Colombus, U.S.A. – The U.S. Chamber’s Institute for 21st Century Energy on July 17 launched a major new campaign focused on building support for utilizing shale energy resources in Ohio.

The “Shale Works for US” campaign is a national effort designed to build support for the vast economic and energy security benefits of natural gas and oil produced from shale. The Institute for 21st Century Energy is the energy policy arm of the U.S. Chamber of Commerce, the world’s largest business organization.

“Shale energy has the potential to be an economic game changer for America and for Ohio,” said Karen Harbert, president and CEO of the Energy Institute. “Ohioans are already beginning to see the benefits of shale development, but much more shale energy sits below the surface.  The Shale Works for US campaign will help educate the public and the business community and demonstrate the ways in which increased shale production will benefit communities across the Buckeye state.”

Almost twenty percent of the Marcellus shale formation — one of the world’s largest — is in Ohio. Development of shale energy is expected to bring more than 65,000 jobs; contribute $4.86 billion to Ohio’s economy; and result in $3.3 billion of labor income (an average of $50,225 per job) by 2014, according to the Ohio Shale Coalition.

“Oil and natural gas production in Ohio is not new, but recent advances in technology will allow for vast quantities of recently discovered shale energy to be produced in a safe, environmentally responsible way,” said Linda Woggon, executive director of the Ohio Shale Coalition and executive vice president of the Ohio Chamber of Commerce. “This production will not only create jobs for Ohioans, but generate new revenues for localities throughout our state, meaning more money for education and public safety and lower residential property taxes.”

Nationally, the Shale Works for US campaign will build a network of communities, businesses and policymakers throughout the states and at the federal level to support the economic, job creation and energy security benefits generated by shale energy.

The Shale Works for US campaign will include extensive grassroots recruitment, advertising, and educational outreach to businesses and community groups. Initially, similar efforts are underway in Pennsylvania and West Virginia with plans to expand across the country.

The mission of the U.S. Chamber of Commerce’s Institute for 21st Century Energy is to unify policymakers, regulators, business leaders, and the American public behind a common sense energy strategy to help keep America secure, prosperous, and clean.

Through policy development, education, and advocacy, the Institute is building support for meaningful action at the local, state, national, and international levels.

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U.S. courts are showing increasing hostility toward Chevron and its CEO John Watson over the company’s $18 billion Ecuador liability as the oil giant’s plan to quash the landmark case continues to falter in the hands of American law firm Gibson Dunn & Crutcher, said representatives of the Amazon indigenous groups who offered an analysis of the 18-year case to its shareholders and industry analysts.

Leaders of the indigenous groups in Ecuador – who last year won the largest environmental court case in history — are presenting their analysis because Watson misled company shareholders about the case in an earnings call last Friday.  Watson failed to disclose his own conflict of interest in that he was a key Chevron executive who drove the purchase of Texaco in 2001 without properly vetting the company for its massive Ecuador liability, said Karen Hinton, the U.S. spokesperson for the Ecuadorians.

In the earnings call, Watson charged that the Ecuador case is part of an elaborate “fraud” to extort money from Chevron — a false statement that directly contradicts court findings based on scientific evidence, including evidence provided by Chevron itself, said Hinton.

“Watson uses rhetoric as a device to hide his failed leadership on the Ecuador case,” said Hinton.  “His comments about the Ecuador liability on the earnings call were misleading and should be treated with extreme skepticism by shareholders.”

For a more accurate analysis of the risks facing the Ecuador case than that Chevron is making in its quarterly calls or in its disclosures to the SEC, Hinton said shareholders should reference a report on the Ecuador case by Simon Billeness and Sanford Lewis that was published in May of last year prior to the company’s annual meeting. Both point out risks that Chevron has not completely disclosed, including the likelihood of standard collection actions against Chevron assets in various countries that are critical to the company’s operations.

Watson’s comments on the earnings call omitted key information that has emerged recently, as follows:

After eight-year trial, the Ecuador court in February 2011 found the company liable and imposed damages of $18 billion. The court found Chevron itself proved the company discharged billions of gallons of toxic waste into the environment, decimating indigenous groups and poisoning rivers and streams that local inhabitants rely on for drinking water.

