet they deserve. Mr. Kerry and President Obama must address the climate-blind project approval process that is shared by Dept. of Energy (DOE) and the Federal Energy Regulatory Commission (FERC) mentioned by GOA-14-762 report. The joint DOE-FERC approval process ignores environmental impacts (aka degradation of the biosphere and extinction of humanity) of greenhouse gases that accompany energy projects they are tasked to assess. "Public interest" must be redefined accordingly.

United States Government Accountability Office

Report to the Ranking Member, Committee on Energy and Natural Resources, U.S. Senate

September 2014

NATURAL GAS Federal Approval Process for Liquefied Natural Gas Exports

GAO-14-762

September 2014

NATURAL GAS Federal Approval Process for Liquefied Natural Gas Exports Highlights of GAO-14-762, a report to the Ranking Member, Committee on Energy and Natural Resources, U.S. Senate

Why GAO Did This Study

What GAO Found

Technological advances in hydraulic fracturing and horizontal drilling have resulted in a dramatic increase in the amount of natural gas that can be produced domestically. DOE is responsible for reviewing applications to export LNG—natural gas cooled to a liquid state for transport—and, under the Natural Gas Act, must approve an application unless it finds that approval is not consistent with the public interest. Since 2010, DOE has received 35 applications to export LNG that must address the public interest question. In addition, under NEPA, FERC is required to assess how LNG export facilities may affect the environment and is responsible for granting approval to build and operate export facilities. Since 2010, FERC has received 17 applications to construct export facilities.

Since 2010, of 35 applications it has received that require a public interest review, the Department of Energy (DOE) has approved 3 applications to export liquefied natural gas (LNG) and 6 applications are conditionally approved with final approval contingent on the Federal Energy Regulatory Commission’s (FERC) issuance of a satisfactory environmental review of the export facility. DOE considers a range of factors to determine whether each application is in the public interest. After the first application was conditionally approved in 2011, DOE commissioned a study to help it determine whether additional LNG exports were in the public interest. Since the 16-month study was published in December 2012, DOE issued 7 conditional approvals (one of which became final) and 1 other final approval (see fig. below). In August 2014, DOE suspended its practice of issuing conditional approvals; instead, DOE will review applications after FERC completes its environmental review.

GAO was asked to report on the federal process for reviewing applications to export LNG. This report describes (1) the status of applications to export LNG and DOE’s process to review them and (2) the status of applications to build LNG export facilities and FERC’s process to review them. GAO reviewed laws, regulations, and guidance; examined export approvals; visited LNG facilities; and interviewed federal and state agency officials and industry representatives, including LNG export permit applicants.

DOE LNG Export Application Status

Since 2010, FERC has approved 3 LNG export facilities for construction and operation, including 2 facilities in 2014, and is reviewing 14 applications (see fig. below). FERC’s review process is, among other things, designed to fulfill its responsibilities under the National Environmental Policy Act (NEPA). Before submitting an application to FERC, applicants must enter an initial stage called pre-filing to identify and resolve potential issues during the earliest stages of a project. Of the 14 applications, 5 are in the pre-filing stage at FERC and not shown in the figure below. FERC conducts an environmental and safety review with input from other federal, state and local agencies. FERC LNG Export Facility Application Status

GAO is not making any recommendations in this report.

View GAO-14-762. For more information, contact Frank Rusco at (202) 512-3841 or ruscof@gao.gov. United States Government Accountability Office

Contents

Letter

1 Background DOE Has Approved 9 Applications to Export LNG through a Review Process That Considers a Range of Factors to Determine Whether Approval Is in the Public Interest FERC Has Approved 3 Facility Applications and Is Reviewing 14 Others Using a Technically Complex Process That Involves Other Agencies Agency Comments

15 22

Appendix I

Application Names Used by the GAO

Appendix II

GAO Contact and Staff Acknowledgments

Table 1: Names of Applications Referred to In This Report, Based on Associated Applications to FERC and DOE

Table

Figures Figure 1: LNG Export Facility Figure 2: Status of Applications Submitted to DOE to Export LNG Figure 3: Status of Applications Filed with FERC to Build and Operate LNG Export Facilities

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Abbreviations CAA Coast Guard Corps DOE DOT EA EIA EIS EPA FERC FTA LNG MARAD MMBtu NEPA NERA NGA NSR PHMSA

Clean Air Act U.S. Coast Guard U.S. Army Corps of Engineers Department of Energy Department of Transportation environmental assessment Energy Information Administration environmental impact statement Environmental Protection Agency Federal Energy Regulatory Commission free trade agreement liquefied natural gas Maritime Administration million British thermal unit National Environmental Policy Act NERA Economic Consulting Natural Gas Act of 1938 new source review Pipeline and Hazardous Materials Safety Administration

This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.

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441 G St. N.W. Washington, DC 20548

September 26, 2014 The Honorable Lisa Murkowski Ranking Member Committee on Energy and Natural Resources United States Senate Dear Senator Murkowski: Technological advances in hydraulic fracturing and horizontal drilling have dramatically increased the amount of natural gas that can be extracted domestically. This increase has helped reduce natural gas prices in the United States, although prices remain significantly higher overseas. To take advantage of overseas prices, energy companies have applied to the federal government for permission to export natural gas. Natural gas, like crude oil, requires federal approval before it can be exported. 1 To transport natural gas by ship, the natural gas is cooled to a liquid state called liquefied natural gas (LNG). This cooling process requires expensive processing and liquefaction facilities that do not currently exist in the contiguous United States. 2 The Department of Energy (DOE) and Federal Energy Regulatory Commission (FERC) are two federal agencies with primary responsibility for approving LNG exports. Under the Natural Gas Act of 1938 (NGA), as amended, 3 DOE is responsible for reviewing LNG export applications and, for countries that do not have a free trade agreement (FTA) with the United States, determining whether approval of such applications is

Section 3 of the Natural Gas Act (NGA) (15 U.S.C. § 717b) requires federal approval of natural gas exports. For crude oil exports, the Energy Policy and Conservation Act of 1975 (42 U.S.C. § 6212(b)) directs the President to “promulgate a rule prohibiting the export of crude oil” produced in the United States. The Department of Commerce administers export licenses for crude oil. 2 The Kenai LNG export facility in Nikiski, Alaska, has been authorized to export LNG to Japan for the last 45 years. According to DOE, because there is no pipeline interconnection between Alaska and the lower 48 states, those LNG markets are generally viewed as distinct. 3

Pub. L. No. 75-688, §3, 52 Stat. 822, codified as amended at 15 U.S.C. § 717b.

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consistent with the public interest. 4 In this report, we discuss non-FTA applications that require a public interest review. FERC is responsible for authorizing the construction and operation of facilities located onshore or within state waters that liquefy natural gas and load the LNG onto ships for export. 5 FERC conducts an environmental review of the facility to help with this decision. 6 Until May 2014, DOE granted approvals—known as conditional approvals—on the condition that FERC completed a satisfactory environmental review of the associated export facility. DOE granted final approvals only after it had the opportunity to consider and adopt the FERC-led review. In May 2014, DOE proposed suspending its practice of issuing conditional approvals and instead proposed reviewing applications only after FERC has completed the environmental review, and DOE has sufficient information to determine the public interest of an application. 7 In August 2014, DOE finalized this proposal after a public comment and review period. 8 Since 2010, DOE has received 35 applications to export LNG that require a public interest review, and FERC has received 17 applications to construct LNG export facilities. 9

4 In 1992, Congress amended the NGA to require DOE to treat applications to export LNG to FTA countries as consistent with the public interest. Unless otherwise indicated, the DOE applications discussed in this report are non-FTA applications. 5

In 1984 DOE delegated to FERC the authority to approve or deny LNG facilities. DOE Delegation Order No. 0204-112, 49 Fed. Reg. 6684, 6690 (Feb. 22, 1984). FERC also authorizes the construction and operation of associated pipelines under section 7 of the NGA. 6

For facilities located offshore beyond state waters, the Maritime Administration (MARAD) within the Department of Transportation authorizes construction pursuant to the Deepwater Port Act. According to a DOE official, MARAD serves as the lead agency for the environmental review of offshore LNG facilities beyond state waters. According to this official, DOE has received two applications to export LNG from these offshore facilities, but MARAD has not received applications to construct the associated facilities. 7

79 Fed. Reg. 32261 (June 4, 2014).

8 79 Fed. Reg. 48132 (Aug. 15, 2014). Applications that DOE has conditionally approved still require a final approval from DOE after DOE has reviewed FERC’s environmental document. The revised process applies only to the lower 48 states. 9

For the purposes of this report, we will refer to companies that apply to DOE or FERC for export or facility approvals as “applicants.” As of late August 2014, in addition to 35 applications to non-FTA countries, DOE has received 42 applications to export LNG to FTA countries. These totals are for the lower 48 states. In July 2014, DOE also received an application to export LNG from a proposed facility in Alaska to FTA and non-FTA countries.

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You asked us to report on DOE’s and FERC’s processes for reviewing applications for LNG exports and export facilities, respectively. This report describes (1) DOE’s process for reviewing applications to export LNG and the status of those applications and (2) FERC’s process for reviewing applications to build LNG export facilities and the status of those applications. To describe the process and status of application reviews at DOE and FERC, we reviewed DOE and FERC approval documents and spoke with agency officials. To describe DOE’s process for reviewing applications to export LNG, we examined relevant federal laws, regulations, and policy documents. We reviewed DOE approvals to export LNG, including one final and seven conditional approvals. We also interviewed DOE officials responsible for reviewing applications to export LNG to discuss the review process and how they determine whether an application is in the public interest. To describe FERC’s process for reviewing applications to build LNG export facilities, we examined relevant federal laws, regulations and FERC guidance. We also interviewed FERC officials to discuss the export facility review process. We reviewed FERC environmental documents relating to LNG export facilities. We also interviewed other federal and state agencies involved in the review process—including the U.S. Coast Guard (Coast Guard), the Pipeline and Hazardous Materials Safety Administration (PHMSA) within the Department of Transportation (DOT), the U.S. Army Corps of Engineers (Corps), the Maryland Public Service Commission, the Louisiana Department of Environmental Quality, and the Texas Commission on Environmental Quality—to describe their roles in FERC’s review process. To describe the applicants’ experience, we interviewed a nonprobability sample of applicants from the Sabine Pass, Freeport, Lake Charles, Cove Point, and Jordan Cove facilities. We also visited a nonprobability sample of LNG facilities at Lusby, Maryland; Brazoria County, Texas; and Cameron Parish, Louisiana. 10 We selected these facilities because they applied to FERC and were approved or conditionally approved for export by DOE. To describe how the public is involved in the review process, we interviewed representatives of organizations that have commented on applications, such as America’s Energy Advantage, the Sierra Club, the American Public Gas Association, and the Industrial Energy Consumers of America.

Because these were nonprobability samples, the information collected during site visits cannot be generalized to all LNG facilities but provides illustrative examples.

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We conducted this performance audit from September 2013 to September 2014 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Background

This section describes the factors affecting recent LNG activities in the United States, the liquefaction process, DOE’s responsibilities for authorizing export applications, FERC’s responsibilities for authorizing export facilities, and positions of those supporting or opposing the export of LNG.

Factors Affecting Recent LNG Activities in the United States

According to the Congressional Research Service, in the early 2000s, natural gas production in the United States was declining as energy demand was increasing and, as recently as the mid-to-late 2000s the United States was projected to be a growing natural gas importer. 11 In addition to four onshore import terminals that were already operational, natural gas companies built five LNG onshore import facilities in the latter half of the 2000s to meet the expected need for natural gas imports. 12 However, technology enhancements improved the extraction of natural gas from shale formations and resulted in a dramatic increase in domestic natural gas production. These technology enhancements allow companies to extract natural gas from shale formations that were previously considered to be inaccessible because traditional techniques did not yield sufficient amounts for economically viable production. 13 According to Energy Information Administration (EIA) data, 14 between 2007 and 2013, domestic natural gas withdrawals increased by 22

CRS, U.S. Natural Gas Exports: New Opportunities, Uncertain Outcomes R42074 (April 8, 2013).

There are currently six onshore import facilities on the Gulf Coast and three on the East Coast. In addition, there are two offshore import facilities on the East Coast.

In particular, the application of horizontal drilling techniques and hydraulic fracturing—a process that injects a combination of water, sand, and chemical additives under high pressure to create and maintain fractures in underground rock formations that allow oil and natural gas to flow—have increased U.S. natural gas and crude oil production.

EIA is a statistical agency within the DOE that collects, analyzes, and disseminates independent information on energy issues.

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percent, driven primarily by increased withdrawals from shale formations. 15 According to EIA, increases in natural gas supplies generally cause prices to drop. Specifically, between 2007 and 2013, the price of natural gas in the United States decreased by nearly 50 percent. 16 As the price of natural gas in the United States declined, prices in Europe and Asia remained considerably higher. In July 2014, FERC estimated that prices of LNG imported to Europe and Asia during August of 2014 would be about 100 and 250 percent higher than prices in the United States, respectively. 17 These price differences have motivated U.S companies to apply to export natural gas.

The Liquefaction Process

The majority of U.S. trade in natural gas is by pipeline with Canada and Mexico; however, over long distances separated by water, natural gas is generally converted to LNG and transported by specialized tanker ship. 18 To convert natural gas to LNG, companies pretreat the natural gas to remove components that would freeze during the liquefaction process and contaminate the LNG. 19 After the gas is pretreated, it is processed through a complex system called a liquefaction train that cools the natural gas to -260 degrees Fahrenheit, converting it to a liquid state. This process reduces the volume of the gas by 600 times. Once liquefied, the

15 Withdrawals from other natural gas sources such as gas wells, oil wells, and coalbed wells decreased over this period. 16

From 2007 to 2013, the average annual Henry Hub price of natural gas decreased from $6.97 per million British thermal unit (MMBtu) to $3.73 per MMBtu. The Henry Hub is a major gas trading center in the Gulf of Mexico and the delivery point for natural gas futures contracts on the New York Mercantile Exchange.

In July 2014, FERC estimated the following landed prices of natural gas for August 2014: at the Cove Point import facility in Maryland - $3.27 per MMBtu; in the United Kingdom - $6.59 per MMBtu; in India- $11.20 per MMBtu, and in Japan $11.35 per MMBtu. The landed price represents the price of LNG at an import facility, before it has been converted back to a gas.

LNG can also be stored in specialized containers and transported on cargo vessels. LNG exports by container are generally much smaller volumes than exports on an LNG tanker. For example, Carib Energy, 1 of the 3 export applications approved by DOE, was approved to export 0.04 billion cubic feet per day of natural gas in liquid form in these containers. For comparison, Sabine Pass, the first LNG export application approved by DOE for export by LNG tanker, was approved to export 2.2 billion cubic feet per day.

Natural gas transported by pipeline contains, among other contaminants, small amounts of water, carbon dioxide, hydrogen sulfide, and mercury, as well as hydrocarbons such as pentane and hexane that could freeze and contaminate the liquefaction process.

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natural gas is stored in large tanks until it is offloaded to a ship for transport. Once the ship reaches its destination, it is offloaded to tanks for storage or converted to natural gas for distribution by pipeline. 20 Figure 1 illustrates some of the common components of an LNG export facility. Figure 1: LNG Export Facility

DOE’s Responsibilities

Under Section 3 of the NGA, the import or export of LNG and the construction or expansion of LNG facilities requires authorization from DOE. 21 In 1984, DOE delegated the responsibility to approve or deny applications for LNG facilities to FERC. 22 Under Section 3, an authorization is to be granted unless DOE finds that approving the export or import is inconsistent with the public interest. According to DOE, Section 3(a) of the NGA creates a rebuttable presumption that a proposed export of natural gas is in the public interest—that is, it places the burden on those opposing an application to demonstrate that an

The United States exports a small amount of LNG that has been shipped to the United States, stored in LNG tanks at import facilities, and then reexported when it makes economic sense for the companies involved.

15 U.S.C. § 717b.

DOE Delegation Order 0204-112, 49 Fed. Reg. 6684, 6690 (Feb. 22,1984).

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export is inconsistent with the public interest. The NGA also authorizes DOE to attach terms and conditions necessary to protect the public interest. DOE evaluates public interest under Section 3, and can conduct studies or other reviews to support its public interest determination. In the Energy Policy Act of 1992, Congress amended the NGA to require DOE to use a different standard for the review of applications for export to countries with FTAs with the United States (FTA countries). 23 Specifically, under Section 3(c) of the NGA, DOE must treat applications to export LNG to FTA countries as consistent with the public interest, and DOE is to approve these applications without modification or delay. 24 These FTA applications therefore do not require the same public interest review as non-FTA applications. DOE started to receive applications to export LNG in 2010 and, since then, it has approved 37 of 42 applications to export LNG to FTA countries. During this same period, DOE approved 9 (3 final and 6 conditional) of 35 applications to export LNG to non-FTA countries. 25 Most major importers of LNG are non-FTA countries such as Japan and India, among others. As previously mentioned, this report discusses DOE’s process to review applications to export to non-FTA countries.

FERC’s Responsibilities

In keeping with its obligation to authorize LNG facility siting and construction under the NGA, FERC reviews applications to construct and operate LNG export facilities. FERC’s review is considered a federal action and subject to the National Environmental Policy Act (NEPA). 26

Countries that have FTAs with the United States and can trade natural gas without restrictions are Australia, Bahrain, Canada, Chile, Colombia, the Dominican Republic, El Salvador, Guatemala, Honduras, Jordan, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, South Korea, and Singapore.

15 U.S.C. § 717b(c).

As of late August 2014, DOE has approved 37 applications to export LNG to FTA countries, amounting to nearly 38 billion cubic feet per day of natural gas in the form of LNG. In addition, DOE has approved 10.56 billion cubic feet per day in conditional or final export approvals to non-FTA countries.

Enacted in 1970, NEPA has as its purpose, among others, to promote efforts to prevent or eliminate damage to the environment. NEPA requires an agency to prepare a detailed statement on the environmental effects of any “major federal action” significantly affecting the environment. Regulations promulgated by the Council on Environmental Quality implementing NEPA generally require an agency to prepare either an environmental assessment (EA) or an environmental impact statement (EIS), depending on whether or not a proposed action could significantly affect the environment.

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NEPA requires federal agencies to assess the projected effects of major federal actions that significantly affect the environment. Prior to the NEPA review, the law requires applicants to communicate with FERC for a minimum of 6 months—known as pre-filing—before submitting an application. 27 FERC acts as the lead agency for the environmental review required by NEPA, prepares the NEPA environmental documentation, and coordinates and sets the schedule for all federal authorizations. 28 The outcome of this review is an environmental document, also called the NEPA document, which provides the commissioners with staff’s assessment of the environmental impacts from facility construction and operation. 29

Positions Surrounding the Export of Natural Gas

DOE and FERC consider comments from the public during the application review process, and these comments reflect a range of perspectives on the potential benefits or harm from exports. Proponents maintain that LNG exports are consistent with U.S. free trade policies and will provide an economic boon for the United States, resulting in increased employment and an improved trade balance among other things. 30 They assert that the increased availability of natural gas resources will prevent a significant increase in natural gas prices. Opponents have expressed numerous environmental and economic concerns about LNG exports. For example, opponents have expressed concern that exports will increase hydraulic fracturing and its associated environmental effects, as well as increase greenhouse gas emissions from the production and consumption of natural gas. 31 Other opponents have expressed concern that exports will increase domestic natural gas prices, hurting the public and the growing industrial and manufacturing sectors that are sensitive to natural gas prices. Opponents have also stated that the primary beneficiaries of LNG exports will be a small segment of society involved in natural gas development and trade, and that most segments of society

15 U.S.C. § 717b-1(a).

DOE’s review is also considered a federal action and subject to NEPA, and DOE uses FERC’s NEPA document and its own analysis to fulfill its NEPA responsibility.

FERC is overseen by a commission of up to five Presidential appointees who serve 5year terms.

DOE also notes that U.S. LNG exports will diversify international supply options and improve energy security for many allies and trading partners of the United States. 31

Opponents have identified numerous concerns related to hydraulic fracturing, including the potential for groundwater contamination.

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will lose economically. Evaluating whether exports of LNG to non-FTA countries are consistent with the public interest is beyond the scope of this report.

DOE Has Approved 9 Applications to Export LNG through a Review Process That Considers a Range of Factors to Determine Whether Approval Is in the Public Interest

Since 2010, DOE has granted final approval to 3 applications and conditional approval to 6 others. DOE considers a range of factors to determine whether approving an export application is in the public interest.

DOE Has Approved 3 Applications and Conditionally Approved 6 Others

As of mid-September 2014, DOE has granted 3 final approvals for applications to export LNG, including the Sabine Pass application in 2012 and the Cameron LNG and Carib Energy applications in September 2014. Sabine Pass is the only LNG export facility currently under construction in the United States and is expected to begin operations in late 2015. 32 In August 2011, after DOE conditionally approved exports from Sabine Pass, DOE commissioned a study of the cumulative effects of additional LNG exports on the economy and the public interest. 33 DOE did not approve any conditional applications during the 16-month period of the

The Sabine Pass application was fully approved by DOE in August 2012 following FERCâ&#x20AC;&#x2122;s facility approval in April 2012. FERC approved applications to construct the Cameron and Freeport facilities in June and July of 2014, respectively. According to FERC officials, the Cameron facility was given notice to proceed with site preparation activities for its facility in July 2014. LNG exports under the Carib Energy application will not pass through an LNG export facility; instead, LNG will be processed at a natural gas liquefaction and storage facility where it will be loaded into specialized containers and transported by truck to various ports for export on cargo vessels.

33 When DOE conditionally approved the Sabine Pass application in May 2011, it had received 2 other LNG export applications and expected more. DOE received 13 other nonFTA applications during the period of the two-part study.

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study. 34 The study was completed in December 2012. Since then, DOE has conditionally approved 7 applications, including the Cameron LNG application that it granted final approval in September 2014 (See fig. 2). 35 DOE also approved the Carib Energy application in September 2014. 36 DOE’s export approvals, as of late August 2014, amount to 10.56 billion cubic feet of natural gas per day in the form of LNG; for comparison, Qatar, the world’s largest exporter of LNG, exported about 10 billion cubic feet per day in 2012.

The study consisted of two parts, a study from the EIA and a study from NERA Economic Consulting (NERA). EIA study, Effect of Increased Natural Gas Exports on Domestic Energy Markets; NERA study, Macroeconomic Impacts of LNG Exports from the United States.

DOE conditionally approved applications to export from the following facilities: Freeport, Texas (two separate applications); Lake Charles and Cameron, Louisiana; Cove Point, Maryland; and Jordan Cove and Oregon LNG, Oregon.

DOE issued a final approval for the Carib Energy application because it found that FERC had already completed a NEPA review of the LNG liquefaction and storage facility that Carib Energy proposed to use; DOE determined that FERC's environmental review addressed all of the reasonably foreseeable activities likely to arise from Carib Energy’s proposed use of the facility. More specifically, DOE determined that the Carib Energy application qualified for a categorical exclusion, which it issued on May 30, 2014. An agency may generally exclude categories of actions from the requirement to prepare a NEPA document if it has determined that the actions do not individually or cumulatively have a significant impact on the environment and that there are no extraordinary circumstances that might cause significant environmental effects.

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Figure 2: Status of Applications Submitted to DOE to Export LNG

Notes: DOE has received 26 other applications since the beginning of 2010 that DOE has not approved and are not displayed. The export amount that DOE conditionally approved for the Freeport and Freeport Expansion applications is accounted for in a single Freeport facility application to FERC.

DOE Reviews Each Application Separately and Considers a Range of Factors to Determine if Approval Is in the Public Interest

According to DOE, when determining whether approval of an application is in the public interest, DOE focuses on (1) the domestic need for natural gas, (2) whether the proposed export threatens the security of domestic natural gas supplies, and (3) whether the arrangement is consistent with DOE’s policy of promoting market competition along with other factors bearing on the public interest, such as environmental concerns. 37 In passing the NGA, Congress did not define “public interest;” however, in 1984, DOE developed policy guidelines establishing criteria that the agency uses to evaluate applications for natural gas imports. 38 The guidelines stipulate that, among other things, the market—not the government—should determine the price and other contract terms of

See Sabine Pass Liquefaction LLC, FE Docket No. 10-111-LNG, DOE/FE Order No. 2961, p. 27-29; May 20, 2011.

49 Fed. Reg. 6684 (Feb. 22, 1984).

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imported natural gas. In 1999, DOE began applying these guidelines to natural gas exports. 39 DOE’s review of export applications is not a standardized process, according to agency officials; rather, it is a case-by-case deliberation, where each application is considered separately from others. 40 DOE’s review process begins when an applicant submits documentation to DOE requesting permission to export LNG. DOE examines applications one at a time, and it issues a notice of application in the Federal Register to invite persons interested in the application to comment, protest, or intervene. 41 Applicants are then given an opportunity to respond to comments. DOE’s internal review includes an examination of the application and analysis of public interest using public comments and applicant responses, the criteria outlined in its policy guidelines, the NGA, DOE’s study of the effects of additional LNG exports, and past DOE authorizations. As discussed above, the NGA authorizes DOE to attach terms and conditions necessary to protect the public interest. To further inform its public interest review, DOE commissioned the study of the

39 Phillips Alaska Natural Gas Corporation and Marathon Oil Company. DOE Order No. 1473, Order Extending Authorization to Export Liquefied Natural Gas from Alaska (Apr. 2, 1999). 40

DOE officials said that, although reviews are handled on a case-by-case basis, each deliberation considers the cumulative effects from prior approvals.

Any member from the public can comment on or protest applications during a 60-day comment period. In addition, an entity can file a motion or notice to intervene with DOE. Intervenors become participants in the proceeding and can request a rehearing after DOE issues an order. DOE officials examined and considered almost 200,000 public comments on its commissioned study in its review of the applications for Freeport, Lake Charles, Cameron, Cove Point, Jordan Cove, and Oregon LNG. When reviewing public comments, DOE officials said they consider the merits of the issue addressed, not the volume of comments submitted.

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potential effects of additional exports on the economy. 42 Since the study was released in December 2012, DOE has used it to support its public interest review for each of its application approval documents, including referencing the study’s conclusion that LNG exports would have a net positive effect on the economy. 43 After considering the evidence, DOE issues an order denying the application or granting the application on condition of a satisfactory completion of the NEPA review by FERC. 44 DOE includes the reasoning behind its decision in each order. DOE may also modify the request in an order, such as by limiting the approved export amount or duration. 45 Once DOE conditionally approves an application, it does not grant a final approval until it has reviewed FERC’s NEPA document and reconsidered its public interest determination in light of relevant environmental information. Under NEPA, DOE must give appropriate consideration to

77 Fed. Reg. 73627 (Dec. 11, 2012). The study consisted of two parts. The first part of the study was conducted by EIA and examined the potential effect of 6 to 12 billion cubic feet per day of natural gas exports on domestic energy consumption, production, and prices under various scenarios. This part of the study found that natural gas prices would rise gradually under most study conditions. The second part of the study, conducted by NERA, evaluated the macroeconomic effects of LNG exports on the U.S. economy using the results of the EIA study. This part of the study found that LNG exports would have net economic benefits in all cases. One concern of export opponents was that NERA used data from EIA’s 2011 Annual Energy Outlook, which did not reflect more recent EIA reports that projected greater increases in domestic demand for natural gas. In February 2014, in response to a request from Cheniere, NERA updated its study using data from EIA’s 2013 Annual Energy Outlook and found that its conclusions from the original study were still valid.

Additionally, in December 2012, DOE established a precedence order for reviewing applications. Under this order, DOE prioritized applications from companies that had already entered the filing process with FERC, and moved those applications ahead of others that had not started the process with FERC.

According to a DOE official, MARAD would lead the NEPA review for offshore facilities beyond state waters.

DOE conditionally approved an export application for Freeport for 0.4 billion cubic feet per day of natural gas rather than the 1.4 billion cubic feet per day that the applicant requested. DOE approved the lesser quantity because the facility application Freeport submitted to FERC was not capable of handling the full amount of natural gas proposed to DOE.

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the environmental effects of its decisions; FERC’s NEPA document provides the basis for this consideration. 46 On May 29, 2014, DOE proposed that it would no longer approve applications for export on the condition of a satisfactory completion of the environmental review by FERC and the resulting NEPA document; instead, it would review applications for export only after FERC issues the NEPA document. 47 On August 15, DOE issued a final decision to implement this procedural change, suspending its practice of issuing conditional orders. 48 DOE also announced on May 29 that it would request another economic study to further examine whether additional exports are in the public interest. 49 At the same time, DOE released two reports on environmental issues for public review—an action prompted by public comments and the number of applications DOE has received since 2010. 50 DOE officials said that, after DOE receives and responds to public

DOE is a cooperating agency for FERC’s NEPA review of LNG export projects and contributes to the development of the NEPA document.

79 Fed. Reg. 32261 (June 4, 2014). The change would also supersede the precedence order. According to the DOE notice, DOE could still choose to implement the policy of issuing conditional orders at a later date. According to DOE officials, this change would allow them to use agency resources more efficiently because they would conduct a single review of each application instead of separate reviews for conditional and final approvals. In addition, the proposal would allow projects that are more commercially advanced to be reviewed by DOE once FERC has issued a NEPA document.

79 Fed. Reg. 48132 (Aug. 15, 2014). According to DOE officials, the benefits of this change include DOE being able to ensure prompt action on applications that are otherwise ready to proceed, and to better allocate departmental resources by reducing the likelihood that the DOE would be forced to act on applications with little prospect of proceeding.

