EQT

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EQT
Type Methane gas drilling and oil
Founded 1925
Headquarters Pittsburgh, PA
Number of locations Pittsburgh, PA
Revenue $1.3 billion

EQT Corporation is a Pittsburgh, Pennsylvania-based oil and gas company. It is involved in the controversial practice of fracking for methane gas in the Northeastern U.S. in the Marcellus Shale region. EQT is a leader in the Appalachian basin with over three million acres and one of the largest amounts of methane gas produced.[1] Though lauded as an environmentally-friendly alternative to coal, fracking for gas has been linked to depleting drinking water resources of local communities and polluting the wells of the people living around drill sites. According to a 2010 article in Vanity Fair, "as use of the technique (fracking) has spread, it has been followed by incidents of water contamination and environmental degradation, and even devastating health problems." [2] And according to data released to the EPA, Halliburton, a major supplier of fracking fluid, admitted using 807,000 gallons of diesel-based chemicals in its fluids, in violation of an agreement drillers had with the EPA.[3]

Executive Summary

EQT Corporation, known as Equitable Resources Inc. until February 2009, has a total Appalachian leasehold of 3.5 million acres for various plays including Marcellus Shale, Huron Shale and coal-bed methane production.[4] As of February 2011, EQT owned 500,000 acres in the prime Marcellus play. 86 wells, in addition to the 433 horizontal and vertical wells already in use in EQT landholdings around North America, are planned for 2011, mainly in Tioga County, Pennsylvania.[5][6] It has been reporting annual revenues of between $1.3 billion and $1.6 billion a year over the past five years, with gross profits of between $188 million and $270 million[7] a year in this period. Its CEO has an annual compensation of $4.14 million. EQT Corporation has been accused of numerous safety violations for possibly polluting rivers and spoiling drinking water by contaminating it with fracking fluids. EQT and its executives have also been very active in making partisan political donations, predominantly in favor of pro-fracking Republicans. This company, headquartered in Pittsburgh, Pennsylvania, has invested significant funds in elections in Pennsylvania, a state with large shale deposits, and its PAC was a major spender in the election of the new governor of Pennsylvania, Tom Corbett.

Partisan Political Activity

EQT is one of the oldest gas and oil companies in Pennsylvania and has had a long history of contributing to campaigns on both sides of the aisle since it began drilling in the Marcellus Shale area. The majority of its political donations has gone to pro-fracking Republicans. 2010 was the biggest year in gas and oil political contributions by corporations hoping to encourage lawmakers to continue with the lax restrictions surrounding methane gas drilling.[8] Nowhere is this seen more than in Pennsylvania, where the majority of the Marcellus Shale area lies. Between EQT's political action committee (PAC) and its executives and board members, contributions in 2009-2010 totaled $95,700 in Pennsylvania.[9] Between 2001 and 2010 contributions totaled $244,380.[10]

Corporate Political Action Committee

EQT (Equitable Resources) started its PAC in 1998. There is a second PAC, called Equitable Corporation State PAC, that was donated to as well. Since the start of its PAC, EQT employees have donated a total of $338,246 to the Equitable Resources Political Action Committee.[11] This number is likely much higher as corporate political contributions are difficult to track.

The Money Game: Marcellus Money reported that "Equitable Production Co. gave $53,550 in the names of five executives and one political action committee - EQT Corp PAC - in the 2010 election season." In Pennsylvania, $35,500 was given to Governor Tom Corbett, a known supporter of fracking companies, and another $39,000 to the losing candidate, Democrat Dan Onorato.[12]

In Virginia, another state where EQT owns a large amount of acres, specifically for coal mining, the State Donor Web site shows that EQT PAC and employees have donated $246,395 since 1996. $143,377 of which went to Republicans. 2009-2010 were the years with the biggest contributions: $66,245.

Donations were made to politicians, parties and other PACs. Here is a list of the company's most popular recipients: Senator Don White (R-Pa and Environmental Resources and Energy Committee member), Former Governor Ed Rendell (D-Pa), Dan Onorato (D-Pa), Senator Joseph Scarnati (R-Pa), Governor Tom Corbett (R-Pa), Congressman Tim Murphy (R-Pa and member of the Subcommittee on Environment and Economy), Senator Jay Costa (D-Pa), Senator Tommy Tomlinson (R-Pa), Former Congressman Michael Diven (R-Pa), Senator Robert Jubelier (R-Pa), President George Bush, John McCain (R-AZ), Pennsylvania Business Council, Senator Dominic Pileggi (R-Pa and Majority Floor Leader), the Republican National Committee and the Kentucky Republican Party.[13]

