FOIA FRIDAY |
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This week's document: Internal emails from the Department of Energy's Energy Information Administration responding to a New York Times article on fraking. Document dates: June and July, 2011 Every Friday, POGO will strive to make one document available that we or others have obtained through the Freedom of Information Act (FOIA), especially documents that have not previously been posted online. Some of these documents will be more important than others, some may only be of historical interest— although relevance is in the eye of the beholder. POGO is doing this to highlight the importance of open government and FOIA throughout the year. |
By MIA STEINLE
In the aftermath of last summer’s damaging New York Times investigation into fracking—a method of shale gas drilling lauded by investors—industry and the Department of Energy (DOE) went into damage control mode.
Internal department emails obtained by POGO through the Freedom of Information Act give insight into how DOE’s Energy Information Administration (EIA) responded to the first story from Ian Urbina’s “Drilling Down” series for The Times. The story itself helped bring the fracking debate into the public consciousness, by making public internal industry emails and DOE documents, which showed skepticism about fracking’s promises as early as 2009.
The EIA emails obtained by POGO show that agency employees were displeased with The Times investigation, which revealed, among other things, industry emails from 2009 comparing shale gas investments to Ponzi schemes. The Times noted that, just one year prior, residents of Fort Worth, Texas, were promised almost $28,000 per acre for drilling leases—but many never received such high royalty checks.
The emails also show that employees from the fracking industry—from investment banks, consulting firms and energy companies—and EIA employees emailed each other Urbina’s article and press releases, written by both EIA and industry employees, that were critical of the article.
One EIA economist sent fellow agency employees a press release from natural gas producer Chesapeake Energy Corp. (CHK), which called The Times investigation “inaccurate” and “misleading.” The EIA economist wrote, “This is only my opinion, but I concur with CHK’s findings.” Another EIA employee forwarded the CHK press release to fellow employees, noting, “Here is a rebuttal from a company my nephew works at. Just for amusement.”
It’s no wonder industry hit back hard against Urbina’s story, considering how much they’re betting on fracking and the natural gas market. Another Urbina story also brought to light the dependence EIA has on industry data. As that story notes, EIA “relies on research from outside consultants with ties to the industry. And some of those consultants pull the data they supply to the government from energy company news releases.” So perhaps it shouldn’t come as any surprise some EIA employees, who’ve depended on industry for their view of fracking’s potential, might be taking industry’s side. And if industry indeed has made some rosy assumptions, this is troubling.
The Times story made public nearly 500 pages of documents, including an email from a former employee of industry consultant IHS CERA, in which the employee called fracking “a lot of hype.” In the emails obtained by POGO, another IHS CERA employee sent the company’s press release to EIA, noting that The Times article “does not reflect the IHS position on shale gas.”
EIA spokesman Jonathan Cogan told POGO that senior agency employees received many questions via phone and email after the release of The Times investigation, to which the agency responded with its own press release. As EIA employees sent around a draft of the press release, one employee commented, “We have a lot of interested observers and stakeholders on the topic.”
An agency within the DOE with an annual budget of $95 million, the EIA, “collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment,” according to its website. By law, the agency’s findings are released independent of review from elsewhere in the government.
The emails obtained by POGO show that even those associated with the EIA admitted that The Times investigation had its merits. One agency employee wrote to a colleague, “The NY Times reporter intentionally spun a sensational, poorly-researched narrative; however, it did bring a key issue to the forefront: what are the assumptions that underlie our projections.” He pointed to the final paragraph of a Houston Chronicle blog post on the issue that noted that energy companies often report distorted information on “finding costs” (that is, the cost of finding and developing a gas reserve) to investors, while the more accurate financial information they report to the Securities and Exchange Commission “are not the finding costs most widely discussed.”
In fact, the emails published by The Times showed that an official from an independent oil and gas exploration company wondered how gas companies “are getting their reserve estimates past the SEC?”
After the publication of The Times investigation, which included heavily redacted versions of agency emails, the EIA made public more lightly redacted versions of the emails. In an email POGO obtained, one agency senior executive explained to an employee, who was apparently out of town during the investigation’s aftermath, why the agency decided to release the emails with fewer redactions.
“A lot of people are pretty unhappy with us and the stories,” he wrote.
Mia Steinle is a POGO investigator.
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