According to the DOE notice, DOE requested that the EIA update its 2012 study, which had been included as part 1 of DOE’s LNG export study. DOE requested that EIA evaluate the effect of increased natural gas demand—reflecting possible exports of U.S. natural gas—on domestic energy markets using the modeling analysis presented in its 2014 Annual Energy Outlook as a starting point. DOE officials said that they commissioned the new study to include updated data and consider export scenarios ranging from 12 to 20 billion cubic feet per day. In addition to the EIA study, DOE officials said they planned to commission an outside contractor to conduct a macroeconomic review using EIA’s results.

79 Fed. Reg. 32258, 32260 (June 4, 2014). The goal of the two studies, according to the DOE notice, was to provide the public with further information on the 1) effect of LNG exports on greenhouse gas emissions and 2) potential environmental impacts from increased development of unconventional natural gas resources, particularly production that involves hydraulic fracturing.

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comments on these reports, it will use the reports and NEPA document to complete its environmental responsibilities under NEPA

FERC Has Approved 3 Facility Applications and Is Reviewing 14 Others Using a Technically Complex Process That Involves Other Agencies

Since 2010, FERC approved 3 facility applications, including 2 in 2014, and is currently reviewing 14 applications. FERCâ&#x20AC;&#x2122;s reviews of LNG export facility applications are a multiyear analysis of the potential environmental and safety effects of the facility that involves other federal, state, and local agencies.

FERC Approved 3 Facility Applications and Is Reviewing 14 Applications

FERC approved applications to construct and operate the Sabine Pass LNG export facility in April 2012, the Cameron facility in June 2014, and the Freeport facility in July 2014. As of late August 2014, FERC was reviewing 14 applications (See fig. 3). FERC has issued three final NEPA documents in 2014, including for the Cameron and Freeport facilities, and expects to complete one more by the end of 2014. 51 FERC officials said that they could not discuss when the Commission would act on these facility applications. 52

FERC has issued three final NEPA documents in 2014. These include the Cameron final EIS, issued April 30, 2014 (facility approved by the Commission on June 19, 2014); the Freeport final EIS, issued June 16, 2014 (facility approved by the Commission on July 30, 2014); and the Cove Point EA, issued on May 15, 2014. FERC also issued a draft EIS for Corpus Christi on June 13, 2014.

FERC staff are restricted by regulation from discussing the nature or timing of future Commission actions. 18 C.F.R. Â§3c.2(b) 2014.

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Figure 3: Status of Applications Filed with FERC to Build and Operate LNG Export Facilities

Note: FERC also approved an application to construct and operate a natural gas liquefaction and storage facility in 2008. This facility was identified as the source of LNG to be exported in containers under the Carib Energy application to DOE.

As shown above, FERCâ&#x20AC;&#x2122;s review of applications to construct LNG export facilities can take 2 to 3 years or more. 53 FERC officials said that these reviews are lengthy because of the complexity of the facilities and number of permits and reviews required by federal and state law. For example, applicants must model the effects of LNG spills from pipes and storage tanks on areas around the facility under a variety of scenarios. One of the applicants we spoke with said that the number of variables involved in modeling a single scenario could require up to a week of computer processing.

Application estimates based on the duration of FERCâ&#x20AC;&#x2122;s completed and pending applications.

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FERC’s Reviews of Applications to Construct LNG Export Facilities Are Technically Complex

FERC’s review process is technically complex and includes the following three phases. Pre-filing. According to FERC officials, the pre-filing phase is intended to allow applicants to communicate freely with FERC staff and stakeholders to identify and resolve issues before the applicant formally files an application with FERC. 54 Under Commission regulations issued pursuant to the Energy Policy Act of 2005, applicants are required to pre-file with FERC a minimum of 6 months before formally filing. The pre-filing phase can vary significantly depending on project specifics; the Freeport and Lake Charles applications were in the pre-filing phase for over 19 months, while the Cameron application was in the pre-filing phase for about 7 months. FERC officials said that the duration of each phase can vary depending on the site specific characteristics of the proposed facility and responsiveness of the applicant to requests for information from FERC. 55 The pre-filing period also involves public outreach by the applicant and FERC, and FERC allows public comments during this period. 56 An applicant completes the pre-filing period when it has submitted the required documentation to FERC and formally filed. This documentation includes a series of 13 resource reports that consist of, among other things, detailed information on project engineering and design, air and water quality, and fish and wildlife, as well as a description of the anticipated environmental effects of the project and proposed mitigation measures. One applicant told us that the resource reports it submitted to FERC consisted of over 12,000 pages. Application review. The application review phase includes FERC’s review of the application and development of the environmental document required by NEPA. FERC officials told us that they start the review phase after an applicant has successfully completed the pre-filing process and

Once an applicant formally files, FERC ex parte regulations require all communications between an applicant and FERC to be on the record.

FERC officials told us that the applicant generally determines how long pre-filing will last. After the 6-month minimum pre-filing period has been reached and the applicant has submitted the appropriate documentation, FERC staff cannot prevent the applicant from ending the pre-filing phase by filing an application. 56

According to FERC officials, a public scoping period typically occurs for 30 days after FERC issues a notice in the Federal Register announcing its intent to prepare an environmental document. The goal of this period is to determine the scope of issues to be addressed and to identify significant issues related to a proposed action.

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submits an application. 57 FERC reviews, among other things, facility engineering plans and safety systems identified by the applicant; environmental effects from the construction and operation of the facility; and, potential alternatives to the proposed project. 58 FERC develops a NEPA document with input from relevant agencies that elect to participate, called cooperating agencies, as well as other stakeholders. 59 FERC officials told us that, depending on the location of the proposed facility and amount of construction, FERC prepares either an environmental impact statement (EIS) or environmental assessment (EA). FERC will prepare an EA if it believes the review will find no significant impact on the environment from the project. For example, FERC prepared an EA for the Sabine Pass facility because the proposed facility was within the footprint of an existing LNG import facility and previously the subject of an EIS. 60 FERC officials told us that the agency generally prepares an EIS for proposed facilities that would extend beyond the footprint of an existing import facility. After an EIS or EA is drafted, FERC solicits comments from federal agencies and the public on the document. 61 FERC reviews agency and public comments and integrates those into a final EIS or EA, as necessary. The final EIS or EA will recommend any environmental and safety mitigation measures to be

According to FERC officials, the public has the opportunity to intervene and become a party to the proceeding for a period specified in FERCâ&#x20AC;&#x2122;s notice in the Federal Register announcing that an application has been filed (typically 21 days). Parties have the right to seek court review of Commission orders.

For example, one aspect of this review includes an analysis of liquefaction systems, fire suppression and alarm systems, instrumentation, transfer piping, and dikes and sumps to ensure that the effects of any LNG spill stay within the facility boundary.

Cooperating agencies have jurisdiction by law or special expertise with respect to resources potentially affected by the proposal and participate in the NEPA analysis. According to FERC officials, the Coast Guard, the Corps, DOT, DOE, and the Environmental Protection Agency are typically cooperating agencies for FERC LNG facility reviews. According to these officials, a state or local agency or American Indian tribe may also become a cooperating agency under certain conditions.

FERC must conduct an EIS after an EA if the EA determines that significant impacts are likely.

FERC issues a draft and final document for an EIS. According to FERC officials, the public has the opportunity to comment, typically for 45 days after FERC issues a draft EIS, and FERC addresses those comments in the final EIS. EAâ&#x20AC;&#x2122;s do not include a draft document; the public has the opportunity to comment, typically for 30 days after the EA is completed. FERC addresses these comments in the Commission order. The public may also file a motion to intervene during these comment periods.

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completed during various stages of the project. FERC staff submits the final NEPA document and other staff analyses to FERC commissioners for consideration. 62 FERC commissioners consider the entire record of the proceeding, including the NEPA document, to determine whether to approve a project. Post-authorization. The post-authorization phase includes FERC oversight of plant construction and operations. After FERC approves a project but before an applicant can start construction, the applicant must develop a plan describing how it will meet any conditions and mitigation measures identified in FERC’s approval. FERC oversees construction and ensures that these conditions are met. The Coast Guard and DOT also oversee construction to ensure compliance with their respective regulations. FERC conducts compliance and site inspections during construction at least every 8 weeks. Following construction, the applicant must receive written authorizations from the Commission to begin operations at the facility. Once the facility is operational, FERC conducts annual inspections and requires semiannual status reports from the facility operator.

FERC’s Review Process Involves Other Federal, State, and Local Agencies

As the lead agency responsible for the environmental and safety review of LNG export facilities under NEPA, FERC works with federal, state, and local agencies to develop the NEPA document. In some cases, such as with the Corps and DOE, agencies will adopt and use the NEPA document in issuing their respective permits related to the export facility. In addition, FERC regulations require applicants to consult with the appropriate federal, state, and local agencies to ensure that all environmental effects are identified. 63 FERC ensures that the applicant obtains the appropriate federal permits or consultations with these agencies. Major federal participants in FERC’s LNG facility review include the following: Coast Guard. The Coast Guard requires applicants to assess the effects of a new facility on a bordering waterway. The applicant

After a final EIS or EA is issued, federal agencies or agencies with delegated federal responsibilities are to issue a final decision on the applicant’s request for the federal authorization within 90 days, unless a schedule is otherwise established by federal law. 18 C.F.R. §157.22.

18 C.F.R. §380.3 (b)(3),(4).

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provides the assessment to the Coast Guard for validation and review before filing its FERC application, and the Coast Guard advises FERC on the suitability of the waterway for the LNG marine traffic associated with the facility. The Coast Guard and DOT also assist FERC’s review of safety and security of the facility. 64 PHMSA. PHMSA is an agency within DOT responsible for establishing national policy relating to pipeline safety and hazardous material transportation, including the authority to establish and enforce safety standards for onshore LNG facilities. To assist FERC’s assessment of whether a facility would affect public safety, FERC regulations require applicants to show that their facility design would comply with PHMSA regulations for hazardous liquids vapor dispersion and fires. 65 Applicants submit models of vapor dispersion to FERC, and FERC consults with PHMSA to ensure that the models comply with PHMSA regulations. 66 The Corps. Under section 404 of the Clean Water Act, operations that discharge dredged or fill material into U.S. waters are required to obtain a permit from the Corps. 67 Discharges under this permit must have a state certification to ensure the discharge meets water quality standards. 68 In addition, under section 10 of the Rivers and Harbors Act of 1899, the Corps has regulatory authority to oversee construction activities within the navigable waters of the United

In 2004, to help ensure coordination between federal agencies, FERC, DOT, and the Coast Guard entered an interagency agreement that defined responsibilities among the agencies regarding the safety and security at waterfront LNG facilities.

Some applicants told us that, in August 2013, PHMSA asked them for more information for its review of vapor models than previously required, and that PHMSA took more time to review the models. Some applicants also told us that staffing shortages at PHMSA caused delays in these reviews. PHMSA officials we spoke to said staff has been added to address these delays.

PHMSA has indicated that these regulations are out of date and do not reflect modern modeling technology. PHMSA officials told us that the agency plans to revise these regulations accordingly, and that it has issued guidance to help with interpretation of these regulations.

33 U.S.C. §1344. EPA may prohibit, withdraw, deny, or restrict section 404 permits.

33 U.S.C. §1341. EPA may review the water quality certifications issued by state agencies.

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States, and applicants may be required to obtain a permit from the Corps. 69 Environmental Protection Agency (EPA). Applicants may be required under the Clean Air Act (CAA) to receive air permits for the construction and operation of LNG facilities. 70 State environmental agencies generally issue these permits, but EPA can issue the permits if a state is not authorized to issue permits, or under other limited circumstances. 71 EPA also comments on the FERC draft and final EIS, as required by the CAA. 72 Applicants may also be required by law to consult with these and other federal agencies, such as the National Oceanic and Atmospheric Administration and the Fish and Wildlife Service, to ensure their applications comply with federal laws such as the Endangered Species Act, 73 the Migratory Bird Treaty Act, 74 the Magnuson-Stevens Fishery

33 U.S.C §403. The Rivers and Harbors Act regulates any work or structures that potentially affect the navigable capacity of a body of water.

According to EPA, potentially applicable CAA requirements include prevention of significant deterioration, nonattainment new source review (NSR), minor source NSR, title V, new source performance standards, hazardous air pollutants, and other state air regulations.

The majority of states are authorized or approved to implement the relevant CAA permitting programs relevant to LNG facilities.

42 U.S.C. §7609(a).

The Endangered Species Act, Pub. L. No. 93-205, codified as amended at 16 U.S.C. §§1531-1543, has as its purpose, to conserve threatened and endangered species and the ecosystems upon which they depend. Under section 7 of the act, federal agencies must ensure that any action they authorize, fund, or carry out is not likely to jeopardize the continued existence of a species protected under the act.

The Migratory Bird Treaty Act, act of July 3, 1918, ch. 128, codified as amended at 16 U.S.C. §§ 703-712, implements various treaties and conventions between the United States, Canada, Japan, Mexico, and the former Soviet Union for the protection of migratory birds.

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Conservation and Management Act, 75 and the Fish and Wildlife Coordination Act. 76 In addition to federal permits and consultations, applicants may also be required to obtain other permits under state and local law. Because of the wide variety of projects, locations, and state and local laws, permitting requirements vary by project. The applicant is responsible for identifying the necessary permits and consultations and reporting these to FERC as part of the pre-filing process. In addition to issuing most air permits and water quality certifications, states and local agencies have other permitting and consultation responsibilities, such as to consult with applicants to ensure compliance with the Coastal Zone Management Act 77 and the National Historic Preservation Act. 78

Agency Comments

We provided a draft of this product to FERC and the DOE for their review and comment. DOE and FERC provided technical comments, which we incorporated throughout the report as appropriate. As agreed with your office, unless you publicly announce the contents of this report earlier, we plan no further distribution until 5 days from the report date. At that time, we will send copies to the appropriate congressional committees, the Chairman of FERC, the Secretary of Energy, and other interested parties. In addition, this report will be available at no charge on the GAO website at http://www.gao.gov.

The Magnuson-Stevens Fishery Conservation and Management Act, Pub. L. No. 94– 265 (1976), codified as amended at 16 U.S.C. §1801 et seq., provides the statutory framework for the protection and management of the nation’s marine fishery resources.

The Fish and Wildlife Coordination Act, Act of March 10, 1934, ch. 55, codified as amended at 16 U.S.C. §§ 661-666 provides the basic authority for the Fish and Wildlife Service’s involvement in evaluating impacts to fish and wildlife from proposed water resource development projects.

The Coastal Zone Management Act of 1972, Pub. L. No. 92-583 (1972), codified as amended at 16 U.S.C. §§ 1451-1466, promotes comprehensive and coordinated planning for coastal zone development and preservation between states and the federal government.

The National Historic Preservation Act, Pub. L. No. 89-665 (1966), codified as amended at 16 U.S.C. §§ 470 to 470x-6 requires, among other things, that federal agencies consider the effects of any federally funded or permitted project on any historic site, building, structure, or other object that is listed on the National Register of Historic Places.

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If you or your staff members have any questions about this report, please contact me at (202) 512-3841 or ruscof@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report are listed in appendix II. Sincerely yours,

Frank Rusco Director, Natural Resources and Environment

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Appendix I: Application Names Used by the GAO Appendix I: Application Names Used by the GAO

For the purposes of this report, GAO developed table 1 below to allow us to use a single name to refer to related applications to the Federal Energy Regulatory Commission (FERC) and the Department of Energy (DOE). Table 1 lists (1) the names of applicants that submitted requests to FERC to construct liquefied natural gas (LNG) export facilities, (2) the names of applicants that submitted requests to DOE to export LNG from those facilities 1, and (3) the name GAO used to refer to these applications. In some cases, multiple companies filed jointly for one application. Table 1: Names of Applications Referred to In This Report, Based on Associated Applications to FERC and DOE FERC applicant name

DOE applicant name

GAO application name

Sabine Pass Liquefaction LLC

Sabine Pass (LA)

Freeport LNG Development LP

Freeport LNG Expansion LP & FLNG Liquefaction LLC

Freeport (TX)

Trunkline LNG Export LLC & Trunkline LNG b Company LLC

Lake Charles Exports LLC

Lake Charles (LA)

Dominion Cove Point LNG LP

Cove Point (MD)

Freeport LNG Expansion LP & FLNG Liquefaction LLC

Freeport Expansion (TX)

Sabine Pass

N/A

Cameron LNG LLC

Cameron (LA)

Jordan Cove Energy Project LP

Jordan Cove (OR)

Corpus Christi Liquefaction LLC

Cheniere Marketing LLC

Corpus Christi (TX)

Oregon LNG

LNG Development Company LLC

Oregon LNG (OR)

Excelerate Liquefactions Solutions

Excelerate Liquefactions Solutions I, LLC

Excelerate (TX)

Elba Liquefaction Company LLC & Southern LNG Company LLC

Southern LNG Company LLC

Southern LNG (GA)

Sabine Pass

Sabine Pass Liquefaction LLC

Sabine Pass Trains 5 & 6 (LA)

Magnolia LNG LLC

Magnolia LNG (LA)

Gulf LNG Liquefaction Company LLC

Gulf LNG (MS)

CE FLNG LLC & CE Pipeline LLC

CE FLNG LLC

CE FLNG (LA)

Golden Pass Products LLC & Golden Pass Pipeline LLC

Golden Pass Products LLC

Golden Pass (TX)

Louisiana LNG Energy LLC

Louisiana LNG (LA)

Downeast LNG, Inc.

N/A

Downeast LNG (ME)

DOE has received over 20 other applications to export LNG from companies that have not filed with FERC and are not listed here.

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Appendix I: Application Names Used by the GAO

FERC applicant name g

N/A

DOE applicant name

GAO application name

Carib Energy (USA) LLC

Carib Energy (FL)

Sources: GAO analysis of FERC and DOE documents. | GAO-14-762 a

The application was submitted by Sabine Pass Liquefaction Expansion LLC, Sabine Pass Liquefaction LLC, and Sabine Pass LNG LP, to which FERC collectively refers as â&#x20AC;&#x153;Sabine Pass.â&#x20AC;?

FERC also included in the application the Pipeline Modification Project submitted by Trunkline Gas Company LLC. The project coincides with the construction of the LNG export facility.

There was effectively a single application to FERC to construct the Freeport LNG export facility. DOE received two applications to export LNG for this facility. d

FERC also included in the application the Pipeline Project submitted by Cameron Interstate Pipeline LLC. The project coincides with the construction of the LNG export facility.

FERC also included in the application to modify the pipeline route submitted by Oregon Pipeline Company LLC. The project coincides with the construction of the LNG export facility.

As of late August 2014, Downeast LNG had not submitted an application to DOE to export LNG.

The Carib Energy application to DOE requested approval to export LNG via specialized container. The LNG will be processed and loaded into containers at a small liquefaction and storage facility that has multiple uses, and is not identified by FERC as an LNG export facility.

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Appendix II: GAO Contact and Staff Acknowledgments Appendix II: GAO Contact and Staff Acknowledgments

GAO Contact

Frank Rusco, (202) 512-3841 or ruscof@gao.gov

Staff Acknowledgments

In addition to the individual named above, Christine Kehr (Assistant Director), Cheryl Harris, and David Messman made key contributions to this report. Important contributions were also made by Mark Braza, Michael Kendix, Alison Oâ&#x20AC;&#x2122;Neill, Dan Royer, and Barbara Timmerman.

(361527)

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Ground Zero: What About Implementation?

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - what about implementation?

October 23, 2014 1:12 PM

1 Attachment, 73 KB

Ground zero Implementation GAO reported Figure 1: Reported Federal Climate Change Funding by Category, 1993-2010 .

Office of Management and Budget has reported federal climate change funding in 3 categories: technology to reduce emissions, science to better understand climate change, and international assistance for developing countries. Notes: In its June 2010 report, OMB began reporting funding for wildlife adaptation as an interim category while criteria are developed to more systematically account for a broader suite of adaptation programs. Funding for wildlife adaptation totaled $65 million in 2010, less than 1 percent of the total, and is not included in this figure. .

Funding in the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5 (2009)) included an additional $25.5 billion for technology and $641 million for science. How has funding looked since 2010 pursuant to President Obama's climate admonitions?

Ground Zero: What Is Needed Is Coordination

Douglas Grandt <answerthecall@me.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - what is needed is coordination

October 23, 2014 2:34 PM

2 Attachments, 912 KB

Coordination GAO reported Figure 2: Selected Coordination Mechanism for Federal Climate Change Activites Each department and agency is operating under its own ... authorities and responsibilities, and therefore addresses climate change in different ways relevant to its mission. This type of situation demands a strategic framework and a high level of coordination. In the context of providing climate-related information, the National Research Council observed that no single government agency or centralized unit could perform all the required functions, and that coordination of agency roles and regional activities is a necessity. As illustrated in figure 2, many federal entities manage related programs and activities.

Ground Zero: FERC and DOE Coordinate

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - FERC and DOE coordinate

October 23, 2014 3:33 PM

2 Attachments, 912 KB

GAO reported Figure 2: Selected Coordination Mechanism for Federal Climate Change Activites: The Department of Energy (DOE) and Federal Energy Regulatory Commission (FERC) are two federal agencies with primary responsibility for approving LNG exports. Under the Natural Gas Act of 1938 (NGA), as amended, DOE is responsible for reviewing LNG export applications and, for countries that do not have a free trade agreement (FTA) with the United States, determining whether approval of such applications is consistent with the public interest. FERC is responsible for authorizing the construction and operation of facilities located onshore or within state waters that liquefy natural gas and load the LNG onto ships for export. FERC conducts an environmental review of the facility to help with this decision. Until May 2014, DOE granted approvalsâ&#x20AC;&#x201D;known as conditional approvalsâ&#x20AC;&#x201D;on the condition that FERC completed a satisfactory environmental review of the associated export facility. DOE granted final approvals only after it had the opportunity to consider and adopt the FERC-led review. In May 2014, DOE proposed suspending its practice of issuing conditional approvals and instead proposed reviewing applications only after FERC has completed the environmental review, and DOE has sufficient information to determine the public interest of an application.

Figure 2: Selected Coordination Mechanisms for Federal Climate Change Activities

Ground Zero: LNG Export Approval Process

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - LNG export approval process

October 24, 2014 7:37 AM

4 Attachments, 230 KB

September 26, 2014

http://www.gao.gov/assets/670/666177.pdf

The Honorable Lisa Murkowski Ranking Member Committee on Energy and Natural Resources United States Senate Dear Senator Murkowski: Technological advances in hydraulic fracturing and horizontal drilling have dramatically increased the amount of natural gas that can be extracted domestically. This increase has helped reduce natural gas prices in the United States, although prices remain significantly higher overseas. To take advantage of overseas prices, energy companies have applied to the federal government for permission to export natural gas. Natural gas, like crude oil, requires federal approval before it can be exported. To transport natural gas by ship, the natural gas is cooled to a liquid state called liquefied natural gas (LNG). This cooling process requires expensive processing and liquefaction facilities that do not currently exist in the contiguous United States. The Department of Energy (DOE) and Federal Energy Regulatory Commission (FERC) are two federal agencies with primary responsibility for approving LNG exports. Under the Natural Gas Act of 1938 (NGA), as amended, DOE is responsible for reviewing LNG export applications and, for countries that do not have a free trade agreement (FTA) with the United States, determining whether approval of such applications is consistent with the public interest. In this report, we discuss non-FTA applications that require a public interest review. FERC is responsible for authorizing the construction and operation of facilities located onshore or within state waters that liquefy natural gas and load the LNG onto ships for export. FERC conducts an environmental review of the facility to help with this decision. Until May 2014, DOE granted approvalsâ&#x20AC;&#x201D;known as conditional approvalsâ&#x20AC;&#x201D;on the condition that FERC completed a satisfactory environmental review of the associated export facility. DOE granted final approvals only after it had the opportunity to consider and adopt the FERC-led review. In May 2014, DOE proposed suspending its practice of issuing conditional approvals and instead proposed reviewing applications only after FERC has completed the environmental review, and DOE has sufficient information to determine the public interest of an application.

Federal Approval Process for Liquefied Natural Gas Exports What GAO Found

(GAO is not making any recommendations in this report)

Since 2010, of 35 applications it has received that require a public interest review, the Department of Energy (DOE) has approved 3 applications to export liquefied natural gas (LNG) and 6 applications are conditionally approved with final approval contingent on the Federal Energy Regulatory Commissionâ&#x20AC;&#x2122;s (FERC) issuance of a satisfactory environmental review of the export facility. DOE considers a range of factors to determine whether each application is in the public interest. After the first application was conditionally approved in 2011, DOE commissioned a study to help it determine whether additional LNG exports were in the public interest. Since the 16-month study was published in December 2012, DOE issued 7 conditional approvals (one of which became final) and 1 other final approval (see fig. below). In August 2014, DOE suspended its practice of issuing conditional approvals; instead, DOE will review applications after FERC completes its environmental review. DOE LNG Export Application Status

Since 2010, FERC has approved 3 LNG export facilities for construction and operation, including 2 facilities in 2014, and is reviewing 14 applications (see fig. below). FERCâ&#x20AC;&#x2122;s review process is, among other things, designed to fulfill its responsibilities under the National Environmental Policy Act (NEPA). Before submitting an application to FERC, applicants must enter an initial stage called pre-filing to identify and resolve potential issues during the earliest stages of a project. Of the 14 applications, 5 are in the pre-filing stage at FERC and not shown in the figure below. FERC conducts an environmental and safety review with input from other federal, state and local agencies. FERC LNG Export Facility Application Status

EXPORTING POISONOUS POLLUTANTS

Ground Zero: Lifting the Ban on Oil Exports GAO Recommends

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - lifting the ban on oil exports - GAO recommends

October 24, 2014 7:47 AM

3 Attachments, 95 KB

September 30, 2014

http://www.gao.gov/assets/670/666274.pdf

The Honorable Lisa Murkowski Ranking Member Committee on Energy and Natural Resources United States Senate Dear Senator Murkowski: Almost 4 decades ago, Congress passed legislation restricting U.S. crude oil exports and establishing the Strategic Petroleum Reserve (SPR) in response to the Arab oil embargo and economic recession it triggered. In recent years, however, crude oil market conditions have changed, reversing decades-long trends in declining domestic crude oil production and increasing crude oil imports. You asked us to provide information on the implications of removing crude oil export restrictions. This report examines what is known about: (1) the potential effect of removing crude oil export restrictions on prices of crude oil and consumer fuels; (2) other potential implications of removing crude oil export restrictions; and (3) implications for the SPR, if any, from recent changes in crude oil market conditions. Changing market conditions have implications for the size, location, and composition of Department of Energy's (DOE) Strategic Petroleum Reserve (SPR). In particular, increased domestic crude oil production and falling net imports may affect the ideal size of the SPR. Removing export restrictions is expected to contribute to additional decreases in net imports in the future. As a member of the International Energy Agency, the United States is required to maintain public and private reserves of at least 90 days of net imports but, as of May 2014, the SPR held reserves of 106 daysâ&#x20AC;&#x201D;worth about $73 billionâ&#x20AC;&#x201D;and private industry held reserves of 141 days. DOE has taken some steps to assess the implications of changing market conditions on the location and composition of the SPR but has not recently reexamined its size. ... Without such a reexamination, DOE cannot be assured that the SPR is sized appropriately and risks holding excess crude oil that could be sold to fund other national priorities.

Allowing Exports Could Reduce Consumer Fuel Prices, and the Size of the Strategic Reserves Should Be Reexamined GAO-14-807: Published: Sep 30, 2014. Publicly Released: Oct 20, 2014 | http://bit.ly/GAO20Oct What GAO Found The studies GAO reviewed and stakeholders interviewed suggest that removing crude oil export restrictions is likely to increase domestic crude oil prices but decrease consumer fuel prices. Prices for some U.S. crude oils are lower than international prices—for example, one benchmark U.S. crude oil averaged $101 per barrel in 2014, while a comparable international crude oil averaged $109. Studies estimate that U.S. crude oil prices would increase by about $2 to $8 per barrel—bringing them closer to international prices. At the same time, studies and some stakeholders suggest that U.S. prices for gasoline, diesel, and other consumer fuels follow international prices, so allowing crude oil exports would increase world supplies of crude oil, which is expected to reduce international prices and, subsequently, lower consumer fuel prices. Some stakeholders told GAO that there could be important regional differences in the price implications of removing crude oil export restrictions. Some stakeholders cautioned that estimates of the implications of removing export restrictions are uncertain due to several factors such as the extent of U.S. crude oil production increases, how readily U.S. refiners are able to absorb such increases, and how the global crude oil market responds to increasing U.S. production. The studies GAO reviewed and stakeholders interviewed generally suggest that removing crude oil export restrictions may also have the following implications: Crude oil production. Removing export restrictions would increase domestic production—8 million barrels per day in April 2014—because of increasing domestic crude oil prices. Estimates range from an additional 130,000 to 3.3 million barrels per day on average from 2015 through 2035. Environment. Additional crude oil production may pose risks to the quality and quantity of surface groundwater sources; increase greenhouse gas and other emissions; and increase the risk of spills from crude oil transportation. The economy. Removing export restrictions is expected to increase the size of the economy, with implications for employment, investment, public revenue, and trade. For example, removing restrictions is expected to contribute to further declines in net crude oil imports, reducing the U.S. trade deficit. Changing market conditions have implications for the size, location, and composition of Department of Energy's (DOE) Strategic Petroleum Reserve (SPR). In particular, increased domestic crude oil production and falling net imports may affect the ideal size of the SPR. Removing export restrictions is expected to contribute to additional decreases in net imports in the future. As a member of the International Energy Agency, the United States is required to maintain public and private reserves of at least 90 days of net imports but, as of May 2014, the SPR held reserves of 106 days—worth about $73 billion—and private industry held reserves of 141 days. DOE has taken some steps to assess the implications of changing market conditions on the location and composition of the SPR but has not recently reexamined its size. GAO has found that agencies should reexamine their programs if conditions change. Without such a reexamination, DOE cannot be assured that the SPR is sized appropriately and risks holding excess crude oil that could be sold to fund other national priorities.

