Oil & Gas in the Capitals

“They asked for it, and now they are going to get it.”–U.S. President Franklin D. Roosevelt, January 1943.

Environmental protests and related project delays, costs and risks have become a cost of doing business for oil and gas (O&G) companies—until now. In August, Energy Transfer Partners (ETP), the company building the Dakota Access Pipeline (DAPL), filed suit against Greenpeace International and two other environmental groups, Earth First! and BankTrack, that delayed the pipeline during 2016. ETP contends that Greenpeace and others effectively ran a “criminal enterprise” through their protests of the project.

The suit was filed in U.S. federal court in North Dakota under the Racketeer Influenced and Corrupt Organizations (RICO) Act—a law created to prosecute the mafia. ETP alleges that Greenpeace and its partners solicited donations under false claims about the pipeline, threatened ETP investors and lenders, launched cyberattacks, and sought to sabotage the pipeline with “terrorist threats.”

A new tactic. This represents an aggressive new front in the battle over the 1,200-mi pipeline, which became operational in June. More important, it represents a much-needed shot across the bow of Greenpeace and other radical environmental organizations. ETP seeks a trial and monetary damages, noting that disruptions to construction, alone, cost it at least $300 million, and is requesting triple damages. This could bring a nearly $1-billion verdict and would destroy Greenpeace.

ETP levies numerous accusations against “a vast network of co-conspiring groups and people.” ETP alleges that network members used torches to sabotage the pipeline; manufactured phony satellite coordinates of Indian cultural sites along the pipeline’s path; exploited the Standing Rock Sioux; launched cyberattacks on company computer systems; damaged company equipment; threatened the lives of ETP executives; supported ecoterrorism; and even funded drug trafficking within protest camps. Greenpeace USA General Counsel Tom Wetterer contends the suit was “not designed to seek justice, but to silence free speech through expensive, time-consuming litigation…”

Suit components. The Trump administration approved DAPL in February. It can carry 570,000 bopd from North Dakota to Illinois. The suit’s contentions include:

“This case involves a network of putative not-for-profits and rogue eco-terrorist groups, who employ patterns of criminal activity and campaigns of misinformation to target legitimate companies with fabricated environmental claims and other misconduct, inflicting billions of dollars in damage. The network’s pattern of criminal misconduct includes (i) defrauding charitable donors and cheating federal and state tax authorities; (ii) cyberattacks; (iii) intentional and malicious interference with their victims’ business relationships; and (iv) physical violence, threats of violence, and destruction of private and federal property…”

“The damage to Plaintiffs’ relationships with capital markets has been substantial, impairing access to financing, and increasing their cost of capital and ability to fund projects. Moreover, Plaintiffs incurred substantial expenditures to mitigate the impact of the opposition’s slander campaign and violent protests…” 

“The Enterprise also launched cyber-attacks against Plaintiffs, and intentionally incited the most violent and unstable actors at their disposal to target company executives, inundating them with death threats, physically menacing Company directors and officers, and publishing personal information about them that put them at imminent risk of harm…”

These contentions are familiar to many in the O&G industry.

Other usage of RICO. Unfortunately, there is a current bias among energy firms that favors entering into litigation settlement agreements rather than going to trial. It is thus encouraging that other energy and natural resource companies are retaliating. For example, Greenpeace has targeted Canada’s Resolute Forest Products, accusing it of endangering the Boreal Forest. In response, Resolute sued Greenpeace in the U.S. for violating RICO. The suit, filed in 2016 and pending in federal court in San Francisco, alleges that Greenpeace is essentially a mob syndicate. Resolute contends that it has suffered $100 million in damage to its reputation and seeks triple damages.

Chevron recently used RICO against environmentalists who had sued it over pollution in Ecuador. In June 2016, the U.S. Supreme Court left in place a lower-court ruling that protected Chevron from having to pay damages in the U.S. related to the Ecuadorian dispute. Chevron proved that its activist foes had transformed their suit into an extortion plot featuring “bribery, fabrication of evidence, and ghostwriting judicial opinions.”

Similarly, Cabot Oil & Gas Corporation refused to settle when landowner Ray Kemble and his lawyers filed a nuisance suit against it on allegations that had already been settled in prior litigation in 2012. Rather than offering to settle, Cabot chose to challenge a double-dip filing. The judge dismissed Kimble’s suit in a summary judgment, but Cabot had grown tired of this “sue and settle” racket. So, rather than drop the matter, it filed a counter-suit against Kemble and his lawyers, the Missouri-based Speer Law Firm.

If Greenpeace were a credible organization, its activities would be peaceful, deliberate and constructive, not malicious and destructive. However, Greenpeace is the leader of the radical anti-energy movement: It is anti-prosperity, anti-energy and anti-progress. It and other similar organizations deserve to be sued into oblivion.  

About the Authors

Dr. Roger Bezdek

Contributing Editor

Dr. Roger Bezdek is an internationally recognized energy analyst and president of MISI, in Washington, D.C. He has over 30 years’ experience in the energy, utility and environmental areas, serving in industry, academia and government. He has served as senior adviser in the U.S. Treasury Department, U.S. energy delegate to the EU and NATO, and as consultant to the White House, the U.N., government agencies, and numerous corporations and organizations. He has written eight books, has published over 300 articles in professional journals, and his work has been featured in the Wall Street Journal, the Washington Post, New York Times, Time, Business Week, Science, Nature, World Oil, and other print and digital media.