Over the past 12 months, the company has been responsible for more than 23,000 gallons of oil spills.
Editor’s note: This is part of The Revelator’s months-long investigation into Hilcorp Energy. For the rest of this series, click here.
Hilcorp Energy’s oil and gas operations in Louisiana have been involved in at least seven oil spills since July, including two spills that dumped thousands of gallons into the Mississippi River and marshlands along the Louisiana Gulf Coast.
Scott Eustis, coastal wetland specialist for the Gulf Restoration Network, says Hilcorp’s history of regulatory violations and operating shortcuts contribute to the company’s repeated oil spills.
“If Hilcorp applied for permits properly, surveyed properly, and maintained equipment properly,” he says, “they would not have all these accidents.”
Hilcorp spokesperson Lori Nelson said in a May 10 email to The Revelator that “Hilcorp has a long history of investment which helps build and maintain Louisiana’s energy development.”
She said company “adheres to all state and federal regulations and attains necessary permits as required for our operations.”
Hilcorp’s Louisiana oil spills in the last 12 months include:
July 25, 2016: A Hilcorp abandoned pipeline leaked 4,200 gallons into the Lake Washington oil field in Plaquemines.
Aug. 23, 2016: About 42 gallons of crude oil was spilled due to an equipment failure in Little Lake Marsh.
Sept. 5, 2016: A pipeline owned by Hilcorp subsidiary Harvest Pipeline Co. was cut during dredging operations to rebuild an island and released 5,250 gallons of crude oil along the shores of Cheniere Ronquille Island.
Oct. 8, 2016: About 12,600 gallons of oil were released from the company’s Caillou Island Tank Battery in south Louisiana. Most of the oil was contained in a recovery system. On Oct. 11 about 1,050 gallons of oil was discovered on Timbalier Island that is believed to be associated with the discharge from Caillou Island.
Oct. 21, 2016: Approximately 126 gallons of crude oil were released from a storage facility in Lafitte, LA into a canal and nearby marsh area.
March 21, 2017: An abandoned wellhead leaked an estimated 840 gallons of crude oil into the Mississippi River.
April 5, 2017: A pinhole leak in a low flow oil line released more than 80 gallons of crude oil in Jefferson Parish.
A new book dives into the toxic history of the companies that poisoned dozens of young women.
Just over 100 years ago — on Feb. 1, 1917 — Katherine Schaub reported for the first day of her new job at Radium Luminous Materials Corporation in Newark, New Jersey, not knowing the job would eventually kill her.
Schaub, and hundreds of other young women just like her, found themselves employed thanks to the radium craze of the early decades of the 20th century. In the Newark factory, and others like it, women hunched over trays full of wristwatches, upon which they meticulously painted glow-in-the-dark numbers with a proprietary concoction containing something they were told was perfectly safe: radium.
Discovered less than two decades earlier, radium was considered something of a wonder material at the time, used on everything from toothpaste to furniture cleaner to purported medicines.
The watches, though, were something less trivial, intended for soldiers fighting in World War I. Thousands of them shipped from the Newark factory. To produce the watches, the girls would put fine-haired paintbrushes into their mouths to form a precise tip and then dip them into the radium paint, a process they repeated for hours on end.
Death for a dollar. Radium watch ad from the Granby Leader newspaper, Nov. 24, 1916
At the end of each day, the girls — their clothes and hair covered in tiny bits of radium dust — would walk home, glowing in the dark. The neighborhood called them the “ghost girls.”
In reality, they were the walking dead.
Years later the pain began to set in. The radium had settled into their bones and flesh, causing debilitating exhaustion, rotting necrosis and crippling bone fractures. But even as the women’s jaws and other bones began to decay, their doctors were at a loss as to why. The health risks of what later came to be known as radium poisoning had not yet made their way into the medial literature. So the women suffered as their bodies failed, and no one could tell them why.
The watch companies, however, had begun to understand what their wonder substance actually did to the human body. Rather than admit their mistake, they continued production and made every effort to hide any hint of their wrongdoing.
The truth eventually leaked out, but it was too late to save anyone. As the women’s bodies, in essence, rotted away, and as they died one by one, they struggled in court and in the press for any form of justice they could find.
Few found that justice, but those who did changed the world.
British author Kate Moore, who first encountered the Radium Girls while directing a play about them, now recounts their story in her meticulously researched new history book, “The Radium Girls” (Sourcebooks, $26.99). It’s a powerful, emotional and haunting volume — part medical mystery, part legal thriller, part horror story — that brings the women and their struggle to life in a way that eclipses previous articles, plays and documentaries.
“That that was my driving force,” Moore says, calling on Skype from her home in London. “I wanted the women to be real. I don’t think you can understand the tragedy unless you know who it is that’s been affected.”
To research her book, Moore unearthed reams of letters from the women, along with documentation from their health and court cases. She also tracked down surviving relatives who recalled the Radium Girls and shared their heartrending stories.
“A lot of the people I interviewed were in their late 80s or 90s,” Moore says, noting that some of the family stories might have been lost to time had she waited longer. The most moving of these interviews, she says, was with the great-niece of a Radium Girl named Catherine Donohue. “One of the questions I asked her was, do you remember Catherine crying out with the pain? Because I was trying to picture the scene of the sickbed and that sort of thing, and her response was that she didn’t have the energy to cry out. She would just moan.” She pauses. “That for me was really haunting.”
Unearthing the radium companies’ documents also gave Moore disturbing moments. “It’s not necessarily a new thing, but it was shocking reading,” she says, a hint of anger in her voice. “Just realizing they knew. There’s no two ways about it, it was a total cover-up. That was shocking to see that they knew they were killing these girls and it, you know, just didn’t mean anything.”
But from the horror of their decaying bodies came resolve. The Radium Girls, as they came to be known in the press, stood up for their rights, fought for themselves in court, and helped to create laws that would later protect millions of people.
“As I talk about in the book, it seems bizarre in a way that poisoning wasn’t originally listed as something that your employer could do to you,” Moore says. “It was the Radium Girls that got that put into the statutes. And then building from there, this was one of the first cases where employers were held liable.” Thanks to these women’s quest for justice, industrial employees in the United States have the right to know if they’re working with dangerous chemicals and to know the results of any company-sponsored medical tests. “They can’t conceal the results in the way that happened to the Radium Girls,” Moore says. “All of those are things that built from this case.”
