When Non-Profit News Attacks Bakken Oil, There Will Be Bad Journalism
A non-profit news outlet based in the San Francisco Bay area – whose donors also finance environmental activist groups – has been called out by a North Dakota researcher and media personality for making alarmist and untrue claims about worker safety in the Bakken oil fields.
The debunking was so swift, comprehensive and embarrassing that the Center for Investigative Reporting (CIR), also known as Reveal, was forced to dodge basic questions about its claims on national television. On CNBC, when asked about the relative safety of oil and natural gas development compared to other industries, CIR reporter Jennifer Gollan said she could not “get to the bottom” of that question because of shortcomings in U.S. government data. But in reality, the data does exist; it’s available on the website of the U.S. Bureau of Labor Statistics, and it shows oil and gas development is safer than many other lines of work.
On Tuesday, Gollan went on CNBC to promote her June 13 story, titled “In North Dakota’s Bakken oil boom, there will be blood.” The feature, running well over 5,000 words, accused the oil and gas industry of being a “serial killer” that pays workers more for drilling fast than drilling safe. Gollen also claimed that the industry uses unique liability clauses in contractor agreements to avoid the “full cost” of responsibility when something goes wrong.
A version of the CIR feature was published on June 15 in Politico Magazine, but within hours, the Say Anything Blog – considered “one of the most prominent political news sources in North Dakota” – sounded the alarm. In just two short blog posts, published June 15 and 16, columnist and researcher Rob Port exposed the CIR feature as “sensational,” “extremely misleading” and “built on a faulty premise,” because, in his words, “the safety rate in North Dakota’s oil fields has improved, not worsened.”
Port – the same blogger who revealed that disgruntled political opponents of North Dakota Gov. Jack Dalrymple (who were represented by the reporter as neutral parties) were behind a New York Times “hit piece” on Bakken oil production last year – has called on CIR to “correct the record.”
While he waits for a response, Energy In Depth has uncovered some other curious facts about this piece. For example, despite their selective outrage at the oil and gas industry, officials at CIR use liability clauses every hour of every day to shield themselves from responsibility for the errors and inaccuracies published on their website. And the fixation of CIR to portray the industry as a “serial killer,” despite its being safer than many other lines of work, conveniently overlaps with the political agenda of the non-profit’s major donors, who send millions of dollars to oil-and-gas opposition groups such as 350.org, the Sustainable Markets Foundation, Earthworks and the Sierra Club.
What follows is a summary of Port’s criticisms, and ours, related to CIR’s most recent piece of attack journalism.
Hiding the data
Let’s be clear: Every workplace death, no matter the industry, is a tragedy. Every workplace death, no matter the industry, is unacceptable. Like other industries, the oil and gas industry strives to ensure workplace deaths never happen, and when they cannot be prevented, accountability is demanded under federal, state and civil laws. Intense media scrutiny of worker safety across all industries, including oil and gas, goes hand-in-hand with those other mechanisms to ensure proper accountability. But given the tragic and serious nature of the subject matter, news outlets have a responsibility to take special care, stick to the facts and avoid sensationalism.
Yet the so-called “investigation” by CIR fails to meet that responsibility. Starting with its “There Will Be Blood” headline, the story ducks and weaves around the facts with an eye on manufacturing a narrative about oil and gas development as inherently dangerous and irredeemably wrong.
For example, CIR claims 74 oil and gas workers were killed between 2006 and 2014 in North Dakota, Montana and across the Canadian border in Saskatchewan and Manitoba. At present, we cannot replicate that number based CIR’s brief description of its methodology. It’s worth noting, however, that CIR’s expansive definition oil and gas development includes things like construction supply delivery if at least “some of the pipe” was intended for an oil and gas project.
For now, though, even if you assume CIR’s numbers are correct, and even if you assume all those deaths happened only in North Dakota, there’s still a missing piece: to get an accurate sense of how the risk- and safety profile of oil and gas activity in the region has changed over time, one needs to compare these injury and incident numbers alongside how many new wells have been being drilled over that same time period, and how many new barrels have been produced. In this case, those two data points can tell you a lot, whereas just one of them, evaluated in isolation, tells you very little.
When Rob Port conducted that analysis, he found “the exact opposite of what the article argues.” Far from being a “serial killer,” the fatality rate actually declined 73 percent between 2006 and 2014, despite an almost 650 percent increase in the number of wells drilled each year. Port graphed out the trend:
Putting aside the “fraught language” and “what it might tell us about the biases of the article’s authors,” the CIR’s biggest failure was hiding key data from its readers to support the “serial killer” narrative, Port said. He concluded:
“The rate of oil worker deaths per well is way, way down from 2006 and in recent years seems to be on a continued improvement trend.
Again, worker safety is nothing to trivialize. This is an important topic to discuss. But it should be discussed honestly. That this context and data was missing from the sensational CIR/Politico story is telling.”
Misrepresenting the facts
Just one day later, Port followed up with another report debunking Reveal’s claim that workers get bigger bonuses for fast drilling than safe drilling. He found the facts show the opposite – “workers do get rewarded more for safety than speed.”
