The Center for Public Integrity

Down in Washington, Pennsylvania, an hour’s drive southwest from Pittsburgh, one message can be found plastered on billboards, newspapers, even diner placemats. It reads: “Coal, Pennsylvania’s #1 Fuel for Electricity. Now Clean and Green.” 

Those last words probably don’t spring to mind for citizens in the coalfields of northern Appalachia, where longwall mining thrives. A highly productive method, longwall mining yielded 176 million tons of coal in 2007—15 percent of total U.S. production. An estimated 10 percent of all U.S. electricity now depends on coal from longwall mines, which have grown in Appalachia and in Illinois, Utah, Colorado, and New Mexico. 

But longwall mining is the most brutal technology yet employed to extract coal from underground quickly and cheaply. A hulking shearer, the longwall machine chews the coal seam and leaves the ground to cave in what the industry calls “planned subsidence.” Residents living above mines describe the effect differently. Says Rebecca Foley, whose historic house has been shaken apart by the shock waves: “It’s like living through an earthquake that happens in slow motion.”

Northern Appalachia represents that epicenter. In southwestern Pennsylvania, six of the country’s top 25 longwall mines snake below 138,743 acres of rural terrain—15 percent of the area. By contrast, the remaining 19 mines are scattered among West Virginia, Ohio, Virginia, Kentucky, Indiana, and western states. Nationwide, no other place has as many operations—or as many citizens living above them—as southwestern Pennsylvania.

Rusk County, TEXAS — A gentle twilight pink stretches across the sky, touching the waters of Martin Creek Lake. The still air, smelling only of East Texas pines, brings the faint sounds of wildlife in the surrounding woods. Smog and traffic seem much further away than the 145-mile drive to Dallas.

But like so many still-idyllic scenes in Texas in the 21st century, this one is pristine only from a certain camera angle, and maybe only when the wind blows a certain way. Turn to the west, and three enormous smokestacks loom up, towering over jet-black pyramids of coal, products of the strip-mining that TXU helps facilitate throughout the state

Iosif Dan, a top advisor to Romanian President Ion Iliescu, explained in a recent interview with the Center for Public Integrity why he had accepted money from a petroleum company vying for a piece of the country's oil-privatization action.

"I have taken some money from these boys, as a loan, and this seems perfectly okay to me," Dan said. "Should I have gone to a bank that would give me money with … interest instead of going to these people? They are my friends."

The frank and surprising interview took place in the Cotroceni Palace, the headquarters of the Romanian Presidency. Dan is just one of several top Romanian officials who have connections to the oil industry.

With proven crude oil reserves of about 950 million barrels and with the largest refining capacity in Central and Eastern Europe, Romania, a nation of 22.6 million people, plays an important role in the European oil economy.

From the end of the Second World War until December 1989, when Romanian communist dictator Nicolae Ceausescu was executed, the Romanian oil industry was entirely State-run. Since then, it has been gradually privatized and restructured and its refining capacity downsized.

Romania is scheduled to join the European Union in 2007. Privatizing the country's main oil company, the National Petroleum Society, Petrom, is considered a vital part of that process.

Petrom is the biggest national oil company in central and eastern Europe. It is the main crude oil producer in Romania and accounts for roughly a third of Romania's natural gas needs. It also has 700 retail stations and 146 depots, part of a national network that accounts for more than half of the total number of gas stations in Romania.

In 2003, Petrom's annual revenue was more than $2.7 billion. The company also does oil-field exploration in Kazakhstan, Iran and India and has a chain of gas stations in Hungary and the Republic of Moldova.

In the spring of 2001, at a cocktail party on Capitol Hill, a staff member of the House Committee on Science brought up a subject of great interest to a lobbyist for the Gas Technology Institute, a Chicago-area organization that provides research and development for the natural gas industry: Rep. Ralph Hall, an 11-term Texas Democrat who sat on both the science committee and the Committee on Energy and Commerce, was interested in ultra-deepwater drilling and research collaborations between industry and government. In fact, the staffer let on, the science committee was drafting a bill proposing that the government subsidize technology for extracting natural gas and oil from hard-to-reach sources such as sand, rock and the deepest waters of the Gulf of Mexico.

This no doubt came as welcome news to the GTI lobbyist, as the organization was already working on developing deepwater drilling technology. And the news would only get better: GTI eventually contributed language to the legislation, which was later incorporated in the 2003 comprehensive energy bill as a program that would allocate more than $2 billion for research into "ultra deepwater and unconventional natural gas technology."

But if GTI's constituents stood to gain from the measure, many lawmakers saw it as yet another gift to an industry with plenty of market incentive to go after valuable hydrocarbons itself. Now, as Congress places a new energy bill atop its list of priorities for the upcoming session, Gulf-state legislators are shrugging off the skeptics and again promoting the program as beneficial for American energy independence, not to mention hometown jobs.

Energy companies prospecting for oil and gas in the Gulf of Mexico have used advanced technologies to drill in the deepest waters of U.S. territory. But what happens when they have the capacity—some say they already do—to drill beyond those borders into the high seas? Many believe the answer lies in the United Nations Convention on the Law of the Sea.