Some of the protections took decades to materialize, but Moore says the ghost girls helped to pave the way. “It’s cases like the Radium Girls that have that kind of pressure that adds until something gets done,” she says.
Of course, that also makes the book — and the decades-old events it recounts — fiercely relevant today. “Hopefully Donald Trump won’t revoke all of those protections,” Moore says. “We were in the States at the end of January and talking to independent booksellers about the book, and they said how timely it is. People talk about bureaucracy and red tape and how it stops businesses from being able to be profitable, but a story like this actually reminds us that there’s a reason that red tape is there. We joke these days about health and safety laws, but actually they’re there for a very important reason — so that companies don’t put profits before people. They are supposed to be held to account if there is something dangerous they are getting employees to do.”
She adds that the book puts a human face on the need for worker-protection laws. “These laws that we now are supposed to abide by, they have human stories and faces behind them. They’re not just there for red tape, they’re there for a reason because other people have lost their lives.” (The Trump administration has already taken several actions that could increase worker exposure to toxins and reduce ability to track occupational injuries and illnesses.)
It’s also a reminder that the effects of little-understood toxins can take a long time to materialize — many of the Radium Girls worked for years before they got sick — and last for decades. While researching the book, Moore visited Ottawa, Illinois, the home of one of the radium companies, which is still an actively contaminated Superfund site. “That was the crazy thing about radium being used anyway, you know,” she says, incredulously. “It’s got a half-life of 1,600 years. Even though it was used on throwaway products and it was a kind of fun thing, it had this devastating legacy.”
Beyond the horror of what happened to these women, Moore says her readers have already found a positive message in “The Radium Girls.”
“It’s a story that gives hope and courage that in the face of implacable resistance and you know, the authority shouting down these people, these ordinary people who are fighting against injustice,” she says. “The Radium Girls did triumph. They did get the laws changed. They did make people see right from wrong, and so it’s the story that can give hope in these times as well, that when we bond together as the Radium Girls did, you can make change happen.”
She adds, “That’s what I really want readers to take away as the message. Read the book, remember the girls and let’s be brave like they were.”
Owner Jeffery Hildebrand’s emphasis on cost-cutting collides with Alaska regulators.
Editor’s Note: This is part two of The Revelator’s months-long investigation into Hilcorp Energy. You can find part one here.
After making more than $1 billion speculating on West Texas oil and gas shale in 2011, Houston billionaire Jeffery Hildebrand turned his focus to rehabilitating Alaska’s aging oilfields in ecologically sensitive Cook Inlet and the North Slope’s fragile tundra.
It looked like a perfect fit for Hildebrand’s business strategy of redeveloping oilfields after the major companies have moved on to more lucrative prospects. Oil prices were soaring above $100 a barrel, and the state was shelling out billions in subsidies to energy producers.
A key component in Hildebrand’s business model is to slash operating costs to the bone while offering six-figure bonuses for the rank-and-file as incentive to get the work done. The model appears to have worked well when oil prices were high.
But the 2014 collapse in oil to below $50 a barrel and the company’s aggressive operating philosophy put Hilcorp Alaska in regulators’ crosshairs as the company became the most cited energy producer in the history of the Alaska Oil and Gas Conservation Commission.
“The aggressiveness with which Hilcorp is moving forward with operations appears to be contributing to regulatory compliance issues,” the commission stated in its first formal enforcement action in April 2013, when it fined Hildebrand’s company $93,000. The fine was levied after regulators had issued a dozen violations between April and December 2012.
“Strong evidence indicates that Hilcorp has not adequately prepared its personnel for operations in compliance with AOGCC regulatory requirements,” the agency stated. “Left unaddressed and uncorrected these and similar violations will be repeated.”
The commission’s prediction of more problems with Hilcorp Alaska was on the mark.
In November 2013 the commission held what its records called an “unprecedented meeting with Hilcorp operations personnel” to “draw attention to and correct Hilcorp’s relatively high frequency of noncompliant activities.”
The violations included Hilcorp’s failure to follow approved well-drilling procedures, failure to notify the commission of well-safety tests and failure to notify the commission of changes to well-drilling plans.
The unusual meeting appears to have made little impression on Hildebrand.
In October 2014 Hilcorp Alaska narrowly escaped a disaster when fire broke out on an operating natural gas platform in Cook Inlet. Four workers were helicoptered off the Baker Platform after they were unable to put out an electrical fire that started in a heater installed in the 1960s. The fire destroyed the platform’s living quarters.
Hilcorp Baker Platform fire and response, October 2, 2014 (Photo/Nikiski Fire Department)
Hilcorp Alaska had another close call in September 2015 when three workers narrowly escaped death during a well-cleanout operation at its North Slope Milne Point oilfield. The oil and gas commission determined that Hilcorp’s unauthorized use of nitrogen gas during a well-rehabilitation operation resulted in a leak of nitrogen into a building where three workers were overcome by the gas and nearly died.
The commission must approve the use of nitrogen at well sites — an approval Hilcorp had not obtained. Nitrogen’s low density and high-pressure characteristics make it very useful in cleaning old oil wells of water and drilling fluids.
But nitrogen can also cause asphyxiation. All three Hilcorp employees working in a shed “lost consciousness for an unknown duration” and were saved only when a crewmember shut off nitrogen gas flowing into the building, the commission stated in an enforcement order.
“The extent and seriousness of the consequences cannot be overstated,” the commission stated in its March 2 enforcement order stemming from the incident. “Nothing but luck prevented the deaths of three workers during the clean out operation.”
Commission chair Cathy P. Foerster stated in a Nov. 12, 2015 proposed enforcement order that the Milne Point incident that nearly claimed three lives was a result of Hilcorp’s blatant mismanagement.
“The disregard for regulatory compliance is endemic to Hilcorp’s approach to its Alaska operations and virtually assured the occurrence” of the near-fatal event, she wrote. “Hilcorp’s conduct is inexcusable.”
