North Carolina and Virginia Businesses Oppose Atlantic Offshore Drilling

Outer Banks beach

If one lives in the Hampton Roads area of Virginia or the Outer Banks of North Carolina, after the military and the U.S. government spending, the number one driver of the economy is tourism, especially tourism focused on the regions' beaches and waterways.  As I have noted before on this blog, years ago I was in-house counsel for a Fortune 50 company's oil and gas subsidiary, so I do know a thing or two about oil and gas explorations and offshore drilling (I even negotiated concession agreements with foreign governments).  While no oil company wants a drilling disaster, as the BP nightmare in the Gulf of Mexico made clear, accidents do happen and the economic and environmental consequences are dire.    Here are highlights from Think Progress on opposition to Atlantic offshore drilling:

For coastal companies that depend on a healthy stream of tourists to keep business healthy, the prospect of drilling in the Atlantic Ocean means one thing: spills that will sully beaches and drive visitors away.

More than 300 Atlantic coast businesses sent a letter to President Obama Thursday, urging him to take back his administration’s proposal to allow drilling in the Atlantic Ocean. In January, the Obama administration announced a proposal to sell oil and gas leases in offshore sites from Virginia to Georgia.

In the letter, the businesses outline the economic risk posed by offshore drilling, saying that monetary losses due to lost tourism revenue could be “devastating.” They also note that the Energy Information Administration estimates that the Atlantic Ocean holds only about 209 days’ worth of oil and 13 months’ worth of natural gas.

“Offshore drilling is incompatible with our tourism and fishing industries. When you drill, you spill, and day to day drilling operations result in chronic pollution and the industrialization of the coast for oil facilities,” the letter reads. “Look no further than the devastation the BP Deepwater Horizon catastrophe brought to the Gulf of Mexico’s fishing, tourism and wildlife to recognize the impact drilling would have here on the Atlantic Coast.”

Jeff Downey, owner of the Savannah, Georgia restaurant Circa 1875 and one of the signatories of the letter, said on a press call Thursday that about 85 percent of his business during the summer comes from tourists.
“If they allow offshore drilling, it will ruin our coasts first of all, and people will just stop coming,” he said. Savannah is in a hurricane zone, he said, and though hurricanes there have been rare over the last century, he worries a major storm could damage a drilling rig and cause a spill.

Cola Vaughan, owner of Cola Vaughan Realty on North Carolina’s Outer Banks, was another one of the business owners who signed on to the letter. He said businesses in the Outer Banks depend heavily on pristine beaches to attract visitors, and that even a “perceived threat” of spills would cause potential vacationers to think twice about choosing the Outer Banks.
It makes sense for businesses to be worried about a major spill. The Deepwater Horizon disaster, which killed 11 people and sent millions of barrels of oil into the Gulf of Mexico, took a toll on Gulf businesses. An estimated $22.7 billion in Gulf tourism money was lost from 2010 through 2013 because of the spill.  

The 300 businesses hope adding their names to the opposition will help convince the administration to give up plans for Atlantic drilling. 

“Our coasts are worth too much to risk,” they write in the letter. “Rather than exposing our beaches, families and businesses to the inherent risks of drilling, we need to move this country in the direction of renewable energy.”

In the interest of full disclosure, the husband and I live on a tidal creek, and a major oil spill offshore from Hampton Roads could foul the creek behind our home.

Our backyard and Robinson Creek last fall

Consol Energy - Ken Cuccinelli's Most Serious Conflict of Interest/Ethics Problem

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Even though he has donated $18,000 to a charity - a charity run by some of his large donors - in an effort to deflect the ongoing "Gift Gate" scandal arising from gifts he received from Jonnie R. Williams, Sr./Star Scientific, Ken Cuccinelli continues to take a beating and is accused of doing too little too late.  But by far the largest ethical/conflict of interest problem for Kookinelli is that relating to Consol Energy and the improper assistance Cuccinelli's office gave to private litigants in a civil lawsuit against Virginia landowners.   The Virginia news media should be jumping on this issue non-stop.  Given the timing of the AG's office's improper assistance and the subsequent large contributions made to Cuccinelli's campaign by the beneficiaries of such improper assistance, it is difficult to see the contributions as anything other than payments made in exchange for favorable treatment.  Another word for such payments might be bribes.   

