How New York State Employees Fund Frackers
by Buck Quigley
A new analysis by the Public Accountability Initiative shows that by paying into New York State’s Common Retirement Fund through paycheck deductions, roughly one million New York State employees have been unwittingly supporting efforts by natural gas companies to lobby legislators, including giving them campaign contributions, in the drive to lift the moratorium on high-volume horizontal fracturing in the state.
The report explains how the US Supreme Court’s Citizens United decision “guaranteed corporations’ right to make electoral expenditures with campaign treasuries (substantially financed by New York’s and other public pension funds), raising the concern that public employees are being forced to fund pro-fracking lobbying via mandatory contributions to the Common Retirement Fund deducted from their paychecks.”
State Comptroller Thomas DiNapoli, who oversees the state retirement fund, has been trying to use his clout as a major investor to pressure frack companies to “provide him with risks of their drilling practices, the kinds of chemicals used and to take into account community opposition to drilling plans,” according to a Buffalo News story.
According to PAI, DiNapoli’s efforts have not always been effective:
DiNapoli’s 2011 resolution “seeking greater disclosure of the risks associated with hydraulic fracturing” received 43.7% of the vote at Carrizo Oil’s shareholder meeting. The Common Retirement Fund holds $12 million of Carrizo stock. DiNapoli filed similar resolutions with Chesapeake Energy, Hess, Range Resources, XTO Energy, and Cabot Oil & Gas in 2010. According to the Office of the State Comptroller, the resolutions called for the boards of the energy companies to:
[S]ummarize for shareholders: the environmental impact of their unconventional natural gas operations; potential policies for the company to adopt, above and beyond regulatory requirements, to reduce or eliminate hazards to air, water, and soil quality from operations including those from hydraulic fracturing; and, other information regarding the scale, impacts of potential material risks, short or long term, to the company’s finances or operations, due to environmental concerns regarding fracturing.
Cabot, of which New York owns about $36 million in stock, attempted to block the resolution from a vote, though the SEC overruled them. Even so, that resolution was defeated at Cabot as well as at Chesapeake, and it does not appear to have come up for a vote at Hess, Range, and XTO.
On moral grounds, DiNapoli was successful in divesting the retirement fund from companies in Iran and Sudan. However, he maintains that his primary responsibility is to make sure the fund makes profits. Unless the high-volume horizontal fracturing moratorium is lifted in New York, the many frack companies in which the state pension fund is heavily invested could stand to lose.
They may lose anyway. An increasing body of evidence suggests that the natural gas boom is petering out in other parts of the country where predictions once stated that gas would flow for decades. That, coupled with depressed prices for natural gas due to frantic overproduction, has some analysts likening the hype surrounding the shale gas boom to the notorious dot-com bust. Others see the so-called “boom” unraveling like a Ponzi scheme, with the added insult of environmental degredation left in its wake.
All this is being disclosed against the backdrop of a recent Siena poll that found that only 39 percent of New Yorkers support lifting the moratorium, while 38 percent oppose it. The remainder still don’t know enough about fracking to offer an opinion. This 50/50 split guarantees that Governor Andrew Cuomo is about to make a decision that will alienate half the electorate.
According to Siena pollster Steve Greenberg, “A plurality of Democrats and upstaters oppose allowing hydrofracking, while a plurality of Republicans and New York City voters support it. Independent voters and downstate suburbanites are nearly evenly divided, although small pluralities of both groups favor it.”
Of course, the downstate New York City watershed will remain protected from fracking even if the DEC recommends lifting the ban for poorer counties in the upstate Southern Tier—whose waters are not part of the New York City watershed. Talk about a bunch of downstate Republican NIMBYs!
Without citing sources, CBS News reported on Sunday, August 19, that “New York is close to making a decision about fracking and is expected to roll out guidelines after Labor Day.”
Should that come to pass—as is now widely expected—it will be important to remember all the forces that finally pushed it through. According to the PAI report, the state pension fund has $6,609,413,930 invested in fracking companies. That’s $6.6 billion, if you don’t want to count all the commas.
To read the Public Accountability Initiative report, visit: blog.littlesis.org.blog comments powered by Disqus
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