Ecology & Environment (E & E), the New York Department of Environmental Conservation (DEC) contractor whose membership in the lobbying group Independent Oil and Gas Association (IOGA) of New York set off alarm bells, “clarified” its relationship with the organization last week.
In a letter released April 24, E & E asserted that it was never a member of IOGA, though it had previously paid an employee’s membership fees “in order to attend IOGANY’s Conferences and receive its newsletter to be kept apprised of new technical developments in the industry and develop industry contacts.” The environmental consultant castigated IOGA for not obtaining authorization to name Ecology & Environment in its letter to Andrew Cuomo pushing to move forward with fracking in New York State. E & E also declared that it had directed its employee to terminate his IOGA membership.
According to the April 24 letter, “E & E’s nationwide policy has been to not take any position on fracking and only provide objective environmental consulting;” however, the company has a financial interest in New York’s approving the practice evinced in corporate financial reports and past work for oil and gas companies. E & E has also been criticized for its overly optimistic prediction of fracking’s economic effects written on contract for the DEC and further has ties to a now-defunct fracking research institute at the University at Buffalo that incorrectly reported that the incidence of major environmental citations had declined in Pennsylvania.
Financial interest in fracking
Although Ecology & Environment claims to be neutral on the fracking issue, the company stands to gain financially if it is allowed in New York. In its 2010 annual report, E & E wrote:
E & E’s management recognized early on that the oil and gas industry provided outstanding opportunities for commercial consulting contracts due to federal and state permitting requirements for new facilities.
In its most recent 10-K filing with the Securities and Exchange Commission, E & E identifies “unconventional natural gas development” as a business area:
Recent advances in gas drilling techniques have opened “shale gas” reserves for development. E&E has positioned itself to respond to industry demands for permitting well development and take away pipelines required to move shale gas to market.
E & E’s 10-K from 2011 had the same language, followed by: “The company is currently working in the Marcellus and Barnett Shale Gas Reserves.”
Work that E & E has done for the oil and gas includes “play[ing] a key role in the development of El Paso Corporation’s 680-mile (1,094-km) Ruby Natural Gas Pipeline,” and reports supporting the permitting of the Williams Companies’ Transcontinental Pipeline that stretches from South Texas to New York City.
Ecology & Environment has also lent its name to a report by National Fuel Gas titled “Natural Gas: Nature’s Choice for Clean Energy,” providing technical review for a company booklet encouraging people to use more natural gas.
“Thin” economic analysis
E & E’s business serving the oil and gas industry aroused suspicions in 2011 when the company and the DEC released the Economic Assessment Report the company prepared to support the state’s Supplemental Generic Environmental Impact Statement (SGEIS) evaluating the potential impacts associated with permitting fracking.
The analysis, for which E & E was paid $223,000, predicted that fracking would add nearly 25,000 jobs and $1.7 billion in wages to New York State’s economy.
This forecast was criticized by the economists Jannette Barth, Edward Kokkelenberg, and Timothy Mount for relying too heavily on assumptions about the amount of gas produced and the lifespan of an average gas well, for glossing over negative economic effects from fracking such as reduced property values and decreased tourism revenue, and for overestimating tax revenue projections from fracking, among a litany of other concerns.
The group Food & Water Watch also issued a report that criticized E & E’s analysis and raised many of the same issues as Barth, Kokkelenberg, and Mount. Focusing on the fact that many shale gas workers in Pennsylvania come from out of state and the 30-year timescale of the E & E study, Food and Water Watch concluded that fracking would only add around 600 jobs to New York’s economy in the first 10 years of an average development scenario.
In the wake of this criticism, DEC Commissioner Joseph Martens tasked E & E with expanding their socioeconomic study in the areas where it was “a little thin.” According to Martens, this additional study has been completed, though details will not be available until the DEC releases the latest iteration of the regulatory review.
Ties to fracking institute at University at Buffalo
E & E also has ties to the now-defunct Shale Resources and Society Institute (SRSI) at the University at Buffalo. In May 2012, SRSI published a study that inaccurately downplayed the environmental risks from fracking – researchers either misread or misrepresented Pennsylvania Department of Environmental Protections data, claiming that major environmental incidences declined from 2008 to 2011 when they actually increased – which led to an inquiry from the State University of New York Trustees and resulted in the Institute’s closure.
The Institute’s director and co-author of the study, John P Martin, was employed by Ecology & Environment as a senior advisor according to a presentation about fracking he made in Jakarta, Indonesia in February 2012. Martin also operates an energy consulting firm that “provides strategic planning, resource evaluation, project management and government/public relations services to the energy industry, academic institutions and governments.”
An Ecology & Environment employee was also a member of the five-person review panel that missed the error in arithmetic that led the SRSI authors to their incorrect conclusion. George Rusk, a regulatory specialist and vice president at E & E, was tasked with reviewing SRSI’s report and providing comments to its authors. Presumably neither Rusk nor the four other reviewers in his cohort noticed the report’s fatal math error as the study contained and relied on this flaw for its central conclusion both as originally published and in a revised version.
While Ecology and Environment maintains that its membership in the Independent Oil and Gas Association was misrepresented in the letter IOGA executive director Brad Gill sent to Governor Cuomo, the consulting firm has significant ties to the oil and gas industry as well as a stated financial interest in unconventional natural gas development. On top of this, E & E has a history of signing onto reports used to promote natural gas, all of which amounts to a substantial conflict of interest for a company hired to perform an objective study of fracking for New York’s environmental regulators.
Combined with the revelation that other contractors, URS Corporation and Alpha Geoscience, that worked on the fracking Environmental Impact Statement had similar affiliations with IOGA, and that the DEC hired Norse Energy and EQT consultant (and SRSI co-director with John Martin) Robert Jacobi to study fracking’s seismologic impact, Ecology & Environment’s conflicts raise serious questions about the independence and objectivity of New York’s fracking review.