As noted before in prior posts, I find it inconceivable that a senior Assistant Attorney General would have provided assistance to the energy company litigants without directives from above.  From my many dealings with the AG's office, such things simply do not happen and Cuccinelli's claims that he knew nothing about it just do not ring true.   From my experience in the oil and gas industry (both with a law firm representing energy companies and as in-house counsel for the oil and gas subsidiary of a Fortune 50 company), this type of assistance is NOT normal and simply does not happen under normal circumstances.  In short, it is difficult to explain why the improper assistance occurred except Cuccinelli's use of his office to benefit contributors in exchange for money.  In my view, the FBI needs to be investigating Cuccinelli for this behavior which would seem to be directly tied to very large campaign contributions.  A piece in The Checks and Balances Project lays out a timeline that shows that Cuccinelli's lies explanations to date do not add up.  Here are highlights:

The unfolding controversy around Attorney General Ken Cuccinelli’s involvement with CONSOL Energy Inc., a Pittsburgh-based fossil fuel (oil, gas and coal) company, has focused on the widely criticized assistance his office provided the company. It also has focused on the total amount of money Cuccinelli has received from CONSOL.

When forced to respond to C&BP recently, Cuccinelli has asserted the company “gave me $100,000 after I opposed them.” A comparison of the timing of contributions and actions that favored CONSOL paint a very different picture.

In the first eight years of Mr. Cuccinelli’s political career (state senate), his campaigns received a total of $3,500 from CONSOL. However, once elected to Attorney General, his office began taking actions that favored CONSOL and disadvantaged southwestern Virginia landowners who hadn’t been paid by CONSOL. A comparison of the timelines of actions and money show a pattern of accelerating support as favorable actions increased, bringing a total of $140,000 to Cuccinelli after the actions favorable to CONSOL began.

In June 2010, Mr. Cuccinelli issued an advisory opinion that limited the jurisdiction of the Virginia Gas and Oil Board that forced Virginia landowners to go to court over royalty payments, a move clearly in CONSOL Energy’s favor.

Two months later, in August 2010, his office sided with CONSOL and against Virginians in a lawsuit to recover improperly withheld royalties, helping the out-of-state oil company defend against a claim by Virginia landowners.

From August 2010 through April 2012, Cuccinelli’s office (through a Senior Assistant Attorney General Sharon Pigeon) began secretly providing legal research and advice to CONSOL’s attorneys regarding the lawsuit, outside of the scope of the AG office’s official capacity. The Virginia Inspector General is now investigating to determine whether the AG’s office misused taxpayer funds.

Finally, Mr. Cuccinelli, helped CONSOL again earlier this year when he issued another advisory opinion that barred local jurisdictions from using zoning laws to establish fracking moratoriums.

This situation stinks to high heaven and Virginia voters and taxpayers deserve answers as to why Cuccinelli was improperly assisting out of state energy companies against Virginia landowners and taxpayers.  To date, Cuccinelli runs from reporters when asked about this very dirty business. 

 

Ken Cuccinelli's Explanation of Aid to Gas Companies Begins to Unravel

Not to beat a dead horse, but as previously noted, NEVER, EVER in my experience as an attorney working in the oil and gas industry did I see a state attorney general's office aiding oil and gas companies in civil litigation matters against landowners over royalty payments.  So-called "force pooling" statutes and regulations - which assembly a group of leases to provide a viable exploration sites for wells - have been around for many decades.  Cuccinelli's office had no legitimate reason to be advising gas companies on litigation strategy, etc.  Absolutely none.  Now, as the Virginian Pilot states in a main page editorial, Cuccinelli's bogus explanation is unraveling big time.  One can only hope that Terry McAuliffe hammers this message home to residents of Southwest Virginia.  Here are editorial highlights:

Attorney General Ken Cuccinelli's credibility suffered another blow recently, after a southwestern Virginia newspaper unearthed records showing a senior assistant in his office communicated through email dozens of times with attorneys representing energy companies in a lawsuit filed by property owners.

Sharon Pigeon, a senior assistant attorney general, "sent at least 52 emails to lawyers of defendants EQT Production and CNX Gas since lawsuits were filed three years ago," the Bristol Herald Courier reported. Consol Energy, the parent of CNX, has contributed more than $100,000 to Cuccinelli's gubernatorial campaign since last year.

