This report is part of a joint project by the Center for Public Integrity and InsideClimate News.
BISMARCK, N.D.— North Dakota's Heritage Center makes for a jarring sight in this Midwestern prairie capital. The newly-expanded museum consists of four interlocking cubes of stone, steel and glass, a gleaming architectural statement poking out of the otherwise drab Capitol grounds. Each cube features a gallery devoted to an era of North Dakota’s history, but the state’s present is everywhere.
The legislature approved the dramatic $52 million expansion in 2009, but required the museum to come up with $12 million of that to supplement state money, and more than half has come from energy companies—including a $1.8 million gift from Continental Resources Inc. that put its name on one of the galleries. The gifts have "given us a chance to do some things that we've never really had a chance to do," said Merl Paaverud, director of the State Historical Society.
Oil development has transformed this state to the point where it's hard to find a place or person that hasn't been touched by the boom. Energy companies have drilled more than 8,000 wells into western North Dakota's rugged prairie since the beginning of 2010, quadrupling the state's oil production. From July 2011 through June 2013, the state collected $4 billion in oil taxes, and is expecting a $1 billion surplus for the current biennium, not including an oil-funded sovereign wealth fund that will approach a balance of $3 billion. North Dakota is in the uncommon position of facing a labor shortage, spurring a state-run campaign to attract workers, paid for in part by Hess Corp.
In addition to the tax revenue they've brought, the oil companies have showered the state with additional money—new millions for universities, museums, hospitals and other charitable causes. They've also given hundreds of thousands to politicians, making the sector the largest single source of those contributions. The oil industry is the top contributor to Gov. Jack Dalrymple, according to the National Institute on Money in State Politics, and gave money in all but 10 of the 75 legislative races held in 2012.
"I don't think most people know how pervasive the influence of the oil industry is in the Capitol," said Jim Fuglie, a former state tourism director and former head of the state Democratic-Nonpartisan League Party. "Nothing this big has happened since homestead days. This is a game changer for North Dakota."
OTTAWA—When you combine climate change, an unlikely partnership between Californians and French-speaking Canadians—and the prospect of an 8-cents-a-gallon rise in gasoline prices—what do you get?
The energy industry vs. California. And Quebec.
Last year, California and Quebec launched the Western Climate Initiative (WCI), a system that makes businesses pay for carbon pollution. When it comes to climate change, that puts California and Quebec well ahead of their national governments in Washington and Ottawa. It also puts California and Quebec squarely in the sights of the oil-and-gas industry, which strongly opposes action by sub-national governments enforcing polluter-pay regimes on their own.
The first phase of the system, now under way, covers large industrial facilities, but on Jan. 1, the cap-and-trade scheme will expand to cover pollution from companies that distribute oil, natural gas and gasoline. With that deadline less than six months away, energy companies are urging the two governments to pull back.
A foreign oil company convicted of polluting a Texas community's air with dangerous chemicals has gotten off easy in a criminal case that could undercut the prosecution of environmental crimes in the United States. The case revolves around Venezuelan-owned Citgo Petroleum's decade-long violation of the federal Clean Air Act at its refinery in Corpus Christi.
In 2007, the Citgo refinery became the first to be criminally convicted of violating the Clean Air Act by a U.S. jury. The refinery had spent a decade illegally operating two giant oil-water separator tanks without any emission controls. Every day for 10 years, nearby residents breathed noxious fumes emitted from the roofless tanks, including the carcinogen benzene.
It took another seven years, until February, before the judge in the case finally sentenced the company. U.S. District Judge John D. Rainey fined Citgo a little more than $2 million—a penalty prosecutors said would not deter Citgo from committing future crimes since, they argued, the company made $1 billion in profit as a result of its illegal operation. Corpus Christi residents were disappointed with the fine, but disappointment quickly turned into fear and confusion when the judge refused to announce in court his ruling on how much restitution must be paid to the refinery's neighbors.
On April 30, people who had been awaiting a decision for years finally found out what they would receive from Citgo: absolutely nothing.
"When I walked out of [the courtroom] I knew what it was gonna be: he was going in Citgo's favor," says Thelma Morgan, who lived two blocks away from Citgo for more than 35 years and whose husband and son were also exposed to toxic chemicals. "When he said 'I'll notify you all by letter' I said then, 'You're against us, so we can forget it.'"
A newly released internal e-mail from TransCanada Corp. is raising fresh questions about whether its managers attempted to undermine the credibility of a former employee who questioned the company's commitment to safety, describing him as "disgruntled."
The email is the latest in a collection of thousands of pages of records released by the former employee, engineer Evan Vokes, who has been at the center of a dispute over the safety of TransCanada's operations in Canada. The emails also touch on TransCanada's record in the United States, where it hopes to build the multibillion-dollar Keystone XL pipeline project. Another TransCanada pipeline, which runs from Alberta, Canada to Cushing, Okla. and is known simply as the Keystone, has been plagued by at least 35 leaks or other incidents in the U.S. and Canada since it opened in June 2010.
The records Vokes released document internal safety concerns raised within the Alberta-based energy company, along with the responses from management. Vokes worked at TransCanada for five years, specializing in "non-destructive" examination, which uses tools or visual inspections of the infrastructure without damaging the pipeline.
Don Feusner ran dairy cattle on his 370-acre slice of northern Pennsylvania until he could no longer turn a profit by farming. Then, at age 60, he sold all but a few Angus and aimed for a comfortable retirement on money from drilling his land for natural gas instead.
It seemed promising. Two wells drilled on his lease hit as sweet a spot as the Marcellus shale could offer—tens of millions of cubic feet of natural gas gushed forth. Last December, he received a check for $8,506 for a month's share of the gas.
