This Changes Everything (35 page)

We also know, from experience in the U.S., that cheap and abundant natural gas doesn’t replace only coal but also potential power from renewables. This has led the Tyndall Centre’s Kevin Anderson to conclude, “If
we are serious about avoiding dangerous climate change, the only safe place for shale gas remains in the ground.” Biologist Sandra Steingraber of New Yorkers Against Fracking puts the stark choice like this: we are “standing at an energy crossroads. One signpost points to a future powered by digging fossils from the ground and lighting them on fire. The other points to renewable energy. You cannot
go in both directions at once. Subsidizing the infrastructure for one creates disincentives for the other.”
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Even more critically, many experts are convinced that we do not need unconventional fuels like fracked gas to make a full transition to renewables. Mark Z. Jacobson, the Stanford engineering professor who coauthored the road map for reaching 100 percent renewable energy by 2030, says
that conventional fossil fuels can power the transition and keep the lights on in the meantime. “We don’t need unconventional fuels to produce
the infrastructure to convert to entirely clean and renewable wind, water, and solar power for all purposes. We can rely on the existing infrastructure plus the new infrastructure [of renewable generation] to provide the energy for producing the rest of
the clean infrastructure that we’ll need,” he said in an interview, adding, “Conventional oil and gas is much more than enough.”
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How have the Big Green groups responded to this new information? Some, like the NRDC, have cooled off from their earlier support, acknowledging the risks and pushing for tougher regulations while still advocating natural gas as a replacement for coal and other dirty
fuels. But others have chosen to dig in even deeper. The Environmental Defense Fund and the Nature Conservancy, for example, have responded to revelations about the huge risks associated with natural gas by undertaking a series of initiatives that give the distinct impression that fracking is on the cusp of becoming clean and safe. And as usual, much of the funding for this work has strong links
to the fossil fuel sector.

