Anatomy of an Industry Front Group

How the oil and gas industry runs the show at the Center for Sustainable Shale Development

Executive Summary

Last year, the Public Accountability Initiative (PAI) published “Big Green Fracking Machine,” a report on the Center for Sustainable Shale Development, a body created to certify drillers as environmentally sustainable, and its ties to the oil and gas industry. Billed in the press as a collaboration between environmentalists, philanthropists and gas drillers working toward the shared goal of improving the industry’s environmental record, we found that the group bore the hallmarks of a public relations campaign meant to “greenwash” gas drilling.

Though the participating groups included two philanthropic foundations, five environmental groups, and four natural gas drillers, only three of the environmental groups and one of the foundations were represented on CSSD’s board of directors, while all four gas companies had seats. Further, the environmental groups that did have board representation were intimately tied to the natural gas industry through their boards and major donors. The philanthropic representative on CSSD’s board, Robert F. Vagt, was also a board member of Kinder Morgan, the largest gas pipeline operator in the country.

Specifically, we reported:

  • Significant industry presence on the CSSD board of directors. When we published “Big Green Fracking Machine,” CSSD’s sponsors from the shale gas drilling industry, Chevron, Consol, EQT Resources, and Shell, controlled four of the 12 seats on the group’s board of directors. EQT, which is based in Pittsburgh and owns the building where CSSD is headquartered, was the group’s interim director.
  • Close ties between environmental groups and the natural gas industry. Of the five groups named as CSSD participants, only three had positions on the board of directors. All three had ties to the drilling industry through their boards, their funders, or both, and one, the Environmental Defense Fund, had lent its name to since discredited academic studies proclaiming fracking to be environmentally safe.
  • Undisclosed ties between CSSD’s major philanthropic backer and the natural gas industry. The Heinz Endowments, which provided funding to every environmental group participating in CSSD as well as to CSSD itself, was represented by its president, Robert Vagt, on the CSSD board of directors. At the time, Vagt also served on the board of directors of Kinder Morgan, a large natural gas pipeline company, though this fact was not disclosed on the Heinz Endowments website or in any CSSD materials.

Since we released “Big Green Fracking Machine,” the Center for Sustainable Shale Development appears to have doubled down on its energy industry ties, replacing lost philanthropic support with funding from an oil-and-gas-tied foundation and hiring an oil and gas attorney as its executive director. Its current chairman was once the head of the science committee of a tobacco industry misinformation group.

In the year since we released “Big Green Fracking Machine,” we found:

  • Three of CSSD’s founding sponsors have ended their involvement with the group, replaced by the family foundation of West Virginia’s “king of the wildcatters.” Beginning in October 2013, the Heinz Endowments, the William Penn Foundation, and Citizens for Pennsylvania’s Future (PennFuture) have all pulled out of CSSD, though PennFuture still provides input to the group at its discretion. After the Heinz Endowments and the William Penn Foundation ended their philanthropic sponsorship, the Claude Worthington Benedum Foundation, endowed by the oil and gas driller Michael Late Benedum, joined CSSD. The Claude Worthington Benedum Foundation also maintains ties to the drilling industry through its board of trustees, including chairman Lloyd G. Jackson II, who is president of Jackson Resources and Jackson Management and a vice president of the West Virginia Oil and Gas Association.
  • CSSD has hired an attorney from an oil and gas industry firm as its executive director. The same day that the group announced that it was accepting applications for sustainable certification, CSSD also announced that it had hired Susan Packard LeGros to replace EQT public policy research director Andrew Place as its executive director. Before joining CSSD, LeGros was an environmental attorney at Stevens & Lee, and the contact named for the firm’s oil and gas practice. The practice “represents companies doing business in the energy industry as producers, distributors, and consumers,” according to the law firm’s website.
  • Robert Vagt’s CSSD chairmanship has been taken over by Jared Cohon, who once selected projects for funding by the tobacco industry’s Center for Indoor Air Research. The Center for Indoor Air Research was set up by the tobacco industry as it battled claims that secondhand smoke was harmful to human health. As the chair of CIAR’s Science Advisory Board, Cohon helped to develop the Center’s research agenda and recommended research proposals to the Center’s board of directors for funding.

    Vagt retired as president of the Heinz Endowments several months after PAI published “Big Green Fracking Machine,” and has since taken a position chairing the board of directors of Rice Energy, a relatively new oil and gas drilling venture.
  • CSSD has hired an energy industry public relations professional to manage its communications. Press releases announcing the Center’s opening for applications, the participation of the Claude Worthington Benedum Foundation, and the LeGros hire, list Tim O’Brien of O’Brien Communications as CSSD’s press contact. O’Brien lists the energy industry first among the industries it serves, providing “communications planning, counsel and support to companies actively engaged in developing one of the largest natural gas fields in North America – the Marcellus Shale.”