Then one day in April, Feusner ripped open his royalty envelope to find that while his wells were still producing the same amount of gas, the gusher of cash had slowed. His eyes cascaded down the page to his monthly balance at the bottom: $1,690.
Chesapeake Energy, the company that drilled his wells, was withholding almost 90 percent of Feusner's share of the income to cover unspecified "gathering" expenses and it wasn't explaining why.
"They said you're going to be a millionaire in a couple of years, but none of that has happened," Feusner said. "I guess we're expected to just take whatever they want to give us."
Like every landowner who signs a lease agreement to allow a drilling company to take resources off his land, Feusner is owed a cut of what is produced, called a royalty.
Part 2 of a two-part series on the residents of Mayflower, Ark., who live a short distance from the homes that were evacuated after Exxon's oil spill and who feel neglected. Read Part 1.
MAYFLOWER, Ark.—The Pegasus pipeline runs between Illinois and Texas, over streams, under rivers, through wilds, and under relatively few homes. The fact that it split open underneath a housing development was a twist of bad luck. An independent forensic metallurgical report on the faulty stretch of pipe made note of that coincidence, and gave a half-nod to possible causality: "During construction of the homes, the pipeline may have experienced vehicle loadings caused by construction equipment and/or vehicles crossing the pipeline at multiple locations, including over the fractured segment." All else equal, humans are safer keeping a distance from pipelines, and vice-versa.
Part 1 of a two-part series on the residents of Mayflower, Ark., who live just a short distance from the homes that were evacuated following Exxon's oil spill. Read Part 2.
MAYFLOWER, Ark.—In the week after an oil spill strangled the air in Ann Jarrell's neighborhood, tens of thousands of her bees either died or went mad.
Jarrell has kept bees in her backyard since she moved to Mayflower almost two years ago. Living in the hamlet between Little Rock and Conway has afforded her the chance to be close to her daughter, Jennifer. Behind her three-bedroom brick home, at the corner of her small fenced-in yard, she tended to two beehives. Apiarists select and breed passive bees, and Jarrell's were no different, until they were.
ExxonMobil's Pegasus pipeline ruptured March 29, pouring what the company says was at least 200,000 gallons of oil into Mayflower. For days, the stench blowing from the sour heavy Canadian crude was rank. It was the familiar smell of oil, intensified. "Burning tires," Jarrell said. "It was just putrid. You'd smell it and you would gag." But no one told her it could be any more worrisome than the oil-stink of hot asphalt. Early on, Jarrell called the Mayflower police to ask whether she was in danger. A man on the other end told her she was merely noticing an additive meant to alert people to a leak, like the artificial chemical that gives natural gas its distinct aroma. (That was flatly wrong.) A few days later, an Exxon employee working on the cleanup came near her house, and Jarrell asked about the smell. The woman told her not to fret. "I didn't know what we were breathing in was toxic," Jarrell said recently. "Nobody was giving us any information."
When the Environmental Protection Agency abruptly retreated on its multimillion-dollar investigation into water contamination in a central Wyoming natural gas field last month, it shocked environmentalists and energy industry supporters alike.
In 2011, the agency had issued a blockbuster draft report saying that the controversial practice of fracking was to blame for the pollution of an aquifer deep below the town of Pavillion, Wyo.—the first time such a claim had been based on a scientific analysis.
The study drew heated criticism over its methodology and awaited a peer review that promised to settle the dispute. Now the EPA will instead hand the study over to the state of Wyoming, whose research will be funded by EnCana, the very drilling company whose wells may have caused the contamination.
Industry advocates say the EPA's turnabout reflects an overdue recognition that it had over-reached on fracking and that its science was critically flawed.
But environmentalists see an agency that is systematically disengaging from any research that could be perceived as questioning the safety of fracking or oil drilling, even as President Obama lays out a plan to combat climate change that rests heavily on the use of natural gas.
InsideClimate News reporters Elizabeth McGowan, Lisa Song and David Hasemyer are the winners of this year's Pulitzer Prize for national reporting.
The trio took top honors in the category for their work on "The Dilbit Disaster: Inside the Biggest Oil Spill You've Never Heard Of," a project that began with a seven-month investigation into the million-gallon spill of Canadian tar sands oil into the Kalamazoo River in 2010. It broadened into an examination of national pipeline safety issues, and how unprepared the nation is for the impending flood of imports of a more corrosive and more dangerous form of oil.
The Pulitzer committee commended the reporters for their "rigorous reports on flawed regulation of the nation's oil pipelines, focusing on potential ecological dangers posed by diluted bitumen (or "dilbit"), a controversial form of oil."
A primary concern about the proposed Keystone XL oil pipeline is that a leak would contaminate the Ogallala aquifer, one of the nation's most important sources of drinking and irrigation water. InsideClimate News is republishing this investigative story from ProPublica because it highlights another risk to U.S. aquifers: The EPA is allowing some of them to be used as dumping grounds.
Federal officials have given energy and mining companies permission to pollute aquifers in more than 1,500 places across the country, releasing toxic material into underground reservoirs that help supply more than half of the nation's drinking water.
In many cases, the Environmental Protection Agency has granted these so-called aquifer exemptions in Western states now stricken by drought and increasingly desperate for water.
EPA records show that portions of at least 100 drinking water aquifers have been written off because exemptions have allowed them to be used as dumping grounds.
"You are sacrificing these aquifers," said Mark Williams, a hydrologist at the University of Colorado and a member of a National Science Foundation team studying the effects of energy development on the environment. "By definition, you are putting pollution into them. ... If you are looking 50 to 100 years down the road, this is not a good way to go."