The Nature Conservancy, for its part, has received hundreds of thousands of dollars from JP Morgan to come up with voluntary rules for fracking. JP Morgan, unsurprisingly, is a leading financier of the industry, with at least a hundred major clients who frack, according to the bank’s top environmental executive, Matthew Arnold. (“We are number one or number two in any
given year in the oil and gas industry worldwide,” Arnold told
The Guardian
in February 2013.) The conservancy also has a high-profile partnership with BP in Wyoming’s Jonah Field, a huge fracking-for-gas operation in an area rich with vulnerable wildlife. The Nature Conservancy’s job has been to identify habitat preservation and conservation projects to “offset the impacts of oil and gas drilling
pads and infrastructure.” From a climate change perspective, this is an absurd proposition, since these projects have no hope of offsetting the most damaging impact of all: the release of heat-trapping gases into the atmosphere. Which is why the most important preservation work that any environmental group can do is preserving the carbon in the ground, wherever it is. (Then again, this is The
Nature Conservancy, which has its very own gas well in the middle of a nature preserve in Texas).
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Similarly, the EDF has teamed up with several large energy companies
to open the Center for Sustainable Shale Development (CSSD)—and as many have pointed out, the very name of the center makes it clear that it will not be questioning whether “sustainable” extraction of fossil fuels from shale is
possible in the age of climate change. The center has advanced a set of voluntary industry standards that its members claim will gradually make fracking safer. But as then–Demos senior policy analyst J. Mijin Cha pointed out, “The Center’s new standards . . . are not enforceable. If anything, they provide cover for oil and gas interests that want to derail the transition to a clean economy powered
by renewable energy.”
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One of the center’s key funders is the Heinz Endowments, which as it turns out, was no disinterested party. A June 2013 investigation by the Public Accountability Initiative reported that, “The Heinz Endowments, has significant, undisclosed ties to the natural gas industry. . . . Heinz Endowments president Robert F. Vagt is currently a director at Kinder Morgan, a natural
gas pipeline company, and owns more than $1.2 million in company stock. This is not disclosed on the Heinz Endowments website or the website of CSSD, where Vagt serves as a director. Kinder Morgan has cited increased regulation of fracking as a key business risk in recent corporate filings.” (After the controversy broke, Heinz Endowments appeared to move away from some of its earlier pro-gas positions
and went through a significant staffing shakeup, including the resignation of Vagt as foundation president in early 2014.)
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The EDF has also received a $6 million grant from the foundation of New York’s billionaire ex-mayor Michael Bloomberg (who is strongly pro-fracking), specifically to develop and secure regulations intended to make fracking safe—once again, not to impartially assess whether
such an outcome is even possible. And Bloomerg is no impartial observer in all this. The former mayor’s personal and philanthropic fortune—worth over $30 billion—is managed by investment firm Willett Advisors, which was established by Bloomberg and his associates. According to
Bloomberg Businessweek
, and confirmed by Bloomberg Philanthropies (which shares a building with the firm), Willett “invests
in real assets focusing on oil and natural gas areas.” Michael Bloomberg did not respond to repeated requests for comment.
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The EDF has done more than help the fracking industry appear to be
taking environmental concerns seriously. It also led research that has been used to counter claims that high methane leakage disqualifies fracked natural gas as a climate solution. The EDF has partnered
with Shell, Chevron, and other top energy companies on one in a series of studies on methane leaks with the clear goal, as one EDF official put it, of helping “natural gas to be an accepted part of a strategy for improving energy security and moving to a clean energy future.” When the first study arrived in September 2013, published in
Proceedings of the National Academy of Sciences,
it made news
by identifying fugitive methane leakage rates from gas extraction that were ten to twenty times lower than those in most other studies to date.
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But the study’s design contained serious limitations, the most glaring of which was allowing the gas companies to choose the wells they wanted inspected. Robert Howarth, the lead author of the breakthrough 2011 Cornell study on the same subject, pointed
out that the EDF’s findings were “based only on evaluation of sites and times chosen by industry,” and that the paper “must be viewed as a best-case scenario,” rather than a reflection of how the industry functions as a whole. He added, “The gas industry can produce gas with relatively low emissions, but they very often do not do so. They do better when they know they are being carefully watched.”
These concerns, however, were entirely upstaged by the priceless headlines inspired by the Environmental Defense Fund study: “Study: Leaks at Natural Gas Wells Less Than Previously Thought” (
Time
); “Study: Methane Leaks from Gas Drilling Not Huge” (Associated Press); “Fracking Methane Fears Overdone” (
The Australian
); and so on.
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The result of all this has been a great deal of public uncertainty.
Is fracking safe after all? Is it about to become safe? Is it clean or dirty? Like the well-understood strategy of sowing doubts about the science of climate change, this confusion effectively undermines the momentum away from fossil fuels and toward renewable energy. As Josh Fox, the director of the Academy Award–nominated documentary on fracking,
Gasland
, puts it: “I think that what’s happening
here is a squandering of the greatest political will that we’ve ever had towards getting off of fossil fuels.”
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Because while green groups battle over the research and voluntary codes, the gas companies are continuing to drill, leak, and pour billions of dollars into new infrastructure designed to last for many decades.

When governments began negotiating the international
climate treaty that would become the Kyoto Protocol, there was broad consensus about what the agreement needed to accomplish. The wealthy, industrialized countries responsible for the lion’s share of historical emissions would have to lead by capping their emissions at a fixed level and then systematically reducing them. The European Union and developing countries assumed that governments would
do this by putting in place strong domestic measures to reduce emissions at home, for example by taxing carbon, and beginning a shift to renewable energy.