Introduction

Since its creation, the Center for Sustainable Shale Development has borne the hallmarks of a greenwash campaign to scrub the image of the increasingly unpopular shale gas drilling industry. Though the groups participating at CSSD’s launch included two philanthropic foundations, five environmental groups, and four natural gas drillers, only three of the environmental groups and one of the foundations were represented on CSSD’s board of directors while all four gas companies had seats. Further, the environmental groups that did have board representation were intimately tied to the natural gas industry through their boards and major donors. The philanthropic representative on CSSD’s board, Robert F. Vagt, was also a board member at Kinder Morgan, the largest gas pipeline operator in the country.

The links between CSSD in its first year of operation and the oil and gas industry can be seen in Map 1 below (click here to open in LittleSis).

Map 1: Oil & gas ties of the 2013 CSSD board and staff

In June 2013, Public Accountability Initiative released “Big Green Fracking Machine,” an examination of CSSD’s ties to the oil and gas industry and its function as a public relations gambit. A major shakeup at the Heinz Endowments followed soon thereafter: Caren Glotfelty, the head of the foundation’s environmental programming, and Douglas Root, the communications director, left the organization at the beginning of August. In October 2013, Vagt announced that he too was leaving the Heinz Endowments. Heinz Endowments chairwoman Teresa Heinz Kerry told the Pittsburgh Post-Gazette that the board of directors had never authorized the creation of CSSD.

While CSSD was frequently mentioned in journalism on fracking and the gas boom in the first half of 2013 (the news section of CSSD’s website links to 29 articles between March 20 and May 29), the press seems to have sought the group’s viewpoint far less in the months following “Big Green Fracking Machine” (CSSD links to 11 articles in the latter half of the year).

After about six months of quietude, CSSD lurched back onto the scene at the end of January 2014. Despite having “difficulty finding participants” in the wake of last year’s controversy, the group appears to have doubled down on its energy industry ties, replacing lost financial support with sponsorship from oil barons’ family foundations, making the former head of the science committee of a tobacco industry misinformation group its chairman, and hiring an oil and gas attorney as its executive director.

PAI has continued to monitor the group CSSD in the year since we released “Big Green Fracking Machine.” We found that three of CSSD’s founding sponsors – the Heinz Endowments, the William Penn Foundation, and Citizens for Pennsylvania’s Future – have ended their involvement with the group; the oil-and-gas-tied Claude Worthington Benedum Foundation has joined CSSD as a funder; and Susan Packard LeGros, an attorney from an industry law firm, has been hired as executive director. We also found that current CSSD chairman Jared L. Cohon once lead the science advisory board of a tobacco industry group that downplayed the health risk of secondhand smoke and that CSSD has engaged an oil-and-gas-focused public relations professional to manage its communications.

Of the changes at CSSD, former interim director (and director of public policy research) Andrew Place told the Pittsburgh Tribune-Review: “With layer upon layer of oversight, even the most skeptical person cannot say this is green lipstick. It’s building unassailable credibility. We hope it should be bulletproof.” While credibility may be CSSD’s aim, the direction the group has taken in the past year does little to diminish the group’s appearance as an oil and gas industry front.

I. The Claude Worthington Benedum Foundation

On January 21, 2014, CSSD announced that the Claude Worthington Benedum Foundation had signed on as a philanthropic sponsor. The Claude Worthington Benedum Foundation is a West Virginia-based family foundation, established in 1944 as a memorial to the only child of Michael Late Benedum, an oilman called the “king of the wildcatters” by Pittsburgh Quarterly in 2009.

At the time of the announcement the Heinz Endowments and the William Penn Foundation were still named as a CSSD participants, with former president Robert Vagt still listed as a contact for the Endowments in CSSD press materials; however, it appears that the Claude Worthington Benedum Foundation’s sponsorship was intended to supplant the two foundations’. Heinz’s pull-out seemed apparent when Teresa Heinz Kerry told the Pittsburgh Post-Gazette that the CSSD’s creation had been unauthorized, and in May 2014, the Pittsburgh Tribune-Review reported that both the Heinz Endowments and the William Penn Foundation had cut their funding from CSSD.