On January 3, an Ecuador appellate court affirmed the trial court judgment and blasted Chevron for its “abuse of the judicial process” in Ecuador by filing frivolous motions and threatening a judge with jail time.  The court also upheld a punitive damages sanction against the company.

The U.S. Court of Appeals in New York last week rejected a Chevron attempt to seek a worldwide injunction blocking the Ecuadorians from enforcing their judgment, essentially nullifying the centerpiece of the U.S. component of the oil giant’s legal strategy.

Chevron’s lead outside law firm, Gibson Dunn & Crutcher, has created even greater risk for Chevron shareholders by bungling key aspects of the litigation.

Since the firm took over the matter in 2009, Chevron lost the underlying case;  lost at the appellate level; lost a motion to attach  assets of the Ecuadorians in the U.S.; seen its plan to block enforcement overturned by the U.S. federal appellate court; and been exposed to potential criminal liability for trying to bribe Ecuador’s government.

Documents recently obtained via U.S. discovery actions shows that Chevron engaged in extensive acts of corruption and fraud in Ecuador.  Chevron doctored soil samples to mislead the Ecuador court and used a secret lab to hide evidence of toxic contamination; paid $2.2 million in hush money to a man who threatened to expose the company’s corruption in the Ecuador trial; tried to entrap an Ecuadorian judge with secret video recordings, and used U.S.-based experts to lie to the Ecuador court about the company’s deceptive field sampling.

U.S. and Ecuadorian courts have sanctioned Chevron for the use of unethical litigation practices done at the behest of Gibson Dunn and its lead partner, Randy Mastro.  Several U.S. and Ecuadorian judges sanctioned Chevron for harassing witnesses, filing a frivolous lawsuit, and abusing the judicial process.

Recognizing it could not win the lawsuit on the merits, Chevron recently tried to bribe Ecuador’s government with a “donation” to an environmental project in exchange for the “settlement” of the legal case without the involvement of the plaintiffs, according to sources within Ecuador’s government. Chevron never denied the reports of the attempted bribe, which might violate criminal laws in both Ecuador and the U.S.

Chevron also suffered a major setback in a U.S. federal appellate court in Philadelphia when Mastro was harshly criticized for seeking the case file of an American lawyer who represented the Ecuadorians.  The panel unanimously overturned a trial court order secured by Mastro.

Chevron faces potential criminal and civil liability for orchestrating a video scandal to entrap the Ecuador trial judge in a trumped-up bribery scandal.  Several lawyers working for Chevron, including Robert Middlestadt of Jones Day, have been deposed or face potential depositions in the matter.

One of Gibson Dunn’s investigators on the Ecuador matter, San Anson, was caught trying to pay an American journalist to spy on the plaintiffs.

The Gibson Dunn strategy also includes fomenting open conflict between Chevron and Ecuador’s government, a tact considered grossly impolitic for an oil major.  Chevron is already facing likely criminal charges in Brazil – a country with enormous reserves coveted by the company — for lying about its recent spill off the coast of Rio province.

Mastro, the mastermind of Chevron’s increasingly shaky legal strategy, was laughed at as he was unable to answer basic questions posed by the New York appellate panel that issued its order last week.  One judge even asked whether Chevron’s legal expenditures on the case was a good use of shareholder money.

Hinton said shareholders needed full information to be able to understand the risks facing the company.

“With these numerous setbacks over the last several months, it is even more apparent that John Watson and Gibson Dunn have brought Chevron’s shareholders to the edge of the proverbial cliff,” said Hinton.

“No matter what Watson does, Chevron simply cannot change the fact its horrific contamination in Ecuador is visible to the naked eye and has been confirmed by journalists and courts the world over,” she added.  “The evidence is so overwhelming that no amount of trickery can save the day for Chevron at this point.

“It is also becoming increasingly obvious that Gibson Dunn has sold Chevron’s management a bill of goods for which it has charged hundreds of millions of dollars over the last two years,” added Hinton.  “If this management team doesn’t monitor the situation more carefully, some additional and very unpleasant consequences for the company’s shareholders could be in store.”