Foerster was “unavailable” to comment for this story, a commission spokesperson stated in an email. The agency did not respond to a request to interview other commission officials about Hilcorp’s regulatory history.
After initially recommending a $720,000 fine for Hilcorp’s North Slope violations that nearly killed three of its workers, the commission ultimately fined Hilcorp $200,000 — equal to two of Hildebrand’s $100,000 bonus checks paid to each of his 1,300 employees in December 2015. The commission noted that the reduced fine came after it ordered Hilcorp to shut down four well-cleanup projects for three weeks in October 2015, costing the company a substantial amount of money.
Hilcorp Alaska has objected to the commission’s assessments of its operations, calling them “harsh” and “inflammatory,” and claims that “virtually all” of its operations are performed in full compliance, according to commission records.
Drift River Terminal Oil Spill. Excavation activity at dig site 1, September 23, 2016. (Photo/ADEC)
Hilcorp spokeswoman Lori Nelson stated in a May 10 email that the company is working with the state to improve regulatory compliance. She cited a March 21 order from the oil commission that states “during the past twelve months, Hilcorp has taken initiatives that have improved their overall regulatory compliance.”
At the same time Hilcorp Alaska was violating state regulations, it also came under fire from the U.S. Environmental Protection Agency for Clean Water Act violations stemming from a February 2015 Milne Point oil spill.
The EPA alleged Hilcorp Alaska and its partner, BP, spilled nearly 10,000 gallons of crude oil and oil-mixed water onto 40,000 square feet of Arctic tundra and gravel pad. The spill resulted from a pipeline leak. Hilcorp and BP each agreed to pay a $100,000 fine to settle the violation. This is just one of a dozen EPA enforcement actions against Hilcorp nationwide since 2011.
Milne Point spill cleanup. Photo: Starsman-ADEC
In 2015 and 2016, Hilcorp received five warning letters from the federal Pipeline and Hazardous Materials Safety Administration for an array of safety violations, including failure to inspect and test gas pipeline main valves and relief valves, failure to follow control-room management procedures and failure to accurately report pipeline flow data (2015 warning letters; 2016 warning letters).
Hilcorp’s record adds up
The spike in regulatory violations comes at the same time Hilcorp Alaska is facing mounting environmental problems.
The company’s deteriorating undersea pipelines in Cook Inlet are showing signs of systemic collapse. Two gas pipelines have failed since December. Environmental groups, including the Center for Biological Diversity (publisher of The Revelator) and Cook Inletkeeper, are demanding that state and federal regulators inspect all offshore pipelines in Cook Inlet for corrosion and other damage.
Nelson stated in her email that the company works closely with state and federal regulators to “monitor and manage Cook Inlet pipelines to ensure system integrity.”
But throughout the four months when one its undersea pipelines leaked more between 200,000 and 310,000 cubic feet a day of methane into the environmentally sensitive Cook Inlet, Hilcorp Alaska’s response was to downplay the potential of serious environmental problems and keep pumping oil.
“Hilcorp believes the samples also demonstrate that current water quality does not pose a threat to wildlife,” the company stated in March 24 press release about the methane leak.
State officials later criticized the company’s monitoring because the tests were not conducted in the actual methane plume.
When faced with the choice of immediately shutting down the methane pipeline when the leak was first discovered in late December and visually verified on Feb. 7, or keeping natural gas flowing to power two offshore oil platforms pumping $68,000 worth of oil a day (at $50/barrel), Hilcorp Alaska opted for the black gold.
Hilcorp said it needed to keep pumping oil to prevent an oil pipeline running parallel to the leaking methane pipeline from freezing and possibly rupturing. And the company stated it couldn’t fix the pipeline until the ice cleared from Cook Inlet.
“Ice conditions in the Cook Inlet prevented divers from safely accessing the pipeline following identification of the leak,” Nelson stated in her email.
Hilcorp stopped the leak coming from a half-inch crack in the 8-inch diameter pipeline with a temporary repair on April 13.
Hildebrand’s next big bet
Despite Hilcorp’s financial and infrastructure problems in Cook Inlet, Hildebrand still has big plans on Alaska’s North Slope.
Hilcorp Alaska is seeking federal permits to construct a 24-acre, artificial gravel island in 19 feet of water located five miles offshore in the Beaufort Sea to develop a massive oil reserve. The 60,000-to-70,000 barrel per day Liberty Project, which is 50 percent owned by BP, would be the nation’s first offshore oilfield in the Arctic Ocean relying entirely on federal leases.
The oil would be extracted from two federal offshore leases acquired by Shell Oil Co. in the 1990s. Hilcorp Alaska submitted a development plan in 2015 to the federal Bureau of Ocean Energy and Management. The agency is expected to release a draft “environmental impact statement” in May and hold public hearings this summer.
Hilcorp Alaska already has experience in operating the Northstar and Endicott offshore oil production islands purchased from BP in 2014. Northstar, built in 2001, is the first North Shore, manmade offshore production island. The company points to years of safe operations at four North Slope oil production islands as evidence that that the Liberty Project can be safely constructed and operated.
But Hilcorp Alaska’s history in Cook Inlet is raising red flags about the company’s ability to safely operate an offshore oil platform in the North Slope’s harsher climate. Hilcorp Alaska’s Milne Point facility has already been the site of a major oil spill and the accident that nearly claimed three lives.
“The fact that you have these high-risk, high-value operations offshore, means we need to have confidence in the people who are doing it,” says Lois Epstein, Arctic program director for the Wilderness Society. “The U.S. regulatory structure can never oversee it.”
“If Hilcorp can’t even stop a gas leak under the ice in Cook Inlet, then it has no business drilling its Liberty Project in the Arctic, where sea conditions are even more treacherous,” Miyoko Sakashita, ocean program director for the Center for Biological Diversity, said in a release.
But that argument may not sway federal regulators, says Epstein. “BOEM doesn’t care what goes on elsewhere,” she says. “They just hide behind their own jurisdiction.”
The Bureau did not respond to repeated interview requests.