Political Donations by Company Execs

Board members and senior management have donated large amounts of money to EQT PAC and politicians. The West Virginia Public Records Web site shows that between 1997 - 2010, $57,193 was donated by executives, with the majority of that going to the company's PAC. Though not exhaustive, here is a list of the biggest individual contributors from EQT:

  • David Porges - President and CEO - $48,700
  • Philip Conti - CFO and Senior Vice President - $15,413
  • Randall L. Crawford - Senior Vice President and President, Midstream, Distribution and Commercial - $10,385
  • Martin Fritz - Vice President and President of Midstream - $5,537
  • Charlene G. Petrelli - Vice President and Chief Human Resources Officer - $5,209
  • Steven T. Schlotterbeck - Senior Vice President and President, Exploration and Production - $4,810
  • Lewis B. Gardner - Vice President and General Counsel - $2,711

Lobbying

According to the Common Cause's "Deep Drilling, Deep Pockets" report from May 2010, EQT spent $485,243 on lobbying from 2007-2009[14]

Also, Joe Dawley, an attorney with EQT and former general counsel to the West Virginia DEP, was chosen in September 2010 to be part of a "new nine-member task force that will help the West Virginia Department of Environmental Protection determine how to better regulate West Virginia's booming industry. DEP Secretary Randy Huffman also appointed a lobbyist for the West Virginia Environmental Council, a coal industry lawyer and an advocate for landowners' rights. The task force will try to find consensus on some issues as DEP staff write the necessary rules, regulations and legislation." The DEP has admitted that the growth of the number of wells being drilled in Marcellus is overwhelming the current number of inspectors.[15]

Front Groups

EQT is a supporter of several special interest groups that push for expanded drilling rights and limited or no regulation of fracking. It is a member of: The American Gas Association (Randall Crawford is on the Board),[16] The Independent Petroleum Association of America (IPAA),[17] the Virginia Oil & Gas Association (Maurice Royster, Vice-President of EQT, serves on the Board),[18] the Marcellus Shale Coalition,[19] West Virginia Oil and Natural Gas Association (Kevin West, who works in the Midstream Production Resources Division, is the Vice President of Legal of the Executive Committee)[20] and Energy In Depth.[21]

Claimed Violations of Safety Rules or Other Laws

Health and Safety Violations Alleged

Pennsylvania's DEP records show that EQT has 16 health and safety and administrative violations between 2008-2011 (as of February 2011). With one of the lowest instances of fines among fracking companies, EQT still has some safety violations such as: "Production fluid allowed to escape storage pit onto ground and leave worksite"; "failure to notify DEP and landowners 24 hours prior to drilling"; "Operator providing DEP information on drilling fluids spill"; "Tears in liner of storage pit"; "Stream discharge of IW, includes drill cuttings oil, brine and/or silt".[22]

Lawsuits

2010: "Two lawsuits filed on June 28, 2010 in federal court accuse the largest natural-gas companies that operate in Virginia of underpaying royalties to Southwest Virginia mineral owners who have leased their gas rights." The suits allege that Consol Energy, its subsidiary CNX, and EQT Corp., sold gas at below-market-value prices and deducted costs, which resulted in lower-paid royalties. Lawyers for the plaintiffs are requesting that the lawsuits proceed as class actions on behalf of mineral owners who have leased their gas rights to CNX or EQT and have received royalty payments. The amount of damages sought remains unclear.[23]

Twin class-action lawsuits filed in June 2010 accuse EQT Corporation and CONSOL Energy Inc. of stealing natural gas belonging to Southwest Virginia landowners and have "illegally exploited provisions of the 1990 Virginia Gas and Oil Act to produce a gas that belongs exclusively to landowners, who never have been compensated. The plaintiffs argue that they should be paid for all of the coal-bed methane gas the companies have produced from beneath their lands, past and future."[24] Residents of Russell, Buchanan, Tazewell and Dickenson Counties, all in Virginia, are involved in the lawsuit.
UPDATE: In July 2010, EQT submitted a motion to dismiss all cases against them, claiming they are the wrong party to go after. Landowners are seeking billions of dollars between EQT and CONSOL Energy/CNX.[25]

Revenue, Profits, and Taxes

EQT Corp. paid 5.3 percent of pretax income from 2001 to 2011, despite the corporate tax rate of 35 percent. According to data compiled by Bloomberg, EQT, Range Resources, Chesapeake Energy, and other U.S. oil and gas producers have been drawing upon a 1916 rule that allows them to expense “intangible drilling costs,” enabling them to postpone income taxes in recognition of the "inherent risk" of drilling wells that may turn out to be dry, which Bloomberg said "may be outdated for companies" due to fracking technologies.[26]

2010 statement is not available as of February 2011.

