On KBDI, Caldara failed to note guests' links to energy industry, allowed industry lobbyist to mislead on oil shale development

Summary: Discussing Colorado energy issues on KBDI Channel 12's Independent Thinking, host Jon Caldara of the Independence Institute omitted that his two guests had extensive connections with the energy industry and conservative political causes. Further, he uncritically allowed guest Greg Schnacke, an energy industry lobbyist, to make the misleading claim that oil companies are discouraged from investing in oil shale development because Congress temporarily has halted commercial leases for oil shale development. Schnacke did not note that three oil companies already have obtained research, development and demonstration leases in Colorado.

On the May 22 broadcast of KBDI Channel 12's Independent Thinking, host and Independence Institute President Jon Caldara introduced his guests for a discussion of Colorado energy issues -- president and CEO of Americans for American Energy (AAE) Greg Schnacke, and founder of Colorado Consumers for Affordable Energy (CCAE) Bishop Phillip H. Porter Jr. -- without noting their extensive ties to the energy industry or conservative political activism.

Caldara also allowed Schnacke to claim misleadingly that "Congress puts a ban on" commercial leases for the development of oil shale, and further state, "[T]he problem that you have with oil shale is, no company is going to spend the billions of dollars that you have to invest in the technology to try to bring this resource out of the ground and produce it unless there's going to be a commercial enterprise at the end of the day." However, neither Schnacke nor Caldara noted that four different oil companies in Colorado and Utah already have pursued and received oil shale research, development and demonstration (RD&D) leases from the U.S. Department of the Interior's Bureau of Land Management. Furthermore, while a congressional moratorium on publishing final commercial oil shale leasing regulations or issuing leases is in effect until October 1, the BLM's website states that the agency "is working with the States of Colorado, Utah and Wyoming to develop regulations for commercial oil shale leasing, as directed by the Energy Policy Act of 2005."

While Caldara and his guests discussed the potential economic impact of a proposed oil and gas severance tax increase and the Colorado Oil and Gas Conservation Commission's revised regulations covering energy development in the state, Caldara failed to inform viewers that Schnacke is an energy industry lobbyist who headed the Colorado Oil & Gas Association for 13 years. Moreover, neither disclosed that Schnacke is vice president of the lobbying firm Policy Communications Inc., which, according to its website, founded AAE. The firm's clients include "companies, associations, and organizations" associated with "[a]dvanced power generation/coal technologies," "[e]nergy services," and "[o]il & gas exploration, production and distribution."

An August 15, 2007, article in The Denver Post reported that AAE was formed "to advocate for increased energy development and less regulation," as Colorado Media Matters has noted. In an October 25, 2007, article (accessed through the Nexis database), the Post described AAE as "a front for the oil-and-gas industry."

While Caldara introduced Porter as being a bishop who was "with" CCAE, and Porter stated that his church was the Church of God in Christ, Caldara failed to mention that Porter also is a conservative activist and former president of Coloradans for Marriage, which sponsored Amendment 43, a 2006 ballot initiative that amended the Colorado Constitution by defining marriage as "between one man and one woman." Moreover, Caldara neglected to mention that, according to a May 1 Rocky Mountain News article, Porter's organization, CCAE, "was launched by Rob Fairbank, a former Republican lawmaker from Littleton, with help from the Congress of Racial Equality, a national group that disputes global warming and has received $275,000 from ExxonMobil since 1998, records and news reports show." According to the National Institute on Money in State Politics, from 2000 to 2002, during his bids for state representative, Fairbank received at least $3,400 in contributions from the oil and gas industry, including donations from ExxonMobil Corp., BP (formerly known as British Petroleum), and Schnacke.

Later in the broadcast, Schnacke misleadingly claimed that the federal government has banned access to enormous deposits of oil shale in Colorado, Utah, and Wyoming by placing "a moratorium on commercial leasing." Additionally, he suggested that no company would "spend billions of dollars in research and development if there's no payoff at the end of the process."

According to a May 16 Post article, the congressional moratorium "passed in December bans the administration from issuing oil-shale regulations or leases through the end of this fiscal year" ending September 30. However, Schnacke omitted that under the Energy Policy Act of 2005, the BLM already is managing oil shale development on federal lands by issuing RD&D leases, conducting a Programmatic Environmental Impact Statement, and finalizing regulations for commercial leasing. In fact, the Energy Policy Act was intended to foster oil shale development in the United States:

Not later than 180 days after publication of the final regulation required by subsection (d), the Secretary [of Energy] shall consult with the Governors of States with significant oil shale and tar sands resources on public lands, representatives of local governments in such States, interested Indian tribes, and other interested persons, to determine the level of support and interest in the States in the development of tar sands and oil shale resources. If the Secretary finds sufficient support and interest exists in a State, the Secretary may conduct a lease sale in that State under the commercial leasing program regulations.