The Liberty Project, even if approved, is years away from construction and would face substantially higher construction and production costs than other domestic U.S. oil sources that could make it too expensive to build. Hilcorp spokeswoman Nelson stated the Liberty project “will require in excess of $1 billion in investment.”
Meanwhile, Alaska, in a fundamental shift, is quickly moving away from its symbiotic relationship with oil. Faced with a massive $3 to $4 billion budget deficit last year, the state took steps to sharply reduce the billions of dollars in tax breaks to encourage oil production.
Alaska’s lucrative tax breaks were the primary reason Hildebrand set up operations in Alaska in 2011. Dave Wilkins, Hilcorp Alaska senior vice president, made that point to the Alaska Senate Resources Committee in April 2016 when he urged them to keep the tax breaks in place.
“It’s also no secret that Alaska’s tax credit system and the Cook Inlet Recovery Act were key drivers in bringing Hilcorp to Alaska and in our investments to date,” Wilkins testified.
Wilkins warned the committee that eliminating the tax breaks could have dire consequences. Hilcorp Alaska, he said, “isn’t going to continue to invest hundreds of millions of dollars in Alaska, especially in this price environment, when the fiscal structure continually changes.”
Alaska Gov. Bill Walker went one step further and slashed another $430 million in tax rebates through a line-item veto. More cuts are looming as the legislature is debating this year whether to end or reduce tax credits on the North Slope where the state reimburses 35 percent of oil company losses.
“If the legislature decides to change tax policy again, we will evaluate the economic impact to our company and adjust our spending accordingly,” Wilkins testified before the House Resources Committee on Feb. 1.
The economic outlook is not only increasingly uncertain for Hilcorp Alaska, it’s also hitting back home in Texas.
Jeffery Hildebrand’s personal wealth is taking a substantial hit in the face of the new reality of cheap oil and scaled-back subsidies.
Hildebrand’s “real time” net worth, according to Forbes, has declined from $5.9 billion in 2015 to a mere $3.9 billion as of May 21.
Coming next: We look at Hilcorp’s record in another state known for oil leaks: Louisiana.
A planned $12.3 billion coal mine in Australia has been “deferred” for now, a major victory for climate activists and conservationists trying to protect the nearby Great Barrier Reef. The Carmichael coal mine would have reportedly created as many as 5,000 construction jobs, but a study published last week found that it would have doubled Australia’s carbon emissions. The Queensland government had offered Indian billionaire Gautam Adani a “royalties holiday” subsidy that would have saved his company hundreds of millions of dollars, making it a potentially lucrative endeavor, but growing resistance to that tax scheme seems to have paved the way for Adani to pull out—at least for now.
Cook Inlet pipeline ruptures expose fractures in billionaire Jeffery Hildebrand’s Hilcorp Energy companies.
Houston multibillionaire Jeffery Hildebrand has a big problem brewing in Alaska, where one of his Hilcorp Energy companies has presided over two pipeline breaks in the ecologically rich Cook Inlet since December.
After decades of flying under media and public scrutiny, Hildebrand finds his Hilcorp Alaska operation in the limelight. It’s struggling to keep 50-year-old underwater pipelines in the treacherous inlet intact — and at the same time eke out a profit from a depleted oilfield.
It wasn’t supposed to turn out this way.
When he began investing more than $4 billion in Alaska in 2011, oil prices were above $100 a barrel, and Alaska was handing out billions of dollars in subsidies. It was a fat time for oilmen. Now oil prices are hovering near $50, and Alaska’s beginning to slash lucrative tax credits to oil and gas producers, putting a financial squeeze on independent energy producers such as Hildebrand.
Saddled with a history of negative cash flow and a decrepit infrastructure, Hildebrand’s Hilcorp Alaska is now attracting widespread public criticism and negative press focusing on its Cook Inlet pipeline failures.
One of the ruptured underwater pipelines released between 200,000 and 300,000 cubic feet methane a day from late December until April 13, posing a threat to the endangered Cook Inlet beluga whale (Delphinapterus leucas) and other marine mammals and fish. The number of beluga whales in the region has declined from 1,300 individuals in 1979 to just 349 in 2014.
“Hilcorp knew when it purchased the (Cook Inlet) property it was buying old infrastructure and did nothing to maintain and inspect it in way that would suggest they were a good neighbor,” says Bob Shavelson, advocacy director for Cook Inletkeeper, a Homer, Alaska environmental group. “They do the bare minimum to wring profits out of here.”
A two-month Revelator investigation of Hildebrand and Hilcorp Energy reveals the 58-year-old petroleum engineer found his way to vast wealth as an energy vulture. Hildebrand became America’s 134th richest person, worth $4 billion according to Forbes (or $9.5 billion/138th richest according to Bloomberg), by rehabilitating played-out oil and gas fields after major energy companies moved on to more lucrative opportunities.
(The Revelator is published by the Center for Biological Diversity, which on Feb. 27 filed a 60-day notice of intent to sue Hilcorp Alaska under the federal Clean Water Act for violations in Alaska.)
Hildebrand deploys a well-paid, highly motivated work force using advanced technology to squeeze out more oil from fields well past their prime. He also emphasizes aggressive cost-cutting that frequently sidesteps environmental and safety regulations, state and federal regulatory records show.
Our investigation shows that Hildebrand is adept at exploiting weak regulatory oversight that is characterized by warnings, forgiveness and slap-on-the-wrist fines. There is little incentive for Hilcorp and other energy producers not to cut corners to save money.
Hildebrand’s rapid-fire investments in the volatile oil and gas industry combined with a damn-the-regulations attitude show just how quickly an energy boom can fizzle and how downward economic pressure can increase threats to the environment and workers’ safety.
A window into Hilcorp’s operations provides a peek into the likely impact of the Trump administration’s “streamlining” and eliminating regulations for energy producers. Regulatory rollbacks have been welcomed on Wall Street, where stocks rose sharply after Trump’s surprise election.
Even before that election, efforts to tighten pipeline regulatory oversite have been stymied for decades by the powerful oil and gas industry, which writes the industry standards for operating and manufacturing pipelines that are then incorporated into federal regulations, says Carl Weimer, executive director of Pipeline Safety Trust, a nonprofit citizen’s group based in Bellingham, Wash., that monitors oil and gas pipeline operations, including Hilcorp’s.