Why GAO Did This Study Almost 4 decades ago, in response to the Arab oil embargo and recession it triggered, Congress passed legislation restricting crude oil exports and establishing the SPR to release oil to the market during supply disruptions and protect the U.S. economy from damage. After decades of generally falling U.S. crude oil production, technological advances have contributed to increasing U.S. production. Meanwhile, net crude oil importsâ&#x20AC;&#x201D;imports minus exportsâ&#x20AC;&#x201D;have declined from a peak of about 60 percent of consumption in 2005 to 30 percent in the first 5 months of 2014. According to Energy Information Administration forecasts, net imports are expected to remain well below 2005 levels into the future. GAO was asked to provide information on the implications of removing crude oil export restrictions. This report examines what is known about (1) price implications of removing crude oil export restrictions; (2) other key potential implications; and (3) implications of recent changes in market conditions on the SPR. GAO reviewed four studies on crude oil exports, including two sponsored by industry, and summarized the literature and views of a nonprobability sample of stakeholders including academic, industry, and other experts. What GAO Recommends In view of changing market conditions and in tandem with activities to assess other aspects of the SPR, GAO recommends that the Secretary of Energy reexamine the size of the SPR. In commenting on a draft of this report, DOE concurred with GAO's recommendation.

Recommendation for Executive Action 1.

Recommendation: In view of recent changes in market conditions and in tandem with DOE's ongoing activities to assess the content, connectivity, and other aspects of the SPR, the Secretary of Energy should undertake a comprehensive reexamination of the appropriate size of the SPR in light of current and expected future market conditions. Agency Affected: Department of Energy

Status: Open Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Ground Zero: Lifting the Ban on Oil Exports - Air

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - lifting the ban on oil exports - air

October 24, 2014 7:57 AM

3 Attachments, 95 KB

September 30, 2014

http://www.gao.gov/assets/670/666274.pdf

Most stakeholders state that the increased crude oil production that would result from removing the restrictions on crude oil exports may affect the environment. Crude oil development may pose certain inherent environmental and public health risks; however, the extent of the risk is unknown, in part, because the severity of adverse effects depend on various location- and process-specific factors, including the location of future shale oil and gas development and the rate at which it occurs, as well as geology, climate, business practices, and regulatory and enforcement activities. Air quality: Increased crude oil production may increase greenhouse gases and other air emissions because the use of consumer fuels would increase, and also because the crude oil production process often involves the direct release of pollutants into the atmosphere (venting) or burning fuels (flaring). Two stakeholders told us that venting and flaring has escalated in North Dakota, in part because regulatory oversight and infrastructure have not kept pace with the recent surge in crude oil production in the state. In January 2014, the North Dakota Industrial Commission reported that nearly 30 percent of all natural gas produced in the state is flared. According to a 2013 report from Ceres, flaring in North Dakota in 2012 resulted in greenhouse gas emissions equivalent to adding 1 million cars to the road. Another stakeholder told us that allowing crude oil exports would lead to more air pollution as a result of increased production through horizontal drilling and hydraulic fracturing. RFF estimated the potential environmental effect of removing export restrictions, estimating that increases in crude oil production and consumption would increase carbon dioxide emissions worldwide by almost 22 million metric tons per year. By comparison, U.S. emissions from energy consumption totaled 5,393 million metric tons in 2013 according to EIA. NERA estimated that increased crude oil production and use of fossil fuels would increase greenhouse gas emissions by about 12 million metric tons of carbon dioxide equivalents per year on average from 2015 through 2035.

Recommendation for Executive Action 1.

Status: Open Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Ground Zero: Lifting the Ban on Oil Exports - Water

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - lifting the ban on oil exports - water

October 24, 2014 8:07 AM

3 Attachments, 95 KB

September 30, 2014

http://www.gao.gov/assets/670/666274.pdf

Most stakeholders state that the increased crude oil production that would result from removing the restrictions on crude oil exports may affect the environment. Crude oil development may pose certain inherent environmental and public health risks; however, the extent of the risk is unknown, in part, because the severity of adverse effects depend on various location- and process-specific factors, including the location of future shale oil and gas development and the rate at which it occurs, as well as geology, climate, business practices, and regulatory and enforcement activities. Water quality and quantity: Increased crude oil production, particularly from shale, could affect the quality and quantity of surface and groundwater sources, but the magnitude of such effects is unknown. In October 2010, we found that water is needed for a number of oil shale development activities, including constructing facilities, drilling wells, generating electricity for operations, and reclamation of drill sites. In 2012, we found that shale oil and gas development may pose a risk to surface water and groundwater because withdrawing water from streams, lakes, and aquifers for drilling and hydraulic fracturing could adversely affect water resources. For example, we found that groundwater withdrawal could affect the amount of water available for other uses, including public and private water supplies. One of the stakeholders we interviewed suggested that water withdrawal is already an important consideration, particularly for areas experiencing drought. For example, the stakeholder noted that crude oil production and associated water usage already has implications for the Edwards Aquifer, a groundwater system serving the agricultural, industrial, recreational, and domestic needs of almost two million users in south central Texas. In addition, removing export restrictions may affect water quality. Another stakeholder told us that allowing crude oil exports would lead to more water pollution as a result of increased production through horizontal drilling.

Recommendation for Executive Action 1.

Status: Open Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Ground Zero: Lifting the Ban on Oil Exports - Transportation

October 24, 2014 8:17 AM

3 Attachments, 95 KB

September 30, 2014

http://www.gao.gov/assets/670/666274.pdf

Most stakeholders state that the increased crude oil production that would result from removing the restrictions on crude oil exports may affect the environment. Crude oil development may pose certain inherent environmental and public health risks; however, the extent of the risk is unknown, in part, because the severity of adverse effects depend on various location- and process-specific factors, including the location of future shale oil and gas development and the rate at which it occurs, as well as geology, climate, business practices, and regulatory and enforcement activities. Transportation challenges: Increased crude oil production could exacerbate transportation challenges. In March 2014, we found that domestic and Canadian crude oil production has created some challenges for U.S. crude oil transportation infrastructure. Some of the growth in crude oil production has been in areas with limited transportation to refining centers. To address this challenge, refiners have relied on rail to transport crude oil. According to data from the Surface Transportation Board, rail moved about 236,000 carloads of crude oil in 2012, which is 24 times more than the roughly 9,700 carloads moved in 2008. As we recently found, as the movement of crude oil by rail has increased incidents such as spills and fires involving crude oil trains have also increasedâ&#x20AC;&#x201D;from 8 incidents in 2008 to 119 incidents in 2013 according to Department of Transportation data. Some stakeholders told us that removing export restrictions would increase the risk for crude oil spills by rail and other modes of transportation such as tankers. On the other hand, one stakeholder suggested that removing export restrictions could reduce the amount of crude oil transported by rail, in some instances, since the most economic way to export crude oil is by pipeline to a tanker. As a result, the number of rail accidents involving crude oil spills could decrease.

Recommendation for Executive Action 1.

Status: Open Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Ground Zero: LNG Exports and Climate Peak-A-Boo

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - LNG exports and climate peak-a-boo

October 26, 2014 4:30 PM

1 Attachment, 228 KB

Ground zero Fortune Magazine reported on September 24, 2014: "U.S. regulators have approved construction of two plants for exporting natural gas, potentially to lucrative markets in Europe, Japan, Taiwan and other parts of Asia. The permits, awarded to Cameron, a subsidiary of Sempra Energy, for a Louisiana facility, and Carib Energy s smaller plant in Florida, represent a significant milestone for the industry. They are only the second and third facilities approved to export liquified natural gas, or LNG, to nations without free trade agreements with the United States. The Cameron LNG Terminal in Cameron Parish, Louisiana is authorized to export up to the equivalent of 1.7 billion standard cubic feet per day of natural gas for a period of 20 years. Construction is expected to be complete by 2018. Carib, meanwhile, will be able to export 40 million cubic feet per day from its proposed liquefaction facility in Martin County, Fla. It was unclear when Carib would start its exports. The two projects join Cheniere Energy’s Sabine Pass project, which is under construction near the Louisiana-Texas border after winning its final permits in 2012." Kate DeAngelis, climate and energy campaigner for Friends of the Earth, stated in response: .

“In supporting liquefied natural gas exports, President Obama is treating climate change like a game of peak-a-boo, opening his eyes to the harmful impacts of carbon but closing them to the devastating disruption potential of methane. Allowing more LNG exports completely counteracts President Obama’s expressed commitment to reduce emissions and protect the public health.”

Ground Zero: Gas Condensate Exports

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - gas condensate exports

October 26, 2014 5:30 PM

1 Attachment, 423 KB

Ground zero BreakingEnergy.com opined on November 20, 2013 with the headline "The US’s Absurd Oil & Gas Export Laws": United States law prohibits exports of crude oil and condensate except under certain conditions, while exports of refined products and natural gas are far less restricted. In this new environment of abundance, some of these rules not only inhibit smooth functioning of markets, they are, in some cases, absurd. “In the olden days, these laws and rules didn’t make any difference. Now in a world of exports, they do.” The Wall Street Journal reported on June 24, 2014: The Obama administration cleared the way for the first exports of unrefined American oil in nearly four decades, allowing energy companies to start chipping away at the longtime ban on selling U.S. oil abroad. For now, the rulings apply narrowly to the two companies, which said they sought permission to export processed condensate from south Texas' Eagle Ford Shale formation. The government's approval is likely to encourage similar requests from other companies, and the Commerce Department is working on industrywide guidelines that could make it even easier for companies to sell U.S. oil abroad. In a statement Tuesday night, the Commerce Department said there has been "no change in policy on crude oil exports." Under rules imposed after the Arab oil embargo of the 1970s, U.S. companies can export refined fuel such as gasoline and diesel but not oil itself except in limited circumstances that require a special license.

Ground Zero: Petroleum Exports

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - petroleum exports

October 26, 2014 6:36 PM

1 Attachment, 617 KB

Ground zero The Obama administration has quietly cleared the way for the first exports of unrefined American oil in four decades, allowing energy companies to chip away at the long-standing ban on selling U.S. crude overseas. Bloomberg reported on September 9, 2014: If the U.S. ban on oil exports is lifted, the only losers would be refiners that are now benefiting from crude prices cheaper than the global benchmark, said Larry Summers, President Barack Obama’s former economic adviser. .

In an unconditional endorsement yesterday of ending the decades-long export ban, Summers said few public policy changes would hold such obvious benefits. .

Allowing more exports would lower gasoline prices, according to an analysis by the Brookings Institution, a Washington-based research group that analyzes national public policy. “I don’t really understand who the losers are who are very important,” Summers said. .

His remarks and the report from Brookings add support for exports beyond the oil industry lobbyists who’ve argued removing the ban is the best way to ensure the U.S. energy renaissance continues.

Ground Zero: U.S. Chamber of Commerce Supports Oil Exports

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - U.S. Chamber of Commerce supports oil exports

October 26, 2014 11:15 PM

1 Attachment, 272 KB

On September 29, 2014, the U.S. Chamber of Commerce opined: Jobs are being created, cities and towns are experiencing tremendous economic growth, its effects reach all corners of the country, and oil imports are rapidly declining. To maintain this momentum, it’s time to end the 40-year ban on oil exports. If companies can sell on the global market, they will have a incentive to develop more American energy. Washington Post Robert Samuelson makes the case for lifting the ban: If you want companies to search for oil, you have to provide them with a viable market where they might profitably sell it. As output has increased, this has become a bigger issue. Here’s why. The new oil consists mostly of “sweet, light” crudes, meaning they have a low sulfur content and are less dense than “sour, heavy” crudes. The trouble is that many U.S. refineries have been designed to process heavy, sour crudes and, therefore, aren’t suitable for the new oil. At the end of 2013, the United States had 115 oil refineries capable of processing about 18 mbd, according to a report from the Congressional Research Service. About half were fitted for sour and heavy crudes. That’s especially true along the Gulf of Mexico coast, where more than half of U.S. refining capacity is located. The result is that more and more new oil is chasing less and less usable refining capacity. Refineries’ bargaining power rises. Producers have to accept price discounts to sell their oil.

He goes on to point out that by maintaining the export ban, “producers will be discouraged by an oil market that seems rigged against them. They will react by slowing — or possibly stopping — new exploration. The oil boom will ebb or end.” And with it will go the jobs and economic growth.

Ground Zero: Brookings Weighs Oil Export Possibilities

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - Brookings weighs oil export possibilities

October 26, 2014 11:40 PM

3 Attachments, 208 KB

On October 17, 2014, Brookings Institution gave an assessment: The precipitous drop in oil prices could not have come at a worse time for U.S. oil producers, who have been advocating for the United States to lift the long-time ban on crude oil exports (in place since 1975). According to the Brookings Energy Security Initiativeâ&#x20AC;&#x2122;s research on the issue, if the ban were to be lifted immediately, the United States could be exporting 1.7 million to 2.5 million barrels per day (mmbd) by 2015. With the market in such a weak position and demand falling, adding as much as 2.5 mmbd to the world market would significantly drive down both crude oil and petroleum product prices (gasoline and home heating fuel). While beneficial to consumers in the near term, the effect on crude prices will only add to the current market turmoil and a further downward spiral in crude prices. Furthermore, with many unconventional oil wells also producing natural gas, to the extent that oil prices fall below $60 per barrel, some natural gas production could also be affected. [T]he further crude prices fall in the near term, the faster they may rebound, as low prices become the engine that leads to a resumption of demand and world economic growth. The fall in oil prices will have various effects on different countries, though the magnitude is often overstated. Countries that produce at a high cost with large populations, subsidized consumer prices and various political constraints, such as Iran (sanctions), Indonesia (falling energy exports), Iraq (political turmoil), Nigeria (political instability and falling exports) and Venezuela (a collapsed economy in need of high export prices) will be thrown into turmoil. Fearful of low prices, Venezuela recently attempted and failed to call an emergency meeting of OPEC to discuss the situation. Given the already fragile nature of many of these regimes, the prospect of serious social upheaval cannot be ruled out. On the other hand, large oil importing countries such as China, India, Brazil, Japan and South Korea stand to benefit from falling oil prices. It is against this backdrop that OPEC will meet in late November. The oil price slide and efforts to reverse it will be priority one on the ministersâ&#x20AC;&#x2122; agenda. While the Saudis may be willing to cut production if all the other OPEC members also agree to substantial cuts, the prospects for an agreement are slim to none, given their individual internal political realities and revenue needs. As a long-term observer of the oil market, I have seen this game played out in various manifestations over the last 40 years. We are clearly in for a wild ride; buckle your seat belts.

World Oil Demand: And Then There Was None Charles K. Ebinger | October 17, 2014 9:30am | http://bit.ly/Brookings17Oct

In recent weeks, many analysts have expressed considerable surprise as oil prices have hit $80 per barrel and prices at American gas pumps have fallen. This “surprise” seems to have crept up on us, but evidence of shifting market demand and energy production has been available for some time. Over the past three years, high oil prices have generated increased interest in oil and gas in remote locations such the Arctic and East Africa. In addition, breakthroughs in oil and gas technology have also driven the development of unconventional oil and gas resources in regions of the world that were previously considered too high-cost, too high-risk or too far away from established markets for profitable energy production. Further, as a result of climate change melting Arctic ice, new oil fields and delivery routes have opened up, while technological advancements in resource extraction are opening vast new regions for resource exploration in countries like Mozambique and Tanzania, which lack even the most the most basic infrastructure and need high energy prices to justify their development. Despite possible environmental and infrastructure challenges, a number of countries and regions are motivated to pursue increased resource development and extraction for a variety of non-energy related reasons. For example, the political leadership of Greenland views the development of energy and mineral resources as an opportunity to gain independence from Denmark. For its part, Canada sees the development of its northern territories as a way to bolster its claims to national sovereignty over its “internal waters,” a view contested by both Washington and Moscow. In the case of Russia, development of the Yamal Peninsula and its offshore Arctic waters has been a major priority for President Vladimir Putin, who believes the policy will catapult Russia into the vanguard of future global oil and gas producers and, as a result, will make Russia a market player in the Far East as well as Europe. Oil Prices are in a Free Fall Unfortunately, while these emerging energy producers are coming on line, the market for energy has been shrinking—at least for the near-term. Since June 2014 (when oil was at $115 per barrel), oil prices

have been in a free fall, with demand dropping across Europe, Japan, India, China, Brazil and much of the emerging world market. The drop in demand is the result of a number of factors, including: Slowing global economic growth; Rising global oil production (especially in North America); Unexpected resumption of oil production in Libya, Nigeria, South Sudan and Iraq; Increasing energy efficiency, a response to three years of oil prices in excess of $110 per barrel, which, in turn, had an impact and continues to impact long-term global demand; A decision by Saudi Arabia in August 2014 to cut oil production by 400 thousand barrels per day, an attempt to defend its market share in the face of falling global oil prices; Record oil output from Russia; Surging natural gas liquids and hydrocarbon gas liquids production outside the OPEC quota system; Natural gas eating away oil’s market share as a refining fuel and as a feedstock in petrochemicals; The decision by Japan to restart some of its nuclear reactors, reducing forward demand for fuel oil in the power sector; Dumping of oil onto the marketplace by hedge fund managers who had gone long on oil prices (by some estimates as much as two million barrels per day) in anticipation of further price rises – the hedge funds had no alternative but to liquidate their positions when the market turned against them. In August, Saudi Arabia tried and failed to stop the slide in oil prices. Now supported by the United Arab Emirates and Kuwait, the Saudis have decided to send a message to the world market that it will do whatever is necessary to maintain its market share, even accepting a near-term loss in revenue over the next two years. The Saudi goal is to slow or halt unconventional oil production, which is undermining their market share and profits. The short-term decline in oil prices also serves Saudi Arabia’s agenda by hurting their adversaries (Iran and Iraq) and squeezing Russia’s ability to fund the Assad regime in Syria. However, the Saudis and their allies may be overlooking the complex economics of unconventional oil

production in North America. For example, while drilling new wells in some unconventional basins may not be profitable at $80 per barrel, many existing wells have largely been amortized by current tax policies making them economic at prices in some basins such as the Permian at prices as low as $40 to $50 per barrel. The most important factor is that the production profile of many unconventional wells is very different. For example in the Bakkan wells flow very strongly but then crash often initially only recovering four percent of the oil in place while the Permian wells tend to plateau but ultimate recovery is much higher. While various pundits have opined on this question, the truth of the matter is that no analyst really knows the full range of production costs across the unconventional crude oil production continuum since this information is highly proprietary. Nonetheless, with oil prices for West Texas Intermediate (WTI) at $81 per barrel and Brent at $83 per barrel and with Wall Street in turmoil and Europe poised on the brink of a new recession, the specter of a major price decline similar to that of 2008 cannot be ruled out. While prices could overshoot on the downside, I believe that prices will fall to $60 to $70 per barrel, before stabilizing at a level still far above the $38 per barrel we saw in 2008. The U.S. Crude Oil Exports Ban The precipitous drop in oil prices could not have come at a worse time for U.S. oil producers, who have been advocating for the United States to lift the long-time ban on crude oil exports (in place since 1975). According to the Brookings Energy Security Initiativeâ&#x20AC;&#x2122;s research on the issue, if the ban were to be lifted immediately, the United States could be exporting 1.7 million to 2.5 million barrels per day (mmbd) by 2015. With the market in such a weak position and demand falling, adding as much as 2.5 mmbd to the world market would significantly drive down both crude oil and petroleum product prices (gasoline and home heating fuel). While beneficial to consumers in the near term, the effect on crude prices will only add to the current market turmoil and a further downward spiral in crude prices. Furthermore, with many unconventional oil wells also producing natural gas, to the extent that oil prices fall below $60 per barrel, some natural gas production could also be affected. Crude Oil Prices in the Near-Term Keep in mind, however, that the further crude prices fall in the near term, the faster they may rebound, as low prices become the engine that leads to a resumption of demand and world economic growth. The fall in oil prices will have various effects on different countries, though the magnitude is often overstated. For example, any further fall in oil prices could have serious deleterious effects on the Russian economy. As a major oil export economy (with oil accounting for 14.5 percent of Russiaâ&#x20AC;&#x2122;s gross domestic product), Russiaâ&#x20AC;&#x2122;s budget for 2014 is predicated on an average price of $97 per barrel. Therefore a price slide to $80 per barrel or below would pose a major economic setback for that

country. The fact that prices have averaged at $110 per barrel for the year-to-date however allows Russia some cushion in the event of a short term price drop – as do Russia’s large financial reserves. However, any prolonged drop in oil prices will pose serious challenges to the Russian economy. Countries that produce at a high cost with large populations, subsidized consumer prices and various political constraints, such as Iran (sanctions), Indonesia (falling energy exports), Iraq (political turmoil), Nigeria (political instability and falling exports) and Venezuela (a collapsed economy in need of high export prices) will be thrown into turmoil. Fearful of low prices, Venezuela recently attempted and failed to call an emergency meeting of OPEC to discuss the situation. Given the already fragile nature of many of these regimes, the prospect of serious social upheaval cannot be ruled out. On the other hand, large oil importing countries such as China, India, Brazil, Japan and South Korea stand to benefit from falling oil prices. It is against this backdrop that OPEC will meet in late November. The oil price slide and efforts to reverse it will be priority one on the ministers’ agenda. While the Saudis may be willing to cut production if all the other OPEC members also agree to substantial cuts, the prospects for an agreement are slim to none, given their individual internal political realities and revenue needs. As a long-term observer of the oil market, I have seen this game played out in various manifestations over the last 40 years. We are clearly in for a wild ride; buckle your seat belts.

Charles K. Ebinger Director, Energy Security Initiative Senior Fellow, Foreign Policy @CharlesEbinger Charles K. Ebinger is the director of the Energy Security Initiative at Brookings, housed within the Foreign Policy Program. Previously, Ebinger served as a senior advisor at the International Resources Group where he advised over 50 governments on various aspects of their energy policies, specializing in institutional and economic restructuring of their utility sectors. Ebinger has special expertise in South Asia, the Middle East and Africa, but has also worked in the Far East, Southeast Asia, Eastern Europe, Central Asia and Latin America.

Ground Zero: Reasons To Keep the Ban on Oil Exports

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - reasons to allow oil exports

October 26, 2014 8:30 PM

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On September 16, 2014, National Public Radio reported on the debate whether to lift the ban on oil exports. This portion of the report is how NPR reported those who oppose lifting the ban: Among the most vocal opposition to lifting the ban are refineries that process the lighter crude oil produced in the U.S. They've benefited from the current situation because, without exports, domestic crude prices are lower than world crude prices. Four such refineries have formed the group Consumers and Refiners United for Domestic Energy, known as CRUDE. Lobbyist Jeffrey Peck says having plenty of supply in the U.S. helps the country. He points to the situation now: Even with turmoil in several oil-producing countries, prices are actually going down. "There's one reason — one reason only — that consumers are not paying $5 and $6 a gallon of gas at the pump, and that's because of the oil being produced in the United States," Peck says. He predicts that, to keep prices at their current level, big oil-producing countries like Saudi Arabia would simply cut back on production if the U.S. allows exports. President Obama could end the export ban with an executive order, and some of his allies think he should, including his former White House National Economic Council director, Larry Summers. The White House says there's no change in policy, yet. Also opposing the effort to lift the export ban are some environmental groups worried that the move would lead to more drilling. "We really need to address climate change and actually start to think about which reserves — which fossil fuel reserves — we're going to leave in the ground," says Lorne Stockman, research director with Oil Change International. At stake in the export issue are billions of dollars in profits and whatever the White House decides could determine winners and losers. The campaigns are just starting, and you can expect much more in the months to come.

Ground Zero: Oil Exports Uncertain Mixed Effects

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - oil exports' uncertain mixed effects

October 28, 2014 9:00 AM

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Source: EIA Annual Energy Outlook 2014 Early Release .

On October 20, 2014, FuelFix.com reported: GAO predicts that lifting the U.S. longstanding ban against most crude exports could lift oil prices inside the country while decreasing the cost of gasoline.. “This latest review by the GAO is a welcome addition to the growing body of analysis supporting the case for greater oil exports,” said Sen. Lisa Murkowski of Alaska, the top Republican on the Energy and Natural Resources Committee. The report does not recommend lifting the export ban. “Allowing free trade in energy will mean more jobs, downward pressure on fuel costs, and can further reduce the impact of global unrest on oil markets,” said John Felmy, API’s chief economist. GAO warns that refinery closures could cause widely varying effects on gasoline prices if U.S. oil starts flowing overseas. “Two stakeholders told us that because of requirements to use more expensive U.S.built, -owned and -operated ships to move crude oil between U.S. ports, allowing exports could enable some domestic crude oil producers to ship U.S. crude oil for less cost to refineries in foreign countries.’’ The GAO noted that the Energy Information Administration two years ago warned that refinery closures in the Northeast could be associated with higher and more volatile gasoline prices.

Ground Zero: Making Money Is the Objective

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - making money is the objective

October 28, 2014 10:00 AM

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T. Boone Pickens Russell Gold/The Wall Street Journal

October 23, 2014 in the Wall Street Journal: Boone Pickens Tells Oil Companies to Stop Drilling. He has seen plummeting oil prices before and says he knows what the problem is. Energy companies are pumping too much oil and none of them wants to be the first to stop, Mr. Pickens said. The result—plunging crude prices that aren’t going to rebound until oil companies do what “a five-year old could’ve figured out” he said. Stop drilling. The legendary oilman said energy companies are optimists. “They keep thinking the price is going to go back up,” the 86-year-old said. “I am not criticizing the industry. I’m not. It is a bunch of guys that think independently of each other. We all—and put that in there—we all keep drilling” and hoping other companies stop first. The same thing happened a couple years ago in North America’s natural gas market. Supply outstripped demand and prices began to fall, but no company wanted to blink first. The same phenomenon is now happening with crude. It’s an oil-soaked game of Prisoner’s Dilemma. The price of oil could sink lower—perhaps to $70, Mr. Pickens said. “It depends on if everyone continues to produce, then we’ll have too much oil.” What could buoy oil prices is a production cut by the Organization of the Petroleum Exporting Countries (OPEC) —a move lead cartel member Saudi Arabia has signaled it’s unwilling to do. A more likely scenario, Mr. Pickens said, is that Saudi Arabia is in a stand-off with U.S. drillers and frackers to “see how the shale boys are going to stand up to a cheaper price.”

ENSLAVING OUR NAFTA NEIGHBORS

Ground Zero: Energy Superpower or NAFTA Energy Colony

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - energy superpower or NAFTA energy colony

October 28, 2014 9:41 AM

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On August 21, 2014, the Institute for Agriculture and Trade Policy published a comprehensive report titled "Tar Sands: How Trade Rules Surrender Sovereignty and Extend Corporate Rights" which states, in part (found on pages 5 and 6 of the report http://bit.ly/IATP21AugPDF: Though endowed with immense natural resource wealth, this NAFTA partnership renders Canada powerless in setting its own energy conservation policy, as Laxer and Dillon write: "When Prime Minister Harper refers to Canada as an “energy superpower,” it is clear he hasn’t consulted a dictionary. Superpowers influence events by projecting economic, military, political and cultural power on a world scale. Proportionality makes Canada more like an energy colony. A colony or satellite is a people who lose control of their resources to a foreign power. When you cannot safeguard your citizens against freezing in the dark, nor control how much you export, nor set the price at which citizens buy back their own energy from foreign transnational corporations, you know you are not a superpower. Instead, Canadian energy policies are geared toward ensuring U.S. energy security. TAR SANDS DRIVEN BY TRADE - The tar sands represent incalculable wealth for Canadians. In order to maintain continued economic growth, Canada must promote and ensure the tar sands are open to extraction and trade. A well-managed system exerts control over profits, natural resources and possess accountability to its citizenry. These aspects are missing from tar sands management. At the root of this malfeasance is the existing NAFTA free trade framework and the current negotiations of the TTIP and CETA. Free trade agreements, by nature, reduce government sovereignty in favor of corporate rights to natural resources and profit. NAFTA’s energy proportionality clause and investor-state provisions present a model for just how trade agreements can undermine sovereignty. Additionally, the current TTIP and CETA negotiations have already been seen to put pressure on governments to weaken climate policy.