UNCLOS has been signed by 156 nations plus the European Union since opening for ratification in 1982. The treaty endeavors to establish a comprehensive legal framework regarding the world's oceans, including navigational rights, marine conservation and exploitation of resources. The convention also creates several institutions to carry out its provisions: the International Sea Bed Authority regulates mineral prospecting in the deep seabed, the International Tribunal for the Law of the Sea resolves border disputes, and the Commission on the Limits of the Continental Shelf determines national maritime boundaries.

President Ronald Reagan originally refused to sign the treaty because of language he believed prevented the United States from mining minerals from the sea bed. The following year, however, he announced a new oceans policy that incorporated most of the convention's provisions, including the establishment of a 200-nautical-mile exclusive economic zone (EEZ) off U.S. shores. In November 1994, President Bill Clinton sent UNCLOS to the Senate Foreign Relations Committee for ratification, but in 1995 incoming chairman Jesse Helms (R-N.C.) refused to even hold a hearing on it because of his view that all such UN charters undermined U.S. sovereignty.

Today, a coalition encompassing legislators, the energy industry, scientists and the U.S. Navy hope to finally witness the ratification of UNCLOS during the coming session of Congress. The Bush administration has called passage of the treaty "urgent," and industries from fishing to shipping to telecommunications have lobbied in favor of it.

After scores of private meetings with Big Oil giants such as ExxonMobil and ChevronTexaco, the Federal Energy Regulatory Commission is aggressively undermining the authority of state and local governments to reject dozens of proposed liquefied natural gas facilities all across the country.

The energy companies' influence with FERC and its chairman, Pat Wood III, is evident in schedules, letters, e-mails and handwritten notes obtained through the Freedom of Information Act by the Center for Public Integrity. The documents indicate an extremely close relationship between the commission and the industry it regulates.

Over the past three years, FERC's current four commissioners have met privately at least 83 times with executives and lobbyists representing oil and gas companies active in the LNG trade. In comparison, FERC has met privately only a handful of times with opponents of specific LNG projects.

Industry access seems to be paying off. For example, despite state and local opposition, FERC recently asserted its authority to unilaterally permit the construction and operation of LNG facilities. (California is currently in the process of challenging that decision in court. ) Top FERC officials have also supported more LNG imports in speeches and presentations. The agency has even announced a "new regulatory approach" that "remove[d] economic and regulatory barriers to the development of onshore LNG import terminals."

NEW DELHI — Late last year, officials at the World Bank decided it was time to practice what they had been preaching about reducing carbon emissions.

Well, sort of.

Some environmentally-friendly types at the international finance agency calculated the bank spewed 147 tons of carbon into the atmosphere when it flew in attendees for a conference in Washington in October 2003.

Looking to set a cheap and practical example on the worldwide issue of carbon emissions, the Washington, D.C.-based organization went halfway around the world to a tiny village located in the remote jungles of southern India.

In the ironically named village of Powerguda, the villagers had recently begun to collect and sell to a local mill the seeds of a native tree called the Pongamia pinnata. The seeds produce a natural oil that can be used as an alternative to diesel fuel. And unlike diesel and other fossil fuels, pongamia oil produces little carbon emissions when burned.

By providing the raw material for an alternative to relatively dirty diesel, Powerguda was effectively reducing the overall carbon load in the atmosphere—at least in the eyes of the World Bank. And it was this theoretical tiny reduction in worldwide carbon emissions that the Bank decided to buy to offset the carbon emissions resulting from its conference.

The price tag to the World Bank: $645. For that the bank got the village's entire potential carbon emission savings for the next 10 years.

The World Bank and others believe the Powerguda deal—while tiny and relatively insignificant—could help provide a new blueprint for governments and businesses trying to comply with the spirit of the Kyoto Protocol, the controversial manifesto meant to address greenhouse gas emissions on a worldwide basis. The treaty goes into effect early next year, after being approved this month by Russia.

Former Sen. Bob Dole, the Kansas Republican who ran for President in 1996, is known for his dry wit and television commercials after 45 years of public service.

What he is not known for is his work as a powerful lobbyist in the nation's capital for Indonesia.

Espousing the Pacific nation's value to the United States as an ally in the war on terror, Dole is also trying to recover hundreds of millions of dollars for the Indonesians—at the expense of an American company.

The Indonesian government paid the Alston & Bird law firm nearly $850,000 to have Dole and nine other lobbyists wine and dine Washington officials during a five-month period in the past year. Another political insider, Jonathan Winer, a former deputy assistant secretary of state for International Law Enforcement and chief counsel to Sen. John Kerry, the Democrats' presidential candidate, is part of Dole's team.

One of the top tasks for Dole and company is protecting the interests of Indonesia's state oil company Pertamina in a huge, multi-million dollar legal case brought against it by Karaha Bodas Co., a Cayman Islands-based joint venture between U.S. companies Caithness Energy and Florida Power and Light Co.

In 1998, Karaha Bodas had a contract with Pertamina to build a geothermal plant in Indonesia, which was voided by the since-ousted Suharto dictatorship. The Geneva Arbitration Court found Pertamina liable for breach of contract, and KBC subsequently took Pertamina to court across the globe—in the U.S., Canada, Hong Kong, even Singapore—to freeze the company's assets and collect up to $299 million in damages and interest. Pertamina has said it wants to settle the case, but Karaha Bodas has held firm and pushed ahead with its litigation.

"Pertamina owes KBC a lawful debt and they should pay it as soon as possible," said Chris Dugan, lead counsel for Karaha Bodas in the case.