And the details simply magnify the concerns expressed by a federal judge three months ago, when she described the attorney's correspondence with the energy companies' legal counsel as "shocking."

The attorney general previously claimed Pigeon's role was limited to defending the constitutionality of the Virginia Gas and Oil Act. But the latest reporting shows there were few, if any, limits to Pigeon's advice, and a federal judge said she found no indication of advice pertaining to constitutional issues, the Bristol paper reported.

"Instead, Pigeon's emails appear to have focused on such topics as the effect of a jury pool, judicial orders and other case issues, suggest references in court documents. She sent many of those emails months after a senior judge ruled on the constitutional challenges and after the attorney general's office dropped out of the case."

The state inspector general is investigating whether Pigeon inappropriately used state resources, but he cannot investigate whether the attorney general had any direct involvement, or direct knowledge, of her actions unless the governor, or the attorney general himself, or a grand jury, requests he do so.

Cuccinelli's initial bid to explain Pigeon's conduct has boomeranged. His only recourse for trying to salvage credibility on the subject now appears to be to draw the same kind of independent scrutiny that he brought on himself this spring, after revising his incomplete financial disclosure forms.

After 36 years in the legal profession, I find it inconceivable that a senior assistant attorney general would have acted as Ms. Pigeon did without directives from above.  There seemingly is no other explanation.  Well, there is one: the over $100,000 Cuccinelli received from the parent company of one of the gas company litigants.    The man is dirty and a liar, in my view.  

 

Dozens of Improper E-mails Surface from Cuccinelli's Office to Gas Company

Yesterday I wrote about the growing scandal that Ken Cuccinelli is facing arising from his office's improper assistance to a gas company litigant in a lawsuit brought by Virginia landowners to recovery gas royalties.  As noted in that post, from my experience as a former in-house attorney to an oil company who is familiar with Virginia's Oil and Gas Act, there is no legitimate basis for the AG's office to have been assisting the gas company litigants.  Now, the Bristol Herald Courier is reporting that a slew of additional e-mails from one of Cuccinelli's assistant attorney generals assisting an oil and gas company owned by one of his biggest campaign contributors have surfaced.  The bottom line message to be learned is that Cuccinelli is lying about his involvement in what increasingly appears to be improper intervention in a private civil lawsuit in exchange for over $100,000 in cash contributions.  If Bob McDonnell has a problem with the feds, then Cuccinelli does as well, but even more so.  Here are highlights from the Herald Courier:

ABINGDON, Va. — Court records show that an assistant attorney general sent dozens of emails to lawyers representing the two energy companies now being sued in a federal class-action case over natural gas royalties in Southwest Virginia.

This is in addition to a series of five emails that came to light months ago, when a federal magistrate judge criticized the staffer for appearing to advise the lawyers on how to fight the lawsuits.

With the larger batch of emails, the magistrate judge eventually ruled that nearly half failed to meet the common-interest legal doctrine that state Attorney General Ken Cuccinelli now insists allowed his staff member to ethically communicate with those lawyers.

Pigeon sent at least 52 emails to lawyers of defendants EQT Production and CNX Gas since the lawsuits were filed three years ago, reveals a Herald Courier review of court documents filed in U.S. District Court in Abingdon.

In June, the attorney general said his office joined the court cases only to fight constitutional challenges to the Virginia Gas and Oil Act, which is at the heart of a series of lawsuits seeking at least $28 million in natural gas royalties now held in state-mandated escrow accounts set up and monitored by the Gas and Oil Board.

Speculation over the relationship between the state’s highest legal office and corporate lawyers has become a political hot topic: Cuccinelli is the Republican candidate vying with Democrat Terry McAuliffe for the governor’s seat, up for grabs in November.

Adding to the fire is the role CNX parent company CONSOL Energy has as one of the top financial contributors to Cuccinelli’s campaign. The company has funneled $111,044 into his campaign coffers since 2012, according to campaign watchdog Virginia Public Access Project.

Last week, the state’s inspector general confirmed to the Herald Courier that his office is conducting an investigation of whether Pigeon wrongfully advised the energy company lawyers and said it could take months to wrap up.

As for Pigeon’s emails, it was early 2011 when the lawyers seeking the royalties on behalf of a group of Southwest Virginia landowners began to ask for her communications with the corporate attorneys.

Cuccinelli’s office fought the release [of the e-mails] and argued that the common-interest doctrine allows lawyers representing separate clients to trade information as long as they have similar interests.

