Saturday, February 8, 2014

Follow the Money: NY's Own Pro-Drilling Grassroots Now Funding "Industry" Lawsuits

JLCNY President Dan Fitzsimmons interviewed by TV people outside the NYS DEC's frack hearings in Binghamton, back in November 2011:  It's now becoming clear that Fitzsimmons' hesitant brand of activism has pushed frustrated pro-drillers from his own base to look for other angles.
The jaded assumption from both pro- and anti-drilling forces in New York is that Big Oil and Gas entities, probably from out of state, were anonymously bankrolling the legal challenge to the Cuomo Administration which features the pathetic (old meaning) bankrupt estate of Norse Energy as lead plaintiff.

Word of Norse's new case
was first publicly broken by NY Shale Gas Now on Nov. 23, 2013.  And then there was a formal filing on Dec. 17, 2013, after which it got quite a bit more coverage as collated here.  It is the first case out of the gates to challenge Cuomo's misuse of the state's environmental review laws in order to thwart fracking — by never making a decision, one way or the other.  The allegation, in bureaucratic terms, is that the governor has illegally frozen the Supplemental Generic Environmental Impact Statement (SGEIS) as a perpetual draft, under a tangled process spawned by the State Environmental Quality Review Act (SEQRA).  It all amounts to a mechanism for Cuomo to uncourageously pocket-veto any shale gas getting produced from inside the state's lines.

It was already widely understood that the bankrupt Norse, its losing penny stock investors, and its other bag-holding creditors were not as a class paying for this lawsuit.  These interests are all broke.  In fact, the only way Norse's bankruptcy trustee could get the federal bankruptcy judge to okay such a litigation scheme was to promise that it wouldn't cost anything to any of the parties caught up in the wind-down bankruptcy, relying instead on
"independent third parties ('The Funding Parties')."

Nobody has previously revealed who these anonymous funders are, but, as of Friday, we have some new clues, and they are surprising.

Let me first note that the funding situation in Norse vs. Cuomo also implies that these same anonymous donors were more or less the same group that was keeping alive Norse's previously launched test case against the Town of Dryden in Tompkins County.  The Dryden case is on the equally important but different front of whether New York is devolving into an unworkable drilling balkanization by letting localities use "home rule" to trump the state's drilling statute and zone out any such activity within their municipal lines.  The case actually started out with a Colorado-based industry plaintiff, Anschutz Exploration, but then those guys packed up, and Norse Energy got itself assigned ownership of enough of Anschutz's local leases to fulfill standing requirements.  And then Norse proceeded with the necessary appeal, the first rounds having been won by the town and its anti allies.

But then Norse went into bankruptcy, and somehow its Dryden case lived on.  Anybody wonder about that?

If you're pro-drilling, you celebrate the anonymous white knights that are keeping these sorts of efforts alive, and you wonder who could possibly still have enough interest in New York State's future shale gas development to take a flier on such long-term, long-shot efforts.  If you're opposed, you emblazon your rhetoric with a bitter, seething resentment at the Greedy Out-of-State Big Gas Fat Cats who scheme to disrupt the comfort (for some) of New York State's ongoing paralysis.

Now it turns out the Litigation Funding Out-of-State Fat Cats might be way more local, and way less fat, than previously realized.  And, by implication, it turns out that Big Oil and Gas is now largely M.I.A. from the onetime Empire State, and has indeed lost hope that the situation in New York will ever get turned around, at least within the time frame of even the most far-sighted business plan.

Here's the evidence:  On Friday, the Norse bankruptcy trustee's contracted lawyer, Tom West out of Albany, put out the word by email (significantly, not yet on his blog), indicating that his plaintiff's table could use — ummm — a little more funding in order to press Norse's procedural case, which is barely underway. 