CIR claimed that oil companies “offer financial incentives to workers for speeding up production – potentially jeopardizing their safety.” Specifically, its “There Will Be Blood” article cited one operator in the Bakken “paid workers performance bonuses of $150 per day for drilling quickly, compared with $40 a day for drilling safely…”
But Port discovered the bonus system had been completely mischaracterized by the reporter. The company told him safety bonuses of $40 a day are paid “for every day of incident-free drilling operations,” and performance bonuses are paid “if and when drilling is completed ahead of schedule.” If you assume it takes about 30 days on average to drill a Bakken well, “workers on a drilling crew that finish 3 days ahead of schedule and log 27 days of safe drilling operations would receive a $450 performance bonus and a $1,080 safety bonus.” If the drilling took 35 days, there would be no performance bonus, but the workers would still earn a $1,400 safety bonus. So, in other words, the real money is made through safe operations.
Port also learned that one of the cases given so much attention by CIR took place during a workover operation of an existing well. But the bonus system only applies to drilling, meaning CIR “drew a connection between a worker’s death and those bonuses when, in reality, the bonuses weren’t even a part of the situation,” according to Port.
He concluded that CIR’s reporting was “extremely misleading, and unfortunate, and the CIR folks should correct the record.”
Hiding the data (again)
During her CNBC interview, CIR reporter Jennifer Gollan dodged what should have been a straightforward question while promoting her “serial killer” narrative about the Bakken:
Herb Greenberg: “Outside of the Bakken, what do deaths look like, not just the oil industry, but all other industries? How does this compare? …”
Jennifer Gollan: “Well that’s a really good question, and something we would have loved to get to the bottom of. However, what we found through our investigation is that OSHA does not have a systematic way to track oil and gas-related deaths. These are jobs that are, say, in construction or excavating in support of oil boom growth. So, it’s very difficult to make an apples-to-apples comparison.”
OSHA, the Occupational Safety and Health Administration, is an agency of the federal government, and Gollan was effectively blaming the U.S. government for not having good enough data to answer Greenberg’s question. But the federal government does keep such data. It can be found at the U.S. Bureau of Labor Statistics – which like OSHA, is part of the U.S. Department of Labor. And given how hard CIR worked to exaggerate the risks of oil and gas development, it’s not surprising that Gollen didn’t want to talk about the BLS’s data.
Here are the facts from BLS: Even when regulators put oil and gas in the same category as mines and quarries, it has a lower fatality rate than occupations in the agriculture, forestry, fishing, hunting, transportation and warehousing sectors. In terms of total deaths, four percent of workplace fatalities in 2013 – the most recent year of complete data – were workers and contractors in the mining, quarrying and oil and gas sectors, behind construction, transportation, warehousing, agriculture, forestry, fishing, hunting, government, professional and business services, manufacturing, leisure and hospitality. Those rates and totals are displayed in more detail in the following BLS tables:
Once again, the fatality rates outlined above include some incidents from mining and quarrying, which suggests the oil and gas rate may be lower than indicated by these tables. That would put oil and gas closer to general construction, which makes sense, because developing an oil and gas well is essentially a construction project involving the use of steel, cement and other building materials. In terms of the separate-but-related category of non-fatal injuries, the BLS finds the incidence rate for oil and gas is 1.3 per 100 full-time workers. That compares favorably to the rate of 3.5 across all industries and government.
The BLS tables cited above also make clear that CIR was exaggerating once again when it claimed on CNBC that the U.S. government isn’t tracking oil and gas “support” workers. For example, if the U.S. Department of Labor was not concerned about contractors, how does CIR explain the “contractor-adjusted” data that went into those BLS tables? In fact, in the most recent data from BLS, more than two-thirds of the oil and gas fatalities were categorized under “support activities for oil and gas operations.”
If CIR wants to criticize the way worker safety data is collected, and suggest some improvements, that’s one thing. But pretending that data does not exist just because it happens to portray oil and gas development as safer than many other lines of work is highly misleading and underscores the sensational nature of CIR’s so-called investigation.
Wrong about indemnity
In its “There Will Be Blood” piece, CIR decries the use of indemnification and liability clauses in contracts, because the outlet says it “allows big energy firms to shield themselves from collateral damage.”
But again, singling out oil and gas developers for reaching agreements with their contractors that include liability clauses is highly misleading. As it turns out, “indemnify and hold harmless” clauses are standard for just about all contractors who work on construction projects, and they are even enshrined in the American Institute of Architects guidebook on drawing up construction contracts. According to the American Bar Association, the AIA’s recommendation is routinely followed and makes the following language a common feature of commercial and residential construction contracts:
“[T]he Contractor shall indemnify and hold harmless the Owner…from and against claims, damages, losses and expenses…arising out of or resulting from performance of the Work, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself), but only to the extent caused by the negligent acts or omissions of the Contractor, a subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable.”
Likewise, state and federal governments use similar clauses in everything from contests to highway projects to motor vehicle leases. Remarkably, CIR highlights cases in which surviving family members received payments and settlements from a combination of insurance companies, contractors and oil and gas developers. Those settlements were reached after investigations by OSHA that determined what went wrong and who was responsible. In other words, for incidents that occurred during the course of oil and gas development, there was accountability within the oil and gas industry.