Image Courtesy of     http://www.flickr.com/photos/rainforestactionnetwork/

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Barack Obama has been challenged this week. John Boehner, leader of the House of Representatives, wrote to the dear leader claiming that under the 1973 War Powers Act, his decision to authorize US military action in Libya without consulting congress was illegal under US law. The White House swiftly replied, stating that military action in Libya was not sufficiently serious that it necessitated congressional approval.

There is much to say merely on this footnote of the story. We might well debate the separation of powers, or the rights of the commander-in-chief, deep into the night. However, there is a much more important point to make, and one that Boehner’s challenge conveniently prompts. The war in Libya is undoubtedly illegal, regardless of US law.

Let’s begin with a little recent history. On March 18^th 2011, President Obama delivered a speech announcing a NATO military operation in Libya, and the imposition of a no-fly zone. The media was almost unilaterally supportive, as it has remained ever since. Later that same day, Mark Mardell (BBC North America correspondent) sycophantically praised this new “Obama doctrine”, which entailed “acting within limits, leading only as a first among equals”.

“Barack Obama has been morbidly belligerent from the very first day he took power.”

To argue that Mardell’s assessment proved to be mistaken would be to miss the point, because even the limited measures announced on March 18^th were transparently illegal (UN Security Council resolution 1973 authorized an internationally organized no-fly zone, not a NATO imposed one), and there was absolutely nothing ‘new’ about this facet of Obama foreign policy. Barack Obama has been morbidly belligerent from the very first day he took power. Within 12 hours of stepping into the elliptic office, he opted to order unmanned drone strikes in Pakistan – a precedent he has continued. George Bush authorized drone attacks in Pakistan a total of 45 times in his whole second term; just within Obama’s first year, he sent 53. The drone attacks themselves constitute a serious war crime, having killed at least 1,500 civilians and a mere handful of supposed ‘militants’. Obama has been carrying out an illegal bombing campaign in Yemen for the past two years, and still maintains the war in Afghanistan.

The White House response to Boehner openly claimed that the Libyan operation was not a war, but a mission to remove Muammar Gaddafi from power. Sickeningly, this script has become familiar to the point of tediousness. The US, UK or NATO announce ‘an intervention’, or a ‘humanitarian campaign’. The campaign, it is said, will be completely different from all previous wars. Strikes will be ‘targeted’, ‘collateral damage’ will be negligible, and of course just as the British government said in 1914, it will be so swift that it’ll all be over in a couple of months. Then the mission changes. A campaign that was authorized by UNSC resolution 1973 only to protect civilians in Benghazi by stopping Gaddafi’s airforce becomes a NATO “mission to remove Muammar Gaddafi from power”. According to any interpretation of Just War theory, this alone flagrantly disregards international law. Furthermore, the repeated air strikes on Gaddafi’s compound (and home) have made it absolutely clear that NATO are attempting to kill him. Whatever one thinks of the ‘intervention’ in Libya, we must accept that it is yet another illegal war.

Where does it go from here? On June 15^th UK armed forces chief General Sir David Richards spoke to relieve fears that Britain would be unable to maintain its part in the war: “We can sustain this operation as long as we choose to” he confirmed, “I am absolutely clear on that”. His statement will no doubt come as a salve to British Foreign Secretary William Hague, who has stated that the UK is in Libya “for the long haul”.

This is revealing in itself. Regardless of what happens, or of what the current Libyan leadership does, NATO has confirmed that it will be there “for the long haul”. Saif al-Islam Gaddafi announced on the 16^th of June that his father Muammar was willing to hold elections in Libya (monitored by the international community). NATO, I’m sure, will ignore this statement. The goal was never the promotion of democracy in Libya, or the protection of civilians, nor was it – I suspect – even “regime change”. The goal is simply ‘to be’ in Libya. Another oil rich Arab nation; another illegal war.

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In December of 2009, the average price of gasoline nationally reached $2.60. Republicans in Alaska and Florida, along with those in other coastal states, worked to build support for the expansion of offshore drilling efforts. The attractive potential of stabilized oil had much of Congress reconsidering the offshore ban of protected areas. The slogan “Drill, baby, drill!” a staple of the 2008 Republican Presidential campaign, became commonplace among the vernacular of the American people. For all intents and purposes, the country was moving in the direction of expanding offshore exploration.