Ground Zero: Energy Proportionality

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - energy proportionality

October 28, 2014 9:44 AM

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On August 21, 2014, the Institute for Agriculture and Trade Policy published "Tar Sands: How Trade Rules Surrender Sovereignty and Extend Corporate Rights" which states on pages 5 and 6: Energy Proportionality Clause - One of the more controversial yet lesser-known clauses contained within NAFTA is the energy proportionality clause, article 605. The energy proportionality clause is unique in that it’s only applicable to Canadian and U.S. energy trade, a similar clause cannot be found between any other trading partners. Article 605 requires Canadian energy exports to the U.S. to be maintained indefinitely at the average proportion to total supply of the previous 36months. That proportion has varied over the course of the agreement, but because of Article 605, it theoretically cannot go down—only rise. This clause was negotiated at a time when Canada was seeking trading partners to accept its overabundance of energy products, and when the U.S. was looking for a stable and secure energy source as an alternative to its reliance on Middle Eastern oil. The energy proportionality clause seemed to fit both countries’ needs. However, as the U.S. gained a monopolistic hold over Canadian energy resources, it became clear this trade mandate compromises Canada’s energy security and Canadian sovereignty of natural resources. If Canada were to reduce energy production (such as for conservation purposes), or if there were a supply shock, Canada, one of the world’s largest oil producers, would be unable to satisfy its own people’s energy needs due to its export obligations to the U.S. The U.S. is Canada’s primary energy importer, importing around 98 percent of Canada’s total exported oil. More distressing is the U.S.’s steady rise in imports of total Canadian crude oil supply, increasing from approximately 29 percent in 1989 to over 58 percent in 2011. ... Gordon Laxer’s 2007 calculations show that a 10 percent reduction in Canadian oil production, in line with the Suzuki Foundation’s suggestion to promote a more sustainable alternative energy future, would result in a shortfall of over 8 million barrels of oil for Canadians. The same 10 percent reduction, by 2012 numbers, results in a deficiency of more than 50 million barrels. A greater than five-fold increase in projected energy shortfall suggests a degree of negligence in maintaining a balance between trade and securing citizen wellbeing. Proportionality not only compromises Canadian sovereignty of natural resources but can be seen as a regulatory force perpetuating non-renewable energy trade. And as the ratio of tar sands to conventional energy source exports increase the proportionality clause will maintain elevated levels of trade in tar sands oil, thereby further jeopardizing everyone who experience the effects of climate change by promoting fuel with inherently greater GHG emissions.

Ground Zero: Tar Sands Becoming Less Profitable

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - tar sands becoming less profitable

October 29, 2014 7:00 AM

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Credit: Kris Krüg; CC BY 2.0

Ground zero On October 21, 2014, PRI Living on Earth reported "Big companies are pulling the plug on their projects in Alberta's tar sands — Uncertainly over the Keystone XL pipeline and a slump in oil prices are prompting several big companies to halt plans to extract oil from the Alberta tar sands." The latest company to pull out of the tar sands is Norwegian oil giant Statoil. But just in the last year, Shell, Total, and SunCor Energy have all cancelled tar sands projects. Brian Palmer, a writer for OnEarth Magazine (a publication of the Natural Resources Defense Council), says there are a variety of factors behind these decisions, but the main reason is the uncertainty surrounding the Keystone XL pipeline. That pipeline is crucial to tar sands projects becoming profitable, Palmer says. Without it, “a marginally profitable business [turns] into a completely unprofitable business — and that's scaring oil producers off of tar sands projects,” Palmer explains. Because tar sands oil is a much lower-quality version of crude oil, it sells at $20 to $30 dollars less than conventional crude. With conventional crude oil now selling for about $80 a barrel, the price of tar sands oil has fallen to around $60 a barrel. It also costs about $25 per barrel to move tar sands crude by rail from Alberta to the Gulf of Mexico, Palmer says. The Keystone Pipeline would cut that transportation price from $25 to $9 a barrel, which is why oil companies are so eager to see the pipeline move forward.

POINT OF VIEW

Ground Zero: Exxon Mobil Perspectives

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - exxon mobil perspectives

October 29, 2014 7:30 AM

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Ground zero ExxonMobil Perspectives blog by Ken Cohen states "Energy is a complex industry that generates strong and diverse views. It’s also the foundation of our global economy and touches our daily lives in countless ways." The blogs also describes Ken Cohen as "vice president of public and government affairs for Exxon Mobil Corporation. He has worldwide responsibility for the company’s public policy, government relations, communications, media relations and corporate citizenship activities." It is presumed that Mr. Cohen's content speaks for ExxonMobil corporate policy.

About Perspectives .

From my experience in talking with people about ExxonMobil and energy issues, there are as many viewpoints shared as there are dimensions to the energy challenges we face. Energy is a complex industry that generates strong and diverse views. It’s also the foundation of our global economy and touches our daily lives in countless ways. To help encourage dialogue on the energy challenges we all face, we’ve created the Perspectives blog. I’m calling it our “energy issues and policy blog,” meaning I’ll talk about ideas and actions from industry, governments, researchers and many others that affect the world of energy. I’ll also talk about what ExxonMobil is doing to produce the energy our world needs, and our commitment to doing so in a manner that is safe, protects the environment and upholds the highest principles of corporate citizenship. I hope you’ll enjoy reading and participating in Perspectives. Ken Cohen

Ground Zero: Letâ&#x20AC;&#x2122;s Talk Trade, Cherry Picking

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - let's talk trade: cherry picking

October 29, 2014 7:45 AM

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Ground zero ExxonMobil Perspectives blog post by Ken Cohen on October 27, 2014: Commerce Secretary Penny Pritzker visited Seoul and Tokyo last week on a business development mission to promote trade in Asia and seek new opportunities for American businesses. A Commerce Department press release said the trip was designed to “focus on reinforcing trade agreements that reflect our values, such as the Trans-Pacific Partnership (TPP) and U.S.-Korea Free Trade Agreement (KORUS), that will help U.S. firms gain greater access to the Japan and South Korea markets.” To that end, while in Asia the secretary challenged our allies to be bolder in opening their markets. It occurs to me her case would be strengthened if the United States would take the same approach and show a bold commitment to free trade from Washington. The best way to do that would be for the Obama administration to loosen arbitrary restrictions on the export of crude oil and liquefied natural gas. Washington should treat these commodities no differently from pharmaceuticals, agricultural products, automobile parts, or any of the myriad other items American companies export. There is plenty of evidence to suggest that expanded global trade in energy products would benefit American consumers, as well as add to international energy security. Just last week the U.S. Government Accountability Office unveiled the latest study confirming that removing the ban on crude oil exports will greatly benefit the country. The GAO could not have been clearer: “Removing export restrictions is expected to increase the size of the economy, with implications for employment, investment, public revenue, and trade.”

That analysis reaches conclusions similar to those offered by a host of experts, including the Dallas Federal Reserve Bank, IHS Consulting, the Council on Foreign Relations, ICF International and the Aspen Institute. A Washington Post editorialstated that scrapping the crude oil exports ban would be “an unambiguous win for the country.” The same goes for lifting restrictions (in the form of unnecessary regulatory delays) on LNG exports. Study after study – including one commissioned by the Obama Administration’s energy department – has concluded that encouraging American exports of LNG would give our economy a needed boost. In the wake of Sec. Pritzker’s tour of Seoul and Tokyo, it’s worth recalling that representatives from a number of Asian nations – including Japan and South Korea – have previously made a point to encourage the U.S. to liberalize its policies with respect to trade in energy products. If we are going to challenge our allies to be bolder in opening their markets, it would be helpful for the secretary to let our allies know we have heard their requests and recognize that energy security in Asia can help strengthen stability throughout the world.

Ground Zero: Divestiture Debate

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - divestiture debate

October 29, 2014 7:55 AM

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Ground zero ExxonMobil Perspectives blog post by Ken Cohen* on October 10, 2014, opens describing divestment as a "movement to get large institutional investors to divest their holdings of companies involved in producing fossil fuels. For one thing, divestment represents a diversion from the real search for technological solutions to managing climate risks that energy companies like ours are pursuing. The industry-driven natural-gas boom in the United States is Exhibit A in this regard." .

Mr. Cohen concludes: "The energy poverty numbers are as staggering as they are heartbreaking – 1.3 billion people lacking electricity, and 2.7 billion people using wood, charcoal, or dung for cooking fuel. The World Health Organization estimates that millions die each year just from air pollution caused by the use of pre-modern energy sources in people’s homes, such as open fires for cooking or heating. .

"A moral imperative exists – for policymakers as well as large energy companies – and it is to seek economic ways to expand the use of modern energy sources to the billions of people around the world currently living without them, and to do so in a manner that safeguards our environment. .

"That’s what we will do at ExxonMobil. At the same time – as we have been doing for over a century – we will continue to invest in research to develop technology that makes our energy future better." . .

This is the logic that justifies continuing business as usual. The devil is in the detail of the assumptions, which, not surprisingly are from the perspective of one corporation's self-interest. . . .

* Ken Cohen is vice president of public and government affairs for Exxon Mobil Corporation. He has worldwide responsibility for the company’s public policy, government relations, communications, media relations and corporate citizenship activities.

Some thoughts on divestment Posted: October 10, 2014 by Ken Cohen At the recent United Nations-sponsored Climate Summit, U.N. General Secretary Ban Ki-Moon stated, “Now is the time for action.” We can all agree that climate change poses a significant challenge for the world. The question, then, is what sort of action should be taken? One proposal that is being pushed – with a full-throated endorsement from Mary Robinson, Ban KiMoon’s special envoy on climate issues – is a movement to get large institutional investors to divest their holdings of companies involved in producing fossil fuels. It is, simply, a movement that is out of step with reality. For one thing, divestment represents a diversion from the real search for technological solutions to managing climate risks that energy companies like ours are pursuing. The industry-driven natural-gas boom in the United States is Exhibit A in this regard. Fossil fuel benefits … Domestic natural gas production has risen more than 25 percent since 2008 thanks to our industry’s innovations, and natural gas reserves are up more than 25 percent as well. These additional supplies have helped displace a significant amount of coal for power generation, leading to a reduction in U.S. energy-related greenhouse gas emissions to levels last seen in the 1990s. No government program or mandate brought about this progress. Now compare what has happened in the United States to Europe, where a more bureaucratic approach to emissions reductions and other climate policies has undermined investment and innovation, and largely failed to curb emissions. Those currently calling for divestment should celebrate what our industry has done, not condemn it. President Obama certainly celebrates our industry’s accomplishments. His all-of-the-above strategy hails the fact that the United States, since 2005, has reduced emissions more than any other nation on earth. And in his speech last week at Northwestern, the president noted how increased domestic oil production has strengthened our energy security. Furthermore, he pointed out, growing natural gas production has helped spark a manufacturing renaissance in a nation where, a decade ago, manufacturing was thought to be in decline. On top of that, it’s worth pointing out the critical contribution our industry makes to the American economy every day. According to PricewaterhouseCoopers, the oil and gas sector supports 9.8 million jobs – that’s 5.6 percent of total U.S. employment. In 2011, the industry’s total impact on U.S. GDP was $1.2 trillion, or 8 percent of the U.S. economy.

… and energy scale In the ongoing discussions about how to address the risks of climate change, it is important to recognize how the radical recommendation of the divestment movement – that society stop using fossil fuels altogether – would immediately jeopardize the basic standards of living for billions of people around the world. And it would preclude the billions more in developing nations who are seeking to reach modern living standards from ever doing so. That’s because there are no scalable alternative fuels or technologies available today capable of taking the place of fossil fuels and offering society what those energy sources provide. “Scalable” is the key word in that sentence. The divestment movement completely ignores the enormous size of global energy needs today (and in the future) and therefore fails to understand the inability of current renewable technologies to meet it.

Renewable energy sources such as wind, solar, biomass, and hydropower accounted for just 13 percent of the world’s primary energy supply (and only 3 percent of fuels for road transportation) in 2009, according to the International Energy Agency. Most of renewables’ contribution came from biofuels and hydropower. Wind, solar, and geothermal energy provided just 1.3 percent of global energy. Renewable energy has a contribution to make, but it looks to be a relatively small one. Now consider that global energy demand is expected to grow nearly 35 percent by 2040 as developing nations advance and billions of people join the middle class. The nearby chart shows quite clearly the challenge inherent in scaling up technologies to meet a demand that is itself scaling up rapidly. Renewable sources will need to see fantastic growth just to maintain or slightly exceed their current share in the energy mix. (And don’t forget that until some unforeseen breakthrough in battery technology occurs, natural gas must remain on call as a backup for intermittent renewable sources

technology occurs, natural gas must remain on call as a backup for intermittent renewable sources like wind and solar for generating electricity.) Most estimates suggest that wind, solar, and geothermal will make up no more than 4 percent of the global energy supply by 2040, while the combined share of biomass and hydropower will remain about the same as today. All told, renewables’ contribution to the global energy mix in 2040 is expected to be about 15 percent – not much more than today. Meanwhile, experts at the International Energy Agency, the U.S. Energy Information Administration, and elsewhere have all concluded that fossil fuels will continue to meet about 75 percent of global energy needs well into the middle of this century. Given these numbers, it’s difficult – if not impossible – to see how, in the next several decades, renewables could replace fossil fuels. That point is never seriously addressed by those advocating divestment. They merely say “no” to fossil fuels. But to not use fossil fuels is tantamount to not using energy at all, and that’s not feasible. I expect those who advocate divestment themselves continue to use fossil fuels as their main sources of energy in their day-to-day lives – automobiles, trains, planes, electricity, petrochemicals, thermoplastics, modern pharmaceuticals … and the list goes on. Energy and progress The chief reality this movement ignores is that access to reliable and abundant sources of energy is the linchpin for societal progress. Energy is modern life. Over the past century and a half, mankind on the whole has lived richer, healthier, cleaner, freer, and more prosperous lives than were lived throughout the entire course of human history. That began when the Industrial Revolution harnessed large-scale energy resources for the betterment of society. The modern world in which we live – and that many often take for granted – is a world of electricity, transport, trade, labor-saving inventions, and profoundly improved health. It has been made possible by the widespread use of energy. Wealthier and healthier This point is so obvious and so fundamentally true that it is often overlooked. It should not be. World Bank official Rachel Kyte perhaps says it eloquently: Access to energy is absolutely fundamental in the struggle against poverty. It is energy that lights the lamp that lets you do your homework, that keeps the heat on in a hospital, that lights the small businesses where most people work. Without energy, there is no economic growth, there is no dynamism, and there is no opportunity.

Though the bulk of humanity is far richer and healthier than at any time in history, there are places on earth where the way people live is little different from the subsistence levels of the past. There are lessons to be learned here: Almost every place on the planet where there is grinding poverty, there is also energy poverty. Wherever there is subsistence living, it is usually because there is little or no access to modern, reliable forms of energy. The energy poverty numbers are as staggering as they are heartbreaking – 1.3 billion people lacking electricity, and 2.7 billion people using wood, charcoal, or dung for cooking fuel. The World Health Organization estimates that millions die each year just from air pollution caused by the use of pre-modern energy sources in people’s homes, such as open fires for cooking or heating. A moral imperative exists – for policymakers as well as large energy companies – and it is to seek economic ways to expand the use of modern energy sources to the billions of people around the world currently living without them, and to do so in a manner that safeguards our environment. That’s what we will do at ExxonMobil. At the same time – as we have been doing for over a century – we will continue to invest in research to develop technology that makes our energy future better. I’ll blog more on that topic in the weeks ahead.

GROW OR DIE

Ground Zero: By All Means, Grow or Die

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - by all means, grow or die

October 29, 2014 3:33 PM

5 Attachments, 811 KB

Grow or die A Few Reasons To Be Cautious On ExxonMobil SeekingAlpha.com | October 25, 2014 | http://bit.ly/Alpha25Oct Summary ExxonMobil has several problems which need to be corrected in the next few years. The company's production levels have been steadily declining since 2009. ExxonMobil is not generating enough free cash flow to finance its enormous share buyback program and dividend commitments. ExxonMobil has been taking on debt to finance its dividend and share buybacks. Many of ExxonMobil's forward growth projects are in Russia, which the company is pulling out of. It seems that almost every day, I read an article on either this site or others that provides a very positive analysis of oil and gas giant ExxonMobil (NYSE:XOM). In most of these articles, the author points out how ExxonMobil has a long history of steady dividend increases and a massive share buyback program. ExxonMobil also has a very strong balance sheet with very little debt, a fact which helps many investors feel some comfort with the company.

A more sober look at the firm, however, reveals that ExxonMobil has a number of problems which need to be corrected over the next few years. The first and perhaps most important of these problems revolves around the company's production. Earlier this year, Platts, a unit of McGraw Hill Financial focusing on commodities, reported that ExxonMobil's production of oil has declined by 7.8% over the 2009 to 2013 period, from an average of 2.387 million to 2.202 million barrels of oil per day. ExxonMobil is not alone in having this problem. In fact, as this chart shows, several major producers of these resources suffered from declining production over the period.

Source: Platts ExxonMobil's production has continued declining throughout this year. In the first quarter of 2014, ExxonMobil's production averaged 2.148 million barrels of oil per day. The company's production fell again in the second quarter of 2014 to 2.048 million barrels of oil per day. While production levels were up slightly if the expiration of a 75-year agreement with the ruler of Abu Dhabi to operate some oil fields is excluded, that does not change the fact that ExxonMobil needs to find a replacement for the production lost as a result of this. Exploration and production companies derive much of their revenues from extracting oil and gas from the ground. Vertically-integrated companies such as ExxonMobil also have refinery operations in addition to their exploration and production divisions that produce some revenue and earnings but that does not change the fact that in order to sustainably grow, these companies need to keep increasing their production. ExxonMobil has clearly failed to accomplish this for more than five years now. This shows up in ExxonMobil's top line numbers. Here are ExxonMobil's revenues for each of the past three years (2009 and 2010 are excluded because oil prices were, on average, lower during those two years than in 20112013).

(click to enlarge) Source: Yahoo! Finance As I have discussed several times in the past, it has become considerably more expensive in recent years to extract oil from the ground. This, combined with ExxonMobil's declining revenues has had an adverse effect on ExxonMobil's cash flow. Here are the company's operating cash flows over the 2011-2013 period:

Source: Yahoo! Finance As these numbers show, the overall trend is decidedly negative, despite the slight increase from 2011 to 2012. The trend is even more apparent when free cash flow is examined. Free cash flow is the cash that a company is able to generate after spending the money that is required in order to maintain or expand its asset base. Many investors like ExxonMobil because of the enormous amount of cash that the company returns to investors through share repurchases and dividends. The free cash flow tells us how much money the company generated that it can use for that purpose. Here is ExxonMobil's free cash flow over the past three years:

Source: Company Statements As this chart shows, ExxonMobil's free cash flow has been steadily declining over the past three years. In fact, in 2013, ExxonMobil did not even generate enough cash to cover the cost of its buyback program in that year, let alone the cost of the dividend. ExxonMobil made these payments through three methods. One way is by borrowing money. At the end of 2012, ExxonMobil had a total of $15.136 billion in short- and long-term debt. By the end of 2013, the company's debt load had increased to a total of $27.441 billion. Another method that it used to finance the buybacks and dividend is selling off assets (primarily oil and gas fields). In the company's 2013 year-end presentation, ExxonMobil states that its total cash flows from operations and asset sales were $47.6 billion. The company's cash flows from operations were $44.9 billion. Thus, ExxonMobil sold off assets totaling $2.7 billion in 2013. While the company did discover enough crude oil in 2013 to replace the reserves that it sold off, its natural gas reserves did decline year-over-year. Finally, ExxonMobil partially funded these returns to shareholders by spending the cash that it has on its balance sheet. At the end of 2012, ExxonMobil had $9.923 billion in cash and cash equivalents on its balance sheet. By the end of 2013, the amount had been reduced to $4.913 billion. Thus, ExxonMobil is borrowing money, liquidating assets, and spending down its cash in order to by back its stock and pay dividends to investors. Despite the fact that free cash flow is declining, the amount that the company is spending on dividends is increasing. In 2011, ExxonMobil paid out a total of $9.93 billion to shareholders in the form of dividends. By 2013, this amount had grown to approximately $11.2 billion. Thus, the dividends have been increasing at a rate that exceeds the reduction of the company's total share count. In fact, the company's free cash flow in 2013 just barely covered the cost of the dividend program. If it continues to be the case that the company's total spending on its dividend program increases year-over-year then ExxonMobil will have to either grow its production dramatically in order to increase free cash flow, reduce or eliminate its share buyback program, or continue financing share buybacks with debt.

I have seen analyses published here on Seeking Alpha and elsewhere that discuss how the company's enormous reserves are a reason to be confident about the company's future. ExxonMobil has successfully managed to achieve a reserve replacement ratio of 100% for the past twenty years straight, meaning that the company has managed to discover replacement resources for everything that it has pulled out of the ground. This is certainly an impressive track record. However, a closer look at these reserves reveals that the company's reserves may not be as good as many believe. Early last year, the Energy Policy Forum released a report entitled, "Why We Should Be Very Worried About Reserve Replacement at ExxonMobil." Specifically, the authors of this report were concerned that 750 million barrels, fully 40% of the company's reserve additions in 2012 came from two unconventional plays: the Woodford and the Bakken. As I discussed in a recent article, both of these plays have incredibly steep decline rates with production falling more than 60% in the first year and more than 90% by the fifth year. As the Energy Policy Forum mentioned, production in the Woodford play has been plummeting to the point where it is virtually nonexistent and the high decline rate and high need for continual capital expenditures to maintain production in the Bakken means that developing these reserves will likely strain the company's free cash flow going forward unless oil prices rise significantly. ExxonMobil also relied heavily on these plays in 2013, with the company reporting 25% of its total reserve additions coming from the Woodford, Permian, Bakken, Montney, and Duvernay plays. While this is not as concerning as the company's 2012 reserve additions, due to the lower dependence on the Woodford and Bakken plus the addition of a few more plays, it still represents a relatively high dependence on plays sporting a very high decline rate. In addition, ExxonMobil failed to discover enough natural gas to replace the amount that it extracted from the ground in 2013. Its reserve replacement ratio for natural gas in 2013 was only 52%. If the company fails to correct this problem going forward then the company will eventually run out of natural gas. ExxonMobil clearly needs to correct these problems. To that end, the company is investing in 25 new projects in the coming years that it hopes will be able to reverse its declining production, revenue, and free cash flow. However, many of these projects are in Russia. This makes sense given that the Kara Sea alone is believed to contain more oil than Saudi Arabia. Unfortunately, the sanctions that were imposed by the United States and several other Western governments against Russia have made these projects unfeasible for ExxonMobil. On September 21, 2014, ExxonMobil announced that it is winding down its first project in the Russian Arctic due to the sanctions. It is likely that the company will be unable to proceed with any of its other Russian projects for as long as these sanctions are in place. This will greatly curtail ExxonMobil's ability to correct the problems discussed in this article in the near-term. Additional disclosure: Although I have no direct position in any stock mentioned, I am invested in some mutual funds which may include XOM among their holdings.

Ground Zero: Portfolio Value For Wealth, Grow or Die

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - portfolio value, for wealth, grow or die

October 30, 2014 8:38 AM

2 Attachments, 646 KB

Grow or die Oil and gas production and refining operations require the best and brightest engineers, geologists, physicists, mathematicians, economists, and other technical experts to manage the billions of barrels of petroleum and trillions of cubic feet of methane resources. Minor miscalculations, or misjudgments are worth millions and billions of dollars, which equate to all-important return on investment. Making decisions as to production, transportation and refining strategies command astute attention to detail. Likewise, strategies for maintaining value for investors are a primary concern. Portfolio value is the foundation employee personal savings. Executives and Officers who receive compensation in the form of stock options and bonuses expect the best and brightest to maintain share value. ExxonMobil spends considerable effort managing its finances and stock price. ExxonMobil's acquisition of XTO undoubtedly included short-term share price considerations as well as long-term future growth considerations. Portfolio value equates to executive personal wealth.

Ground Zero: Winners and Losers, Production Down but Profits Up, Grow or Die

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - winners and losers, production down but profits up, grow or die

October 30, 2014 9:11 AM

1 Attachment, 490 KB

Grow or die On July 31, 2014, Forbes reported: Profits Gush At Exxon And Conoco, But Stocks Stumble Oil giant Exxon Mobil reported a 28% surge in second quarter profit Thursday morning, but because of a decrease in oil production during the quarter, shares of the company’s stock are suffering in early morning trading. Meanwhile, Exxon competitor ConocoPhillips also reported higher-thanexpected profit but its stock is also lingering in negative territory in early Thursday trading. “Exxon Mobil’s financial results were achieved through strong operational performance and portfolio management,” Exxon chairman Rex Tillerson said in a statement Thursday morning. “We continue to enhance shareholder value by funding capital projects and delivering robust shareholder returns through dividends and share purchases.” Exxon delivered $11.7 billion to shareholders through dividends and share purchases during the first half of 2014, and on Wednesday announced that it will offer a 69-cent per-share dividend in the third quarter of 2014, the same-size dividend it paid during the second quarter. Despite the relatively positive top and bottom line results, Exxon’s oil-equivalent production dropped 5.7% compared to production in the same time in 2013, a decrease that lowered earnings by $200 million. Exxon said that excluding the impact of the expiration of its Abu Dhabi onshore concession, production only decreased 2.3%. All in all, Exxon produced 3.84 million barrels of oil and gas per day during the second quarter, down from the 4.15 million barrels produced during the same time last year. Following the release of the earnings results, shares of both Exxon and Conoco fell into negative territory in early Thursday trading; Exxon is currently down 1.9% and Conoco is trading for a 1.4% decline. Year-to-date, Conoco is the clear winner of the two: it has gained 21% since the first trading day of the year compared to Exxon’s 3.5% year-to-date uptick.

Ground Zero: Buy Back Plan or Boomerang, Grow or Die

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - buy back plan or boomerang, grow or die

October 30, 2014 9:59 AM

2 Attachments, 223 KB

Grow or die Oil and gas production and refining operations require the best and brightest engineers, geologists, physicists, mathematicians, economists, and other technical experts to manage the billions of barrels of petroleum and trillions of cubic feet of methane resources. Minor miscalculations, or misjudgments are worth millions and billions of dollars. Decisions as to production, transportation and refining strategies command astute attention to detail. Likewise, strategies for maintaining value for investors are a primary concern. Portfolio value is the foundation employee personal savings. Management and Officers receive stock options and bonuses. ExxonMobil retains the best and brightest to advise and manage its portfolio wealth. Everything financial is calculate. Buying back shares of common stock has been a practice at ExxonMobil, steadily reducing the number of outstanding shares. The net effect of that strategy has been to maintain an everincreasing dividend per share. This strategy has implications for the future. Will it boomerang?

Ground Zero: This is What We Know - Technology, Grow or Die

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - this is what we know, technology, grow or die

October 30, 2014 10:39 AM

2 Attachments, 416 KB

Grow or die Oil and gas production and refining companies have explored various ventures into becoming energy companies, but they have all retrenched to the comfortable knowledge of what they do best: drill, explore, produce and refine. That is what they know. E&E Publishing explains it well: Redlinger addressed a question that occurs to many when they think of the oil companies and renewable energy. The oil majors are better than anyone at energy. Solar, wind and geothermal power are all energy. So what's the problem? What the oil companies do, Redlinger said, is one part exploration -- geology, geophysics, computer simulation of oil reserves, drilling and heavy earthwork. The other part is chemical engineering, massaging chemical bonds with treatment and heat to convert crude into usable fuels like diesel and gasoline. What solar and other electricity-generation business do, by contrast, is electronics engineering and manufacturing. "The electrons business is just not core to what the oil majors do." "It's not that the oil companies can't get good at it," he said. "They're very, very talented and have very good personnel. The question they have to ask themselves is why. If you have a business model that is profitable, and will remain profitable for 20 or 30 years, and that takes all your resources to remain profitable, why change it?" Society must demand that they retrain, retool, reinvent or step aside and go by the wayside. We must challenge Rex Tillerson, ExxonMobil and other similarly situated to change course.

Ground Zero: Petrol Dinosaurs Will Become Extinct. Grow or Die

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - petrol dinosaurs will become extinct - grow or die

October 30, 2014 11:33 AM

2 Attachments, 164 KB

Grow or die If the dinosaur cannot adapt it will die and become extinct ... perhaps this is the only alternative for the entrenched oil and gas production and refining corporations. Those corporations must die. I challenge Rex Tillerson and ExxonMobil and any other similarly situated to change course.

Re-energize with clean carbon-free fuels â&#x20AC;&#x201D; for life! . . . . . . . . . . . . . . . . . . . . . . or die Re-invent ExxonMobil as an energy company, be more than an oil & gas company. . . . . . or die Re-direct capital from carbon-based infrastructure to carbon-free infrastructure. . . . . or die Announce a retirement schedule for your refineries â&#x20AC;&#x201D; let the end-game begin. The time is now ..

Rex Tillerson, your "leadership by example would usher in a new era...."