The Claude Worthington Benedum Foundation, in addition to being founded with oil money, maintains extensive ties to the oil and gas industry, both through the Benedum family and through other members of its board of trustees:

  • Lloyd G. Jackson II, chairman
    Benedum’s chairman, Lloyd G. Jackson II, is the president of Jackson Management Company and Jackson Resources. Jackson is also on the executive committee of the West Virginia Oil and Natural Gas Association (WVONGA).
  • Paul G. Benedum Jr., trustee, past chairman
    Paul G. Benedum Jr. was chairman of the Claude Worthington Benedum Foundation immediately preceding Lloyd G. Jackson II. Benedum is the owner of Benedum Interests, an oil and gas exploration company, and is the descendant of Michael Benedum, “the king of the wildcatters.”
  • Thomas A. Heywood, trustee
    Trustee Thomas Heywood is a partner at Bowles Rice LLP, a Charleston West Virginia law firm with an oil and gas practice. Bowles Rice is also an associate member of WVONGA and serves as general counsel to the Independent Oil and Gas Association of West Virginia (IOGAWV).
  • Ralph J. Bean Jr., trustee emeritus
    Ralph J. Bean Jr. is a former partner at the law and lobbying titan Steptoe & Johnson. An associate member of WVONGA, Steptoe has an oil and gas practice and has also lobbied on behalf of a number of oil and gas clients. Bean also worked for the Consolidated Natural Gas (CNG) Company, a gas utility now owned by Dominion Resources, for 21 years as CNG’s corporate counsel and as president of its West Virginia subsidiary, Hope Gas Inc.
  • Another Claude Worthington Benedum Foundation trustee emeritus, L. Newton Thomas, is a coal magnate, having built ITT Carbon, one of West Virginia’s most prolific coal producers.

    The Claude Worthington Benedum Foundation’s ties to the oil and gas industry can be seen in Map 2 below (click here to open in LittleSis).

    Map 2: Oil & gas ties of the Claude Worthington Benedum Foundation

    In May 2014, it was reported that CSSD had also received a two-year $150,000 grant from the Richard King Mellon Foundation, which was endowed by its namesake’s fortune made from Mellon Bank, Gulf Oil (now owned by CSSD founder Chevron), and the Alcoa aluminum company.

    II. Citizens for Pennsylvania’s Future

    Amid CSSD’s announcements of new funders and staff, the list of “strategic partners” on the group’s website remained relatively unchanged. A cached version of the page from February 2014 shows that, though updated to reflect the recent endorsement of the Claude Worthington Benedum Foundation, CSSD had not removed the Heinz Endowments’ logo. Though Heinz had not publicly pulled out, they presumably had already terminated their relationship with CSSD, as Robert Vagt, the Heinz Endowments president and CSSD chairman, had left the charity and chairwoman Teresa Heinz Kerry had disavowed approval of CSSD several months previously.

    Until recently, the environmental group Citizens for Pennsylvania’s Future (also known as PennFuture) was also among those listed as CSSD strategic partners.

    When contacted in June 2014 to inquire about the status of their participation in CSSD, PennFuture’s communications manager Elaine Labalme told PAI that the group had not been involved with CSSD “for a while,” despite their logo still appearing on CSSD’s website. That day, PennFuture was removed from CSSD’s list of participants. Labalme told PAI that, at PennFuture’s discretion, the group provides input to CSSD when they believe it worthwhile, participating in calls and offering their perspective when asked, as they do for other groups.

    The remaining participants are the Environmental Defense Fund (EDF), Pennsylvania Environmental Council (PEC), Clean Air Task Force (CATF), and the Group Against Smog and Pollution (GASP).

    Of these groups, EDF and PEC have significant oil and gas ties that we detailed in “Big Green Fracking Machine.”

    III. Susan Packard LeGros

    Also among CSSD’s early 2014 announcements was that EQT Resources’ director of public policy research Andrew Place was being succeeded as executive director by Susan Packard LeGros, an environmental attorney at Stevens & Lee and a former EPA section chief. We found that LeGros has industry ties that, as it did with other participants, CSSD downplayed while stressing her environmental bona fides.

    CSSD’s press release, and the news articles that followed it, describe LeGros as an environmental attorney from Philadelphia. From 2001 until she was hired at CSSD, LeGros was of counsel to the environmental and energy practice at Stevens & Lee, a large firm based in Pennsylvania with offices throughout the Mid-Atlantic region.