But when the Clinton administration came to the negotiations, it proposed an alternate route: create a system of international carbon trading modeled on the cap-and-trade system used to address acid rain (in the run-up to Kyoto, the EDF worked
closely on the plan with Al Gore’s office).
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Rather than straightforwardly requiring all industrialized countries to lower their greenhouse gas emissions by a fixed amount, the scheme would issue pollution permits, which they could use, sell if they didn’t need them, or purchase so that they could pollute more. National programs would be set up so that companies could similarly trade these permits,
with the country staying within an overall emissions cap. Meanwhile, projects that were employing practices that claimed to be keeping carbon out of the atmosphere—whether by planting trees that sequester carbon, or by producing low carbon energy, or by upgrading a dirty factory to lower its emissions—could qualify for carbon credits. These credits could be purchased by polluters and used to
offset their own emissions.

The U.S. government was so enthusiastic about this approach that it made the inclusion of carbon trading a deal breaker in the Kyoto negotiations. This led to what France’s former environment minister Dominique Voynet described as “radically antagonistic” conflicts between the United States and Europe, which saw the creation of a global carbon market as tantamount
to abandoning the climate crisis to “the law of the jungle.” Angela Merkel, then Germany’s environment minister, insisted, “The aim cannot be for industrialized countries to satisfy their obligations solely through emissions trading and profit.”
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It is one of the great ironies of environmental history that the United States—after winning this pitched battle at the negotiating table—would fail
to ratify the Kyoto Protocol, and that the most important emissions market would become a reality in Europe, where it was opposed from the outset. The European Union’s Emissions Trading System (ETS) was launched in 2005 and would go on to become closely integrated with the United Nations’ Clean Development Mechanism (CDM), which was written into the Kyoto Protocol. At least initially, the markets
seemed to take off. From 2005 through 2010, the World Bank estimates that the various carbon markets around the globe saw over $500 billion in trades (though some experts believe those estimates are inflated). Huge numbers of projects around the world, meanwhile, are generating carbon credits—the CDM alone had an estimated seven-thousand-plus registered projects in early 2014.
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But it didn’t
take long for the flaws in the plan to show. Under the U.N. system, all kinds of dodgy industrial projects can generate lucrative credits. For instance, oil companies operating in the Niger Delta that practice “flaring”—setting fire to the natural gas released in the oil drilling process because capturing and using the potent greenhouse gas is more expensive than burning it—have argued that they
should be paid if they stop engaging in this enormously destructive practice. And indeed some are already registered to receive carbon credits under the U.N. system for no longer flaring—despite the fact that gas flaring has been illegal in Nigeria since 1984 (it’s a law filled with holes and is largely ignored).
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Even a highly polluting factory that installs a piece of equipment that keeps a
greenhouse gas out of the atmosphere can qualify as “green development” under U.N. rules. And this, in turn, is used to justify more dirty emissions somewhere else.

The most embarrassing controversy for defenders of this model involves coolant factories in India and China that emit the highly potent greenhouse gas HFC-23 as a by-product. By installing relatively inexpensive equipment to destroy
the gas (with a plasma torch, for example) rather than venting it into the air, these factories—most of which produce gases used for air-conditioning and refrigeration—have generated tens of millions of dollars in emission credits every year. The scheme is so lucrative, in fact, that it has triggered a series of perverse incentives: in some cases, companies can earn twice as much by destroying
an unintentional by-product as they can
from making their primary product, which is itself emissions intensive. In the most egregious instance of this, selling carbon credits constituted a jaw-dropping 93.4 percent of one Indian firm’s total revenues in 2012.
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According to one group that petitioned the U.N. to change its policies on HFC-23 projects, there is “overwhelming evidence that manufacturers
are gaming” the system “by producing more potent greenhouse gases just so they can get paid to destroy them.”
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But it gets worse: the primary product made by these factories is a type of coolant that is so damaging to the ozone that it is being phased out under the Montreal Protocol on ozone depletion.

And this is not some marginal piece of the world emissions market—as of 2012, the U.N. system
awarded these coolant manufacturers its largest share of emission credits, more than any genuinely clean energy projects.
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Since then, the U.N. has enacted some partial reforms, and the European Union has banned credits from these factories in its carbon market.