New disclosures raise more questions about Obama’s Energy pick

Recently-released financial disclosures are shedding additional light on the severity of conflicts of interest surrounding an influential MIT natural gas study led by Ernest Moniz, President Obama’s choice to lead the Department of Energy. The Public Accountability Initiative first raised questions about the widely-publicized study, titled “The Future of Natural Gas,” in a report released last month. In that report (available here), PAI examined “The Future of Natural Gas” and found that the study promoted fracking and gas exports without noting that several key report authors, including Moniz, had paid industry positions. The PAI report prompted responses from the White House and MIT last month.

Now, on the eve of Moniz’s confirmation hearing, new disclosures are raising further questions about the independence of the MIT study:

* In financial disclosure forms filed with the Obama administration, Moniz reported paid consulting jobs for BP, GE, and energy private equity firm Riverstone Equity Holdings in addition to his lucrative board membership at ICF International. Moniz has consulted for Riverstone since 2008, and received $75,000 in compensation from the firm in 2012. As the Boston Globe reported, Riverstone is a major oil and gas investor, with more than $1.5 billion invested in fossil fuel companies worldwide. Moniz also made $5,850 consulting for BP; “more than $5,000″ from General Electric, which announced today that it was purchasing the oil pump maker Lufkin; $15,000 combined from Schlumberger and the IHS; and more than $13,000 from a non-profit foundation created by the Italian petroleum company Eni, which is also a sponsor of the Moniz-directed MIT Energy Initiative.

* Canadian financial filings show that the gas company Talisman Energy paid MIT study co-chair Anthony Meggs $4.5 million in 2012. (Source: see Talisman Management Information Circular, available here.) Meggs downplayed fracking’s environmental impacts at the press conference announcing the MIT report, but failed to disclose that he had taken the lucrative position at Talisman the month prior. PAI’s review of the MIT study’s environmental impacts section found little scientific data to back his claims, which Moniz echoed in congressional testimony. Meanwhile, Talisman has racked up numerous violations from the Pennsylvania Department of Environmental Protection for its operations in the Marcellus Shale. The recent Talisman filing shows that about half of Meggs’ $4,482,708 compensation package from 2012 was clawed back when he left the company in January 2013. However, he did “receive a severance amount as determined by the terms of his employment contract.” Talisman’s financial filing suggests that Meggs was entitled to a severance payment of over $2.5 million.

Some press reports have downplayed Moniz’s oversight of fracking as energy secretary, but he will play a critical role in doling out research funding and overseeing the federal permitting process for liquefied natural gas (LNG) exports. The oil and gas industry is clamoring for expanded exports, which will allow it to access markets where natural gas fetches a higher price. The MIT report argued for expanded LNG exports on the basis of thin evidence, but failed to disclose that study author John Deutch sits on the board of directors of Cheniere Energy, which was awarded the first (and so far only) permit to export liquefied natural gas (LNG) from the lower 48 states. Deutch currently owns Cheniere stock worth $1.7 million. Cheniere’s stock price has risen over 150% since the MIT report was released in June 2011.

The report argued firmly for LNG exports, contending that an integrated global gas market “advances [U.S.] security interests through diversity of supply and resilience to disruption,” which Moniz repeated when he testified before a Senate committee. However, PAI found that the report provided little justification for this conclusion and offered no serious analysis of the economic consequences of market integration.

Moniz is being introduced at his nomination hearing by Brent Scowcroft, who has strong ties to the MIT natural gas study’s advisory chair, Mack McLarty. Scowcroft manages a business advisory firm, the Scowcroft Group, which lists McLarty Associates, managed by Mack McLarty, as one of two principal partners on its website. McLarty Associates lists Chevron and London-based oil and gas company Chevron among its clients and the Scowcroft Group advertises an energy and mining lobbying practice. Former Senator Jeff Bingaman is also introducing Moniz.

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