The industry’s fundamental approach, he says is to “put a pipe in the ground, wait for it to fail and then go out and fix it.”
Hilcorp’s flouting of state and federal regulations certainly has not hindered Hildebrand’s ability to raise capital needed to expand his oil, gas and pipeline empire that includes operations in Alaska, Texas, Louisiana, Wyoming, New Mexico, Colorado, Ohio and Pennsylvania.
In fact his attitude is a plus on Wall Street, where it translates into lower costs, higher productivity and a bigger bottom line. This business philosophy has encouraged private equity firms like the Carlyle Group to invest up to $1.24 billion in Hilcorp to acquire, develop and operate onshore oil and natural gas properties in North America.
“We’re thrilled to be partnered with Hilcorp,” said Carlyle’s managing director David Albert of his firm’s December 2015 investment. Carlyle has raised an additional $2.8 billion to invest in privately run energy firms like Hildebrand’s, which have turned to private equity as commercial bank lending tightened after oil prices collapsed in late 2014.
Hildebrand and his wife, Mindy, operate River Oaks Donuts in the exclusive River Oaks neighborhood in Houston.
Hildebrand also remains a darling in the business press, which hailed him for handing out $100,000 bonuses to most of his employees in December 2015. The $100 million-plus payout was a reward for doubling daily oil production to 150,000 barrels over the previous five years. The big-league bonuses have buffed Hilcorp’s shining star — Fortune has hailed it as one of America’s best companies to work for five years running.
The production-based bonuses may have another purpose. Industry watchdogs caution that Hilcorp’s windfall bonuses can also create a powerful incentive for employees to ignore safety and environmental regulations to facilitate profits and another big bonus.
“One of the things you could get from compensating employees that way is people may be willing to lie for you,” says Carol M. Parker, a New Mexico attorney and former Pipeline Safety Trust board member.
In an emailed response to questions submitted by The Revelator, Hilcorp spokesperson Lori Nelson stated the company “absolutely” does not believe its bonuses provide an incentive to its employees to cut corners and mislead regulators.
“Our company incentives put safety and regulatory compliance above all else,” Nelson stated in a May 10 email: “Hilcorp’s incentives drive a ground up performance delivery of safe and efficient production of domestic energy sources.”
But a pattern of deceiving regulators has apparently played out multiple times. Alaska regulators, exasperated over Hilcorp’s flagrant disregard of safety and environmental regulations, have stated in writing that the company has not been truthful in communications. In Louisiana records show a Hilcorp employee provided false information to federal regulators concerning the destruction of wetlands. (See part III in our series, coming later this week.)
The Alaska Oil and Gas Conservation Commission sharply criticized Hilcorp for its misleading statements. In a Nov. 25, 2015 notice-of-enforcement letter concerning an incident that nearly killed three Hilcorp workers, the commission stated that Hilcorp’s “lack of candor” is “neither isolated nor innocent” since arriving in the state in 2011.
Hilcorp rapidly became one of Alaska’s largest energy companies producing 53,000 barrels of oil and 150 million cubic feet of natural gas per day from about 500 producing wells.
In doing so, Hilcorp became the most frequently cited company in the history of the Alaska Oil and Gas Conservation Commission, with a dozen formal enforcement actions since 2013.
Cashing in on Texas shale, Hildebrand turns to Alaska
Jeffery’s Hildebrand’s biggest payday came from speculating on the Texas Eagle Ford shale oil and gas prospect when oil prices were around $100 a barrel. Hildebrand gained control over 100,000 acres of the Eagle Ford shale belt for about $100 million. The belt extends from the Mexican border in southwest Texas into the middle of southeast Texas.
In June 2010 New York private equity firm KKR invested in Hildebrand’s Eagle Ford holdings through a new partnership called Hilcorp Resources LLC. KKR invested up to $400 million to acquire a 40 percent share of the new partnership.
A year later, with oil still hovering over $100 a barrel, Hilcorp Resources LLC sold its Eagle Ford assets, which had grown to 140,000 acres, to Marathon Oil & Gas for $3.5 billion. Moody’s Investors Services states Hildebrand’s share of the sale was $1.8 billion. Eagle Ford is now one of the nation’s leading oil and gas shale producers.
Flush with cash, Hildebrand turned his focus to Alaska’s Cook Inlet, an ecologically critical body of water extending from Anchorage 180 miles southwest to the Gulf of Alaska. Cook Inlet and the onshore areas surrounding it host the oldest oil and gas production and pipeline facilities in state, most of which were built in the 1960s.
The Cook Inlet Recovery Act enacted by the state legislature in 2010 was a key factor in Hildebrand investing in the state, according to a Hilcorp official’s 2016 testimony before that legislature. The act provided large subsidies to spur oil production that steadily declined to about 9,000 barrels per day from its 230,000 peak in 1970.
Hilcorp seized on what the Alaska Journal of Commerce called “one of the most generous” government subsidy packages in the world featuring hundreds of millions of dollars in refundable tax credits and drilling incentives. The state paid Cook Inlet producers $400 million in refundable tax credits in 2015.
Cook Inlet oil production from all producers totaled only 14,046 barrels per day in February, according to the Alaska Oil and Gas Conservation Commission. (The $400 million subsidy to produce 5,126,790 barrels of oil per year is equal to a $78/barrel subsidy.)
Hildebrand entered the Alaska market in June 2011, when Hilcorp Alaska acquired Chevron subsidiary Union Oil Co.’s production and pipeline facilities in Cook Inlet. At the time the investment appeared to fit nicely with Hildebrand’s operating strategy of purchasing aging oilfields from major oil companies and rehabilitating the production infrastructure.
Hilcorp Alaska expanded its Cook Inlet holdings in late 2012 when it purchased substantially all of Marathon’s oil and gas holdings, giving it control of 70 percent of the natural gas production in Cook Inlet. Together, Hilcorp’s Union Oil and Marathon acquisitions were valued at $879 million.
