It is often difficult to navigate the tangled web of just who owns and operates oil and gas companies. I found this out recently as I was reviewing the Pennsylvania Department of Environmental Protection's "eFACTS" website. This website tracks compliance with environmental laws and permits. It is an unbelievably tedious task to sift through these records, but every once in a while it pays off.
There are dozens of oil and gas companies drilling in Pennsylvania's Allegheny National Forest. One of these companies is called Duhring Resource Company. It sounds local enough. After all, there is a small town in the Allegheny National Forest called "Duhring." So it must be locally owned and operated, right? Well, the answer is not so clear.
As I was sifting through DEP's records for Duhring Resource Company on its eFACTS webite, I found this violation for an improperly lined pit. As you can see, the violation was recorded on October 4, 2006. But take a closer look to see what company the DEP held accountable for the fine. Instead of Duhring Resource Company, it is Quail Energy Corp.
I had never heard of Quail Energy Corp and was curious as to why it was being held accountable for a violation under records for Duhring Resource Company, so I decided to dig a little deeper. It turns out that Quail Energy Corp is a "project" of Itera USA, which is based in Jacksonville, FL.
On April 14, 2007, Itera USA posted this on its website:
First ten oil wells from the Quail project have been drilled and completed and are now in full production
Quail Energy Corp.
Itera is pleased announce that the first ten oil wells from the Quail project have been drilled and completed and are now in full production. The oil is lifted by American Refining Group out of Bradford,PA. This oil is high grade crude oil typical of the area.
Turning to Itera USA's website you find under its "Energy Resources" tab:
Itera has invested in a joint venture with Quail Energy, Corp. in a lease development project in Warren County, Pennsylvania. The goal of the project is the drilling and completion of up to 22 wells in the Devonian formation (approximately 2,000 feet) in acreage adjacent to large oil and gas fields first produced by Pennzoil Production in the late 19th century. This area was the first in the world to produce commercial quantities of oil and gas.
Development continues today, and the region's wells produce the highest-quality oil in the United States. The area's "Penn-Grade" crude oil combined with co-produced high-BTU gas makes for strong economics. Quail Energy is an independent producer-operator that has been involved in developing oil and gas wells in the Appalachian basin for more than 45 years.
This is the same area where Duhring Resource Company is drilling. This slideshow documents Duhring Resource Company's "operations" in Warren County, where Itera USA says it is operating in a joint venture with Quail Energy Corp...and don't forget that it is Quail Energy Corp that showed up as the company responsible for a violation under records for Duhring Resource Company.
But it gets even better (or worse). Itera USA is part of ITERA, which is an international group of companies that "bring warmth to people," as its website says. The Chairman of the Board for both ITERA and Itera USA is Igor Viktorovich Makarov.
According to the Harpers article, ITERA needed assistance to access U.S. markets because of shady dealings with Gazprom, a Russian-controlled conglomerate. The U.S. Trade and Development Agency had just pulled a pending $868,000 contract to ITERA because of its relationship with Gazprom. According to Harpers:
Two months later, however, things began to look up when congressman Curt Weldon flew to Moscow to meet with the firm's executives. Weldon publicly praised ITERA and called it "a great source" for U.S. energy firms seeking foreign partnerships. After he returned home, Weldon attacked the Trade and Development Agency for withdrawing the grant and contacted Karl Rove and Energy Secretary Spencer Abraham on the firm's behalf.
Four months later, ITERA signed a $500,000 contract with Solutions North America, a firm led by Karen Weldon, the congressman's twenty-nine-year-old daughter. Karen's job, according to lobbyist disclosure filings, was to create "good public relations so in the future ITERA may sell goods and services to U.S. entities." Representative Weldon—who is now the target of an unfolding federal investigation—helped create that good P.R. by continuing to make favorable pronouncements about the controversial Russian firm.
The article continues to document the shady dealings between ITERA and Gazprom:
This was post-Soviet corruption of the worst sort, but none of it appears to have troubled Weldon. In late September of 2002, he helped organize a dinner at the Library of Congress in honor of ITERA's CEO, Igor Makarov. Karen Weldon's firm also lent a hand and was paid for its efforts as part of its contract with ITERA. Two days after the dinner, Weldon praised ITERA in a speech on the House floor; then, in late 2002, when Weldon led a congressional delegation to Eastern Europe, ITERA paid for Karen Weldon to join him. During a stop in Moscow, Rep. Weldon called for an increase in U.S. imports from ITERA and other Russian energy corporations. And in January 2003, ITERA opened an expanded U.S. headquarters in Jacksonville, Florida, and flew Weldon down to attend the gala affair. "I can think of no other company," said the congressman, "that represents what Russia is today and offers for the future."
So, partly as a result of former PA Congressman Weldon, Itera USA is operating in a joint venture with Quail Energy Corp in Pennsylvania's Allegheny National Forest. And, despite having vast sums of money, Quail Energy is being cited by the Pennsylvania DEP for having improperly lined pits, which threatens our water quality and health.
Who could have guessed that in remote northwestern Pennsylvania, this trail of ownership would lead back to a political and corporate corruption scandal that spans the globe? How many other similar webs like this exist?
You can contact the following offices and let them know that oil companies should not be allowed to operate on U.S. Public Lands if they cannot properly line pits for storing their toxic material because it threatens water quality and human health.