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Some Appointees to Oil and Gas Commission Are Industry Execs, Lobbyists

Industry executives and lobbyists hold positions on an interstate oil and gas commission that espouses the safety of hydraulic fracturing.

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(Abrahm Lustgarten/ProPublica)

December 13, 2010: This post has been corrected.

Joseph Pettey is the owner of Pettey Oilfield Services Inc., and the 2003 West Virginia Oil and Gas Festival Man of the Year. Thomas E. Stewart is a third-generation driller who lobbies the government on behalf of energy companies. Both sit on the Interstate Oil and Gas Compact Commission, which is increasingly positioning itself as an authority on drilling-related issues like hydraulic fracturing.

The 38-state commission was created in 1935 to promote the efficient harvesting of oil and gas. Its mission was later expanded to acknowledge the need to protect health, safety and the environment while accomplishing that goal. It is funded by government grants and fees from the states. The commission members are appointed by the member governors. Most are state regulators who oversee gas and oil drilling, but at least seven states have representatives who are either lobbyists or energy executives.

Pettey is the official representative for West Virginia; Stewart is an associate representative for Ohio; lobbyist Robert W. Harms is an associate representative for North Dakota; James R. Daniels, the general manager of Murfin Drilling Company, is an associate representative for Kansas; William S. Daugherty, CEO of natural gas company NGAS, is Kentucky’s official representative and D. Michael Wallen, also of NGAS, is its associate representative; Rick Calhoon of Pruet Oil and Charlie Williams Jr. of oil and gas production company Vaughey & Vaughey are associate representatives for Mississippi; and Steven C. Agee of Agee Energy LLC is an associate representative for Oklahoma.

Both official and associate representatives participate in committees, said commission executive director Mike Smith, although associate representatives vote on policy recommendations only if the official representative isn't available.

The governors can also appoint as many committee members as they choose. The agency denied ProPublica's request for a list of committee members; a spokeswoman said the list has been confidential since 2008.

Although the organization meets biannually, most of its activities -- conducting research, developing resolutions and communicating that information to public officials -- take place in small committee meetings throughout the year. The commission's recommendations have enjoyed substantial credibility in the debate over hydraulic fracturing, or fracking, the controversial natural-gas extraction technique that the commission has deemed to be safe. The IOGCC authored an oft-cited 2002 survey that determined that nearly 1 million wells had used fracking "with no documented harm to groundwater" in its member states.

When asked by ProPublica if he felt his dual affiliations presented a conflict of interest, Stewart, the associate representative from Ohio, answered with a one-word e-mail: "No." A few minutes later he sent a second e-mail asking this reporter if she felt it was a conflict of interest to present herself as a journalist.

Harms, the lobbyist who is the associate representative for North Dakota, said that while he believes that government agencies should avoid "even the appearance of impropriety," he doesn't think his participation in the IOGCC counts as such. "The organization is not an advocate for the industry," said Harms. "It primarily contains state regulators, and those are the people who run the show."

Agee, the Agee Energy president who is an associate representative for Oklahoma and also an economics professor at Oklahoma State University, echoed Harms' statement. "I don't think it's a conflict," he wrote in an e-mail. "The governor chooses well-informed representatives that act in the best interest of the state."

The other official and associate representatives contacted for this article did not respond to requests for comment.

Exactly how the presence of gas and oil interests might affect the agency's resolutions is difficult to determine, because little information about the organization's inner workings is accessible to the public. When Smith was asked whether having industry representatives on the commission raised potential conflicts of interest, he referred that question to the member governors.

A spokeswoman for Gov. Mark Parkinson of Kansas said in an e-mail that "it is beneficial to appoint members to boards or commissions with related experience in the industry or field to help bring perspective." She also noted that the decision to appoint a drilling company manager to fill one of the Kansas slots was not made by Gov. Parkinson.

The six other governors with representatives known to be industry executives or lobbyists did not respond to requests for comment.

Inform our investigations: Do you have information or expertise relevant to this story? Help us and journalists around the country by sharing your stories and experiences.

Correction (December 13, 2010): This post originally stated that Joseph Pettey was the 2003 Virginia Oil and Gas Festival Man of the Year. He was the 2003 West Virginia Oil and Gas Festival Man of the Year.

Brady Russell - Clean Water Action

Dec. 9, 2010, 1:58 p.m.

I am from Kansas. I was disappointed to see that ours is one of the bad states. I live in PA now, tho, and this is where drilling is currently booming.

If it’s so important to bring experts into this commission, then why haven’t a few states appointed some environmentalists, who won’t be cautious about calling lobbyists on their misstatements and distortions?

Thomas Stewart has got decades of direct experience in O&G drilling and you think this makes him a poor candidate for an organization whose prime responsibility is to promote safe, responsible and efficient harvesting of oil and gas.

I would assume someone with a journalism, public relations or law background would make a better candidate?

Would you want an advisory organization on pediatric medicine staffed by pediatricians or accountants? How about a agricultural advisory group that was staffed with graphic designers rather than farmes.

What planet are you from?

C. A. Pomeroy

Dec. 9, 2010, 8:11 p.m.

If the commission has a regulatory function, then it should be staffed with regulators, and industry people could be consulted as necessary.  Lobbyists don’t necessarily know a lot about the nuts and bolts of the industries they represent.  What they know about is Washington.