Over the next two years, Hilcorp Alaska invested an additional $1.2 billion in new drilling and production facility upgrades bringing its total investment in Cook Inlet by 2014 to more than $2.1 billion. The company drilled 50 new wells and now operates 20 oil and gas fields, including 14 offshore platforms. It also operates pipelines, storage facilities and a marine oil terminal.
Revenue from Hilcorp Alaska’s investments, however, has fallen far short of expenses. By the fall of 2014, the company was $600 million in the red, according to the Alaska Journal. Hilcorp’s projections of rapidly ramping up Cook Inlet oil production from 6,000 barrels per day to 25,000 barrels a day by 2014 fell also fell far short reaching only 12,000 to 13,000 barrels in 2015.
Cook Inlet oil production from all producers totaled only 14,046 barrels per day in February, according to the Alaska Oil and Gas Conservation Commission.
“With the track we’re on we still see six or seven years before payout on this, and we think we still need to invest another $1 billion to $2 billion,” Hilcorp Alaska CEO Greg Lalicker told the Alaska Journal in October 2014. His prediction was made before oil completed its dive to $50 and less.
Two years after Hilcorp Alaska began its Cook Inlet operations, Hildebrand invested heavily on the North Slope, where billions of dollars in state subsidies were also being doled out to oil producers.
In April 2014, with oil prices still over $100 a barrel, Hilcorp Alaska spent $1.25 billion to purchase two declining North Slope oilfields and 50 percent interest in two others, including the proposed offshore Liberty Project, from energy giant BP. In a risky move, Hilcorp issued $500 million in unsecured bonds to help finance the BP acquisition.
Hilcorp executed the deal right before it got caught in a major financial squeeze.
Beginning in September 2014, OPEC, led by Saudi Arabia, flooded the market and slashed oil prices in an attempt to wreck the booming U.S. oil shale industry. By January 2015 oil prices had plummeted from triple digits six months earlier to under $50 a barrel.
With Cook Inlet years out from turning a profit, the North Slope projects have only exacerbated Hilcorp’s financial problems in Alaska.
“We have a long ways to go before we’re coming anywhere close to making the money that we hoped to make when we originally made that (North Slope) investment a year and a half ago,” Hilcorp Alaska’s Greg Lalicker said during a luncheon for Alaska legislators in November 2015, according to the Petroleum News, an Anchorage weekly.
Hilcorp spokeswoman Nelson stated the company “can’t speculate on our future returns with our Alaska investments, but we continue to invest in Alaska’s energy future.”
The precipitous decline in oil prices and Hilcorp Alaska’s bleeding red ink coincides with a tsunami of regulatory violations. We’ll examine those in part two of our investigation, appearing tomorrow.
Wind and solar are key, but so are family planning and plant-based diets.
Here’s a painfully hard truth: There is no single silver bullet that will save us from the effects of climate change.
But according to a new book, there are 80 existing silver bullets — plus 20 more nascent technologies and solutions — that could work together to reverse global warming and put the planet on the path to sustainability. The top-ten list includes renewable energy solutions most of us are familiar with, such as wind and solar, but also some more unexpected strategies, including refrigeration management, reducing food waste, educating girls and family planning.
Each solution is ranked according to how much CO2 it will save, how much money it will cost and its total economic savings. Cumulatively the 80 solutions profiled in the book would save more than 1,000 gigatons of emissions and produce nearly $74 trillion in economic value between 2020 and 2050, after an initial cost of $27 trillion.
“All our data is based on science,” says environmental entrepreneur and author Paul Hawken, editor of “Drawdown.” (The book has a bold subtitle: “The most comprehensive plan ever proposed to reverse global warming.”) Hawken and the team of researchers at his nonprofit Drawdown Project spent the past few years analyzing data from the Intergovernmental Panel on Climate Change, International Energy Agency, World Bank and other institutions, plus other peer-reviewed research, to come up with their list of solutions.
It wasn’t easy, Hawken admits. “When we first started it we would go around saying, why hasn’t anybody done this?” he says. “I mean, we can Google just about anything and rank it — the biggest blogs, the most followers on Twitter. But here we have the greatest crisis human civilization has ever faced and you cannot find a list of the most substantive solutions to address global warming.”
The solutions that you can find right now on Google are what Hawken calls “proverbs” — things like walking more or buying less stuff. “No question those are very true things, but they’re not solutions and they’re not measured,” he says. “You can’t cost them. You can’t invest in them. It’s kind of like saying ‘love your mother.’ It doesn’t tell you what to do and how to do it.”
The book flips that equation, providing concrete rankings for each solution and brief examinations of how to implement each one on a global scale, all of which will be expanded upon on the Drawdown Project’s website. The list includes everything from building better cars to implementing improved rice-cultivation techniques, and from developing electric bikes to supporting indigenous people as land stewards.
“Drawdown” even includes some potentially controversial solutions, such as waste-to-energy and nuclear power, both of which the book calls “regret solutions” that could have both high value and potentially higher costs.
“Our job was to be objective,” says Hawken of the decision to include nuclear in the book. “We said we’re going to model the top 100 solutions. We’re not promoting or demoting anything. Nuclear was one that I struggled with because I think it’s just the most absurd and ridiculous way you could ever imagine to boil water.” The book notes that the new, smaller generation of nuclear power plants could change the equation, but still create a waste issue that would last for thousands of years.
Hawken says “Drawdown” isn’t the type of book you’d give to someone as a gift — although it is beautifully illustrated — but instead one that will find life in schools and universities. “Students have had it up to here with books and literature about what’s going to happen if we don’t act or don’t act sufficiently,” he says. “It’s terrifying and sort of immobilizing. Students want to know what to do. They want solutions.”
He also believes the book will find audiences among philanthropists and impact investors, as well as policymakers ranging from international bodies to city councils — in other words, people who want to know where to put their money to do the most good.
Hawken doesn’t expect “Drawdown” to have much of an impact on the policies of the Trump administration; but on the upside, he also doesn’t believe the Trump administration will have much impact on the book’s solutions.
“Two days after the election I looked at every solution one by one and thought, ‘Okay, what will happen to this solution if we have a very ignorant and obstreperous administration and Congress?’ And actually, it was like not much, really, not much at all. It almost had zero impact,” he says.