U.S. Magistrate Pamela Meade Sargent wrote that none of the dozens of emails Pigeon traded with defense lawyers seemed to touch upon any constitutional issues.

Instead, Pigeon’s emails appear to have focused on such topics as the effect of a jury pool, judicial orders and other case issues, suggest references in court documents. She sent many of those emails months after a senior judge ruled on the constitutional challenges and after the attorney general’s office dropped out of the case.

 The AG’s office jumped back into the lawsuits only to fight the plaintiff’s request for the emails.

Something is clearly rotten in this picture.  Personally, from all my dealings with the Attorney General's office over the years, I find it hard to believe that Pigeon advised the gas companies without direction from above.  One can only hope that Pigeon will opt to not fail on her sword and will come clean about who was directing her to assist the gas company defendants.   If that happens, I suspect the feds will be opening an investigation of Cuccinelli. 

Ken Cuccinelli's Gas Royalties Scandal

While there are growing calls for Bob McDonnell to resign from office due to the growing "Gift Gate" scandal - McDonnell's defense basically sounds like Sergeant Schultz  in Hogans Heroes: he heard nothing, he saw nothing and knew nothing about his wife's raking in loot and receiving loans for Jonnie R. Williams, Sr. - to date, Ken Cuccinelli has continued to refuse to return any of the loot that he received from Williams.  But perhaps the biggest scandal that has yet to fully unfold surrounding Cuccinelli is his office's improper provision of legal assistance to  the subsidiary of one of Cuccinelli's $100,000 plus donors in a civil lawsuit against Virginians.  

Cuccinelli has tried to claim that the subordinate in the Attorney General's office gave legal advice to his donor's subsidiary as part of her representation of the Virginia Oil and Gas Board.  Pardon my French, but this story line is BULLSHIT.   Why do I say this?  First, I am well familiar with the Virginia's Oil and Gas regulatory scheme.  In fact, when Virginia's statutes were enacted in 1982, one of my fellow attorneys at the oil company I worked for at the time was on the advisory committee working on the legislation (Union Texas Petroleum was at the time the largest holder of oil and gas leases in Virginia).  Since I was a member of the Virginia State Bar, I was involved in reviewing proposed legislation that implemented the current regulatory scheme.   I suspect I know more about oil and gas law in Virginia and elsewhere than anyone on the current Attorney General's staff.  There was NO NEED for the Oil and Gas Board to be involved in this lawsuit.

In addition, in private practice, I have been involved in litigation with leaseholders from the lessee/oil company perspective.  NEVER, EVER in such litigation did the state oil and gas board or the state attorney general's office provide legal assistance to my law firm or our oil company clients.  NEVER, EVER.   In short, there is no legitimate way to explain why an Assistant Attorney General was giving legal advise and assistance to oil company litigants in a civil lawsuit.  A $100,000 contribution to Cuccinelli's gubernatorial campaign is seemingly the only explanation.  Cuccinelli sold out Virginia landowners and taxpayers in exchange for cold cash.  Democrat Attorney General Candidate Mark Herring explains it all well:

“At a time when Virginians deserve the truth, Ken Cuccinelli and his office continue to fight to keep the public in the dark about the help they gave to out-of-state gas companies trying to deny Virginians millions in mining royalties," Herring said. “It’s shameful that Ken Cuccinelli aligned with the gas companies to keep their emails out of the public view. And it’s shameful that Cuccinelli would think it’s acceptable for his office to offer legal advice to an out of state company, instead of working on behalf of Virginians.

“It seems every day we have more proof that Ken Cuccinelli is more concerned with sweeping his scandals – whether it’s Star Scientific or this mining royalties scandal – under the rug instead of revealing the truth. It’s shocking that his ticketmate Mark Obenshain sits quietly on the sidelines while Ken Cuccinelli puts the interest of a company that donates to his campaign over the interests of Virginia taxpayers. This is why Virginians are ready for a change in the Office of Attorney General,”

Oh, and did I mention that Cuccinelli's office fought to block the release of the e-mails that revealed the extent of the Attorney General's office was in this civil litigation?  Cuccinelli is a lying douche bag in my opinion.  Like most of the far right faction that likes to wear their religiosity on their sleeve, Cuccinelli makes a tawdry whore look virtuous.