Texas, California towns withstand gusher of midterm oil money

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Last night saw the culmination of the most expensive midterm election in U.S. history, totaling some $4 billion in spending.

Among the biggest spenders were the oil and gas industry, led by Americans for Prosperity, the group founded by petrochemical execs Charles and David Koch, which spent $125 million to run approximately 34,000 ads and set up ground operations in 35 states.

On a national level, this appears to have paid off, as pro-industry Republicans sailed to victory in key congressional elections.


Locally, however, all that spending could not stop four communities in California and Texas from electing candidates and approving measures that directly challenge oil and gas interests.

In Richmond, California, a slate of progressive candidates captured the mayor's race, as well as three city council seats, in the face of $3 million in money spent by Chevron, the world's second-largest oil company. The winning Richmond Progressive Alliance spent about 1/10th that amount. Last year Richmond sued Chevron over damages from a 2012 fire at its local refinery, and the company could face millions in liabilities.

Mayor-elect Nate Butt’s campaign manager, Alex Knox, told RichmondConfidential.com, “I didn’t expect a full slate victory, but it’s a clear statement. I hope it means that this kind of money won’t be spent the same way again, that maybe it will change how corporations buy elections.”

Chevron's favored candidate, Nat Bates, told the site the outcome was a "bloodbath" — the mirror image of how one Democratic pollster described his party's overall results Tuesday.


Meanwhile, Denton, Texas became the largest city in America to ban fracking. The north Texas town of 123,000 residents has 272 total active wells, including ones that have been fracked, within city limits, and another 212 in its extraterritorial jurisdiction. The measure to kill fracking cruised 59-41.

“The responsible citizens of Denton have spoken — loudly and clearly,” Ed Soph the Treasurer of Pass the Ban, the group spearheading the campaign, said Tuesday according to the Denton Record Chronicle's Peggy Heinkel-Wolfe.


Fracking involves shooting enormous quantities of fluid into the ground to free up oil and gas. Fracking and related operations have been linked to increased earthquake frequency and groundwater contamination.

It was another campaign where oil money didn't win. Opponents of the fracking ban spent close to $700,000, while supporters raised just $75,000. Chevron, along with fellow California oil giant Occidental Petroleum, spent $95,000 in a failed attempt to prevent the ban— even though neither company operates any wells in Denton.


Two other fracking bans were approved in San Benito and Mendocino counties in California, despite oil companies' spending more than $6 million in an attempt to defeat the initiatives there and in Santa Barbara. Santa Barbara was the oil industry's lone Golden State victory, after voters there shot down a proposed fracking ban.

That so much money was spent this year to counter the measures is no accident. The New York Times quoted recently quoted one oil exec saying the industry fears cascading moratoriums:

“If one community after another continues to say ‘Not in my backyard,’ then before long, a tsunami of exclusion will jeopardize our freedom as a country,” said Chris Faulkner, the chief executive of Breitling Energy in Dallas and an industry representative who spoke out against the Denton ban.


At least one proposed fracking ban is slated for 2016 in Butte County, California, which recently saw a surge in gas drilling.

While California legislators recently passed a statewide law imposing more stringent regulations on fracking, residents in the affected communities said the restrictions didn't go far enough. Andy Hsia-Coron, a retired teacher who helped launch the ban proposal in Benito, told SFGate.com, “I don’t think they’re up for policing this process across the state. From early on, I thought it was going to require counties to defend themselves.”


The bans could still be challenged in court. A study commissioned by the Denton Chamber of Commerce warned a ban there would cost the city more than $250 million, and the equivalent of more than 2 years worth of lost wages. And an oil company called Citadel had hoped to accelerate drilling on a 688 acre plot of land in Benito, which they estimated could be holding 100 million barrels of original oil-in-place.

But Cathy McMullen, who led the anti-fracking campaign in Denton, does not fear the suits that may be coming.


"We lawyered this ban every which way before launching this effort," she wrote on her blog early Wednesday. "And we consulted legal precedents for Texas home rule cities like Denton. And we’re confident it will stand up."

She has a message for the oil companies:

"To those in industry and government who are concerned by the success of this ban, rather than try to overturn it, address why we had to pass it," she said. "If you want to prevent more bans, especially in towns that know drilling best, do yourselves a favor and listen to concerned citizens. Because if you don’t, you may wind up reaping what you’ve sown."


Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.

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