2009[27]

  • Revenue: $1.3 billion
  • Gross Profit: $729.57 million

2008[28]

  • Revenue: $1.6 billion
  • Gross Profit: $712.72 million

2007[29]

  • Revenue: $1.4 billion
  • Gross Profit: $616.84 million

2006[30]

  • Revenue: $1.3 billion
  • Gross Profit: $595.69 million

Executives and Annual Compensation

  • CEO and President David L. Porges: $4.14 million[31]
  • CFO and Senior Vice President Philip Conti: $1.4 million[32]
  • Senior Vice President and President of Midstream, Distribution and Commercial Randall Crawford: $2.5 million[33]
  • Senior Vice President and President of Exploration and Production Steven Schlotterbeck: $1.4 million[34]
  • Vice President and General Counsel Lewis Gardner: $776,980[35]
  • Vice President and Chief Human Resources Officer Charlene G. Petrelli: $1.9 million[36]
  • Chairman of the Board and Director Murry Gerber: $6.7 million[37]

Senior Executives

  • David L. Porges: President and CEO - "He served as the President, Chief Operating Officer and Director of the company since February 2007. He was the Vice Chairman and Executive Vice President, Finance and Administration, of the company in January 2005 through February 2007. Porges has served in a number of senior management positions with the company since joining the company as senior vice president and chief financial officer in 1998. Prior to joining the company, he held various senior positions within the investment banking industry and also held several managerial positions with Exxon Corporation. His is also on the Board of the American Natural Gas Alliance, Inc. (ANGA) and Interstate Natural Gas Association of America (INGAA). Porges is also a member of the McCormick Advisory Council for the Robert R. McCormick School of Engineering and Applied Science at Northwestern University and serves as a member of the Pennsylvania Business Roundtable.
  • Philip P. Conti: Senior Vice President and CFO - Reuters states that Conti has been CFO "since February 2007. He has been Vice President and Chief Financial Officer from January 2005 to February 2007, also Treasurer until January 2006. He was Vice President, Finance and Treasurer from August 2000 to January 2005." Conti has also been a senior production engineer at Tenneco Oil Company.
  • Randall L. Crawford: Senior Vice President and President, Midstream, Distribution and Commercial - "Crawford oversees all of EQT’s commercial, regulatory, operations and project development functions of EQT Marketing; EQT Gathering Inc.; Equitrans Interstate Pipeline; and Equitable Gas Company. Together EQT’s Midstream and Distribution companies operate an 11,000-mile network of methane gas pipeline. He also serves as a director for the American Gas Association, the Energy Association of Pennsylvania, the West Virginia Oil and Natural Gas Association and the Interstate Natural Gas Association of America."[38] All of these groups are front groups to advance the interests of fracking companies.
  • Steven T. Schlotterbeck: Senior Vice President and President, Exploration and Production - Schlotterbeck was elected senior vice president and president of Exploration and Production in April 2010 and previously held the position of president, EQT Production since 2008. "Previously, he spent seven years with Marathon Oil Company, working a variety of engineering positions in the Gulf of Mexico and Alaska. Schlotterbeck is also a member of the Independent Producers Association of America."[39]
  • M. Elise Hyland: Vice President and President of Commercial Operations - Hyland became president of Commercial Operations in April 2010 and previously held the position of president of Equitable Gas Company. Before EQT, Hyland "was with Alcoa, Inc. for 18 years. She held various positions in product and process development and served as manager of the Alloy Design Division. She is the holder of five U.S. patents and serves on the board of the Manchester Bidwell Corporation."[40]
  • Martin A. Fritz: Vice President and President of Midstream - Fritz "was elected vice president and president of Midstream in January 2008. Under his leadership, EQT Midstream has constructed more than 1,000 miles of pipe. Prior to joining EQT, he worked for the full service, international law firm of Duane Morris, LLP and for Ernst & Young as a CPA. Fritz also serves as a vice chairman of the EQT PAC.[41]
  • Lewis B. Gardner: Vice President and General Counsel - Gardner joined EQT in 2003 and "was named vice president and general counsel in March 2008. He oversees legal and external affairs, which includes the governmental relations and corporate communications functions. Prior to joining EQT, Gardner was a partner in the Houston and Austin, Texas offices of Brown, McCarroll & Oaks Hartline, general counsel to General Glass International Corp. (GGI) and senior counsel, employment law with Northrop Grumman."[42]
  • Charlene G. Petrelli, SPHR: Vice President and Chief Human Resources Officer - Petrelli has been with the company since 2000. "Her current responsibilities include developing and executing the human capital and talent management strategies for EQT’s 1,800 employees, and directing more than $3 million in annual giving through the EQT Foundation."[43]
  • Murry S. Gerber: Chairman and Chief Executive Officer - Gerber has been with EQT since 1998. He was also the CEO of Coral Energy LP, the Treasurer for Royal Dutch Shell, a member of the Board of BlackRock and a member of the American Association of Petroleum Geologists.[44]