@Mike H: Sorry, but people on ProPublica are too smart to fall for your bizarre corporate shilling. Thomas Stewart has decades making money off fossil fuels that ruin life in their sourcing and their use. Having anyone in a regulatory position who is a profiteer off what they are regulating is like having a rapist in charge of protecting women. I want any commission that has the responsibility of protecting us from these profit-lusting greedheads to be staffed with ethical scientists, consumer advocates and people with a history of putting the health of humans and the environment first- instead of last. I know what planet I am from, and it’s the one you and your fossil fuel boys are KILLING!

Conflicts of interest are ok so long as the interest of the appointee and the industry that these people who are appointed to oversee, are the same or at the very least on the same page.

If you do not believe this definition, ask your US Congressman, your US Senator, your Governor, or your local County’s supervising judge.

The foregoing individual’s definition of a conflict of interest are only void if the appointee is sleeping with the appointer’s wife, unless of couse the appointer is gay and to preserve his standing in the rightwing community the appointee is serving the appointer’s best interests.

This defininition first appeared during Reagan’s first term but only concerned White House appointees but like everything else it just took a little time to deciminate from the top down and now the definition is widespread throughout our government and big business.

How could ENRON, Merril Lynch or other massive companies have reached such high territory without a Board of Directors that was appointed for these same purposes, to protect the interests of the appointer, whatever those interests might be.

As big business infiltrated the system, their practices were just transferred to government.

Why should we complain, we got exactly what we voted for and maybe a little more than we bargained for…

Smith, Winston

Dec. 10, 2010, 11:51 a.m.

Orwellian, the Reaganomics spawned definition of conflict of interest merely reflected the reinstituted consolidation of Corporate/State power in secrecy(as in this commission).  The locked steps toward the inevitable form of government this nexus takes should historically prompt us as citizens to build our own governance or be assimilated by its minority driven minions.  The difficulty is what does majority citizen governance look like?  We’ve never had it from the beginning of this “Republic” so the models are non-existent in our culture.  Models that challenge the existing minority rule are immediately removed by our military before they can be evaluated for use in our culture.  The ironic twist is that unless a more humane model replaces the non-sustainable state capitalism model we have, the laws of nature will do it w/o mercy.

Congratulations to Ms. Baca. It took her asking just one relevant question for oil company proxy Thomas Stewart to show his true colors. To my friends in the state of Ohio, best begin identifying alternative sources for your drinking water.

carlos briones

Dec. 13, 2010, 8:03 a.m.

Doesn’t ProPublica have a conflict of interest?

Isn’t ProPublica rewarded with Pulitzers and contributions for sensationalizing this issue? 

Should ProPublic be required to acknowledge the financial interests of the Sandler family?

Has ProPublica ever acknowledged the parties that stand to gain from delays in shale gas production?

When will ProPublica do a piece about Russian natural gas interests bankrolling the “hydraulic fracturing debate” in the US? 

Who other than Soros and Gazprom stand to benefit from delaying shale gas exploration in Western Europe?

Mike Smith, Executive Director, IOGCC

Dec. 13, 2010, 11:54 a.m.

The Interstate Oil and Gas Compact Commission (IOGCC) is a 75 year old compact of the states formed pursuant to the U.S. Constitution and chartered by Congress. The governors of IOGCC’s 38 states are its members. Each governor appoints an Official Representative (and Associate Representatives) to attend meetings and vote if the governor is unavailable. Additionally, governor and/or Official Representatives are allowed to appoint persons to serve on committees.

Official Representatives, Associate Official Representatives, and committee members serve at the pleasure of the governor. A governor has complete discretion to make appointments of his or her choosing. Appointees serve with the confidence of the governor to represent policy interests of the appointing authority. Appointees may be from state government, the oil and gas industry, landowners, environment groups or any walk of life. For good reason! IOGCC does NOT regulate the oil and gas industry. The individual states have that responsibility within their borders.

IOGCC’s mission is to assist the states in promoting the conservation and efficient recovery of domestic oil and natural gas resources while protecting health, safety and the environment.

It is almost amusing to see these shills for the fossil fuels industry come to Pro Publica. All they can do is try to attack Pro Publica, or as in the case of Mike Smith, they can only utter meaningless phrases. The IOGCC’s mission, as with the mission of Thomas Stewart and all other fossil fuel profiteers, is to extract as much fossil energy as possible as quickly as possible for the least amount of cost as possible and the most profit possible. They’re businesspeople, and their god is money. The public good, and the good of our biosphere, is not of interest to them. Greed is their god. Read the book What we Leave Behind and you will learn how to see through and resist these people.

DONALD MCNAUGHTON

Dec. 15, 2010, 10:22 p.m.

LET THE FOX IN THE HENHOUSE AND SEE WHAT HAPPENS!

This article is part of an ongoing investigation:
Fracking

Fracking: Gas Drilling's Environmental Threat

The promise of abundant natural gas is colliding with fears about water contamination.

The Story So Far

The country’s push to find clean domestic energy has zeroed in on natural gas, but cases of water contamination have raised serious questions about the primary drilling method being used. Vast deposits of natural gas, large enough to supply the country for decades, have brought a drilling boom stretching across 31 states. The drilling technique being used, called hydraulic fracturing, shoots water, sand and toxic chemicals into the ground to break up rock and release the gas.

More »

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