    Part of the environmental and energy practice for which LeGros was listed as a contact is Stevens and Lee’s oil and gas business. The firm “represents companies doing business in the energy industry as producers, distributors, and consumers,” according to the oil and gas section of its website, where regulatory and government affairs are primary among their industry-focused services:

    Our lawyers have extensive experience in a broad range of regulatory matters including mergers and acquisitions, service territory applications, securities certificates and rate and service matters. Our Energy, Communications and Public Utility Group is led by a former senior regulatory counsel of one of the largest electric utility holding companies in the nation.

    We also have one of the most effective Government Affairs teams in the Commonwealth. Stevens & Lee has initiated over 30 pieces of legislation introduced in the state capitol and monitored thousands on behalf of our clients. Our government affairs specialists have significant experience advocating on behalf of publicly traded gas companies in the Commonwealth. Our team includes a former Chair of the Pennsylvania Senate Environmental Resources and Energy Committee and a former Chair of the Pennsylvania House Environmental Resources and Energy Committee.

    Prior to Stevens & Lee, biographies indicate LeGros worked as in-house counsel for an “international chemical company,” though it is unclear which. During her tenure at Stevens & Lee, LeGros gave a presentation to the Pennsylvania Chemical Industry Council along with another attorney, Terry Bossert, who had come to Stevens & Lee from the Pennsylvania Department of Environmental Protection, where he was the agency’s chief counsel. Bossert is now the vice president of government and regulatory affairs at Chief Oil & Gas.

    LeGros is also a former board member of the Pennsylvania Environmental Council (PEC), a CSSD participant whose numerous ties to the oil and gas industry advocacy group the Marcellus Shale Coalition we noted in “Big Green Fracking Machine.”

    IV. Jared L. Cohon

    Though the Heinz Endowments officially withdrew its support for CSSD, it retains a link to the group through a board member, Jared L. Cohon. Cohon, a past president of Carnegie Mellon University, was a member of CSSD’s original board, and became the group’s chair following Robert Vagt’s departure.

    Cohon has ties to a past effort to clean up the public image of an industry with a notoriously bad record. In the early 1990s, Cohon was the chair of the Science Advisory Board of the Center for Indoor Air Research (CIAR), a group formed by major tobacco companies amid rising public concern about the detrimental health effects of second-hand tobacco smoke.

    According to CIAR documents, the role of the science advisory board was to develop the Center’s research agenda. That agenda was subject to the approval of CIAR’s board of directors, which was “composed primarily of tobacco industry representatives.” Though ostensibly created to study indoor air quality largely, a 1996 review of CIAR-funded projects by Deborah E. Barnes and Lisa A. Bero of the University of California, San Francisco found that the group was used to “develop scientific data that [the tobacco industry] can use in legislative and legal settings.”

    Barnes and Bero found that there existed two separate processes by which project funding could be obtained, either through “peer review” by the Science Advisory Board or by “special review” by tobacco executives on CIAR’s board of directors, and that the “special-reviewed” projects were more likely to support the tobacco industry position on secondhand smoke; however, they concluded “the tobacco industry may be financing peer-reviewed projects through CIAR to enhance its credibility, to provide good publicity, and to divert attention from [secondhand smoke] as an indoor air pollutant.” The peer review process headed by Cohon gave legitimacy to the special-reviewed projects used “to support the tobacco industry position” and “to argue that smoking should not be regulated in public places.”

    Cohon seems to serve a similar function at CSSD. As President Emeritus at Carnegie Mellon University, Cohon and the remainder of the purportedly independent Center for Sustainable Shale Development are enhancing the credibility of and providing good publicity for the fracking industry while diverting attention from its ill effects on the environment and human health.

    V. O’Brien Communications

    CSSD’s January 24 press releases name Tim O’Brien of O’Brien Communications as a media contact. A review of O’Brien Communications’ web presence reveals past work for the gas industry, including “Marcellus Shale marketing communications and public relations support,” as well as a callous view of actual environmental damage caused by extractive industries.

    O’Brien Communication’s website lists energy first among the industries it serves. On the company’s LinkedIn profile, O’Brien described one of his “products” as “Marcellus Shale Communications Support:”

    O’Brien Communications has provided communications planning, counsel and support to companies actively engaged in developing one of the largest natural gas fields in North America – the Marcellus Shale.

    Further, a now deleted post on the O’Brien Communications website lists “Marcellus Shale marketing communications and public relations support” as one of the ways the firm has been “active in helping clients.”