Why the oil majors are backing away from renewable energy David Ferris and Nathanial Gronewold, E&E reporters EnergyWire | Friday, October 3, 2014 | http://bit.ly/EEnews03Oct

Chevron Corp.'s new solar and geothermal business seemed to be having a great year. In January, after just one year in operation, it had established projects with returns of 15 to 20 percent and had plans to build several geothermal plants in Europe. Then Chevron changed its mind. In a series of transactions, it sold off the unit, as well as others that do smaller solar installations and energy efficiency upgrades, and canceled a pair of giant solar farms in Hawaii, according to reports from Bloomberg Businessweek. With that, the oil majors have beaten a near-final retreat from solar power. Why? It is a puzzling question for those who have watched the oil majors bestow their dollars and attention on clean energy and a few years later abruptly walk out the door. Three of the supermajors -- BP PLC, Chevron and Royal Dutch Shell PLC -- have since 2000 taken on ventures in wind, biofuels and geothermal. All took big positions in solar, sometimes more than once. They were positioned to compete or even dominate. Now, as solar is gaining market momentum like never before, the oil majors are nowhere to be found. Analysts who cover the industry say it isn't that oil and gas companies want to kill their brood of adopted low-carbon children, or that they even perceive them as a threat. They have a straightforward answer: The oil business is changing, and times are tough. Projects that made sky-high profits are a little lower in the sky. "It's not their strong suit to be spending a lot of money and time on [renewables] when they are definitely challenged in their core industry," said Lysle Brinker, an oil and gas equity analyst at IHS. Even those depressed profits tower over the margins earned in renewables, where projects are slow, bureaucratic and hard-won. If there are any profits to be had, they are too meager to impress an oil executive. But there is yet another explanation. An executive who has worked with both Chevron and the solar industry says that although the oil company was happy to nurture solar power with seed money, it lost interest when the investment began to require real money -- real money for a business that, at its heart, it didn't understand. It's all about the core When talking to experts about why the oil industry has turned away from renewables, the word "core" comes up a lot. An oil industry buffeted by change has needed to return to the basics, even though the basics are a lot more exotic than they used to be. In recent years, the major oil players have been absorbed with searching for and extracting fuels from a bewildering array of new places. A growing portion of oil companies' portfolios these days is in the "unconventionals" -- the oil sands of Alberta, the natural gas formations of the Marcellus Shale, the ultra-deep waters of the Gulf of Mexico, the frigid Arctic, and the tight oil reserves that underlie South and West Texas and western North Dakota. They require new techniques that are extraordinarily risky and expensive, and so the companies have turned their venture dollars away from "clean" technology and toward innovations in drilling, subterranean mapping and hydraulic fracturing. The supermajors were "caught quite unaware of the potential of shale," said Chirag Rathi, an energy

The supermajors were "caught quite unaware of the potential of shale," said Chirag Rathi, an energy analyst at Frost & Sullivan. A flood of shale gas has upended America's fuel markets in recent years, and it took a lot of investment to get there. "All those trends kind of meant that it was important to focus on the core again," Rathi said. Meanwhile, the big oil firms are finding themselves less welcome at the foreign oil fields that have been mainstays for decades. National oil companies like Aramco of Saudi Arabia and Petronas of Malaysia are renegotiating old contracts and exerting more control over their turf, Rathi added. The Arctic Circle provides just one example of the difficulties. Shell has so far spent $6 billion on setting up drilling rigs in the Chukchi Sea between Alaska and Russia but has been beleaguered with safety and equipment problems (EnergyWire, July 18). Two weeks ago, Exxon announced it would scuttle plans to drill in Russia's Kara Sea because of Western sanctions against Russia related to its aggressions in Ukraine. Shell is in trouble with investors for stagnant production figures and rising exploration and development costs that are eating away at company revenues. In response, the company is in the midst of a major restructuring effort, vacating much of the U.S. shale oil business and focusing investments instead on offshore exploration and production and other projects that could help the company make major gains in its global oil and gas output figures. Meanwhile, as venture dollars have become more precious, those earlier investments in renewable energy projects often struggled or floundered. KiOR Inc., a once-promising maker of biofuel from wood chips and switchgrass, is in severe financial trouble. In general, biofuels have labored under uncertainly about how much the federal government will mandate to be blended into fuels. The renewable energy production tax credit expired at the end of 2013, depressing the profits of all future wind farms. Since the tax credit expired, "there wasn't much meat in the market," Rathi said. "I have this much money to spend," said Daniel Choi, an energy analyst at Lux Research. "Am I going to use it to buy new plots of land, to develop this plot of land, or will I allot it to investing in a new renewable energy company?" Investments in wind and solar shine, then fade Remember a few years ago, when BP said it stood for "Beyond Petroleum" and Chevron's ads declared, "It's time oil companies get behind the development of renewable energy"? A survey of the oil majors' holdings reveals that the investments that gave those claims a ring of truth are now mostly stalled or sold. What momentum exists is near the oil majors' core competencies: biofuels, geothermal and solar projects that make fossil fuel extraction more efficient. Shell and BP still have significant holdings in wind but seem to hold them at arm's length. Shell WindEnergy Inc. pulled out of a major project in California two years ago but still operates eight U.S. wind farms that comprise 720 wind turbines, said Shell spokesman Ray Fisher. The corporate parent, Royal Dutch Shell, maintains a small wind energy branch, though its future is only vaguely defined. Investors are watching for signs that Shell may move out of the wind business in the coming years. BP invested $3 billion in wind farms starting in 2005, eventually operating 16 of them in nine states, producing 2,600 megawatts of power. In 2013, as the company struggled to pay for the damage from its Gulf of Mexico oil spill, it was determined to sell them. Then, a few months later, it decided to hold onto wind after all because no one offered a good buying price. "Despite receiving a number of bids, the company determined that it was not the right time to sell the business," said Jason Ryan, a BP spokesman. Investments in solar photovoltaics (PV), where the oil majors were once formidable, have vanished. BP at one point boasted of having the most efficient thin-film solar panels in the world, and in 2001 hatched a plan to put solar on all new BP service stations. In 2009, it arranged to build solar plants on the roofs of Wal-Mart stores in California (ClimateWire, April 23, 2009). But BP shut down these

the roofs of Wal-Mart stores in California (ClimateWire, April 23, 2009). But BP shut down these operations in 2011. "The continuing global economic challenges have significantly impacted the solar industry, making it difficult to sustain long term returns for the company, despite our best efforts," BP said in an internal letter to staff. Shell in 2002 bought a German solar company (from Siemens AG), established it as one of the leaders in the then-tiny U.S. solar market, and then sold it back to the Germans (to SolarWorld AG) in 2006. Chevron's exit has been the most recent. In the wake of its divestments this year, Chevron's holdings are limited to a few solar photovoltaic projects in California and a small wind farm in Wyoming. It says it is experimenting in solar technology. The one oil company that maintains a vital interest in solar panels is Total SA, the French petroleum giant. In 2011, it spent almost $1.4 billion to buy a controlling interest in SunPower Corp., one of the U.S.'s leading solar panel makers, which it runs as a semi-independent arm. Clean, as long as it's core For the oil industry's other big players, though, the remaining oomph in solar power is in what is called "enhanced oil recovery." Mirrors are positioned to bounce sunbeams to a central point, where a fluid is superheated to create steam. The steam, in turn, is injected in the ground to increase the productivity of an existing oil well. Chevron has a demonstration enhanced oil recovery plant in Coalinga, Calif., that has 7,600 mirrors, while Shell has allied with GlassPoint Solar Inc. on a project in Oman. In geothermal power, which uses hot subterranean rocks to create steam that makes electricity, Chevron operates sizable plants in the Philippines and in Indonesia. One vein that almost all the supermajors still pursue is biofuels, though often on a smaller scale than a few years ago, according to Bloomberg. Chevron and Exxon Mobil Corp. both dabble in advanced biofuels research. By comparison, Shell and BP are more bullish. Shell has a deep history with biofuels that spans about three decades, said Shell's Fisher, adding that Shell is one of the world's largest distributors of biofuels and that capacity expansions are ongoing. BP's green-fuels scope includes the largest bioethanol plant in the United Kingdom, operated with DuPont, and three mills in Brazil that help convert sugar cane into ethanol. In 2012, BP scrapped plans for a $300 million cellulosic ethanol refinery in Florida. One name that rarely enters the conversation, when it comes to renewables, is Exxon Mobil. America's second-largest company by gross revenue showed relatively little enthusiasm for renewable energy projects and ventures in the past, even as interest in renewables grew prominently in 2008 and 2009, and the firm largely maintains this attitude today. Exxon Mobil officials have also expressed deep skepticism of electric cars at past events, arguing that it was unlikely that advanced batteries would ever match the energy density that is contained in liquid petroleum fuels. Exxon Mobil does, however, support renewable energy research indirectly, as a sponsor of the Global Climate and Energy Project, a research initiative at Stanford University that exists to "conduct fundamental research on technologies that will permit the development of global energy systems with significantly lower greenhouse gas emissions," according to the GCEP website. Chevron's 2 flirtations with solar When it comes to understanding why the big oil companies can't seem to embrace clean energy, the experience of Robert Redlinger proves instructive. Redlinger began at Chevron in 2003, when it bought the energy contracting company he worked for, Viron Energy Services. Redlinger headed up Viron's distributed solar business and became a leader in Chevron's clean energy subsidiary, Chevron Energy Services. By the mid-2000s, Chevron Energy Services had become the second-biggest solar integrator in California. It built ground-mount systems

Services had become the second-biggest solar integrator in California. It built ground-mount systems and solar canopies, and on rooftops. But by 2007, Redlinger said in an interview, it was becoming clear to him that solar panels were becoming a commodity and that Chevron would make tiny profits. So at his prodding, Chevron expanded into building utility-scale plants. Redlinger headed the team that secured attractive sites for solar farms. For a brief time, it appeared that a major oil company would have been in a leading position in what is now one of the world's top utility-scale markets for solar. Along with the budding projects came the need for letters of credit and deposits to create interconnections to the grid. It was when it began to require millions of dollars of capital investment that Redlinger's bosses started having second thoughts. "In fact, my superiors at Chevron Energy Solutions never even took it to the corporation and never asked for the funds because they knew it would be rejected," Redlinger said in an email. By 2009, Chevron had sold its solar assets, and Redlinger left the company in 2010. "There was always a disconnect," Redlinger said of Chevron's relationship with solar. "It never really had the buy-in of the corporation. It was always a bottom-up effort of the staff rather than a top-down strategy directed from above." Around 2012, after Redlinger's departure, Chevron Energy Solutions again got an infusion of cash from its parent to pursue big geothermal and solar projects. And again, last month, the company got cold feet. Do oil companies understand electrons? Many aspects of the electricity business were unfamiliar and uncomfortable to an oil executive, Redlinger said. One was debt. Like most equipment-intensive industries, the solar industry incurs lots of debt to build its projects. But Chevron's leaders were allergic to incurring debt and employing other financing structures commonly used to build electric infrastructure. The oil industry, with its huge cash reserves and extraordinary appetite for risk, is used to paying costs from its own pocket. One loan on an oil field gone bad can bankrupt an entire company. As a result, Redlinger said, he could never make the case that a solar project, despite its lower returns, in the end could be as profitable as an oil project if you structured it differently. Furthermore, Chevron executives bristled at the relationship with a solar plant's primary customer -- the electric utility. The oil companies are used to high risk and high reward. The utilities offered low risk, low reward -- and an inferior bargaining position. Utilities are monopolies, and a monopoly defines the terms. Chevron does tango with the utilities as the operator of some big cogeneration electric stations. But when it came to building solar plants, Chevron was distressed by its lower status. "The utility business is not a good one," Redlinger said, "unless you're a utility." Redlinger addressed a question that occurs to many when they think of the oil companies and renewable energy. The oil majors are better than anyone at energy. Solar, wind and geothermal power are all energy. So what's the problem? The problem, Redlinger said, is that the oil companies know molecules, and solar isn't about molecules. It's about electrons. What the oil companies do, Redlinger said, is one part exploration -- geology, geophysics, computer simulation of oil reserves, drilling and heavy earthwork. The other part is chemical engineering, massaging chemical bonds with treatment and heat to convert crude into usable fuels like diesel and gasoline. What solar and other electricity-generation business do, by contrast, is electronics engineering and manufacturing. "The electrons business is just not core to what the oil majors do," Redlinger said.

"It's not that the oil companies can't get good at it," he said. "They're very, very talented and have very good personnel. The question they have to ask themselves is why. If you have a business model that is profitable, and will remain profitable for 20 or 30 years, and that takes all your resources to remain profitable, why change it?"

If the dinosaur cannot adapt it will die and become extinct ... perhaps this is the only alternative for the entrenched oil and gas production and refining corporations. Those corporations must die. I challenge Rex Tillerson and ExxonMobil and any other similarly situated to change course.

Your "leadership by example would usher in a new era...."

DON’T GO THERE

Ground Zero: What’s the Worst That Could Happen, Don’t Go There

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - what's the worst that could happen: don't go there

October 31, 2014 10:10 AM

1 Attachment, 379 KB

Don't go there Reported October 5, 2014: Brushing aside warnings of dangerous geological risk, federal regulators say construction can start immediately on a methane gas storage project next to Seneca Lake that has galvanized opposition from wine and tourism businesses across the Finger Lakes in NY. The Sept. 30 decision by the Federal Energy Regulatory Commission (FERC) represents a major breakthrough for Houston-based Crestwood Midstream. The company has been waging a five-year campaign for permission to convert long-abandoned lakeside salt caverns into a regional storage hub for both methane gas and liquid petroleum gas, or LPG, from fracking operations in Pennsylvania. FERC has jurisdiction over the methane gas storage portion of the project, while the state Department of Environmental Conservation has the final say over the storage of LPG, mostly propane and butane. The company has been trying to persuade both agencies that the old caverns are ideal storage sites for highly-pressurized, volatile hydrocarbons. Scientists who are not paid by the company disagree and have warned of the caverns’ unstable geology. The best the public can hope for in the future is diligent monitoring ... for leaks and roof and wall collapses, said H.C. Clark, a Houston geologist who has sharply criticized FERC’s analysis of the cavern. Clark pointed out in January that FERC had neglected to assess the safety implications of a massive roof collapse in the cavern. He learned about the event in a detailed report written in the late 1960s by Charles Jacoby, an engineer who worked for the cavern’s owner at the time. In August, Dr. Rob Mackenzie analyzed accident events—major fires, explosions, collapses, catastrophic loss of product, evacuations — at salt cavern storage facilities in the U.S. dating back to 1972. He concluded that the risk of an “extremely serious” salt cavern event within Schuyler County over the next 25 years is more than 35%.

Ground Zero: Dire Consequences, Donâ&#x20AC;&#x2122;t Go There

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - dire consequences: don't go there

October 31, 2014 10:35 AM

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Don't go there If there is a remote chance of dire consequences, just don't take that avenue. In the animal kingdom, if a threat appears, the "fight or flight" instinct governs, and normally the one with the most to lose flees the scene. This is where human hubris threatens to bring all of us into a catastrophe.

Ground Zero: Avoid the Train Wreck, Donâ&#x20AC;&#x2122;t Go There

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - avoid the train wreck: don't go there

October 31, 2014 11:11 AM

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Don't go there Re-energize with clean carbon-free fuels â&#x20AC;&#x201D; for life! Re-invent ExxonMobil as an energy company, be more than an oil & gas company. Re-direct capital investments from carbon-based infrastructure to carbon-free infrastructure. Announce a retirement schedule for your refineries â&#x20AC;&#x201D; let the end-game begin. .

Your "leadership by example would usher in a new era...."

TRAIN WRECK ALERT

Ground Zero: Clear and Present Danger, Train Wreck Alert

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - clear and present danger: train wreck alert

October 31, 2014 11:30 AM

2 Attachments, 480 KB

Train Wreck Alert What U.S Administration Officials have said about climate security risks: Secretary of State, John Kerry (2013, 2014) Secretary of Defense, Chuck Hagel (Nov, 2013) U.S. Director of National Intelligence, James R. Clapper (2013, 2014) National Security Advisor, Tom Donilon (April, 2013) U.S. Department of Commerce Assistant Secretary of Commerce for Market Access and Compliance, Michael Camu単ez, (April, 2013) Commander, U.S. Pacific Command, Admiral Samuel Locklear (March, 2013) Former Secretary of State, George Shultz (March, 2013) Former Assistant to the President for Homeland Security and Secretary of Homeland Security under President George W. Bush, Tom Ridge (R-PA) (February, 2013) Secretary of Homeland Security, Janet Napolitano (July, 2012) Former Secretary of Defense, Leon Panetta (May, 2012) Former Commander of U.S. European Command, Admiral James G. Stavridis, USN (ret) (March, 2012) Former Commander of U.S. Pacific Command, Admiral Robert F. Willard, USN (ret) (February, 2012) U.S. Ambassador to the United Nations, Susan Rice (July, 2011) Former Chairman of the Joint Chiefs of Staff, Admiral Michael Mullen, USN (ret) (October, 2010) Former Commander of the U.S. Fleet Forces Command under President George W. Bush, Admiral John Nathman, USN (ret) (October, 2009) Former Secretary of Defense, Robert Gates (July, 2008) Former Chairman of the National Intelligence Council, Thomas Fingar (June, 2008) Former CIA Director, James Woolsey (June, 2008) Former Commander of the United States Army Materiel Command under President George W. Bush, General Paul Kern, USA (ret) (April, 2007) Former Army Chief of Staff, General Gordon Sullivan, USA (ret) (April, 2007) Former NASA administrator Vice Admiral Richard Truly, USN (ret) (April, 2007) Former Commander-in-Chief of U.S. Central Command, General Anthony Zinni, USMC (ret) (April, 2007) Secretary of Defense, Chuck Hagel (March, 2007)

On the Record: Climate Change as a National Security Risk According to U.S. Administration Officials Under both Republican and Democratic Administrations, leaders in the U.S. foreign policy and national security establishment have recognized the security risks of climate change, and have become increasingly active in arguing for a response commensurate to the threat. Below is a sampling of statements, and actions, regarding the security risks of climate change, by some of our current and past foreign policy and national security leaders. This is by no means a complete list, but it is a good reminder that climate change is far more than an environmental concern. See Jill Fitzsimmons’ post from 2012 for more. Secretary of State, John Kerry (2013, 2014) Feb 2014: “When I think about the array of global climate – of global threats – think about this: terrorism, epidemics, poverty, the proliferation of weapons of mass destruction – all challenges that know no borders – the reality is that climate change ranks right up there with every single one of them.” May 2013: “And at the top of that list of shared challenges which does not get enough attention…a principal challenge to all of us of life and death proportions is the challenge of climate change…So it’s not just an environmental issue and it’s not just an economic issue. It is a security issue, a fundamental security issue that affects life as we know it on the planet itself, and it demands urgent attention from all of us.” Secretary of Defense, Chuck Hagel (Nov, 2013) “But the challenge of global climate change, while not new to history, is new to the modern world. Climate change does not directly cause conflict, but it can significantly add to the challenges of global instability, hunger, poverty, and conflict. Food and water shortages, pandemic disease, disputes over refugees and resources, more severe natural disasters – all place additional burdens on economies, societies, and institutions around the world. Typhoon Haiyan in the Philippines is a reminder of humanitarian disaster brought on by nature. And climatologists warn us of the increased probability of more destructive storms to come.” “Planning for climate change and smarter energy investments not only make us a stronger military, they have many additional benefits – saving us money, reducing demand, and helping protect the environment.” “Climate change is shifting the landscape in the Arctic more rapidly than anywhere else in the world…Over the long-term, as global warming accelerates, Arctic ice melt will lead to a sea level rise that will likely threaten

accelerates, Arctic ice melt will lead to a sea level rise that will likely threaten coastal populations around the world.” U.S. Director of National Intelligence, James R. Clapper (2013, 2014) Jan, 2014: “Risks to freshwater supplies due to shortages, poor quality, floods, and climate change are growing. These forces will hinder the ability of key countries to produce food and generate energy, potentially undermining global food markets and hobbling economic growth. As a result of demographic and economic development pressures, North Africa, the Middle East, and South Asia particularly will particularly face difficulty coping with water problems. Lack of adequate water is a destabilizing factor in developing count ries that do not have the management mechanisms, financial resources, or technical ability to solve their internal water problems.” March, 2013: “Terrorists, militants and international crime groups are certain to use declining local food security to gain legitimacy and undermine government authority. Intentional introduction of a livestock or plant disease could be a greater threat to the United States and the global food system than a direct attack on food supplies intended to kill humans. So there will almost assuredly be security concerns with respect to health and pandemics, energy and climate change. Environmental stresses are not just humanitarian issues. They legitimately threaten regional stability.” National Security Advisor, Tom Donilon (April, 2013) “The national security impacts of climate change stem from the increasingly severe environmental impacts it is having on countries and people around the world…The fact that the environmental impacts of climate change present a national security challenge has been clear to this Administration from the outset.” U.S. Department of Commerce Assistant Secretary of Commerce for Market Access and Compliance, Michael Camuñez, (April, 2013) “Extreme weather events can damage agricultural production as we know, paralyze the transport of goods and services, and result in an economic loss that reverberates across the globe. Therefore, protecting our ecosystem and improving the management of our resources are at the core of our regional security and economic prosperity alike. And certainly participating States, like all nations of the world, face the challenge of climate change and global warming, which is perhaps the paramount existential security threat facing us all today.” Commander, U.S. Pacific Command, Admiral Samuel Locklear (March, 2013) Significant upheaval related to the warming planet “is probably the most likely thing that is going to happen . . . that will cripple the security environment, probably more likely than the other scenarios we all often talk about.’’ And: “While the Indo-Asia Pacific today is relatively at peace, I am concerned by a number of security challenges that have the possibility to impact the security environment…Examples include, climate change, where increasingly severe weather patterns and rising sea levels, along with inevitable earthquakes and tsunamis’ and super-typhoons, and massive flooding threaten today and will continue to threaten populations in the future in this region.” Former Secretary of State, George Shultz (March, 2013) “There are huge changes that are in the works if we don’t moderate what’s going on. Changes in heat levels. Some places can get very, very hot, and

going on. Changes in heat levels. Some places can get very, very hot, and we’ve already experienced some of that. Even Vladimir Putin got out of Moscow a couple summers ago. So you’ve got that problem…I’m a marine, and during World War II I flew over the Pacific, and we flew over those islands, and they’re just little islands out there in the ocean…So you can create conditions that lead people to want to fight about things. If I suddenly find that I am losing all my land, I want to get somebody else’s.” Former Assistant to the President for Homeland Security and Secretary of Homeland Security under President George W. Bush, Tom Ridge (R-PA) (February, 2013) “The U.S. national security community, including leaders from the military, homeland security, and intelligence, understand that climate change is a national security threat… They’re not talking about whether or not it is occurring – it is… They’re talking about addressing the problem and protecting the American people. It’s time Washington does the same.” Secretary of Homeland Security, Janet Napolitano (July, 2012) “You have to look at climate change over a period of years, not just one summer…You could always have one abnormal summer. But when you see one after another after another then you can see, yeah, there’s a pattern here.” Former Secretary of Defense, Leon Panetta (May, 2012) “Our mission at the Department is to secure this nation against threats to our homeland and to our people. In the 21st Century, the reality is that there are environmental threats which constitute threats to our national security. For example, the area of climate change has a dramatic impact on national security: rising sea levels, to severe droughts, to the melting of the polar caps, to more frequent and devastating natural disasters all raise demand for humanitarian assistance and disaster relief.” Former Commander of U.S. European Command, Admiral James G. Stavridis, USN (ret) (March, 2012) “Climate change in the Arctic makes it one of the world’s most rapidly changing environments. As the volume of Arctic sea ice decreases, access continues to increase permitting maritime traffic into areas previously impassable without specialized vessels. This new access is creating opportunities for transit, development, and natural resource extraction. While some see these changes as a potential breeding ground for conflict, we see the risk of armed conflict as low, and continue to approach the Arctic as an area of cooperation among Arctic nations.” Former Commander of U.S. Pacific Command, Admiral Robert F. Willard, USN (ret) (February, 2012) “The U.S. alliance with Australia anchors USPACOM’s strategy in Oceania. Australia, with additional contributions from New Zealand, invests extensively in security and assistance efforts in this sub-region. The Australian continent notwithstanding, most of Oceania is comprised of Pacific Island nations spread across the vast expanse of the South Pacific Ocean. Security challenges associated with natural resources in this sub-region tend to predominate. In particular, illegal fishing, resource damage attributed to climate change and global warming, and the susceptibility of low lying island nations to typhoons and tsunamis define USPACOM and U.S. Coast Guard approaches to engagement in Oceania, often in concert with Australian and New Zealand actions.”

U.S. Ambassador to the United Nations, Susan Rice (July, 2011) “In this Council we have discussed many emerging security issues and addressed them, from the links between development and security to HIVAIDS. Yet this week, we have been unable to reach consensus on even a simple Presidential Statement that climate change has the potential to impact peace and security in the face of the manifest evidence that it does. We have dozens of countries in this body and in this very room whose very existence is threatened. They’ve asked this Council to demonstrate our understanding that their security is profoundly threatened. Instead, because of the refusal of a few to accept our responsibility, this Council is saying, by its silence, in effect, “Tough luck.” This is more than disappointing. It’s pathetic. It’s shortsighted, and frankly it’s a dereliction of duty.” Former Chairman of the Joint Chiefs of Staff, Admiral Michael Mullen, USN (ret) (October, 2010) “The scarcity of and potential competition for resources like water, food and space, compounded by an influx of refugees if coastal lands are lost, does not only create a humanitarian crisis but creates conditions of hopelessness that could lead to failed states and make populations vulnerable to radicalization. These challenges highlight the systemic implications and multiple-order effects inherent in energy security and climate change.” Former Commander of the U.S. Fleet Forces Command under President George W. Bush, Admiral John Nathman, USN (ret) (October, 2009) “There are serious risks to doing nothing about climate change. We can pay now or we’re going to pay a whole lot later. The U.S. has a unique opportunity to become energy independent, protect our national security and boost our economy while reducing our carbon footprint. We’ve been a model of success for the rest of the world in the past and now we must lead the way on climate change.” Former Secretary of Defense, Robert Gates (July, 2008) “We also know that over the next 20 years and more, certain pressures— population, resource, energy, climate, economic, and environmental—could combine with rapid cultural, social, and technological change to produce new sources of deprivation, rage, and instability…But, overall, looking ahead, I believe the most persistent and potentially dangerous threats will come less from ambitious states, than failing ones that cannot meet the basic needs— much less the aspirations—of their people.” Former Chairman of the National Intelligence Council, Thomas Fingar (June, 2008) “We judge global climate change will have wide-ranging implications for US national security interests over the next 20 years … We judge that the most significant impact for the United States will be indirect and result from climatedriven effects on many other countries and their potential to seriously affect US national security interests.” Former CIA Director, James Woolsey (June, 2008) “The combination of 9/11, concern about climate change, and $4 a gallon gasoline has brought a lot of people together. I call it the coalition of the treehuggers, the do-gooders, the cheap hawks, the evangelicals, and the mom and pop drivers. All of those groups have good reasons to be interested in

and pop drivers. All of those groups have good reasons to be interested in moving away from oil dependence.” Former Commander of the United States Army Materiel Command under President George W. Bush, General Paul Kern, USA (ret) (April, 2007) “Military planning should view climate change as a threat to the balance of energy access, water supplies, and a healthy environment, and it should require a response.” Former Army Chief of Staff, General Gordon Sullivan, USA (ret) (April, 2007) “Climate change is a national security issue. We found that climate instability will lead to instability in geopolitics and impact American military operations around the world.” Former NASA administrator Vice Admiral Richard Truly, USN (ret) (April, 2007) “The stresses that climate change will put on our national security will be different than any we’ve dealt with in the past.” Former Commander-in-Chief of U.S. Central Command, General Anthony Zinni, USMC (ret) (April, 2007) “You may also have a population that is traumatized by an event or a change in conditions triggered by climate change,” Gen. Zinni said. “If the government there is not able to cope with the effects, and if other institutions are unable to cope, then you can be faced with a collapsing state. And these end up as breeding grounds for instability, for insurgencies, for warlords. You start to see real extremism. These places act like Petri dishes for extremism and for terrorist networks.” Secretary of Defense, Chuck Hagel (March, 2007) According to Andrew Holland at the American Security Project: “Hagel was an original cosponsor of S.1018 in the 110th Congress, which required the Director of National intelligence to submit to Congress a National Intelligence Estimate on the anticipated geopolitical effects of global climate change and the implications of such effects on the national security. This legislation found that “The consequences of global climate change represent a clear and present danger to the security and economy of the United States.” The legislation was included as an amendment to the Committee-passed FY08 Intelligence Authorization, but was removed before passage on the Senate floor due to opposition in the Senate.”

Ground Zero: Stop Now Or Plan For More Damage, Train Wreck Alert

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - stop now or plan for more and more damage: train wreck alert

November 1, 2014 11:59 AM

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Train Wreck Alert January 26, 2009, National Public Radio reported: Climate change is essentially irreversible, according to a sobering new scientific study. As carbon dioxide emissions continue to rise, the world will experience more and more long-term environmental disruption. The damage will persist even when, and if, emissions are brought under control, says study author Susan Solomon, who is among the world's top climate scientists. "We're used to thinking about pollution problems as things that we can fix," Solomon says. "Smog, we just cut back and everything will be better later. Or haze, you know, it'll go away pretty quickly." That's the case for some of the gases that contribute to climate change, such as methane and nitrous oxide. But as Solomon and colleagues suggest in a new study published in the Proceedings of the National Academy of Sciences, it is not true for the most abundant greenhouse gas: carbon dioxide. Turning off the carbon dioxide emissions won't stop global warming. "People have imagined that if we stopped emitting carbon dioxide that the climate would go back to normal in 100 years or 200 years. What we're showing here is that's not right. It's essentially an irreversible change that will last for more than a thousand years," Solomon says. This is because the oceans are currently soaking up a lot of the planet's excess heat â&#x20AC;&#x201D; and a lot of the carbon dioxide put into the air. The carbon dioxide and heat will eventually start coming out of the ocean. And that will take place for many hundreds of years. ... "I guess if it's irreversible, to me it seems all the more reason you might want to do something about it," she says. "Because committing to something that you can't back out of seems to me like a step that you'd want to take even more carefully than something you thought you could reverse."