Apparently, CIR either doesn’t know or doesn’t care that contractors are just as much a part of the oil and gas industry as the operators who bid on properties to explore. For example, you will find a mix of oil and gas developers, service companies, pipeline operators and other representatives from the supply chain on the boards of oil and gas industry trade associations, including the North Dakota Petroleum Council.
To argue, as CIR does, that there is no accountability unless a “top energy firm” – whatever that’s supposed to mean – is blamed is simply wrong. The argument is so weak, in fact, that CIR needed to take a standard business practice – negotiating and reaching agreements over liability – and make it sound completely nefarious, but only when it’s used by oil and gas developers.
What makes this argument even more remarkable is how much it insults the intelligence of the public, who are subjected to liability clauses every time it visits the CIR website.
Double standard on indemnity
“ALTHOUGH WE TAKE REASONABLE STEPS TO PREVENT THE INTRODUCTION OF VIRUSES, WORMS, OR OTHER DESTRUCTIVE MATERIALS AND PROGRAMS TO OUR SITE, WE DO NOT GUARANTEE OR WARRANT THAT OUR SITE OR MATERIALS THAT MAY BE DOWNLOADED FROM OUR SITE ARE FREE FROM SUCH DESTRUCTIVE FEATURES. WE ARE NOT LIABLE FOR ANY DAMAGES OR HARM ATTRIBUTABLE TO SUCH FEATURES. WE ARE NOT LIABLE FOR ANY CLAIM, LOSS OR INJURY BASED ON ERRORS, OMISSIONS, INTERRUPTIONS OR OTHER INACCURACIES IN OUR SITE, NOR FOR ANY CLAIM, LOSS OR INJURY THAT RESULTS FROM YOUR USE OF THIS SITE OR YOUR BREACH OF ANY PROVISION OF THIS AGREEMENT.”
Incidentally, the same goes for Politico, which republished the CIR piece. Its terms-of-service page reads:
“You agree to indemnify and hold us, POLITICO LLC, and our subsidiaries, affiliates, licensors and other partners, and the directors, officers, agents and employees of each, harmless from any claim or demand, including reasonable attorneys’ fees, made by any third party due to or arising out of your use of the Site, your violation of our Terms of Service, or your violation of any rights of another.”
About those environmental mega-donors
On their website, CIR officials thank a series of donors for supporting their mission to “inspire empathy, inform the public discourse, spark action and improve lives.” But a cursory review of the donor list reveals that CIR accepts funding from foundations that pour millions of dollars into environmental activist groups that actively and aggressively oppose oil and natural gas development.
For example, the Rockefeller Brothers Fund – which has donated $210,000 to CIR – has contributed at least $700,000 to 350.org, an anti-fossil fuel group campaigning to eliminate oil and natural gas development through bans on hydraulic fracturing. RBF has also sent almost $1.7 million to the activist group Sierra Club, which is also committed to “eliminating the use of fossil fuels,” including oil and natural gas. In fact, the Sierra Club is actively campaigning against pipeline infrastructure that would transport Bakken oil from North Dakota to other states. RBF also directed more than $900,000 to the Sustainable Markets Foundation, which played a critical role in the campaign to ban hydraulic fracturing – and therefore energy production from the Marcellus Shale – in New York last year.
As Energy In Depth recently testified before the U.S. House Committee on Space, Science and Technology, the New York hydraulic fracturing ban was a text book case of the “echo chamber” created by environmental donors when they fund non-profit news outlets, campaign groups and other organizations to work towards a common political goal. In fact, a 2014 report from the U.S. Senate Environment and Public Works Committee showed that funding media outlets and campaign groups in an effort to “mislead the public” is a common practice among the nation’s biggest environmental donors.
One of the donors cited in the Senate EPW Committee report was the William & Flora Hewlett Foundation, which is also a huge funder of CIR’s operations. The Hewlett foundation has contributed more than $3.4 million to the CIR since 2009, while at the same time giving well over $5 million to the Sierra Club. Other oil and gas opposition groups to benefit include Oil Change International ($500,000) and Earthworks ($420,000), a group that created the anti-fracking “Stop the Frack Attack” coalition.
Perhaps this helps explain why CIR was so willing to throw around inflammatory phrases like “there will be blood” and “serial killer” when writing about the oil and natural gas industry.
When Rob Port observed that CIR’s “fraught language” offered clues about “the biases of the article’s authors,” he was onto something. Instead of an even-handed review of a serious issue – worker safety – that’s worthy of continued discussion across all industries, CIR produced a piece of attack journalism that distorts key facts and conceals others to support the story’s overly frightening, and false, premise. That may please CIR’s donors, and the big environmental groups those donors finance, but it does nothing to promote a fact-based discussion about where, when and how we should produce the energy that supports our way of life.
Jennifer Golan and CIR have a right to a point of view, and a right to be advocates. But that doesn’t mean their work should be misrepresented to the public – and to media outlets like Politico and CNBC – as straight news.