But on April 20, 2010, the explosion of BP’s Deepwater Horizon platform accelerated the pulse of the nation. Oil spewed freely into the Gulf of Mexico for three months, causing what is being called the worst environmental disaster in the history of the United States. The progress of those jockeying to expand drilling was lost in a matter of hours. Many supporters quickly changed routes, instead opting to preserve career longevity. The drilling issue looked dead.

Now, though, the country may be forced to revisit the debate. Revolutions throughout the Middle East have thrown a major wrench into the oil importation strategies of the U.S. Because of the shutdowns of petroleum production sites throughout Northern Africa, prices have risen to over $3.50 a gallon (almost 80 cents more than numbers a year ago).  Economists are concerned that if unrest continues, high fuel costs could slow the already fragile global economy. So what are the alternatives for the United States?

Analysts predict that if the levels continue to dissipate, the United States can release supplies from the Strategic Petroleum Reserve. That strategy would have a minimal impact on prices, though, and only dent the nation’s reserve tanks.

Alternative energy gurus have touted progress for the last two decades; still no viable alternative fuel can be mass produced at the bulk necessary to sustain the American people. Sure, someone will one day find a way to harness solar energy or wind power into something realistic for automotive transport. But when? The country needs to find other means as soon as possible. Waiting for a legitimate fix is no longer an option.

Suddenly, we’ve gone full circle. The ball once again rests in the court of Congress.

The expansion of offshore petroleum exploration appears to hold the most opportunity. Many claim that an increase in production could drive prices back to reasonable areas. Tapping into new production would also provide many new jobs. Many policy makers now insist on the expansion of offshore drilling allowances. Florida lawmakers looked close to making the decision to allow drilling before the BP incident. Research into the other nations allowing offshore production could give the U.S. a good blueprint from which to work.

Many of the views against drilling off the coast of Florida have arisen from the think tanks of environmentalist groups. “Green” associations cite many reasons to continue the Florida offshore moratorium, many of which were strongly reiterated by the BP oil spill example. One of the main arguments of drilling opponents is the pollution factor. Oil rigs have oil spills. No oil rigs, no oil spills. The three-month long release of oil into the Gulf of Mexico provides much of the evidence needed to support the case. The opposition also cites the estimation that offshore production will not be enough to relieve the U.S. dependence on foreign oil. A study shows that offshore drilling (nationwide) will bring in an additional 18 million barrels – total.  The U.S. uses over 8 million barrels a year, according to statistics. Claims by anti-drilling advocates note that the continued importation of petroleum will not allow gas prices to subside. Another platform argues that drilling in Florida waters will damage the state’s profitable tourism industry ($61 billion in 2009). “The biggest con I see to offshore oil drilling is that no one wants to be looking at an offshore oil rig when they go out to the beach,” political blogger Mark Hutcherson testified. Like many arguments in the court of political opinion, this one too has two-sides.

Data gathered by the National Ocean Industries Association shows that each oil platform will provide up to 1,400 new jobs and an estimated $10 million in wages. The infrastructures of many states are not yet setup for offshore production; therefore, many new jobs will be created in the development and building of industrial refining facilities. Considering the number of employees required to run the facilities once they are constructed, the impact on the workforce will be seismic. Employment opportunities will filter down through the trucking and construction industries. New jobs with environmental agencies will also hatch.

The increased domestic production could also mean more government revenues, both nationally and locally. The current national debt is $13,679,284,890,000 plus. The royalties and taxes collected from the new drilling endeavors would allow policy makers to significantly reduce debt levels.  As Marco Rubio, U.S. Senator-elect notes, “The issue of offshore drilling is not going away because America and the world depend heavily on petroleum products.” Although Democrats have backed off their stance of promoting drilling (the then-Democrat-controlled house voted 236 to 189 in October 2008 to lift the moratorium), many Republicans insist on the benefits of increased drilling. If a larger share of the oil being consumed were produced in the United States, it would lessen the U.S. trade deficit with the rest of the world, economists realize.