Ground Zero: Tarsands Pipe Dreams Are Lost Assets, Train Wreck Alert

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - tarsands pipe dreams are lost assets: train wreck alert

November 1, 2014 9:59 PM

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Train Wreck Alert October 29, 2014, Oil Change International reported on a downturn in tarsands development. The article titled "Keystone XL campaign for the win" concludes with this: Where industry and government would have driven us blindfolded off a cliff, the Keystone XL campaign has opened our eyes and prompted a debate that we desperately needed. And at the same time, the Keystone XL campaign is buying us critical time by keeping climate changing carbon in the ground while slowmoving governments and industry come to terms with the end of an era. The article titled "Material Risks: How Public Accountability Is Slowing Tar Sands Development" quantifies for the first time the financial and carbon impact of public opposition to pipelines and other expanded investment in tar sands production. The report, “Material Risks: How Public Accountability Is Slowing Tar Sands Development” presents market analysis and industry data to support its estimates on lost sales revenue to the tar sands industry as public opposition creates delays and project cancellations. Among the report’s findings: Market forces and public opposition have played a significant role in the cancellation of three major tar sands projects in 2014 alone: Shell’s Pierre River, Total’s Joslyn North, and Statoil’s Corner Project. Combined, these projects would have produced 4.7 billion barrels of bitumen. Tar sands producers lost $30.9 billion from 2010 through 2013 due to transportation bottlenecks and the flood of crude coming from shale-oil fields. The combination of risks facing the industry has the potential for canceling most or even all of the planned expansion of the industry in Canada. Rather than seeing more than a doubling of output from 2 million barrels of oil per day to 4.8 million barrels per days — as the industry predicts — the report projects flat production levels. Tar sands producers have lagged, with 9 of 10 leading tar sands producers in Canada underperforming the broader stock market in the last five years.

Ground Zero: Moral Authority Demands Civil Outrage

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - moral authority demands civil outrage

November 1, 2014 10:02 PM

2 Attachments, 689 KB

Moral authority What will it take to get the undivided attention of a unified government? Standing at the front steps of the White House and screaming at the top of our lungs? Walking over 3,000 miles from California to Washington, DC, to deliver messages from people coast-to-coast? A 3,000 mile trek ended at Lafayette Square. Blogged by a mother who is deeply concerned about the fate of our earth November 1, she recounted the Great March, listing six among dozens of poignant messages: “Jobs don’t matter if there is no clean air and no clean water.” “I’m tired of having our planet treated like a trash can. Can you please do something about it?” “I have an 11-year-old son. Please take action, for his sake and for his peers.” “Please please please stop the destruction of Mother Earth.” “We need to get away from fossil fuels. Hopefully you will do this so we don’t lose our planet.” Miriam Kashia, at 71 the oldest marcher to have walked every step of the way, held up an eagle feather she was given by the Zuni pueblo, and a special stone from the Navajos. “They asked me to bring these to Washington, and ‘Tell them to protect our sacred land,'” she said.

Ground Zero: Averting Train Wrecks Demands Civil Engagement

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - averting train wrecks demands civil engagement

November 2, 2014 9:11 AM

2 Attachments, 854 KB

October 29, 2014, KPLU 88.5 radio reported: The boom in domestic oil production through fracking is posing new risks to Washingtonâ&#x20AC;&#x2122;s rails and waterways. Public meetings on a study and initial findings of a marine and rail oil transportation study are attracting busloads of people who want to voice their concerns. Washington Environmental Council has been holding conference calls to prepare for the meetings. Policy specialist Rebecca Ponzio said, "People are really concerned about all of the derailments that have been happening across North America â&#x20AC;&#x201D; Canada and the U.S. The awareness level is getting higher and higher about the risks associated with how oil is being transported...." Ponzio says they want to stop proposals to expand oil exports moving through the state and instead steer Washington toward a clean energy economy.

Ground Zero: Safety and Equipment Design Failures, Train Wreck Alert

Douglas Grandt <answerthecall@me.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - safety and equipment design failures: train wreck alert

November 2, 2014 9:59 AM

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Train Wreck Alert August 23, 2014, the LaCross Tribune reported: The Canadian oil train that derailed in 2013 killing 47 people in Lac-Mégantic passed through the Coulee Region on its way to Quebec, according to Canadian safety officials. A report from Canada’s Transportation Safety Board blamed “systemic weaknesses” in the Montreal, Maine & Atlantic Railway’s safety system for the July 6 derailment. According to the report, the tank cars originated in New Town, N.D., and were hauled by Canadian Pacific through Minneapolis, Milwaukee, Chicago and Detroit on their way to Montreal, where they were transferred to the MMA railway. The derailment brought additional attention to the increase in rail shipments of highly flammable crude oil as production in the Bakken formation of North Dakota has soared. In 2008, railroads transported about 9,500 carloads of oil. Last year they moved an estimated 434,000 loads. That number is expected to reach 650,000 in 2014, according to the Congressional Research Service. That increased traffic has resulted in up to seven oil trains a day passing through La Crosse and neighboring counties, according to industry data. The majority of those trains — 26 to 43 per week — are on the BNSF line along the Wisconsin side of the Mississippi River. Canadian Pacific reported three to five trains a week along its line, which bisects the southern third of the state, running through La Crosse and Monroe counties. Canadian authorities attributed the crash to a combination of factors including insufficient brakes, unaddressed mechanical issues in the locomotive and problems with MMA’s safety management system. “The damage to the tank cars in Lac-Mégantic clearly indicates that product release could have been reduced had the tank car shells and heads been more impact-resistant,” the report stated. “Design improvements to these types of cars are needed to mitigate the risks of a dangerous goods release and the consequences observed in the Lac-Mégantic accident.”

Ground Zero: Dilbit Tankers Plying the St. Lawrence River, Train Wreck Alert

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - dilbit tankers plying the St. Lawrence River: train wreck alert

November 2, 2014 11:59 AM

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Train Wreck Alert September 22, 2014, CBC News reported: Minerva Gloria's arrival in the port of Sorel-Tracy opened a new chapter in the ongoing efforts of Quebeckers to resist shipments of diluted bitumen crude oil from Alberta through their communities ... and deepens community concern for possible oil spill on the St. Lawrence River. The Minerva Gloria is not only the first tanker of its size to arrive in Sorel-Tracy, but it will also be the first to carry diluted bitumen from Alberta’s oil sands on the St. Lawrence River. Since July, Suncor has been transporting diluted bitumen from Alberta by train to a storage facility in Sorel-Tracy. The Minerva Gloria’s arrival in Sorel-Tracy marks the start of the next phase of Suncor’s plans — the transfer of that oil to tankers ships for transport east. Communities along the rail lines that carry the bitumen have mounted protests against Suncor’s shipments. What could transfer to tankers like Minerva Gloria mean for the St. Lawrence River? Monique Hains and other members of the group Alerte Petrole Rive-Sud said a spill in the St. Lawrence would mean disaster for the environment and riverside communities. University of Rimouski professor Emmanuel Guy said the safety system that is currently in place is effective for the current level of tanker traffic on the St. Lawrence River. However, he said it should be reviewed to take into consideration the larger ships and the increasing number of tankers. “The risk is proportional to the level of activity. If there is a rise in the volume [of oil] being transported, it’s important to adjust safety precautions now, and not after the fact,” he said. The Minerva Gloria is due to leave Sorel-Tracy at the start of next week. Radio-Canada reports that it will sail in the direction of the Gulf of Mexico, for a refinery in Lousiana or Texas. It’s expected that 20 to 30 tankers will take on loads of bitumen crude every year from Sorel-Tracy.

Ground Zero: Civil Society Resistance, Train Wreck Alert

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - civil society resistance: train wreck alert

November 3, 2014 9:59 AM

2 Attachments, 1.1 MB

Nearly 100 people from across the country participated in a nonviolent direct action protest this morning shutting down the office of the Federal Energy Regulatory Commission (FERC) in Washington, DC. Today’s action was led by some of the Great March for Climate Action marchers who arrived at the nation’s capital on Nov. 1 after a 3,000-mile cross country walk from Los Angeles, California to Washington, DC. Police say 25 people were arrested this morning. More than 50 organizations endorse this week of action and demands in the face of “ongoing threats to their health, communities, democracy, property values, environment and climate:” 1. We demand FERC withdraw its permit for the dangerous fracked-gas export facility at Cove Point, as well as recent gas expansion permits at Myersville, Minisink and Seneca Lake. In addition, we demand a stop to the permitting of all fracked-gas export facilities and other fracked-gas infrastructure. 2. We demand that all future FERC permits: • Consider as the top priority the rights of human beings and all life on Earth; • Fully assess the cumulative harm from infrastructure projects on public health, local economies and the climate. FERC must consider the damage from fracking–the extreme extraction process that generates the gas for these projects–and from climate change. FERC must reject industry’s practice of disguising major projects by dividing them into separate, ostensibly unrelated ones. • Adhere to the precautionary principle: in the face of uncertainty and the absence of scientific consensus, the benefit of the doubt will go to public health and the environment. The burden of proof that a project is safe falls with those proposing the project; communities will not need to prove that a project is harmful. 3. We demand FERC commissioners meet with communities affected by approved and proposed fossil fuel infrastructure, including the Cove Point export facility, Myersville and Minisink compressor stations, and Seneca Lake gas storage project. This is a key step in changing FERC from an agency that protects only interests of the fossil fuel industry to one that protects the public interest. 4. We demand a Congressional investigation into FERC’s rubber stamping of industry proposals.

Breaking: 25 Arrested Shutting Down FERC Office in DC Stefanie Spear | November 3, 2014 9:42 am

http://bit.ly/EcoWatch03Nov (continued from above)

“We walked 3,000 miles across the country and heard firsthand from families and communities the hardships they are facing due to extreme energy extraction,” said Faith Meckley, one of the climate marchers who lives in New York state. Meckley said she’s participating in these actions because FERC rubber stamped a methane gas storage facility on the shore of New York’s Seneca Lake that allows methane storage in unstable salt caverns that threatens her community. Other people who took part in today’s action said they have had enough of FERC rubber stamping fracking infrastructure projects in their communities, including pipelines, gas storage under lakes, compressor stations and fracked gas export facilities. Today’s action used a massive portrait of families from Maryland and New York whose homes and communities are threatened by fracking infrastructure that has been approved by FERC. A model town was erected as part of the action which blocked the entrance to FERC preventing employees from entering the building. “The object of the blockade art is to give FERC no other option but to destroy the town and families in order to get to work,” said Kim Fraczek of Sane Energy Project of New York. “The destruction of the art serves a metaphor of reality.”

Ground Zero: First Nations, Train Wreck Alert

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - first nations: train wreck alert

November 3, 2014 10:01 AM

1 Attachment, 377 KB

Train Wreck Alert September 10, 2014, The Nation reported: Shell has now proposed the Jackpine Mine Expansion and the Pierre River Mine on the traditional territory of the Athabasca Chipewyan First Nation, which includes Fort Chipewyan. “You’d be kidding if you thought that Shell hasn’t been offering sweet deal after sweet deal to our nation,” said ACFN spokeswoman and Fort Chipewyan resident Eriel Deranger. “But instead of making money, we’ve spent close to $2 million already to challenge these projects.” The ACFN asserts that the projects will destroy its cultural livelihood along with the ecosystem itself. “We have a line that shouldn’t be crossed, as per our elders’ council, and we’re holding it,” Deranger continued. “It’s not about money. It’s about the protection and preservation of our land, culture and identity.” This is the front line in the fight against tar sands development. When most of Canada’s First Nations ceded their territories to the British crown in the late nineteenth century, they did so in exchange not only for reserves but also for the right to hunt and fish on their traditional lands in perpetuity—lands which many of these nations now say are threatened by rapid resource development. The last few years have seen an onslaught of lawsuits against tar sands development based on these rights, with the ACFN currently challenging specific projects like the Jackpine expansion and the Pierre River Mine, as well as government policies like the Lower Athabasca Regional Plan. Some of the lawsuits seek compensation for the damage already done, but most are seeking the recognition of native rights on these traditional territories (not merely on their reserves), including a say over project approval and development. In fact, native communities across Canada are on a legal winning streak against the resource sector.

How First Nations in Canada Are Winning the Fight Against Big Oil Recent militant action in Canada is leading a global movement to protect frontier resources. Andrea Lim | The Nation | September 10, 2014 | http://bit.ly/Nation10Sept

If it wasn’t for the cannons, the pond might be a tranquil sight: its rippling surface reflects the blue of the sky, diffusing the harsh midday light. But the cannons fire sporadically, a warning to migrating ducks not to land in this toxic soup of arsenic, mercury and carcinogenic hydrocarbons—1,600 ducks died after landing in one of these tailings ponds in 2008. This is the epicenter of the Athabasca Tar Sands operation in northeastern Alberta, Canada, just outside the oil boomtown of Fort McMurray. It’s the third-largest proven deposit of crude oil and the largest industrial project on earth—so costly and environmentally destructive that it’s considered a frontier resource, viable only because conventional oil sources are in decline. I visited in late June as part of the Tar Sands Healing Walk, in which First Nations activists led 250 participants on a fourteenkilometer loop of the oil producer Syncrude’s operations there. The air was noxious and the scale of the destruction nearly impossible to take in, but the Dene drummers steadied us with their constant beat. Tailings are a byproduct of tar sands processing, a wastewater residue left to collect in pools so vast and numerous that they can be seen from outer space. These tailings ponds are not secure: an Environment Canada study from February confirmed that the ponds are leaking into the Athabasca River, which flows into the Mackenzie—the largest river system in Canada—before discharging into the Arctic Ocean. Fort Chipewyan, a remote hamlet downstream from Fort McMurray, emerged in the national consciousness in 2006 when its only doctor, John O’Connor, went public about the high rate of rare cancers in the community. Health Canada accused him of misconduct when O’Connor suggested that this might be connected to tar sands pollution. Shell has now proposed the Jackpine Mine Expansion and the Pierre River Mine on the traditional territory of the Athabasca Chipewyan First Nation, which includes Fort Chipewyan. “You’d be kidding if you thought that Shell hasn’t been offering sweet deal after sweet deal to our nation,” said ACFN spokeswoman and Fort Chipewyan resident Eriel Deranger. “But instead of making money, we’ve spent close to $2 million already to challenge these projects.” The ACFN asserts that the projects will destroy its cultural livelihood along with the ecosystem itself. “We have a line that shouldn’t be crossed, as per our elders’ council, and we’re holding it,” Deranger continued. “It’s not about money. It’s about the protection and preservation of our land, culture and identity.”

This is the front line in the fight against tar sands development. When most of Canada’s First Nations ceded their territories to the British crown in the late nineteenth century, they did so in exchange not only for reserves but also for the right to hunt and fish on their traditional lands in perpetuity—lands which many of these nations now say are threatened by rapid resource development. The last few years have seen an onslaught of lawsuits against tar sands development based on these rights, with the ACFN currently challenging specific projects like the Jackpine expansion and the Pierre River Mine, as well as government policies like the Lower Athabasca Regional Plan. Some of the lawsuits seek compensation for the damage already done, but most are seeking the recognition of

native rights on these traditional territories (not merely on their reserves), including a say over project approval and development. In fact, native communities across Canada are on a legal winning streak against the resource sector. And these courtroom challenges are not only significant for indigenous communities: the conservative Stephen Harper administration’s ongoing dismantlement of federal environmental protections have left native treaty rights as one of the most powerful lines of defense for the food and water sources that everyone needs to survive. This rollback of environmental safeguards set off Idle No More, an indigenous grassroots movement launched in 2012 as a protest against Harper’s Bill C-38, which imposed business-friendly provisions in dozens of pieces of legislation, ranging from changes in environmental regulations to the outright repeal of the Fair Wages and Hours of Labour Act. Crucially, it also violated indigenous treaty rights and threatened the environment in traditional First Nations lands. Within weeks, what began as a hunger strike by a single chief in Ontario had snowballed, Occupy-like, into a nationwide movement, thanks to a social media campaign that spread images, inspiration and news of the protests across Canada, reaching far beyond the metropolitan centers to remote rural communities, including the subarctic. Solidarity actions occurred throughout the United States, and even in London, Berlin, Stockholm and Cairo. “Our nation stands by this: we need a moratorium on all new project development until we determine the impacts of these projects on treaty and aboriginal rights,” Deranger said. “We don’t know what the baselines are for First Nations to be able to continue duck hunting—what river flows, climate, ecosystem and thresholds are needed in order for that activity to continue. Same with fishing, caribou hunts, bison hunts—no one’s done that yet. The thresholds that are being proposed by the government and the energy industry are for ecosystem stabilities, not for the sustainability of cultural rights.” The ACFN has emerged as the highest-profile nation to oppose the development, becoming the subject and beneficiary of Neil Young’s “Honor the Treaties” benefit tour last year, but it is only one part of a growing movement. The range of Healing Walk participants was a testament to this: it included not only First Nations people throughout Alberta but also activists along the veins of the tar sands infrastructure, from the British Columbia coastline (connected to Alberta via the Kinder Morgan pipeline and, potentially, the proposed Northern Gateway pipeline) to Toronto (through which the aging Enbridge Line 9 pipeline passes). Also present were nonindigenous activists from the Gulf Coast and Bay Area, who are battling the transportation of tar sands crude to refineries in their regions via the Keystone XL pipeline and by rail. The irony is that the Keystone XL pipeline is crucial for tar sands expansion precisely because of this movement. For a real return on government and energy industry investments, tar sands oil must be transported to the coasts and sold on the global market—but Canada’s existing tar sands infrastructure is already at capacity, and the growing success of indigenous-led resistance makes the construction of mega-pipelines increasingly unlikely. The Keystone XL pipeline expansion, acting as a pressure valve, would enable further development. But at the same time, tar sands oil is already being shipped via rail to other refineries throughout the United States—and while rail is a far more dangerous means of transport (as evidenced by the catastrophic derailment in Lac-Megantic, Quebec, last year, which destroyed the town center and killed forty-two people), its use will likely increase if the Keystone XL pipeline expansion isn’t approved. Because the infrastructure of extraction sprawls beyond national borders, resistance has followed suit.

Activists and residents all along the Keystone XL route regularly converge on Washington, DC, while 210 Bay Area protesters were arrested on the one-year anniversary of a 2012 fire at Chevron’s Richmond refinery, a location in the Bay Area already receiving tar sands oil. But this isn’t simply a case of NIMBY. US activists recognize that resisting the giants of finance and oil requires an international approach: every major US oil corporation has a stake in the Alberta tar sands, and the Koch brothers are the largest non-Canadian stakeholders. Meanwhile, the indigenous residents of Ecuador’s Amazon jungle are pursuing a lawsuit against Chevron for environmental damages in a Canadian court. “We have alliances across the country, we have treaty territories that are interconnected, and we’re facing a government that wants to bring this toxic commodity to the ports. It’s got to pass through our territory and cross our lands—but they’ve got to get past us first,” said Grand Chief Derek Nepinak of the Assembly of Manitoba Chiefs, when I spoke to him on the sidelines of the walk. Nepinak, somber and burly, is the leading figure behind the new National Treaty Alliance, whose agenda is to assert native treaty rights in the service of indigenous sovereignty. “The reality is that political representation is not out there anymore,” Nepinak said. “The time is now to rekindle the alliances.”

Several hours south of the Athabasca tar sands are the Cold Lake deposits, which overlap the traditional territory of the Beaver Lake Creek Nation in central Alberta. BLCN member Crystal Lameman led the Healing Walk caravan along with women from various Alberta nations, offering prayers to heal the land and spirits along the way. “I remember seeing it twenty-five years ago, but that’s when it wasn’t so bad,” Lameman said of the development on BLCN territory. Her uncle Al Lameman, the BLCN’s chief for thirty-five years, took her to see the seismic lines when she was a little girl. “No one knew it was as bad as it’s gotten in the last ten or fifteen years,” Lameman added. The Cold Lake tar sands are one of the frontiers of Alberta’s tar sands development. Unlike the extraction in the Athabasca region, most of the Cold Lake deposits are part of the 80 percent of Alberta’s tar sands that cannot be extracted through mining, instead requiring in situ (on-site) drilling methods that—at least for now—involve injecting high-pressure steam into the ground. The energy industry claims that these methods are safer and less environmentally destructive, as they forgo the need for open-pit mines, energy- and water-intensive upgrading facilities, or tailings ponds. But they are far from fail-proof: Canadian Natural Resources Limited (CNRL) still hasn’t plugged a leak that began on its Primrose site, in BLCN traditional territory, in May of 2013. Because in situ development occurs largely out of sight, it doesn’t elicit the same visceral reaction as the devastation caused by mining. Its residual effects linger, however. The CNRL leak killed many dozens of animals, but well before it occurred, members of the BLCN had already noticed a decline in the number of animals they hunted and trapped. A 2010 University of Alberta study showed that caribou herds on the BLCN’s traditional hunting grounds had dropped by 70 percent since 1996. As Lameman noted, “2008 was the turning point in the whole Treaty 6 and 8 area [which covers much of Alberta], because that was the time that the ACFN filed their lawsuit.” It was also the year that the BLCN initiated its own lawsuit against the federal and provincial government and the British crown for issuing over 20,000 permits on its traditional territory, which the BLCN argues violated its treaty rights. In 2010 or 2011, “everyone really started to talk about all of this together,” Lameman said, adding that she began working with Deranger in 2011. “And then, thanks to Harper—well, really, he signed his own warrant.”

The BLCN lawsuit is set to go to trial and will take on the cumulative effects of tar sands development (not merely the soundness of individual projects), along with the government’s lax regulatory mechanisms and lack of transparency around project approval and development. “We have a right to give our informed consent,” Lameman said. “Our consent means our permission, and we will define what that consent looks like.” Already, the community has started to see some results: “Since we launched the litigation,” Lameman added, “industry comes to us [sooner] because they don’t want to deal with us later.” The energy industry has also begun to recognize the advantages of consulting First Nations at earlier stages, rather than investing in projects that could ultimately be shut down. “My Uncle Al said, ‘I’m not only going to take the federal government to court—I’m going to take them all to court! Nobody is going to try to get away with anything,’” Lameman recalled. “He knew that they were going to try to pass the buck to each other.”

The day after the Healing Walk, I drove forty-five minutes north of Fort McMurray to Fort McKay, a 500-person hamlet that is home to what many in the energy industry consider the model First Nations community. The Fort McKay First Nation inhabits the center of the Athabasca tar sands, and it is boxed in on all sides by industry development so that, despite being located right on the Athabasca River, all of the community’s drinking water must be trucked in. Nevertheless, the FMFN has grown wealthy over the last three decades by providing support services to tar sands companies through the FMFN-owned Fort McKay Group of Companies, and it is known for encouraging further development. I met FMFN Chief Jim Boucher in his impeccable corner office in the center of town, lined with windows overlooking the river. From where we sat, Boucher pointed to a forested hill in the distance where he had lived as a child, back when there were no roads or electricity, the river water was drinkable, and everyone lived off the land. In 1963, his life began to change: Boucher, who was then 12, left his grandfather’s cabin one day to check on snares he had just set the previous day, only to find a clearing in the woods and men working with heavy machinery where his snares had been. This was where the Syncrude site is today. Needless to say, Boucher lost all his snares. Soon after, Syncrude bulldozed his grandfather’s cabin. No one informed his grandfather, as this was simply how business was carried out: the government and the energy industry struck deals between themselves and went ahead with their plans, bypassing any consideration of the community. Before long, people began to notice the changes: something was wrong with the fish, which tasted of oil; the snow they melted in wintertime for drinking water was now covered in soot; and the river water made people sick. The community spoke out about the destruction but was ignored. As Boucher grew into Fort McKay’s outspoken young radical, he was sent to represent the FMFN at regulatory hearings, where he castigated the government and the energy industry for wantonly destroying his community’s livelihood and health without just compensation for the damage. When no one registered opposition to new projects on FMFN land, Boucher helped set up road blockades to force the energy industry to negotiate. It wasn’t until the mid-1980s that everything changed in Fort McKay. Although two decades of development had polluted the ecosystem, making it impossible to live off the land, the community had at least been able to rely on the trapping economy to make a comfortable living. It was when animal rights activists in Europe succeeded in marginalizing the fur trade that Fort McKay found itself with no choice but to cooperate with the energy industry. In 1985, the FMFN founded the Fort McCay Group of Companies. Today, Boucher is encouraging in situ development in the region, which he considers to

be safe. “We fought for a long time to preserve our way of life,” Boucher told me. “We had a lot of discussion in our community about what our future was, and a lot of people were involved. We knew that our way of life was under threat.” The nation’s relationship with the energy industry has not been without contention: earlier this year, the FMFN dropped a lawsuit against the Dover oil sands project it had filed two years earlier, in which the FMFN had demanded a twenty-kilometer buffer zone to protect the Moose Lake reserve, a site it considers integral to the community’s health and cultural survival. The details of the agreement have been kept under wraps, but Boucher describes it as a victory—despite not having won the buffer zone. He claims that the company has “agreed not to come within a certain distance,” and that ten other companies within the zone have agreed to consult the FMFN on all projects to ensure that their impacts will be minimal. In some cases, “the community will signal to them that they will not be allowed to proceed,” Boucher said. “We’ll be continually involved in the process for the next thirty years.” When I asked Healing Walk participants what they thought about this Dover agreement, many argued that Boucher had sold out and was essentially providing the energy industry with a social license to operate. But not everyone felt that way. “Don’t think they didn’t try to make a stink about it,” Deranger said. “They tried to say these projects were destructive, but tar sands were not a hot topic then. That community basically got destroyed, and no one batted an eyelash—not anyone in the environmental movement, not anyone anywhere. When consultation and accommodation first started happening in the late ’90s and early 2000s, the only thing they really had left to do was to be compensated.”

Tar sands development may be the source of great wealth, but it was Fort McKay’s great misfortune to be located right at its epicenter, and therefore one of the first communities to have been engulfed by development. The ACFN and BLCN still lie on the frontiers of tar sands development, but even they have little choice but to engage with the energy industry, as severing ties completely would amount to economic suicide. Like the FMFN, the ACFN also provides support services to the energy industry and has sought funding from it for green projects and cultural programs that will reduce its economic dependence on the tar sands. As the ACFN negotiates these deals, it is also trying to prevent the energy companies from capitalizing on them and framing the deals as acts of generosity. As native communities win greater power over project approval and development, the challenge will be to avoid providing the energy industry with a social license to operate. At the same time that it is seeking funding from the energy industry, the ACFN has also rejected the core federal funding provided to all First Nations, which the Harper government has tied to their acceptance of legislation rolling back environmental protections. These are the same pieces of legislation that sparked the Idle No More movement. Cognizant, perhaps, of how Fort McKay’s current predicament represents its own possible future if it doesn’t act, the ACFN is holding firm. “They’ve already destroyed a lot. We’re not giving them license to do more,” Deranger said. “We’re saying, ‘You should stop doing that, and you should compensate us for the damage that you’ve done, so that we can figure a way out of this.’”

Ground Zero: The Time Has Come To Pay our Share, Train Wreck Alert

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - the time has come to pay our share: train wreck alert

November 3, 2014 10:50 AM

2 Attachments, 667 KB

Train Wreck Alert Australian rock band Midnight Oil wrote the song "Beds Are Burning" to promote aboriginal justice in 1987. The words are apropos now to the destruction of the biosphere. Combustion of oil, gas and coal releases more and more CO2. Scientists calculate the amount of carbon-based fuels that are available for extraction equal five times the budget of carbon that may be allowed to be expelled into the atmosphere if we hope to keep the average global temperature within 2째C of the pre-industrial. The time has come to say fair's fair, to pay the rent, now to pay our share. .

Ground Zero: Hoax, Lies and Subterfuge, Train Wreck Alert

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - hoax, lies and subterfuge: train wreck alert

November 4, 2014 5:45 AM

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Train Wreck Alert Huffington Post: "This is just the fire alarm. It is not the fire." —Climate Scientist David Archer. "Catastrophic global warming is a hoax. That conclusion is supported by the painstaking work of the nation's top climate scientists." —Senator James Inhofe, R-OK (Will head Environment and Public Works Committee with G.O.P majority). "The EPA has adopted greenhouse gas regulations on the basis of scientific assumptions that have been totally undermined by the latest science." —Senator Ted Cruz, R-TX (Will head Subcommittee on Science with G.O.P majority). "I am not a scientist." —Senator Mitch McConnell, R-KY (Will become Senator Majority Leader of the Senate with G.O.P majority.) "Continued emission of greenhouse gases will cause further warming and long-lasting changes in all components of the climate system, increasing the likelihood of severe, pervasive and irreversible impacts for people and ecosystems." November 1, 2014 IPCC Synthesis Climate Change Report. Among the future trends that will impact our national security is climate change. Rising global temperatures, changing precipitation patterns, climbing sea levels, and more extreme weather events will intensify the challenges of global instability, hunger, poverty, and conflict. They will likely lead to food and water shortages, pandemic disease, disputes over refugees and resources, and destruction by natural disasters in regions across the globe. In our defense strategy, we refer to climate change as a 'threat multiplier' because it has the potential to exacerbate many of the challenges we are dealing with today - from infectious disease to terrorism. We are already beginning to see some of these impacts. —U.S. Department of Defense 2014 Climate Change Adaptation Road Map.