In fact, Hawken thinks President Trump may actually be good for the environment in an unexpected manner. “If anything, the election might have had a positive impact in a kind of perverse way, because people are going to maybe double down on stuff because they’re not happy with the administration,” he says. “The resistance is massive, growing, and unrelenting and will not stop until he’s out of office.”
A new study of North American songbirds reveals an ecosystem falling out of balance.
Yet another new study illustrates the potentially deadly impact that climate change will pose for many migrating bird species.
This time around research into North American songbirds looked at how warmer springs will cause plants to grow either earlier or later than usual. It might be just a few days in either direction, but that’s enough to cause problems for nine out of 48 studied bird species, which researchers say will now have trouble finding the right insects to eat, impacting the birds’ ability to breed.
This follows research published last year which found that similar effects could be felt by hundreds of bird species across five continents.
Many species could go extinct if the border wall is built, experts warn.
What do the bald eagle, robust cottontail, tiger salamander and Texas banded gecko have in common?
Easy: They’re all among the 841 documented vertebrate species that would be affected by the border wall proposed by President Trump. Many of those species, experts warn, would risk extinction or face severe population impacts if the wall were built.
(The Revelator is published by the Center for Biological Diversity, which has sued the Trump administration seeking better studies into the environmental impact of the border wall. The Center has also published its own report on the wall’s impact on wildlife.)
The list, put together by a team led by Dr. Gerardo J. Ceballos González of National Autonomous University of Mexico, includes 42 species of amphibians, 160 reptiles, 452 bird species and 187 mammals. Well-known species in the region include the jaguar, Sonoran pronghorn, North American river otter and black bear.
But wait — there’s more. For one thing, the list doesn’t include fish yet. For another, vertebrates represent only a tiny fraction of the total number of species living along the border between the two countries. “If we included plants, I can easily say we’re talking about 5,000 species,” Ceballos says. “Plants, fish and invertebrates, we’re probably talking about 10,000 species or even more.”
Even without those added species groups, the list Ceballos previewed with The Revelator is impressive — and a little scary. “To my knowledge, this is the most complete list available of species that live along the border,” Ceballos tells The Revelator. The professor and his team compiled the list by combing through the scientific data of species distributions and also traversing the entire U.S.-Mexico border, a 2,000-mile journey they accomplished over several trips totaling six months of travel.
“It’s a really amazing region,” Ceballos says of the border. “These are some very unique ecoregions. It goes from very arid to forests to tropical scrubland. I think there is no place with a border that has more ecoregions than the U.S.-Mexico border.”
Ceballos says some remote areas of the border contained so much wildlife it felt like a zoo. “In the protected areas, it’s very impressive,” he says.
Other, more accessible areas, such as Chihuahua, were the opposite. “There’s very little wildlife left,” Ceballos reports.
Rodrigo Sierra Corona. Used with permission.
New border wall construction would have a number of impacts on nearby species, most notably by cutting off their migratory routes and isolating populations from each other, limiting their genetic flow and viability. “It would make populations smaller,” Ceballos says. “It could put them on the path to become extinct.” The wall could also cut off water supplies, create flooding and cause erosion — and the roads created to build and maintain the wall would have their own environmental impacts.
Beyond its effects on the species themselves, the wall would also have a broader impact on the surrounding ecosystems, says Sergio Avila-Villegas, conservation scientist with the Arizona-Sonora Desert Museum in Tucson, Ariz. “The border infrastructure — which is a broader term than ‘border wall’ — affects the connections, interactions and functions that those species provide in the ecosystems where they live,” he says. “So what’s at stake is not only a long list of species, but also the functions and services these species and their ecosystems provide.”
Ceballos says that he felt the work to compile their list left him with four important lessons. The first is that the areas that already contain a border wall illustrate its environmental consequences. “You can see a lot of erosion already there,” he points out.
Second, the areas without an existing border wall may be that way for a reason. “This is incredibly rough territory,” he says. “It would be an amazing task to put a wall on those areas, and then the impact would be huge.”
Next there’s the impact to a vertebrate species that didn’t make it onto his list: humans. “The communities around the border, sometimes they are not even Mexican or American,” he says. “They are a completely different thing, a mixture of cultures that is rather different from the two countries. Putting a wall there, you would really disrupt their social, economic and political situations.”
Finally, Ceballos says we should remember that the United States and Mexico already have a history of successful teamwork to protect wildlife. “We worked together to save the Mexican wolf, the California condor, the black-footed prairie dog, the jaguar and so on. I think one way to go is to continue that collaboration. Instead of building a wall we should sit together with groups from both sides and try and find solutions.”
He doesn’t seem to think that will happen, though. “Unfortunately, it seems to me that the political agenda in the U.S. has pushed the wall to a different level.”
That’s a shame, he says, because “the wall won’t solve anything.” It won’t help wildlife, it won’t protect the United States from illegal immigration, and it won’t solve the drug war in Mexico that has killed tens of thousands of people. “These are problems that have to be solved together,” says Ceballos.
In the age of Trump, local activism matters, says GreenLatinos president Mark Magaña.
There’s an old saying that all politics is local. For Latino communities in the United States, that may be particularly true when it comes to environmental issues.
“It’s not about being a member of NRDC or Sierra Club or any of the big nationals,” Mark Magaña, founder and president of the environmental nonprofit GreenLatinos, tells The Revelator. “It’s about what they do. It’s about what their grandmother taught them to do. It’s about how they treat their air, their water, their land, how they treat their resources, reuse, repurpose what they have.”
This, Magana says, has often translated into local activism that isn’t always recognized on the national level. “It’s much more ‘my kid has asthma, my town isn’t being treated fairly, we’re getting the coal-fired power plant and the recycling plant on the other side of the railroad tracks,’” he says. “If something is happening where I am being treated with inequity, where my family is being hurt, I’m going to rise up.”
That activism, however, doesn’t always convert to big-picture issues such as climate change or the extinction of species located in faraway habitats. “A lot of our community doesn’t necessarily have the time or the priority to fight for something in the 10-thousand-foot-high level,” Magaña says. “I’m not going to be worrying about polar bears, you know?”