Despite the recent BP incident, U.S. offshore facilities are generally environmentally sound. From 1971 to 2000, offshore facilities and pipelines were responsible for only 2 percent of the oil in U.S. waters (according to statistics compiled by the Environmental Protection Agency). The BP/Deepwater Horizon oil disaster is an outlier; in 40 years of aggressive oil exploration, the nation has never faced a spill of that magnitude. The odds of a major hurricane (Category 3, 4, or 5) landing in Florida are nine times greater than the state’s chances of facing a spill like the BP debacle. According to Coast Guard records, of the 44 oil spills reported in the aftermath of Hurricane Katrina, none were reported by offshore facilities.

Environmentalists also downplay the evidence that oil importation is actually more damaging than drilling in the United States. The countries from which the U.S. imports oil have lower environmental standards than us. For example, many countries elect to vent methane into the environment rather than spending money to capture it. Also, tankers are less reliable than platforms. As history has shown (until recently), the four largest offshore spills involved transportation vessels. Producing the oil off the coast of the U.S. would minimize sea transport of the product via tankers, therefore reducing the risk of transfer error. Also, transport vessels use tons of diesel fuel, which causes damaging exhaust fumes. Proponents of drilling also point out that the Bahamas and Cuba both drill just outside of Florida’s protected waters.

The potential benefits of drilling in coastal waters are just too significant to ignore. Opponents will continue to build allegations and claims about the evils of drilling, but in the end, necessity will win out. Why wait until offshore drilling becomes essential when we can reap the benefits now? The expansion of drilling into the coastal waters of the United States could lead to the creation of new jobs, higher government revenue, lower gas prices, safer oil transport and drilling, and cheaper prices on common household items.

How much must gas prices rise before we rehash the discussion?

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Continuing unrest in Libya as well as other North African and Middle Eastern countries has led to the highest crude oil prices since 2008, the U.S. Engery Information Administration (EIA) reported March 8.

In correlation to the disturbance of crude oil exports in countries such as Libya, West Texas Intermediate (WTI) and other crude oil benchmarks have risen around $15 per barrel since mid-February— $14 higher than previously predicted— allowing  an estimation of $105 per barrel of crude oil to refiners in 2011.

Acceleration of spot crude and gasoline prices has begun to affect consumers in retail environments.  Increases in pump prices will continue to rise through the spring due to delayed relay between crude oil and gasoline.

Motorists can expect regular-grade gasoline to average around $3.56 per gallon, 77 cents higher than the 2010 average, and 40 cents higher than initially predicted for 2011. However, during the peak driving season, (April through September) EIA predicts drivers will pay $3.70 per gallon, considering regional disparity.

Significant uncertainty within the current market has led analysts to predict there is a 25 percent chance that the national average for gas prices this summer could exceed $4.00 per gallon. This may be due not only to rising crude oil prices, but higher refining margins as well.

As long as world oil markets tighten and unrest persists throughout North Africa and the Middle East—the world’s largest oil producers—uncertainty in the oil market will remain.  If instability in the Eastern Hemisphere continues to spread, there will be adverse side effects for the oil market.

Auto Manufacturers such as Chevrolet and Toyota have been strategically reaping the ambiguity facing crude oil.

Although Tesla Motors is given credit with creating the first purely electric car, the roadster (est. 2008; msrp 109,999 and model s (expected to be released in 2012 with a base price of 49,900), Chevrolet and Toyota are making gas and emission free cars more available to middle income families.

Introduced in October 2011, the Chevy Volt is an electric car which uses gas to create its own electricity for up to 40 hours of drive time. Even if the driver is unable to recharge the car, Volt will use a generator which produces several hundreds of miles on a single tank of gas.

Toyota, maker of the hybrid Prius, is expected to release a plug-in version of the popular car in the beginning of 2012.  Recently, they and several other companies such as GE and Schneider Electric have begun manufacturing at-home electric car chargers.

The expansion and increase of residential conveniences toward green cars questions when gas powered vehicles will become obsolete. As emission free technology broadens, techniques for finding and extracting oil will as well.

The development of electricity as an alternative dominate energy source seems plausible, but is the world prepared to move away from the internal combustion engine?

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