    A recommendation on O’Brien’s LinkedIn profile shows that the law firm Eckert Seamans has been a client in the past. As discussed in our last report on CSSD, Eckert Seamans is intimately tied to the group: CSSD was founded as the Institute for Gas Drilling Excellence by Eckert Seamans special counsel John Hanger and CSSD secretary and treasurer Daniel Clearfield is an Eckert Seamans attorney. Further, according to CSSD’s 2012 tax filing, Eckert Seamans was the group’s highest compensated contractor, performing $326,000 worth of legal services for CSSD that year. Also, as we noted in our previous report, Eckert Seamans is a member of the Marcellus Shale Coalition gas industry trade group.

    O’Brien has blogged in favor of fracking on his firm’s blog, “PR, Pure & Simple,” arguing a Levi’s ad campaign, filmed in Pittsburgh suburb Braddock, shows the importance of embracing natural gas drilling:

    Not far from Braddock and all around it, natural gas producers are converging on the region to tap a tremendous deposit of natural gas known in energy circles as the Marcellus Shale. For the first time since the demise of steelmaking in this region, an industry has emerged here with that kind of economic potential.

    O’Brien has also included public relations messaging on behalf of the Marcellus Shale Coalition in the past in a newsletter he distributes, though it is unclear whether O’Brien Communications was ever hired directly by the Coalition.

    For a group ostensibly dedicated to sustainability, CSSD’s public relations expert has a surprisingly crude public take on tragedies caused by the heavy industries he supports. In response to the release of 7,500 gallons of a coal washing chemical into West Virginia’s Elk River upstream of the city of Charleston, O’Brien Communications posited on Facebook that while “the leak is bad enough, the lack of a crisis communications plan and assignments is worse.”

    Conclusion

    With the loss of three major sponsors that lent the group credibility, the fiscal sponsorship of an oil money foundation, and the hiring of an industry attorney as its executive director, the Center for Sustainable Shale Development looks more and more like another front to improve the oil and gas industry’s image.

    Meanwhile, the gas companies involved with CSSD are operating in such a manner as can hardly be considered sustainable. This year CSSD sponsor Chevron was cited by the Pennsylvania Department of Environmental Protection for violations including “hazardous venting of gas,” “open burning,” “discharge of production fluids onto the ground,” and “failure to provide access to a permitted oil and gas facility to properly identified Department personnel and agents” when a fracking well fatally exploded and Chevron blocked the DEP from entering the site for nearly two days. When residents of Finleyville, Pennsylvania began complaining about CSSD founder EQT’s operations, the company offered the each of the residents of an entire street $50,000 in exchange for releasing them from legal liability for health problems, property damage, or any other nuisance caused by EQT’s drilling activities.

    Though the Center for Sustainable Shale Development presents itself as an independent body meant to ensure the responsible drilling for oil and natural gas in shale formations, questions about CSSD’s role in the fracking debate persist due to its continued and increasing domination by the industry that it purports to regulate.

    Addendum: Responses from the Heinz Endowments & the Environmental Defense Fund

    Two groups, the Heinz Endowments and the Environmental Defense Fund, have commented in response to the Public Accountability Initiative’s latest report on industry ties at the Center for Sustainable Shale Development (above).

    Both groups were among CSSD’s founding members, though Heinz has since pulled its support in the wake of PAI’s reporting last year on its former president’s oil and gas ties. Their statements point to a widening gulf between the two groups on the issue of fracking. The statement from Heinz, which is based in Pittsburgh, slams CSSD:

    “We disagree with the position suggested by the organization’s name that fracking can be made environmentally ‘sustainable’ and, given the pace of shale development, we do not believe that the goals of protecting environmental and public health are best served at this point by standards that are voluntary and unenforceable.”

    PAI asked EDF whether they agreed with Heinz’s assessment and whether they planned to continue their involvement with CSSD in light of the group’s deepening industry ties. EDF declined to answer both questions, and issued the following statement:

    “EDF is focused on addressing the real and substantial risks to public health and the environment that are happening now from shale gas development. The critical path for reducing these risks is through strong regulation and aggressive enforcement. CSSD is an important complement to tough regulation and enforcement, but not a substitute for it. EDF will never shrink from an opportunity to push industry to do better.”

    EDF has partnered with the oil and gas industry on several programs, including lending its name as a reviewer to a since-retracted study of the effects of fracking led by UT professor and Plains Exploration director Charles “Chip” Groat, and to another study from a University at Buffalo fracking research institute that has since been shut down due to controversy over its industry ties. In the past, PAI has highlighted EDF’s ties to the oil and gas industry, including the foundation of the “father of fracking.”

    Separately, the AP has picked up on PAI’s finding that PennFuture has cut ties with CSSD.