Ground Zero: Frack Bans Are Gaining Momentum, Train Wreck Alert

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - frack bans are gaining momentum: train wreck alert

November 5, 2014 8:59 AM

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Train Wreck Alert November 5, 2014, it was reported: "For First Time, Texans Vote To Ban Fracking" as well as in other communities in the U.S. Health, safety and anti-fracking sentiment are rising. On Tuesday, voters in Denton, Texas, banned fracking within the city limits by a large margin of 59 to 41. The first such restriction in energy-giant Texas, Denton has been a hotly contested site for the industry and one of eight locales with fracking bans on the ballot this election. “Hydraulic fracturing, as determined by our citizens, will be prohibited in the Denton city limits,” Mayor Chris Watts said in a statement, “the City Council is committed to defending the ordinance and will exercise the legal remedies that are available to us should the ordinance be challenged.” Texas is the nation’s biggest oil and gas producer, and the vote shows that even cities in the heart of fossil fuel territory can take action to slow the industry. Those who voted for the ban worry about water and air pollution, the heavy demand for water, and the possibility that the process causes earthquakes. Researchers recently found alarming amounts of heavy metals such as arsenic in groundwater near fracking sites in Texas. Another high-profile fracking ban in Santa Barbara County, California failed to pass on Tuesday after the oil and gas industry spent close to $6 million opposing it. However a similar version in California’s San Benito County overcame oil and gas opposition and passed by a large margin, 57 percent to 43 percent. As of late Tuesday night, the third fracking ballot ban in California’s Mendocino County was leading by a large margin. In Ohio, voters in Athens approved a fracking ban, while those in three other communities defeated their own ban ballot measures, according to preliminary results reported by the Wall Street Journal.

Ground Zero: Dire Food Outlook Will Not Solve Poverty, Train Wreck Alert

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - dire food outlook will not s poverty: train wreck alert

November 5, 2014 1:25 PM

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Train Wreck Alert November 3, 2014, The New York Times reported: The gathering risks of climate change are so profound that they could stall or even reverse generations of progress against poverty and hunger if greenhouse emissions continue at a runaway pace, according to a major new United Nations report. Despite growing efforts in many countries to tackle the problem, the global situation is becoming more acute as developing countries join the West in burning huge amounts of fossil fuels, the Intergovernmental Panel on Climate Change said here on Sunday. Failure to reduce emissions, the group of scientists and other experts found, could threaten society with food shortages, refugee crises, the flooding of major cities and entire island nations, mass extinction of plants and animals, and a climate so drastically altered it might become dangerous for people to work or play outside during the hottest times of the year. â&#x20AC;&#x153;Continued emission of greenhouse gases will cause further warming and long-lasting changes in all components of the climate system, increasing the likelihood of severe, pervasive and irreversible impacts for people and ecosystems,â&#x20AC;? the report found. In the starkest language it has ever used, the expert panel made clear how far society remains from having any serious policy to limit global warming. The report contained the groupâ&#x20AC;&#x2122;s most explicit warning yet about the food supply, saying that climate change had already become a small drag on overall global production, and could become a far larger one if emissions continued unchecked. A related finding is that climate change poses serious risks to basic human progress, in areas such as alleviating poverty. Under the worst-case scenarios, factors like high food prices and intensified weather disasters would most likely leave poor people worse off.

U.N. Panel Issues Its Starkest Warning Yet on Global Warming By JUSTIN GILLIS | NOV. 2, 2014 | http://bit.ly/NYT03Nov COPENHAGEN — The gathering risks of climate change are so profound that they could stall or even reverse generations of progress against poverty and hunger if greenhouse emissions continue at a runaway pace, according to a major new United Nations report. Despite growing efforts in many countries to tackle the problem, the global situation is becoming more acute as developing countries join the West in burning huge amounts of fossil fuels, the Intergovernmental Panel on Climate Change said here on Sunday. Failure to reduce emissions, the group of scientists and other experts found, could threaten society with food shortages, refugee crises, the flooding of major cities and entire island nations, mass extinction of plants and animals, and a climate so drastically altered it might become dangerous for people to work or play outside during the hottest times of the year. “Continued emission of greenhouse gases will cause further warming and long-lasting changes in all components of the climate system, increasing the likelihood of severe, pervasive and irreversible impacts for people and ecosystems,” the report found. In the starkest language it has ever used, the expert panel made clear how far society remains from having any serious policy to limit global warming. Doing so would require leaving the vast majority of the world’s reserves of fossil fuels in the ground or, alternatively, developing methods to capture and bury the emissions resulting from their use, the group said. If governments are to meet their own stated goal of limiting the warming of the planet to no more than 3.6 degrees Fahrenheit, or 2 degrees Celsius, above the preindustrial level, they must restrict emissions from additional fossil-fuel burning to about 1 trillion tons of carbon dioxide, the panel said. At current growth rates, that budget is likely to be exhausted in something like 30 years, possibly less. Yet energy companies have booked coal and petroleum reserves equal to several times that amount, and they are spending some $600 billion a year to find more. Utilities and oil companies continue to build coal-fired power plants and refineries, and governments are spending another $600 billion or so directly subsidizing the consumption of fossil fuels. By contrast, the report found, less than $400 billion a year is being spent around the world to reduce emissions or otherwise cope with climate change. That is a small fraction of the revenue spent on fossil fuels — it is less, for example, than the revenue of a single American oil company, ExxonMobil. The new report comes just a month before international delegates convene in Lima, Peru, to devise a new global agreement to limit emissions, and it makes clear the urgency of their task. Appearing Sunday morning at a news conference in Copenhagen to unveil the report, the United

Nations secretary general, Ban Ki-moon, appealed for strong action in Lima. “Science has spoken. There is no ambiguity in their message,” Mr. Ban said. “Leaders must act. Time is not on our side.” Yet there has been no sign that national leaders are willing to discuss allocating the trillion-ton emissions budget among countries, an approach that would confront the problem head-on, but also raise deep questions of fairness. To the contrary, they are moving toward a relatively weak agreement that would essentially let each country decide for itself how much effort to put into limiting global warming, and even that document would not take effect until 2020. “If they choose not to talk about the carbon budget, they’re choosing not to address the problem of climate change,” said Myles R. Allen, a climate scientist at Oxford University in Britain who helped write the new report. “They might as well not bother to turn up for these meetings.” The Intergovernmental Panel on Climate Change is a scientific body appointed by the world’s governments to advise them on the causes and effects of global warming, and potential solutions. The group, along with Al Gore, was awarded the Nobel Peace Prize in 2007 for its efforts to call attention to the climate crisis. The new report is a 175-page synopsis of a much longer series of reports that the panel has issued over the past year. It is the final step in a five-year effort by the body to analyze a vast archive of published climate research. It is the fifth such report from the group since 1990, each finding greater certainty that the climate is warming and that human activities are the primary cause. “Human influence has been detected in warming of the atmosphere and the ocean, in changes in the global water cycle, in reductions in snow and ice, and in global mean sea-level rise; and it is extremely likely to have been the dominant cause of the observed warming since the mid-20th century,” the report said. A core finding of the new report is that climate change is no longer a distant threat, but is being felt all over the world. “It’s here and now,” Rajendra K. Pachauri, the chairman of the panel, said in an interview. “It’s not something in the future.” The group cited mass die-offs of forests, such as those killed by heat-loving beetles in the American West; the melting of land ice virtually everywhere in the world; an accelerating rise of the seas that is leading to increased coastal flooding; and heat waves that have devastated crops and killed tens of thousands of people. The report contained the group’s most explicit warning yet about the food supply, saying that climate change had already become a small drag on overall global production, and could become a far larger one if emissions continued unchecked. A related finding is that climate change poses serious risks to basic human progress, in areas such as alleviating poverty. Under the worst-case scenarios, factors like high food prices and intensified weather disasters would most likely leave poor people worse off. In fact, the report said, that has already happened to a degree.

In Washington, the Obama administration welcomed the report, with the president’s science adviser, John P. Holdren, calling it “yet another wake-up call to the global community that we must act together swiftly and aggressively in order to stem climate change and avoid its worst impacts.” The administration is pushing for new limits on emissions from American power plants, but faces stiff resistance in Congress and some states. Michael Oppenheimer, a climate scientist at Princeton University and a principal author of the new report, said that a continuation of the political paralysis on emissions would leave society depending largely on luck. If the level of greenhouse gases were to continue rising at a rapid pace over the coming decades, severe effects would be avoided only if the climate turned out to be far less sensitive to those gases than most scientists think likely, he said. “We’ve seen many governments delay and delay and delay on implementing comprehensive emissions cuts,” Dr. Oppenheimer said. “So the need for a lot of luck looms larger and larger. Personally, I think it’s a slim reed to lean on for the fate of the planet.”

Ground Zero: Talk of a Growing Economy, But Whereâ&#x20AC;&#x2122;s Climate? Train Wreck Alert

A TAX ON CARBON

Ground Zero: We May Be Still In Stalemate, A Tax On Carbon

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - we may be still in stalemate: a tax on carbon

November 8, 2014 4:28 PM

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A tax on carbon September 27, 2014, in the New York Times: President Obama stood in the chamber of the United Nations General Assembly last week and urged the world to follow his example and fight global warming. But a major new declaration calling for a global price on carbon — signed by 74 countries and more than 1,000 businesses and investors — is missing a key signatory: the United States. The declaration, released by the World Bank the day before Mr. Obama’s speech at the United Nations Climate Summit, has been signed by China, Shell, Dow Chemical and Coca-Cola. It calls on all nations to enact laws forcing industries to pay for the carbon emissions.... The United States, which is under growing international pressure to price carbon, is missing from the declaration for a key reason: conservative opposition to Mr. Obama’s climate change proposals, specifically a carbon tax. “The most powerful move that a government can make in the fight against climate change is to put a price on carbon,” said Rachel Kyte, the World Bank’s vice president of sustainability. In order to avoid more opposition from conservatives, Mr. Obama and other top administration officials no longer call publicly for a national price on carbon. But they have nonetheless signaled their support for international and state efforts. In his speech at the United Nations, Mr. Obama quoted the Democratic governor of Washington, Jay Inslee, who is urging other states to pass carbon pricing laws: “As one of America’s governors has said, ‘We are the first generation to feel the impact of climate change and the last generation that can do something about it.’ ”

President’s Drive for Carbon Pricing Fails to Win at Home Coral Davenport | New York Times | SEPT. 27, 2014 | http://bit.ly/NYT28Sept

President Obama stood in the chamber of the United Nations General Assembly last week and urged the world to follow his example and fight global warming. But a major new declaration calling for a global price on carbon — signed by 74 countries and more than 1,000 businesses and investors — is missing a key signatory: the United States. The declaration, released by the World Bank the day before Mr. Obama’s speech at the United Nations Climate Summit, has been signed by China, Shell, Dow Chemical and Coca-Cola. It calls on all nations to enact laws forcing industries to pay for the carbon emissions that scientists say are the leading cause of global warming. The United States, which is under growing international pressure to price carbon, is missing from the declaration for a key reason: conservative opposition to Mr. Obama’s climate change proposals, specifically a carbon tax. The opposition will only intensify if Republicans win control of the Senate in November and the new majority leader is Senator Mitch McConnell of Kentucky, where coal — the world’s largest source of carbon pollution — is the lifeblood of the state’s economy. “It’s time for the global elites to face facts,” Mr. McConnell said in a statement. “President Obama’s war on coal won’t have any meaningful impact on global carbon emissions. What it will do is ship American jobs overseas, raise the cost of living substantially for middle and working-class families and throw thousands more Kentuckians out of work.” Although the nonbinding World Bank declaration is meant largely as a show of resolve ahead of a 2015 climate summit in Paris, it signals the broadest, most explicit effort to date of world leaders and financial institutions to push all nations to enact new taxes on old forms of energy. The declaration notes that governments can either directly tax carbon pollution or create market-based cap-and-trade systems, which force companies to buy government-issued pollution permits. “The most powerful move that a government can make in the fight against climate change is to put a price on carbon,” said Rachel Kyte, the World Bank’s vice president of sustainability. To many Republicans on Capitol Hill, such statements are anathema. In 2010, after Mr. Obama tried but failed in the face of conservative opposition to push a national cap-and-trade bill through Congress, victorious Republicans galvanized against the idea and launched campaigns against politicians who support carbon pricing. Mr. Obama in turn circumvented Congress and in June released a new Environmental Protection Agency regulation under his executive authority that requires states to submit their own plans to cut emissions — but does not tell them explicitly how to do so. Nonetheless, California and nine Northeastern states have already enacted cap-and-trade programs, and seven states — California, Maryland, Massachusetts, Oregon, Rhode Island, Vermont and Washington — signed on to the World Bank declaration. In order to avoid more opposition from conservatives, Mr. Obama and other top administration officials no longer call publicly for a national price on carbon. But they have nonetheless signaled their support for international and state efforts. In his speech at the United Nations, Mr. Obama quoted the Democratic governor of Washington, Jay Inslee, who is urging other states to pass carbon pricing laws: “As one of America’s governors has said, ‘We are the first generation to feel the impact of climate change and the last generation that can do something about it.’ ”

The Obama administration has also enacted a policy signaling its readiness to price carbon should the politics of Congress ever shift: a metric it calls “the social cost of carbon,” designed to account for the cost of one ton of carbon dioxide pollution. Mr. Obama’s economists have determined the cost to be $37 a ton. Secretary of State John Kerry, a longtime advocate of government policy to fight climate change — and the chief author of the failed 2010 cap-and-trade bill in the Senate — last week told a meeting of the Major Economies Forum that “when it comes to climate change, we know exactly what it takes to get the job done.” But Mr. Kerry did not specifically mention carbon pricing at the forum, a gathering of foreign ministers of the world’s 20 largest economies, and said only, “It takes energy policy.” About 40 countries have already implemented carbon pricing policy, while dozens of others are now exploring it. In 2005, the European Union enacted a cap-and-trade plan for carbon pollution, and at the United Nations last week, European leaders pushed hard for the rest of the world to sign on. “We need to define a new economy of the world,” President François Hollande of France said in his remarks at the climate summit. “There will have to be a new pricing system for carbon.” The weekend before the summit, more than 300,000 people protested at a climate change demonstration in the streets of New York, where marchers waved signs reading “Tax carbon!” The new carbon pricing push comes as countries and institutions that once fought the idea are now embracing it. “On carbon pricing, there’s a perfect storm taking place,” said Robert N. Stavins, director of the environmental economics program at Harvard. “There is increasing recognition that approaches that have been taken in the past haven’t worked, and that the only way one can affect the hundreds of millions of decisions is through price signals.” Over the last year China has enacted seven pilot cap-and-trade programs in its provinces, although outside experts remain skeptical of Beijing’s plans as the nation’s carbon emissions continue to rise. At the same time, the political power of the coal industry to fight such laws remains potent. Australia, a major coal-producing nation, offers a case study in the political dangers of supporting a carbon tax in a coal-heavy democracy. A former Australian prime minister, Julia Gillard, made tackling climate change a signature issue and enacted a carbon tax — a move that was seen as political suicide. Last year Australians voted her out of office and this past summer, the new prime minister, Tony Abbott, pushed through a bill to repeal the carbon price. Correction: September 28, 2014 An earlier version of this article referred incorrectly to the location of nine of the states that have enacted cap-and-trade programs. They are in the Northeast, not in the Northwest.

Ground Zero: In the Wake of the Election Put a Price On Carbon, A Tax On Carbon

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - in the wake of the elections put a price on carbo: a tax on carbon

November 8, 2014 4:29 PM

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A tax on carbon November 5, 2014, Energy & Enterprise Initiative (E&EI) Price Atkinson opined on mid-term election results: Climate change is also resonating with key demographics of voters including Hispanics, African Americans and millennials (ages 18-30) who are called the “Rising American Electorate.” These groups comprised 48% of 2012 voters and new polling released late last week by GMU/Yale shows they are more likely to vote for candidates who strongly support taking action to address climate change by a wide 4-to-1 margin. Almost two-thirds of Hispanics (65%) indicated they’re more likely to support these candidates than oppose them (7%). A majority of millennials (44% to 17%) also favor pro-climate candidates, according to the data. It’s clear the ground is fertile for conservatives to step forward with constituents craving climate solutions. Congressional approval ratings persist at records lows because people are sick of gridlock. They’re tired of the partisanship. They want solutions. Here’s a solution on climate change that can and will work: a revenue neutral carbon tax. It’s a free-enterprise solution built around bedrock conservatism that would end subsidies for oil and gas, solar and wind as well as shrink the size and scope of the federal government, including the EPA. It would provide a corresponding tax cut on income that incentivizes innovation and provides a level playing field that would make capitalists salivate. It would make the revenue-neutral “tax swap” border-adjustable, imposing the tax imports and lifting it on exports. ... It would also indirectly prevent the off-shoring of jobs abroad.

GOP Has Huge Opportunity on Climate Change Real Clear Science | Price Atkinson | November 5, 2014 | http://bit.ly/EnEI05Nov We’re in the clear from the midterm elections and now have a snapshot at what next year’s Congress will look like. Conservatives scored big gains this week, and now have big opportunities ahead to pass real, meaningful, reform. Republicans should seize this moment, specifically in working for bipartisan energy and climate change legislation. If not, the GOP may be rendered irrelevant come the 2016 Presidential race, and potentially will be remembered simply as the party of “no” and obstruction. House and Senate Republicans appear poised to begin 2015 and the 114th Congress by passing legislation aimed at giving President Obama the difficult choice of making tough decisions on a litany of bills that died during Senator Harry Reid’s control of the Senate. The Keystone pipeline will be front and center, garnering the political and news headlines with everyone in Washington asking, “will he or won’t he?” We’ve been left to wonder up until now – but the rubber will likely meet the road sooner than later on the Alberta-to-Texas oil pipeline. Increasing natural gas exports to our European friends and allies in Ukraine is another no-brainer. Led by Senator Lisa Murkowski (R-AK) and Representative Cory Gardner (R-CO), Hill Republicans would tee up a major opportunity for the President to take a hack at rival Vladimir Putin, undercutting his energy bullying and ending the “hostage” standoff between the Russian dictator and Ukraine. In addition to addressing these no-brainers, it’s also time to get serious and tackle even tougher challenges like solving our nation’s climate change challenge, while providing leadership for the rest of the world. Republicans can be the center and catalyst for change and reform worldwide. We know that many of our conservative friends in Congress fully understand, and privately admit, that human activity is causing climate change. We know there are many conservatives on the Hill who aren’t shy about stating scientific facts. We also know there are leaders like Senator Rob Portman (R-OH), who are working to bridge the gaps and pass a bipartisan energy-efficiency plan. Defunding the EPA isn't a climate strategy, it's a political tactic, much like the “I’m not a scientist” tactic. It is a placeholder statement that doesn't offer direction or strategy. And, it’s not worth wasting hardearned taxpayer dollars, by tying up the legislative calendar in Washington, debating bills that will simply be subject to increased litigation and junk lawsuits. Especially when there is a clear path forward. Polling by George Mason University’s Ed Maibach and the Center for Climate Change Communication and Yale University continues to show a majority of Republicans acknowledge climate change is real (52%), while only one-third agree with the party’s position on the issue (35%). Climate change is also resonating with key demographics of voters including Hispanics, African Americans and millennials (ages 18-30) who are called the “Rising American Electorate.” These groups comprised 48% of 2012 voters and new polling released late last week by GMU/Yale shows they are more likely to vote for candidates who strongly support taking action to address climate change by a wide 4-to-1 margin. Almost two-thirds of Hispanics (65%) indicated they’re more likely to support these candidates than oppose them (7%). A majority of millennials (44% to 17%) also favor pro-climate candidates, according to the data. It’s clear the ground is fertile for conservatives to step forward with constituents craving climate solutions.

Congressional approval ratings persist at records lows because people are sick of gridlock. They’re tired of the partisanship. They want solutions. Here’s a solution on climate change that can and will work: a revenue neutral carbon tax. It’s a free-enterprise solution built around bedrock conservatism that would end subsidies for oil and gas, solar and wind as well as shrink the size and scope of the federal government, including the EPA. It would provide a corresponding tax cut on income that incentivizes innovation and provides a level playing field that would make capitalists salivate. And, I’ll throw a cherry on top. It would make the revenue-neutral “tax swap” border-adjustable, imposing the tax imports and lifting it on exports. It would bring China and India into compliance with both countries remitting taxes to Washington until they got on board with a carbon tax of their own. It would also indirectly prevent the off-shoring of jobs abroad. With a Republican controlled Senate, tax reform is suddenly back on the table. If enough Democrats join the Majority, it would end a filibuster to move revenue-neutral tax reform legislation and send it to the President’s desk. If the Left is serious about the environment, let’s give the President another tough choice to make. In the process, conservatives can lead the way to cleaner and healthier air that we’re indirectly paying for thru increased health care costs. Price Atkinson is the Director of Communications & Development at the Energy & Enterprise Initiative. E&EI is a nationwide public engagement campaign promoting free-enterprise solutions to energy and climate challenges.

Ground Zero: Citizens in the U.S. and Canada Lobby, A Tax On Carbon

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - citizens in the U.S. and Canada lobby - a tax on carbon

November 8, 2014 4:31 PM

3 Attachments, 2.1 MB

A tax on carbon Citizens Climate Lobby (US and Canada) has been lobbying Congress and Parliament â&#x20AC;&#x201D; promoting a revenue neutral carbon tax â&#x20AC;&#x201D; beginning with the First Annual Conference and Lobby Days in 2010. Modeled after bills proposed by Representative Pete Stark and others, the proposed bill concepts have been endorsed and advocated by Rex Tillerson, CEO of ExxonMobil, in 2009 and 2012 and 2013. Citizens Climate Lobby membership has grown from 25 in 2009 to 80 in 2010 to over 6000 in 2014.

Senate has changed, but not CCL’s strategy to pass climate legislation The people have spoken, and now Republicans control both the House and Senate. So, how does that change CCL’s game plan? It doesn’t. We will continue doing what we’ve done all along — generating political will to enact effective solutions to climate change, regardless of which party controls the House, the Senate or even the White House. Our strategy has never depended on getting the “right” people elected to office. Our strategy is to touch the hearts and minds of the people who represent us, no matter who they are, and convince them to do the right thing. Is this the easy way to achieve our goal? No, it’s the only way. But if it were easy, it would have happened long ago. I don’t need to remind you all what’s at stake in this endeavor — preserving a livable world for future generations. For that reason, we cannot afford to indulge in self-pity and excuse-making — “It’s too hard.” “Big money calls the shots.” Is that what we’ll tell our grandchildren 20 years from now when they ask us why we didn’t do something to keep the world from falling apart? Ultimately, success or failure is not determined by what happens on election day. It is determined by what happens after election day. I believe very strongly that our government still responds to the will of its people, provided the people tell their government what they want. The hill we’re climbing just got a little steeper. Drink some water, eat an energy bar, and press on. By the way, does anyone have contacts in Kentucky? – Mark Reynolds, CCL Executive Director

Ground Zero: Power Shift in the Senate Changes Nothing, A Tax On Carbon

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - power shift in the senate changes nothing: a tax on carbon

November 8, 2014 4:32 PM

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A tax on carbon November 5, 2014, Citizens Climate Lobby Executive Director posted: The people have spoken, and now Republicans control both the House and Senate. So, how does that change CCL’s game plan? It doesn’t. We will continue doing what we’ve done all along — generating political will to enact effective solutions to climate change, regardless of which party controls the House, the Senate or even the White House. Our strategy has never depended on getting the “right” people elected to office. Our strategy is to touch the hearts and minds of the people who represent us, no matter who they are, and convince them to do the right thing. Is this the easy way to achieve our goal? No, it’s the only way. But if it were easy, it would have happened long ago. I don’t need to remind you all what’s at stake in this endeavor — preserving a livable world for future generations. For that reason, we cannot afford to indulge in self-pity and excuse-making — “It’s too hard.” “Big money calls the shots.” Is that what we’ll tell our grandchildren 20 years from now when they ask us why we didn’t do something to keep the world from falling apart? Ultimately, success or failure is not determined by what happens on election day. It is determined by what happens after election day. I believe very strongly that our government still responds to the will of its people, provided the people tell their government what they want. The hill we’re climbing just got a little steeper. Drink some water, eat an energy bar, press on. By the way, does anyone have contacts in Kentucky?

Ground Zero: Put a Price On Externalized Costs, A Tax On Carbon

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - put a price on externalized costs: a tax on carbon

November 8, 2014 4:34 PM

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A tax on carbon November 5, 2014, PEMBINA reported: It’s been hailed as an environmental and economic “success,” a “textbook case” in carbon pricing and “on the right track” toward good economic policy. British Columbia’s carbon tax has been in place for six years, and all available evidence shows it’s working. Here’s the big news: per capita fuel use covered by the tax has dropped by 16 per cent in the province relative to 2008 (the year the carbon tax came into effect), and so too has carbon pollution. That’s good for the environment. Meantime, B.C.’s economy has outpaced the rest of Canada’s over the same period. That’s great for jobs and the economy. Our new backgrounder summarizes B.C.’s terrific success with its carbontax. The economic, environmental and social lessons are worth reflecting upon — both in B.C. and in jurisdictions considering similar carbon pricing approaches, as what we see in B.C. is a leading example of how to price carbon effectively. We touch on the design of the tax, including important features such as a schedule of rate increases over the first five years and a requirement known as “revenue neutrality” that mandates all carbon tax dollars be recycled back to British Columbians and B.C. businesses through tax cuts and credits. We also discuss the impact it’s had on B.C.’s environment and economy, summarizing its influence province-wide and on specific economic sectors. Of course, North America’s most significant carbon pricing policy hasn’t gone without challenges. We share key points of debate that have unfolded and look at how public opinion has evolved over the past six years. But one thing is for sure, having survived two elections and a change in premier, B.C.’s carbon tax is here for the foreseeable future. When it comes to the carbon tax, the message from B.C. is hopeful: acting on climate change can be economically, environmentally and politically successful.

The B.C. carbon tax Backgrounder

British Columbia’s carbon tax has been in place for six years and all available evidence indicates it has been successful. Per capita fossil fuel combustion is down and the economy has performed well relative to the rest of Canada. The policy has survived two provincial elections and a change in Premier. This backgrounder explores B.C.’s experience with the carbon tax.

“British Columbia’s carbon tax is as near as we have to a textbook case, with wide coverage across sectors and a steady increase in the rate.” — Mr. Angel Gurría, OECD Secretary-General

Carbon tax revenue and allocation 1400 1200

Revenue Other tax cuts and credits Corporate income tax cuts Personal income tax cuts Low income tax credits

Basic design B.C.’s carbon tax was implemented with a five-year schedule of rate increases starting at $10 per tonne in 2008, rising by $5 per tonne per year to $30 per tonne in 2012.1 The tax applies to almost all of the fossil fuels burned in the province (e.g., coal, gasoline, natural gas), amounting to over 70 per cent of the province’s carbon pollution.2 In 2013, the government decided to keep the rate and coverage stable for five years — or until other jurisdictions introduce similar carbon pricing approaches. For the 2013–14 fiscal year, the carbon tax is forecasted to raise $1.2 billion — slightly less than three per cent of total provincial revenue. The Carbon Tax Act requires that money raised by the carbon tax be used to reduce other provincial taxes (referred to as ‘revenue neutrality’).3 In 2013–14, the largest reduction measures were cutting corporate income taxes ($440 million) and personal income taxes ($237 million) and providing low-income tax credits ($194 million).4 These were the only three measures in the initial carbon tax design, but additional personal and business tax credits have since been included and they totaled $361 million in 2013–14.5

$ (Millions)

1000

Carbon Tax Rates by Common Fuel Type as July 1, 2012 800 600

200

2008/09

2009/10

2010/11

2011/12

2012/13

Source: Compiled from B.C. Fiscal Plans 2009/10 through 2014/15

Diesel: 7.67 c/litre

Natural gas: 1.49 c/gigajoule

Propane: 4.62 c/litre

Jet fuel: 7.83 c/litre

Source: www.sbr.gov.bc.ca/documents_library/shared_documents/Carbon_Tax_Rates_by_Fuel_Type_ from_Jan_2010.pdf

400

Gasoline: 6.67 c/ litre

Backgrounder: The B.C. carbon tax Pembina Institute

2013/14

Environmental and economic impacts

Looking economy-wide, recent analysis shows per capita fossil fuel use declined by 16.1 per cent in B.C. from 2008 through 2013. The same metric has risen by over three per cent in the rest of Canada.6 During this same period, B.C.’s per capita GDP has slightly outpaced the rest of Canada’s, growing by 1.75 per cent versus 1.28 per cent. The study attributed the positive economic results to B.C.’s decision to use carbon tax revenue to lower personal and corporate income taxes.7 Several studies have looked at the tax’s impact on specific segments of the economy. One found that the carbon tax has been responsible for a much larger than anticipated drop in per capita gasoline demand. The drop was almost five times greater than what would be expected from an equivalent increase in gasoline price not related to the carbon tax.8 An analysis of municipal government climate action in B.C. found that the carbon tax has encouraged B.C. communities to move ahead with clean energy projects. Seven of 12 communities interviewed saw the carbon tax as having either a very or somewhat positive role in building the business case for projects they had implemented. The remaining five viewed it as having a neutral effect, primarily because the rate is too low to significantly influence their investment decisions.9 A study examined the carbon tax’s economic impact on B.C.’s agriculture sector, which had expressed concerns about impacts on competitiveness. Using agriculture trade data, the study compared the economic performance of agriculture sectors across provinces and found “little evidence that the carbon tax was associated with any statistically significant effects on agricultural trade or competitiveness from 2008–2011.”10

Backgrounder: The B.C. carbon tax Pembina Institute

Sales of fuels subject to BC carbon tax Carbon tax starts

0.2

Carbon tax freezes

Rest of Canada

Terajoule / capita

The handful of studies that have attempted to measure the impact of B.C.’s carbon tax have found it to be an environmental and economic success. No studies have identified significant negative impacts.