And West noted that what legal bills have been covered so far were actually paid right out of New York's Southern Tier, not by
Big Oil and Gas:
"This litigation was commenced with funding from several forward-thinking businessmen in the Southern Tier of New York who recognize this as the only path forward to reopen New York State to oil and gas development, revitalize the Southern Tier and provide much needed jobs and economic development."
West's palm-out plea should be jarring for all those who already had their minds made up regarding which side in this battle should be rhetorically made to look bad with charges of wealth and power, and which side should be left alone to cloak itself as impoverished grassroots underdogs.  It should be jarring, but most people have a knack for filing facts away in such a way that their religion isn't challenged.

Meanwhile, the Binghamton-based Joint Landowners Coalition of New York has now shrugged off nearly a full year's self-imposed hamstrungedness by finally starting the clock on a parallel case against Cuomo — lining up the property-rights-focused Mountain States Legal Foundation to send the governor and his minions a two-week warning letter dated Jan. 31, 2014.  That news was broken by an obviously coordinated advance effort at 5 a.m. the same day by Gannett's Albany-based reporter Jon CampbellBut then it was blacked out from both print and screen platforms at the chain's own daily newspapers — on knuckle-headed grounds that Gannett doesn't facilitate idle lawsuit threats from bullies

No, I am not making this up.

Yes, that Binghamton is one helluva messed-up town.

Binghamton is both the epicenter for true pro-drilling grassroots activism statewide, while at the same time it is home base for a kind of Soft-Palmed Leftward Gentry — who are alarmingly disconnected from what's really going on with the Carhartt's in their own backyard, their own Ordinary People.  (Quick! — let's run a story instead on an organic goat's milk farm, or those cool Amish dudes, or maybe the highly promising economics of the upcoming maple syrup season!)

Assuming the landowner coalition's elders don't further delay things on grounds that they still don't have enough money (they were short just a remaining $4,447 out of their originally stated $100,000 goal as of late today, Saturday, Feb. 8 — as can be kept tabs on by looking at the fund-raising thermometer to the upper left of a web page here), JLCNY's case is due to be filed this coming Friday, Feb. 14, or Valentine's Day.

That should be fun. 

But who's really paying for JLCNY's case?  If I were JLCNY, I would compile some statistics and publicly summarize them on the same day they finally file.  I would acknowledge how much cash or in-kind effort Mountain States has really committed to kicking in, and openly outline where that funding comes from.  And I would also state the number of donations it took for JLCNY to get to $100,000, the size of the largest check, and the size of the smallest, and the average size of those donations, and which state the money really came from.  Some of it — not a lot, but some of it — came from me, and if you want to join me by Paypal you can do so here.  I suspect the lion's share of the rest has come from thousands of ordinary land-holding and job-holding people, right in upstate New York, representing a legitimate faction that's now ready to fight to re-legalize opportunity hereabouts through shale gas.

Add it all up, and frack battle spectators and participants now have two sets of parallel cases — one each ostensibly from industry, and verifiably from landowners, on the local drill bans (
Norse vs. Dryden, and  Cooperstown Holstein vs. Middlefield), and one each ostensibly from industry, and verifiably from landowners, on Cuomo's pocket veto (Norse vs. Cuomo, and JLCNY vs. Cuomo).

Whether JLCNY's case against Cuomo will also put forward — or keep ultimately alive — its long-vowed "mineral takings" angle remains to be seen.  I sure hope so.

The bottom line is that, if you're willing to at least try following the money, virtually all the frack-related litigation now underway in New York State is looking more and more like a situation where certain New York State citizens are at war with their own state leadership — and less and less like the anti's preferred rhetorical narrative, where Big Evil Out of State Oil and Gas is trying to force Poor Helpless New York to go frack itself.

Do I expect that fact-supported observation to sink into future media coverage, and to further make it into the public consciousness? 

I don't. 

It's politically harder for Cuomo to cope gracefully with a situation where it's his own disheveled upstate landowners and ordinarily mild-mannered business interests that are fed up.  Mainstream media in New York are going to continue to protect him by declining to rewrite the fable that's already been told and told — that this is all about heartless industry versus homespun greens, as covered for by a paralyzed Cuomo.

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