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Deep Drilling, Deep Pockets in Congress (Nov 2011)

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Natural gas interests have spent more than $747 million during a 10-year campaign – stunningly successful so far – to avoid government regulation of hydraulic “fracking,” a fast-growing and environmentally risky method of tapping underground gas reserves, according to a new study by Common Cause.A faction of the natural gas industry has directed more than $20 million to the campaigns of current members of Congress and put $726 million into lobbying aimed at shielding itself from oversight, according to the report, the third in a series of “Deep Drilling, Deep Pockets” reports produced by the non-profit government watchdog group.

Text of Deep Drilling, Deep Pockets in Congress (Nov 2011)

James Browning & Alex Kaplan November 10, 2011

DEEP DRILLING, DEEP POCKETS IN CONGRESS

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About Common CauseCommon Cause is a nonpartisan, nonprofit advocacy organization founded in 1970 by John Gardner as a vehicle for citizens to make their voices heard in the political process and to hold their elected leaders accountable to the public interest. Today, Common Cause is one of the most active, effective, and respected nonprofit organizations working for political change in America. Common Cause strives to strengthen our democracy by empowering our members, supporters and the general public to take action on critical policy issues. In this spirit, Common Cause serves as an independent voice for change and a watchdog against corruption and abuse of power. Together with our sister organization, the Common Cause Education Fund, we employ a powerful combination of grassroots organizing, coalition building, research, policy development, public education, lobbying and litigation to win reform at all levels of government.

1133 19th Street NW | Washington, D.C. 20036 | 202-833-1200 | Grassroots@CommonCause.org www.CommonCause.org | www.CommonBlog.com | Facebook.com/CommonCause | @CommonCause

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Table of ContentsExecutive Summary Key Findings Fracking Money in Politics Campaign Contributions Lobbying Expenditures Independent Political Expenditures Regulation Failure to Regulate Can the Natural Gas Industry Regulate Itself? Regulation in the States Conclusion Recommendations About This Report References Page 1 Page 3 Page 5 Page 5 Page 7 Page 8 Page 9 Page 9 Page 10 Page 10 Page 13 Page 13 Page 14 Page 17

List of Charts and Figures1. Fracking Industry PAC and Employee Campaign Contributions (graph) 2. Fracking Industry Lobbying Expenditures (graph) 3. Fracking money by vote on the Halliburton Loophole (chart) 4. Av. fracking money received by vote on the 2005 Energy Policy Act (graph) 5. Top 10 fracking entities by PAC and employee campaign contributions (chart) 6. Fracking money to energy committee members vs. non-members (chart) 7. Fracking money to Republicans vs. Democrats (graphic) 8. Top 10 entities by lobbying expenditures, 2001-2011 (chart) 9. Top 5 entities by lobbying expenditures, 2001-2010 (graph) 10. Top 100 in Congress by money received from the fracking industry (chart) Page 4 Page 4 Page 5 Page 5 Page 6 Page 6 Page 6 Page 7 Page 7 Page 15

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Executive SummaryA faction of the natural gas industry has invested more than $747 million as part of a 10-year lobbying and political spending campaign to persuade federal authorities to ignore the dangers of hydraulic fracturing, or fracking, a rapidly expanding but poorly regulated method of tapping gas reserves. Fracking involves injecting a mix of sand, chemicals, and water into a well at high pressure in order to break up underground rock formations and free up natural gas. Pollution may occur underground, with fracking chemicals or methane directly contaminating aquifers and drinking wells, or above ground, as streams or tributaries are polluted by spills or improper wastewater disposal.

Nationwide, more than 1,000 complaints of water contamination due to fracking have already been reported.1 Natural gas obtained from fracking and horizontal drilling in shale deposits a combination which produces massive amounts of toxic wastewater will rise from 16 percent of all U.S. natural gas production in 2009 to 45 percent by 2035, according to the U.S. Department of Energy.2 Despite the pollution risks, the industry has argued that regulatory exemptions for fracking are needed to give America the opportunity to tap vast reserves of natural gas that have been previously unobtainable, generate millions of new jobs, reduce energy costs for the American consumer, and dramatically reduce Americas dependence on foreign oil. This is an impressive listsuggesting a cure-all for some of Americas biggest domestic and foreign challenges.

From 2001 through June 2011, the fracking industry gave $20.5 million to current members of Congress and spent $726 million on lobbying.