Contact Information

Corporate Headquarters
EQT Plaza
625 Liberty Avenue
Suite 1700
Pittsburgh, PA 15222
#412.553.5700

Royalty and Interest Owner Inquiries
royaltyquestions@eqt.com
#412-395-3328

Shareowner Services
BNY Mellon Shareowner Services
P.O. Box 358015
Pittsburgh, PA 15252
#1-800-589-9026
http://www.melloninvestor.com

Web site: http://www.eqt.com/about/default.aspx

Articles & Sources

External Resources

Related SourceWatch Articles

Source Watch has a special clearinghouse on fracking, Fracking for Gas.

References

  1. ↑ "EQT Profile - Wikimarcellus"
  2. ↑ "A Colossal Fracking Mess", Vanity Fair 2010.
  3. ↑ "Fracking Halliburton", Mother Jones.
  4. ↑ "EQT WikiMarcellus Information"
  5. ↑ "EQT WikiMarcellus"
  6. ↑ "Marcellus Shale press release"
  7. ↑ "2010 Quarterly Earnings", Market Watch.com
  8. ↑ "A Colossal Fracking Mess", Vanity Fair 2010
  9. ↑ "EQT Marcellus Money"
  10. ↑ "MarcellusMoney.org EQT Page"
  11. ↑ "Open Secrets EQT Data"
  12. ↑ "Marcellus Money Candidate Donations"
  13. ↑ "Oil & Gas Top Interests", Philadelphia Metropolis.com
  14. ↑ "Deep Drilling, Deep Pockets.", CommonCause.org. Report, May 2010.
  15. ↑ "DEP names panel to help guide West Virginia gas drilling", RD Magazine
  16. ↑ "AGA Board"
  17. ↑ "IPAA Members"
  18. ↑ "Virginia Oil and Gas"
  19. ↑ "Marcellus Shale Coalition Committee"
  20. ↑ "West Virginia Oil and Natural Gas Executive Committee"
  21. ↑ "Energy In Depth"
  22. ↑ "PA DEP Violations Records"
  23. ↑ "Southwest Virginia Landowners File Lawsuit against CONSOL Energy Inc., EQT Corporation and CNX Gas Corporation", Business Week.com, 2010
  24. ↑ "Southwest Virginia Landowners File Suit Against CONSOL Energy Inc., EQT Corporation and CNX Gas Corporation", Business Week 2010
  25. ↑ "Energy corp. seeks dismissal of lawsuit alleging gas thievery", iStock Analyst.com
  26. ↑ Zachary Mider, Bradley Olson, Jesse Drucker and and Todd White, "Chesapeake’s 1% Tax Rate Shows Cost of Drilling Subsidy," Bloomberg, July 2, 2012.
  27. ↑ "Annual Finances"
  28. ↑ "Annual Finances"
  29. ↑ [http://www.marketwatch.com/investing/stock/EQT/financials "Annual Finances
  30. ↑ "Annual Finances"
  31. ↑ "Forbes David Porges Salary"
  32. ↑ "Reuters Philip Conti Bio"
  33. ↑ "Retuers Randall Crawford Bio"
  34. ↑ "Reuters Steven Schlotterbeck Bio"
  35. ↑ "Reuters Lewis Gardner Bio"
  36. ↑ "Reuters Charlene Petrelli Bio"
  37. ↑ "Forbes Gerber Bio"
  38. ↑ "EQT Randall Crawford Bio"
  39. ↑ "EQT Steven Schlotterbeck Bio"
  40. ↑ "EQT Elise Hyland Bio"
  41. ↑ "EQT Martin Fritz Bio"
  42. ↑ "EQT Lewis Gardner Bio"
  43. ↑ "EQT Charlene Petrelli Bio"
  44. ↑ "Merry Gerber Bio"
  45. ↑ "Campaign Money.com"
  46. ↑ "Marcellus Shale.us"
  47. ↑ "Common Cause"
  48. ↑ "Propublica Web site"
  49. ↑ "Marcellus Money"
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