0.15

British Columbia

0.1

0.05 20002001

20012002

20022003

20032004

2004- 20052005 2006

2006- 20072007 2008

20082009

2009- 20102010 2011

20112012

20122013

Adapted from: Stewart Elgie, “Just the Facts: What’s behind B.C.’s whopping fuel use drop?,” Sustainable Prosperity, July 9, 2014. www.sustainableprosperity.ca/blogpost97

“In Vancouver, we are fortunate that our Provincial Government instituted North America’s first carbon tax. In just six years, it has proved to be a success in moving our province towards a greener future. At the same time, our economy is thriving, and in Vancouver, it has spurred rapid job growth in a cleaner, greener economy. Renewable energy and clean tech companies are choosing to invest in Vancouver precisely because we are ahead of the curve with a carbon tax.” — Gregor Robertson, Mayor, City of Vancouver

Public opinion B.C. implemented the carbon tax as part of a wave of climate change initiatives that started in 2007. A year after its implementation, the carbon tax became a central issue in the 2009 provincial election, with the opposition B.C. New Democratic Party (NDP) campaigning to eliminate it. Largely because of their perceived strength on economic issues, the B.C. Liberals — and the carbon tax they implemented — won that election.11 The government proceeded with the scheduled rate increases in 2009 through 2012, which overlapped with the March 2011 transition when Christy Clark replaced Gordon Campbell.12 The 2013 provincial election was a different story. All of the candidates who won seats in the legislative assembly supported the carbon tax. The Liberals endorsed the carbon tax without any further changes, the NDP backed broadening its coverage and moving away from revenue neutrality, while the Green Party wanted to increase the rate and broaden its coverage.13 The B.C. Liberals won the election.

Tracked since the carbon tax was announced in February 2008, public support dropped as low as 40 per cent when the policy was implemented, then mostly trending upwards to as high as 64 per cent in November 2012.14 Independent of the carbon tax, British Columbians have expressed a high degree of confidence that the province can reduce carbon pollution without negatively impacting the economy.15 The province invited British Columbians to share their views on the carbon tax during the 2013 carbon tax review. Of the 2,200 public submissions received, more than 75 per cent expressed support for the tax and for taking next steps to strengthen the policy. That support was distributed throughout urban, suburban and rural parts of the province.16

Points of debate As with any new policy, many aspects of the carbon tax design have been debated in the province. The most prominent are summarized below.17

Industry competitiveness B.C.’s business community has generally been supportive of the importance of addressing climate change and the use of carbon taxes as a potentially effective tool. They have also expressed concern that the carbon tax design doesn’t protect sectors of the economy that are emissions intensive and trade exposed, and they have called for a freeze in carbon tax rates.18 In 2013, the province froze the carbon tax rate and coverage for five years. It also made a small change to the carbon tax’s coverage to largely exempt the agriculture sector.19 While many stakeholders have been open to the idea of targeted measures to protect B.C. businesses where there is a demonstrable need,20 the exemptions introduced by the province were criticized because they weren’t backed by evidence and they undermined the incentive to reduce carbon pollution.21

Backgrounder: The B.C. carbon tax Pembina Institute

“British Columbia should work with the New West Partnership, the Council of the Federation and the federal government to build a unified, Western Canadian and ultimately a pan-Canadian position on carbon pricing.” — BC Business Council

Protecting low-income British Columbians The carbon tax design includes a tax credit for low-income British Columbians to offset the financial burden of more expensive fuel — a decision that was broadly supported.22 A point of debate has been whether the tax credit provides adequate support for low-income British Columbians, with the available evidence offering conflicting conclusions. One study found that low-income households were better off through 2010 because the low-income credit was more than the amount paid in carbon tax. After that, increases in the size of the credit have not kept pace with increases in the carbon tax rate.23 A second study found the carbon tax to be highly progressive, even before the low impact tax credit was considered.24

Northern and rural concerns The original carbon tax design did not contain any other targeted measures like the low-income tax credit. Over time, a number of additional tax credits have been introduced, including an annual grant for northern and rural homeowners.25 The grant was in response to opposition to the carbon tax from those communities.26 Its introduction has been criticized as unnecessary because the province’s data indicated that rural residents were paying less in carbon tax than those in urban and suburban communities.27

Coverage The carbon tax applies to almost all of the carbon pollution produced by burning fossil fuels in B.C., but it excludes non-combustion sources such as methane released during natural gas transmission and processing. Whether the carbon tax should apply to those non-combustion sources has been an ongoing debate since shortly after the tax was implemented.28 The province acknowledges this gap in its Climate Progress report, but has not said how it will be addressed.29

Backgrounder: The B.C. carbon tax Pembina Institute

“For the sake of working people and their families, we have to ensure we have both good jobs and a healthy environment. Putting a price on carbon can be an effective part of larger, comprehensive strategy that involves using the revenue generated by the carbon tax to produce good, green jobs for British Columbians.” — Jim Sinclair, President, BC Federation of Labour

Investing the revenue Government decided to use all carbon tax revenue to reduce other taxes, because they determined it to be in the best interests of the economy and the most saleable to business and British Columbians. A wide range of viewpoints has been offered on this approach. There is support for the revenue neutral approach,30 and there is support for investing some revenue in climate change solutions — either immediately or when carbon tax revenue increases.31 Public opinion research indicates that British Columbians would be more supportive of the carbon tax if at least some of the revenue were invested in healthcare, education and/or climate change solutions.32 The government remains committed to keeping the carbon tax revenue neutral.

“A properly designed carbon tax, with the revenues it generates returned to taxpayers in an economically appropriate manner, is good economic policy. In this context, the B.C. carbon tax seems to be on the right track.” — Munir Sheikh, former Chief Statistician of Canada

Moving forward with carbon pricing in B.C. Having survived two elections and a change in premier, B.C.’s carbon tax is here to stay for the foreseeable future. The economic, environmental and social lessons emerging from the B.C. experience offer a useful platform for other jurisdictions to learn from, and for B.C. to build upon when it decides to move forward with the carbon tax.

“In 2008, we put a price on carbon through a revenue-neutral carbon tax. Since then, our energy-related greenhouse gas emissions have dropped by more than 5 percent and emissions are down across the board, all while our economy has continued to grow. And we still maintain some of the lowest personal and corporate income taxes across Canada. Here in British Columbia, we are proving that you can grow the economy and protect the environment at the same time.” — Premier Christy Clark

Backgrounder: The B.C. carbon tax Pembina Institute

B.C. Carbon Tax Timeline Feb. 13, 2007

Speech from the throne sets climate change as B.C.’s top priority

Feb. 18, 2008

Carbon tax introduced in provincial budget

July 1, 2008

B.C. implements North America’s most ambitious carbon tax; rate starts at $10/tonne

Feb. 17, 2009

Government introduces grant for northern and rural homeowners

May 12, 2009

B.C. Liberals win provincial election

July 1, 2009

Rate increases to $15/tonne

July 1, 2010

Rate increases to $20/tonne

Mar. 14, 2011

Christy Clark sworn in as B.C.’s 35th Premier

July 1, 2011

Rate increases to $25/tonne

Feb. 21, 2012

Government announces carbon tax review in 2012 budget; provides exemption for greenhouse growers

July 1, 2012

Rate increases to $30/tonne

Feb. 19, 2013

Government extends exemptions for greenhouse growers and adds exemptions for agriculture

May 14, 2013

B.C. Liberals win provincial election; carbon tax rate and coverage frozen for 5 years, or until other jurisdictions implement comparable approaches

Endnotes 1.

The carbon intensity of different fuels determines what $30 per tonne means in terms of cost. For gasoline, $30 per tonne is equivalent to 6.67 cents per litre. For natural gas, it is equivalent to $1.40 per gigajoule. The provincial government publishes a full list of carbon tax rates: www.sbr.gov.bc.ca/documents_library/ shared_documents/Carbon_Tax_Rates_by_Fuel_Type_from_Jan_2010.pdf.

The exact figure fluctuates depending on fossil fuel use relative to non-combustion sources such as vented and leaked methane from the natural gas sector. The 70 per cent is calculated based on the carbon pollution included in B.C.’s provincial emissions inventory, and does not include the carbon pollution associated with imported or exported energy (e.g. coal-fired power from Alberta or thermal coal exported to Asia).

According to the Carbon Tax Act (www.bclaws.ca/Recon/document/ID/ freeside/00_08040_01): “The carbon tax is revenue neutral if the dollar amount of the carbon tax collected in a fiscal year is less than or equal to the estimated dollar amount of the reduction in Provincial revenues in the same fiscal year as a result of revenue measures.”

The corporate and personal income tax cuts and low income tax credits accounted for approximately 69% of the tax cuts and credits in 2013–14. The full list of tax cuts financed by the carbon tax is in Table 1 of the Revenue Neutral Carbon Tax Report 2012–13 and 2013–14 on page 64 of the Budget and Fiscal Plan – 2014/15 to 2016/17.

Of the $361 million in other tax credits, $91 million were personal tax measures and $270 were corporate.

Stewart Elgie, “Just the Facts: What’s behind B.C.’s whopping fuel use drop?,” Sustainable Prosperity, July 9, 2014. www.sustainableprosperity.ca/blogpost97

Stewart Elgie, “Just the Facts: Did the carbon tax shift burden or buoy B.C.’s economy?,” Sustainable Prosperity, July 9, 2014. www.sustainableprosperity.ca/ blogpost99

16.

The carbon tax review received a total of 2,200 public comments. Although those comments were not made public, at least 75% came through the Better Future Fund website and were supportive of the carbon tax. The locations of British Columbians that submitted comments to the carbon tax review through the Better Future Fund website are here: https://batchgeo.com/map/ betterfuturefund. Four in ten (42%) originated in Metro Vancouver and the Lower Mainland, one in four (25%) originated in Greater Victoria and the balance (33%) originated in other areas of B.C.

17.

For a more extensive discussion of the perspectives underlying these debates see: Matt Horne, Ekaterina Petropavlova and P.J. Partington, British Columbia’s Carbon Tax: Exploring perspectives and seeking common ground (Pembina Institute, 2012). http://www.pembina.org/pub/2352

18.

B.C. Business Council, Submission to the Provincial Carbon Tax Review (2012). http://www.bcbc.com/submissions-presentations/2012/ submission-bcbcs-submission-to-the-provincial-carbon-tax-review

19.

The provincial government announcement did not provide a detailed rationale for why exemptions were provided for the agriculture sector (http://www. newsroom.gov.bc.ca/2013/04/permanent-carbon-tax-relief-for-bcs-greenhousegrowers.html). The total value of these exemptions was estimated to be $11 million annually (1% of carbon tax revenue).

20.

For example, see Recommendations regarding the future of British Columbia’s carbon tax, joint carbon tax review submission from 17 labour unions and environmental groups. Available at http://www.pembina.org/pub/2370

21.

For example, see Matt Horne, “Exemptions for greenhouse growers set poor precedent for carbon tax review” Pembina Institute, April 4, 2012. http://www. pembina.org/blog/618

22.

British Columbia’s Carbon Tax: Exploring perspectives and seeking common ground.

23.

The low-income credit was last increased in 2011, when it rose to $115.50 per adult and $34.50 per child. Marc Lee and Toby Sanger, Is B.C.’s Carbon Tax Fair? An impact analysis for different income levels (Canadian Centre for Policy Alternatives, 2008). https://www.policyalternatives.ca/publications/reports/ bcs-carbon-tax-fair

Nicholas Rivers and Brandon Schaufele, Salience of Carbon Taxes in the Gasoline Market, Social Science Research Network, June 10, 2013. http://dx.doi. org/10.2139/ssrn.2131468

Timothy Shaw and Claire Beckstead, Local Climate Action in British Columbia: motivations and policy implications, (Pembina Institute, 2012). http://www. pembina.org/pub/2373

24.

10.

Nicolas Rivers and Brandon Schaufele, “The Effect of British Columbia’s Carbon Tax on Agricultural Trade,” Canadian Journal of Agricultural Economics (in press); also published by the Pacific Institute for Climate Solutions (July 2014). pics.uvic.ca/sites/default/files/uploads/publications/Carbon%20Tax%20on%20 Agricultural%20Trade.pdf

Marisa Beck, Nicholas Rivers, Randall Wigle, Hidemichi Yonezawa, “Carbon Tax and Revenue Recycling: Impacts on Households in British Columbia,” Social Science Research Network, September 7, 2014. http://dx.doi.org/10.2139/ ssrn.2492766

25.

The grant was introduced in the 2009 provincial budget. Up to $200 is available per household. In 2013–14 the province estimates that the grant will cost the government $69 million.

11.

Kathryn Harrison, “The Political Economy of British Columbia’s Carbon Tax”, OECD Environment Working Papers, No. 63 (2013). http://dx.doi. org/10.1787/5k3z04gkkhkg-en

26.

Kathryn Harrison and Chelsea Peet, “Historical Legacies and Policy Reform: Diverse Regional Reactions to British Columbia’s Carbon Tax,” BC Studies 173 (2012). http://ojs.library.ubc.ca/index.php/bcstudies/article/view/2431.

12.

Christy Clark committed to follow through on the scheduled carbon tax increases when campaigning in a 2011 by-election after being selected leader of the B.C. Liberal party. http://www.newsroom.gov.bc.ca/downloads/Letter_to_ editor_May6-2011.pdf

27.

“The Political Economy of British Columbia’s Carbon Tax.”

28.

First recommended by B.C.’s Climate Action Team in 2008. Recommendation 1.2. http://www.env.gov.bc.ca/cas/mitigation/pdfs/CAT_FINAL_REPORT_ July_23_2008.pdf.

29.

Government of British Columbia, Climate Action in British Columbia: 2014 Progress Report, 7.

30.

For example, see the B.C. Business Council’s submission to the Provincial Carbon Tax Review (http://www.bcbc.com/submissions-presentations/2012/ submission-bcbcs-submission-to-the-provincial-carbon-tax-review) and Sustainable Prosperity’s analysis of the carbon tax shift’s impact on B.C.’s economy (http://www.sustainableprosperity.ca/blogpost99).

31.

For example, see Recommendations regarding the future of British Columbia’s carbon tax, and Mayor’s Council on Regional Transportation, Regional Transportation Investments: a vision for Metro Vancouver (2014). http:// mayorscouncil.ca/wp-content/uploads/2014/06/MayorsCouncil_Vision_ June-12-2014.pdf

32.

Measuring the Appetite for Climate Action in British Columbia, 3, and British Columbians’ perspectives on global warming and the carbon tax, 6.

13.

Matt Horne, Kevin Sauvé and Josha MacNab, Climate change and the 2013 British Columbia election, (Pembina Institute, 2013). http://www.pembina.org/pub/2450

14.

The Environics Institute and David Suzuki Foundation, Canadian public opinion about the BC carbon tax (2013). http://www.environicsinstitute.org/uploads/ news/focus%20canada%202013%20-%20public%20opinion%20on%20bc%20 carbon%20tax%20-%20december%2016-2013.pdf.

15.

Matt Horne, Measuring the Appetite for Climate Action in British Columbia: British Columbians’ perspective on climate change and carbon taxes (Pembina Institute, 2011), 3. http://www.pembina.org/pub/2233; and Tom Pedersen, Matt Horne and Kevin Sauvé, British Columbians’ perspectives on global warming and the carbon tax (Pembina Institute, 2012), 6. http://www.pembina.org/pub/2376. These two polls also asked a number of carbon tax questions to test support, perceived economy-wide impact, personal impact, coverage, and future rate.

Backgrounder: The B.C. carbon tax Pembina Institute

Ground Zero: Results of Revenue Neutrality A Tax On Carbon

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Ground Zero - results of revenue neutrality: a tax on carbon

November 8, 2014 4:35 PM

1 Attachment, 307 KB

A tax on carbon November 5, 2014, PEMBINA concluded: Government decided to use all carbon tax revenue to reduce other taxes, because they determined it to be in the best interests of the economy and the most saleable to business and British Columbians. A wide range of viewpoints has been offered on this approach. There is support for the revenue neutral approach.30 and there is support for investing some revenue in climate change solutions — either immediately or when carbon tax revenue increases.31 Public opinion research indicates that British Columbians would be more supportive of the carbon tax if at least some of the revenue were invested in healthcare, education and/or climate change solutions.32 The government remains committed to keeping the carbon tax revenue neutral. Notes: 30. For example, see the B.C. Business Council’s submission to the Provincial Carbon Tax Review (http://www.bcbc.com/submissions-presentations/2012/submission-bcbcs-submission-to-theprovincial-carbon-tax-review) and Sustainable Prosperity’s analysis of the carbon tax shift’s impact on B.C.’s economy (http://www.sustainableprosperity.ca/blogpost99). 31. For example, see Recommendations regarding the future of British Columbia’s carbon tax, and Mayor’s Council on Regional Transportation, Regional Transportation Investments: a vision for Metro Vancouver (2014). http://mayorscouncil.ca/wpcontent/uploads/2014/06/MayorsCouncil_Vision_June-12-2014.pdf 32. Measuring the Appetite for Climate Action in British Columbia, 3, and British Columbians’ perspectives on global warming and the carbon tax, 6.

CONUNDRUMS

Conundrum #1: Replace Subsidies with a Carbon Tax for Externalities

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Conundrum #1: Replacing subsidies with a carbon tax for externalities

November 13, 2014 1:33 PM

1 Attachment, 36 KB

Conundrum 1 As 2014 comes to a close â&#x20AC;&#x201D; post mid-term elections â&#x20AC;&#x201D; there is speculation whether Congress will eliminate outdated fossil fuel subsidies and enact a revenue-neutral carbon tax to account for the externalized effects that continued greenhouse gas emissions have on the climate and oceans. Brilliant minds including economists, engineers, scientists, educators, journalists, statesmen, kids, moms and dads agree: Allowing the efficiencies of the market place to respond to a gradually increasing price per ton of carbon will eventually cause shifts in human behavior and corporate investment decisions. Congressman Pete Stark introduced H.R. 4805 (101st Congress) in 1990 with a carbon fee that started low and gradually rose until sufficiently high to cause a leveling off and decline in CO2 emissions. Many versions and variations since then now include revenue neutrality, but they start out in the neighborhood of $10/ton of CO2 which is less than $3/ton of carbon. In 1992 UCLA 'Journal of Environmental Law & Policy', Amy C. Christian's assessment was: "[T]he Stark [1990 and 1991] proposal probably sets the tax level too low to affect a shift in consumption patterns away from energy intensive goods. Stark sets the tax at $30 per ton of carbon contained in the fuel, much less than the $100 per ton tax the Congressional Budge Office estimates is necessary to stabilize carbon-dioxide emissions at 1988 levels by the year 2000." (Please refer to http://bit.ly/ucla_1992_pg53 and http://escholarship.org/uc/item/4356n1xc.) In 1992, "a tax of $100/ton of carbon on fossil fuels ... would increase the price of oil and natural gas at the point of extraction by about 50% and the price of coal by $250%. The price increase of oil and natural gas to ultimate consumers is estimated to be only 25%. CBO: CARBON CHARGES supra note 8, at 19, 20 (table 2) 35 (Table 5)." $100/ton of carbon is $367/ton CO2. Conundrum: If Congress enacts an initial $10-$30/ton tax on CO2, increasing at $10/ton CO2 per year, how long are we willing to wait to see meaningful effects? At what rate/ton will oil consumption begin to decline?

Conundrum #2: Synchronize Actions with Resolved Determination

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Conundrum #2: Synchronize actions with resolved determination

November 13, 2014 2:07 PM

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Conundrum 2 While certain segments of society are striving to create political will for a revenue neutral price on carbon with the intention of rapidly causing a decline in carbon emissions, other segments of society are moving forward with clear focus on taking advantage of recent developments in oil, gas and tarsands extraction. Our society is marching to different drummers, unaligned, out of step. Economic, profit and personal wealth considerations have driven decisions by corporations to exploit technology, which has resulted in the celebrated gas boom and oil boom. Over-supply and falling prices have compelled legislators to amend regulations in attempts to bolster corporate profits. Decisions to loosen and eventually lift decades-old bans on oil and gas exports in the past few years are resulting in the construction of billions of dollars in capital-intensive infrastructure that will lock us into continued combustion of carbon-based fuels for many decades into the future â&#x20AC;&#x201D; at a time when reliance on those fuels should be waning, being replaced with carbon-free technology. Government dictates for corporate profit are contraindicated for what science demands. The rules that govern fossil fuel exports are legislated by Congress, from whom we also expect legislation to forestall climate and ocean deterioration. Legislators are working with cross purposes. The economy drives decisions that are counter to the need to protect the biosphere from further CO2 concentrations. Regulations that govern corporate behavior to increase profits and wealth in unfettered growth drive the purchasing of Congressional influence by lobbyists. The underlying conventional wisdom seems to be "what's good for Coal, Oil and Gas is good for the country." Getting unified agreement and pragmatic alignment on objectives that promote life is a conundrum. Until all our 'left hands' and 'right hands' are working with resolve and determination in alignment, we will continue to act at cross-purposes with ourselves, individually and collectively.

Conundrum #3: Think Carefully About What We Are Asking For

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Conundrum #3: Think carefully about what we are asking for

November 13, 2014 2:31 PM

1 Attachment, 36 KB

Conundrum 3 While a revenue-neutral carbon tax should reduce carbon emissions in a deliberate, speedy way, there are possible side effects that few are aware of, or at least not acknowledging publicly. It should be fundamentally understood that as the carbon tax increases, say by $10/ton per year, CO2 emissions will decline â&#x20AC;&#x201D; that is the purpose of putting a price on carbon. What goes hand-inhand with reducing emissions, is reducing combustion of coal, gasoline, diesel, kerosene, fuel oil, natural gas, etc. What people do not associate with that is a concomitant rise in price due to supply-demand and other market and operational effects. Not only will the carbon tax increase on top of the basic price of fuels, the price of the fuels will be increasing for a number of reasons. Aside from supply and demand, when a business prices a product, there are fixed costs that must be allocated over the quantity of product which adds to the variable cost to manufacture the product. If the quantity of product declines, the fixed costs increase on a per unit basis, thus increasing the per unit price. With billions of dollars of fixed assets (refineries, wells, pipelines, production equipment, employees), the price per gallon of gasoline, diesel, kerosene, fuel oil, etc. and the cost per thousand cubic feet (Mcf) of natural gas will increase as production declines. Another cost that people don't consider is the retiring and dismantling of the infrastructure as the demand declines. Progressively, more and more wells will be shut down and abandoned. Entire oil and gas fields will be shut down and must be cleaned up. Similarly, pipelines will need to be dealt with. All of these costs will be passed along to the consumer in increased prices/gallon or Mcf. Advocates of a revenue-neutral carbon tax expect nothing but upside impacts on the economy. That foreseeable unintended consequences are likely to precipitate a backlash is a conundrum.

Conundrum #4: Numerators and Denominators Exponentiate

Douglas Grandt <answerthecall@me.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Conundrum #4: Numerators and denominators exponentiate

November 13, 2014 2:40 PM

1 Attachment, 36 KB

Conundrum 4 In order to prevent the average global temperature rising more than 2째C, we need to take steps to abandon our reliance on the burning of coal, natural gas, gasoline, diesel, kerosene, fuel oil, etc. Dr. James Hansen et al. calculate 6%/year decline, the German Advisory Council on Global Change suggest a decline between 5% and 9%/year, and the IPCC has said a 7%/year decline is required. As we shut down, dismantle and clean up toxic refineries, the conundrum will be how to fairly spread some $3-$5 trillion cost for decommissioning the 750+ refineries that operate worldwide. End-game costs will likely exceed refineries' profit margins, so it would be reasonable to expect refinery management to allocate costs to remaining production, passing them on to consumers. Below is a very simplified illustration allocating the cost to production in the year a refinery is shut down, not kicking the can down the road, not laying the burden on the next generation. The cost per gallon of gasoline or diesel or kerosene would rise gradually at first, but as the volume of fuels diminishes the allocation per gallon of fuel would rise exponentially. How do we deal with scenarios that become economically infeasible and make a refinery operation unprofitable? Year Year Year Year Year Year Year Year Year Year

1 2 3 4 5 6 7 8 9 10

Production 93.00 MMbbl/day 88.35 MMbbl/day 83.70 MMbbl/day 79.05 MMbbl/day 74.40 MMbbl/day 69.75 MMbbl/day 65.10 MMbbl/day 60.45 MMbbl/day 55.80 MMbbl/day 51.15 MMbbl/day

Cost/gallon $0.126 $0.133 $0.140 $0.148 $0.158 $0.168 $0.180 $0.194 $0.210 $0.229

| | | | | | | | | | |

Year Year Year Year Year Year Year Year Year Year

11 12 13 14 15 16 17 18 19 20

Production 46.50 MMbbl/day 41.85 MMbbl/day 37.20 MMbbl/day 32.55 MMbbl/day 27.90 MMbbl/day 23.25 MMbbl/day 18.60 MMbbl/day 13.95 MMbbl/day 9.30 MMbbl/day 4.65 MMbbl/day

Cost/gallon $0.252 $0.280 $0.315 $0.361 $0.421 $0.505 $0.631 $0.842 $1.262 $2.525

Conundrum #5: Transparent Decisions in the Public Interest

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Conundrum #5: Transparent decision in the public interest

November 13, 2014 3:09 PM

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Conundrum 5 ExxonMobil has touted exercising "portfolio management" in order to maintain a steadily increasing dividend to shareholders. Their stock buy back program not only shrinks the outstanding share base to facilitate increasing dividends in the face of declining earnings, it also helps to bolster the share price. These practices using borrowed funds seems should be recognized as being unsustainable. It is a conundrum that investors do not recognize the artificial manipulation that provides income now while jeopardizing future economic viability of the enterprise. Do the Management and Directors have another objective in mind as they carry out the strategy? Is there an unstated plan for the end-game wherein ExxonMobil steps aside from the petroleum extraction and refining industries, like a matador carefully steps aside in order to deceive the charging bull and play the bull unwittingly to its demise. Will ExxonMobil Management and Board remake the company by reducing it in size and scope through stock manipulation and the selling off of assets to other companies, leaving them to deal with the end-game of retiring, dismantling and cleaning-up production and refining facilities as the profitability of those respective operations begin to falter and go negative? Who will clean up the messes? We the People must demand to participate and understand the vision that ExxonMobil and all petroleum enterprises have for their future. We the People will be the ones who will bale them out. We will pay the piper. We should demand having a say in what we will be willing to accept as the industry wanes and is replaced by carbon-free technology. Nothing should be left to chance or to wishful thinking that the petroleum corporations will behave in the best interest of society. The Corporations will only look out for their own self interest.

Conundrum #6: Make An Offer They Cannot Refuse

Douglas Grandt <answerthecall@icloud.com> To: Rex Tillerson <Rex.W.Tillerson@ExxonMobil.com>, David Rosenthal <David.S.Rosenthal@exxonmobil.com> Conundrum #6: Make an offer they cannot refuse

November 13, 2014 3:31 PM

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Make them an offer How to control or encourage the world's largest and most influential industry to do what is best for society while navigating its own demise is a conundrum. Societies have never done that before. So here we are in an historic scenario, working in the face of diminishing odds of leaving a livable climate and healthy biosphere and oceans for our progeny with a small window of opportunity; with an industry that envisions business-as-usual based on supply-demand forecasts provided by our own government; with total disregard for what scientist are telling us we must do to avoid disaster. It is a conundrum what to do, although many people have specific tasks and visions that occupy their focus. Many of us believe we are on the right track, and that everything will continue to be comfortable and nice while we transition from a carbon-based energy economy to a carbon-free energy paradigm. We believe that industry will go along with our altruistic beliefs, and voluntarily make the shift. But one industry captain has said clearly "we don't do business that way" to me on multiple occasions through his security staff and corporate attorney. [Now, substitute "elected government leader" for "industry captain" or "petroleum company." Read on with double entendre.] It is no conundrum to me how to deal with ExxonMobil or any other petroleum company. Making money is their language. We must make a business proposition that is unresistable to them. Mario Puzo â&#x20AC;&#x201D; through Marlon Brando â&#x20AC;&#x201D; made "make him an offer he can't refuse" a common phrase. Now it is up to We the People to make the industry captains offers they cannot refuse. We will have to use our imaginations and creativity to come up with the offers and the cash to make it happen. There are 750+ refineries that we must purchase and dismantle; 2,300+ coal or gas power plants; millions of industrial furnaces, boilers, ovens and processes; millions more in commercial and residential settings; millions of oil and gas production sites and equipment scattered across the landscape; untold miles of pipelines buried in urban concentrations, in the suburbs, and in rural farmlands. We the People must make them an offer they cannot refuse: $1tn? $5tn? 10tn?

EPILOGUE

Ally, Donâ&#x20AC;&#x2122;t Vilify

Douglas Grandt <answerthecall@icloud.com> To: Douglas Grandt <answerthecall@me.com>, Douglas Grandt <answerthecall@mac.com> Ground Zero - ally, don't vilify

November 11, 2014 8:07 AM

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Ally, don't vilify Barack Obama is a patriotic American Rex Tillerson is a patriotic American Bill McKibben is a patriotic American Stephen Pryor is a patriotic American Larry Summers is a patriotic American You and I are all patriotic Americans But we are going different directions If we cannot unite, we are all doomed