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Such promises have helped the natural gas industry systematically exempt themselves from most major environmental laws, according to Dusty Horwitt, Senior Counsel for the Environmental Working Group, and author of the 2010 study Drilling Around the Law. With little federal regulation in place, the public has been left to rely on industry promises to limit the use of harmful substances in the fracking processpromises which have been repeatedly broken. The EPA is scheduled to publish new, preliminary findings about the potential dangers of fracking in 2012. That gives the natural gas industry a powerful incentive to increase its political spending now in an

attempt to shape public opinion and the debate over fracking in Congress, as well as affect the outcome of the 2012 Congressional elections. Doing so will be much easier after last years U.S. Supreme Court ruling in Citizens United. This ruling threw out a century-old ban on corporate spending around elections and empowered corporations to exert even more influence over the political process. Now money spent on campaign contributions, lobbying, and through other avenues of influence such as the American Legislative Exchange Council (ALEC) can be backed by millions spent on electioneering.

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Key Findings From 2001 through June 2011, companies now engaged in fracking contributed $20.5 million to current members of Congress. Industry giving more than tripled from the 2001-02 election cycle, when $2 million was contributed, to the 2009-10 election cycle, when $6.8 million was contributed. These same companies spent $726 million on lobbying at the federal level from 2001 through September, 2011. Contributions heavily favored current members of Congress who voted for the 2005 Energy Policy Act, which exempted fracking from regulation under the Safe Drinking Water Act. Current members who voted for the bill received an average of $73,433, while those who voted against the bill received an average of $10,894. Current members of the Senate Committee on the Environment and Public Works have received a total of $1.4 million from the industry. Current members of the House Energy and Commerce Committee have received a total of $3.7 million from the industry. Chair Rep. Fred Upton (R-MI) has received $153,917 from the industry and Committee member Rep. Joe Barton (R-TX) is the single-biggest recipient of fracking money in Congress with $514,945. The natural gas industrys fight against regulation has gotten important help at the state level from the American Legislative Exchange Council (ALEC). As documented in an August 2011 Common Cause report, ALEC generates and lobbies for hundreds of model bills every year despite its status as a tax-exempt 501 (c)(3) organization. Prominent financial backers of ALECs activities include the American Petroleum Institute, ExxonMobil, and Koch Industries, owner of the largest network of natural gastransmitting pipelines in the country. The natural gas industrys political expenditures have been used to target supporters of the FRAC Act, which would regulate fracking under the Safe Drinking Water Act and require disclosure of chemicals used in the fracking process. For example, in 2010, the industry gave $3 million to American Crossroads which in turn spent $533,000 in an attempt to defeat FRAC Act sponsor U.S. Rep. Maurice Hinchey (D-NY).

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Fracking Industry PAC and Employee Campaign Contributions, 2001-20105,000,000 4,500,000 4,000,000 3,500,000 Total in Dollars 3,000,000 2,500,000 2,000,000 1,500,000 1,295,178 1,486,132 1,646,124 1,697,182 2,274,194 3,306,972 4,573,727

1,000,000500,000 0 2001 2002 2003 2004 700,438 703,070

896,339

2005

2006

2007

2008

2009

2010

Figure 2

Fracking Industry Lobbying Expenditures, 2001-2010160

144.3140 Total in Millions of Dollars 120 100 80 60 52.1 40 20 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 29.1 37 35.7 34 44 62.3 102.2 110.2

Fracking Money in PoliticsCampaign ContributionsData was retrieved from the Federal Election Commission and represent contributions made from January 1, 2001 through June 30, 2011. Custom databases were built and searched for contributions relating to the PACs and employees of the relevant companies and organizations described in the list available at the below link. Download the entire data sheet at www.commoncause.org/fracking2012

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Figure 3 Fracking money by vote on the 2005 Energy Policy Act / Halliburton Loophole

House In Favor House Against House not in office in 2005 Senate In Favor Senate Against Senate not in office in 2005

Total Count Average $8,655,233 137 $63,117 $1,243,528 123 $10,110 $2,980,647 173 $17,229 $4,931,832 48 $102,747 $172,700 7 $24,671 $2,115,006 43 $49,186

6.2x

4.1x

Figure 4 Average fracking money received by vote on the 2005 Energy Policy Act$102,747 $63,117

$120,000

$100,000$80,000 $60,000 $40,000 $20,000 $0 House In Favor House Against House not in office Senate In Favor Senate Against Senate not in office $10,110 $17,229 $24,671

$49,186

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Fracking PAC total 2001 June 2011 $16,236,806

Fracking employee total 2001 June 2011 $4,250,851

Fracking industry total2001 June 2011 $20,487,657

Figure 5 Top 10 fracking entities by PAC and employee campaign contributionsEntity Exxon Mobil Chevron ConocoPhillips Occidental Petroleum DTE Energy Williams Marathon Oil American Gas Association Ind. Petro. Assoc. of Amer. Anadarko Total $2,843,443 $1,572,175 $1,399,600 $1,197,218 $1,083,392 $1,000,300 $961,350 $926,022 $898,500 $836,000 PAC Employee $2,563,543 $279,900 $1,401,825 $170,350

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