Local activism, meanwhile, can also come with a personal cost. Working on these local environmental issues, Magaña says, can leave local activists feeling isolated, without a broader network of peers, resources and emotional support. That can reduce their effectiveness, both in the short- and long-term.
The need to make these vital, in-person connections became evident to Magaña while he was working in the Clinton and Obama administrations and later as a lobbyist, where he was often the only Latino at various events. “Latino environmental and conservation advocates were working in silos,” he says. “We really didn’t know each other. There wasn’t a hub of communication, and as far as D.C. was concerned there wasn’t a group of Latinos who would get together, go to the Hill, afterwards go drink together, celebrate together, cry together, stay in the game longer because you had a family, you had a support team. That didn’t exist.”
A vision to correct that disconnection led Magaña create GreenLatinos. The organization serves as a network to link up people working on similar issues throughout the United States. “We work to link them up with trusted resources and organizations who are like-minded and want to work on the same issues,” Magaña says. “People need the ability to find out about these successful burgeoning local battles and have to be able to have the trust to be able to work together quickly.”
It’s also a major focus of the organization’s third annual National GreenLatinos Summit, coming May 23-26 at the Asilomar Conference Grounds on California’s Monterey Peninsula. The summit will feature workshops, speakers, and the opportunity to meet people working on similar issues. “You’ve got to meet these people and build personal relationships that aren’t just email-based,” Magaña says. “You know that you can vouch for this person, you met them, you know them, you can work with them, I’ll sign onto their letter, I will move on their cause, because I trust them.”
All of this comes at an important time, especially for the Latino community, following last year’s divisive presidential election. “Trump created himself as a populist, but it wasn’t the case,” Magaña says. “He wasn’t looking after the people. He’s looking after corporate interests. People are realizing that he’s going to take away their healthcare and that he’s going to pollute their air and their water.” He noted that the Trump administration’s reversal of the ban on the pesticide chlorpyrifos, which has been linked to developmental risks for children and other health risks and poses a particular danger to Latino agricultural workers and surrounding communities.
Magaña says he sees great opportunities for successful environmental changes on the state and local level, especially when it comes to supporting local fights with the resources they need to win on environmental issues. “Just organizing that alone, and helping to develop those relationships and those linkages, would really bring about a significant change,” he says. This would not only help local issues but also grow the number of “environmental champions” that exist in local communities and maybe even help pave the way for future success on the federal level.
Dangerous times call for a new kind of environmental news site.
The Earth is at a crossroads.
The climate crisis is deepening, the wildlife extinction crisis is worsening, and pressure on the world’s resources is at an all-time high (to say nothing of the proposed dismantlement of the Environmental Protection Agency, our public lands and the Endangered Species Act).
The world has become an increasingly complicated place. It needs a new kind of environmental news site.
That’s where The Revelator comes in.
Starting today, The Revelator — an independent news site published by the Center for Biological Diversity — aims to be a distinct and fearless voice for conservation in the 21st century. We’ll bring you stories about endangered species, climate change, sustainability, public lands and other important matters. We’ll also provide you with the context and bigger picture behind these issues — details you may not be able to get anywhere else.
In addition to our regular news coverage, The Revelator will include investigative journalism and stories that dig deep into issues that matter. The site will also be the new home for “Extinction Countdown,” my long-running column about the science and politics of endangered species, most recently published by Scientific American, as well as quite a few additional articles by me, all drawing on my 10 years of experience as an environmental journalist.
The Revelator will also feature essays and other contributions from some of the best minds working in conservation and environmental issues, many of whom might have things to say that will surprise you.
Our aim is to provide smart, essential reading for the public, the environmental movement, the media and decision-makers — because accepting the status quo is no longer an option.
Since you’re probably already asking, let’s talk about the name of this publication. “Revelator” is an old-school word for truth-teller. That’s our mission: shining a light on environmental issues so we can find out what works, what doesn’t, and how we can get to a brighter future.
More broadly, yes, the word “revelator” also has fairly apocalyptic overtones — these are tough times, after all — and we’d sure like to help the world avoid getting to that particular junction.
Part of revealing the truth means earning your trust.
First, we want our readers to know that they can come to us for stories that are honest, in-depth, and independent. Environmental journalism is, it can be argued, a form of activism, and we are published by an activist organization, but we enter into our reporting with no preconceived notions or agendas other than continuing a safe existence on this planet. We go where the stories and facts take us: nothing more, nothing less.
Second, we want people to feel comfortable talking to us. Whether it’s the sources for our news articles, who want to make sure we get the facts straight, or whistleblowers who want to shine a light on what’s going on the world but be protected in the process, we promise to listen, tell your tales, and provide an unwavering spotlight on the truth. The process starts when you send us story ideas to tips@therevelator.org.
Finally, we want and value the participation of our readers. Please feel free to post comments, or mail them to comments@therevelator.org. Your ideas matter and we look forward to adding them to the conversation. (You can find our full comment policy here.)
Let’s get moving. On our first day, we present to you several great new pieces:
Plus, the premiere of our occasional news aggregation service, “The Dose: News & Context,” where you’ll find a lot of information in a few concise words.
There’s plenty more to come, including a look at the impact of Trump’s border wall, a massive investigation into an oil company that has so far stayed out of the limelight, and a few interesting essays that we can’t wait to share with you.
That’s just scratching the surface. The Revelator has a lot of stories to tell in the coming weeks and months. So stick around and see what truths we can reveal for you.
Scott Eustis, coastal wetland specialist for the Gulf Restoration Network, says Hilcorp’s history of regulatory violations and operating shortcuts contribute to the company’s repeated oil spills.
British author Kate Moore, who first encountered the Radium Girls while directing a play about them, now recounts their story in her meticulously researched new history book, 
“All our data is based on science,” says environmental entrepreneur and author 
The solutions that you can find right now on Google are what Hawken calls “proverbs” — things like walking more or buying less stuff. “No question those are very true things, but they’re not solutions and they’re not measured,” he says. “You can’t cost them. You can’t invest in them. It’s kind of like saying ‘love your mother.’ It doesn’t tell you what to do and how to do it.”