Moreover, contrary to Schnacke's suggestion that no company would invest in oil shale research and development because "there's no payoff," the BLM in January 2007 issued RD&D leases in Colorado to three companies -- Chevron USA Inc., EGL Resources Inc., and Shell Frontier Oil & Gas Inc. -- and in Utah to Oil Shale Exploration Inc. According to the BLM, those leases "may convert to commercial leases upon demonstrating commercial viability." Furthermore, the BLM has created a Commercial Leasing Program to start selling commercial leases for oil shale development after the impact statements are finished and the lease regulations finalized.

From the May 22 broadcast of KBDI Channel 12's Independent Thinking:

CALDARA: Good evening and welcome; I'm Jon Caldara, president of the Independence Institute. Why are you at home watching me? Why aren't you out on a date having fun? Oh, that's right, you can't afford the gas to go anyplace, so you're stuck at home watching cable. To talk to us about that, from an organization called 'Mericans for 'Merican Energy, Greg Schnacke. Thank you for joining us.

SCHNACKE: Thanks for having me here.

CALDARA: I got that right? 'Mericans?

SCHNACKE: Correct. Americans.

CALDARA: Americans.

SCHNACKE: Americans for American Energy.

CALDARA: Americans for American -- got that. Bishop Phillip Porter, and with an organization called Consumers for Energy something-or-another. Help me out.

PORTER: Colorado Consumers for Affordable Energy.

CALDARA: Colorado Consumers for Affordable Energy. But what's this "bishop" part?

PORTER: Sometimes people reach and get you to do things they think you can do. And hopefully it's not just the people; maybe you've got a divine callin' on ya.

CALDARA: You're a minister and now a bishop. What church, may I ask?

PORTER: Church of God in Christ. We're headquartered in Memphis, Tennessee --

CALDARA: Mmm-hmm.

PORTER: -- and each state or jurisdiction has its administrative leaders. And I've been appointed in 1991 as administrative leader for the state for Montana, which allows me to bring my church here in Colorado along with two or three other brethren who wanted to be with me.

CALDARA: It kind of begs the question: If this is your job, being a minister, being a bishop, goin' out there and passin' the word of God, what do you care about energy affordability here in Colorado? What has that got to do with your role as minister -- or bishop?

PORTER: Energy is really my business. When people talk about the need for a better life, both here and in the world to come, it's all motivated and operated through energy. It just happens that this energy happens to be the energy that motivates all we do in this life -- how we get along, how we work, how we make money, how we treat one another. So that's my business, knowin' about how my parishioners and constituents are gettin' along. And it so happens that I minister to a number of people who fall in an economic level that's either middle income or poor and the working poor. And so when they're having difficulties of all kinds, it becomes a great concern to me and ought to to every minister who has a flock. This is not just about the hereafter, it's about the here and now as well.

CALDARA: And the here and now for your flock, they're havin' a hard time payin' their bills quite in part because we're paying $3.50 or $4 for a gallon of gasoline. These are people that need to get around; is that why you're getting into this?

PORTER: That's why I'm in this.

[...]

SCHNACKE: Well, we've had -- we have offshore drilling in some areas, but we have a big, big chunk of the Outer Continental Shelf that is not available for drilling. We actually, ironically, have Chinese drilling off the shores of Cuba closer to Florida than we can drill in some cases because of the bans. It's a ridiculous situation that does not have to exist. Oil shale's another area that we focus on. We have enough oil shale in three states -- Wyoming, Colorado, and Utah -- that equates to four times the amount of oil Saudi Arabia has. We have the oil; we have the gas. We can power our economy into the future, but we just can't get to it.

CALDARA: And a lot of that becomes cost-competitive now. Oil shale, for instance, costs $3 a gallon to pull out of the ground and turn into gasoline. When gasoline was a buck a gallon, well, you're not gonna do it; now that it's $3.50, it makes sense. So, don't we just let the marketplace take care of this and all these things are going to happen, or is it a governmental policy we need to work on?

SCHNACKE: Well, it's a governmental policy in the case of oil shale. There's a moratorium on commercial leasing. And the problem that you have with oil shale is, no company is going to spend the billions of dollars that you have to invest in the technology to try to bring this resource out of the ground and produce it unless there's going to be a commercial enterprise at the end of the day. And when Congress puts a ban on that, it completely chills --

CALDARA: Puts a ban on what?

SCHNACKE: On commercial leasing. Since you can't go out and commercially lease these areas --

CALDARA: Oh, OK. You can't get to the oil shale, is basically your problem.

SCHNACKE: Well, yeah, you don't have a prospect of making this commercially a viable enterprise. So why would a company spend billions of dollars in research and development if there's no payoff at the end of the process? You have to be able to produce these in commercial quantities, and the private sector is the one that's going to do it.

—C.H.