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Effects of decabrominated diphenyl ether (PBDE 209) exposure at different developmental periods on synaptic plasticity in the dentate gyrus of adult rats In vivo.

Xing T1, Chen L, Tao Y, Wang M, Chen J, Ruan DY.
Author information

Abstract
Polybromininated diphenyl ethers (PBDEs) are widely used as flame-retardant additives. Previous studies have demonstrated that PBDEs exposure can lead to neurotoxicity. However, little is known about the effects of PBDE 209 on synaptic plasticity. This study investigated the effect of decabrominated diphenyl ether (PBDE 209), a major PBDEs product, on synaptic plasticity in the dentate gyrus of rats at different developmental periods. We examined the input/output functions, paired-pulse reactions, and the long-term potentiation of the field excitatory postsynaptic potential slope and the population spike amplitude in vivo. Rats were exposed to PBDE 209 during five different developmental periods: pregnancy, lactation via mother’s milk, lactation via intragastric administration, after weaning, and prenatal to life. We found that exposed to PBDE 209 during different developmental periods could impair the synaptic plasticity of adult rats in different degrees. The results also showed that PBDE 209 might cause more serious effects on the postsynaptic cell excitability in synaptic plasticity, and the lactation period was the most sensitive time of development towards PBDE 209.

http://www.ncbi.nlm.nih.gov/pubmed/19535737

Inhibition of progenitor cell proliferation in the dentate gyrus of rats following post-weaning lead exposure.

Schneider JS1, Anderson DW, Wade TV, Smith MG, Leibrandt P, Zuck L, Lidsky TI.
Author information

Abstract
Although lead is a potent developmental neurotoxin, the effects of postnatal lead exposure on progenitor cell proliferation in the hippocampus has not been examined. Postnatal day 25 rats were fed a lead containing diet (1500 ppm lead acetate) for 30-35 days and administered bromodeoxyuridine (BrdU, 50 mg/kg, i.p.) during the last 5 days of lead exposure. Animals were killed 24 h after the last BrdU injection. Proliferation of new cells in the subgranular zone and dentate gyrus was significantly decreased in lead-exposed rats compared to control animals that ate a similar diet devoid of lead. These results suggest that postnatal lead exposure can have significant deleterious effects on progenitor cell proliferation and thus the structure and function of the hippocampus.

http://www.ncbi.nlm.nih.gov/pubmed/15527882

New battlefront for petrochemical industry: benzene and childhood leukemia by Kristen Lombardi for The Center For Public Integrity

ATHENS, Georgia — It was December 29, 1998, six years after Jill McElheney and her family had moved next to a cluster of 12 petroleum storage tanks. Jill was escorting her son Jarrett, then 4, to the doctor again. He had spent the day slumped in a stroller, looking so pale and fatigued that a stranger stopped her to ask if he was all right.

It was an encounter Jill couldn’t shake. For the previous three months, she had noticed her once-energetic preschooler deteriorating. He complained of pain in his knee, which grew excruciating. It migrated to his shoulder and then his leg. His shins swelled, as did his temples. At night, Jarrett awoke drenched in sweat, screaming from spasms. Jill took him to a pediatrician and an infectious-disease specialist. A rheumatologist diagnosed him with anemia.

Now, as Jarrett lay listless, Jill found herself back at the pediatrician’s office. Tests confirmed a blood count so low that she was instructed to get him to an emergency room immediately. Within hours she was at a hospital in Atlanta, some 65 miles from her home in Athens, watching nurses rush in and out of Jarrett’s room. Doctors identified a common form of childhood leukemia. “I heard the words,” Jill recalled, “and I only knew the bald heads and the sadness.”

In the waiting room, family members heard more unsettling news: A neighbor’s child also had developed leukemia.

Days later, Jarrett’s doctor penned a letter to federal environmental regulators about the two cancer patients, highlighting their “close proximity” to Southeast Terminals, a group of 10,000-gallon tanks containing gasoline, diesel and fuel oil.

“Could you please investigate,” the doctor wrote, “whether high levels of chemicals could have contaminated the water, possibly contributing … to the development of leukemia?”

Only then did the McElheneys consider the possibility that living beside one of the nation’s 1,500 bulk-oil terminals — known sources of cancer-causing benzene — had triggered their son’s leukemia.

“It was one of those light-bulb moments for us,” said Jeff McElheney, Jarrett’s father. “You never get over it.”

New battlefront for industry

Jarrett McElheney does not represent the standard benzene plaintiff. He’s not among the hundreds of thousands of people who toil in American oil refineries or other workplaces contaminated with the chemical and run the risk of developing leukemia. In the rancorous world of toxic-tort litigation, he stands virtually alone. A lawsuit filed by his parents in 2011 against Southeast Terminals owners BP and TransMontaigne is among a relatively few alleging leukemia caused by environmental benzene exposure. Among these, the McElheney case is rarer still: Most have hinged on adult leukemia.

Yet the case may signal an emerging quandary for the petrochemical industry, according to tens of thousands of pages of previously secret documents that have come to light in lawsuits filed against benzene manufacturers and suppliers on behalf of those who suffered from leukemia and other blood diseases, including Jarrett McElheney.

Internal memorandums, emails, letters and meeting minutes obtained by the Center for Public Integrity over the past year suggest that BP and four other major petrochemical companies, coordinated by their trade association, the American Petroleum Institute, spent at least $36 million on research “designed to protect member company interests,” as one 2000 API summary put it. Many of the documents chronicle a systematic attempt by the petrochemical industry to influence the science linking benzene to cancer. Others attest to the industry’s longstanding interest in topics such as childhood leukemia.

“A number of publications in the last few years have attempted to link increased risks of childhood leukemia with proximity to both petroleum facilities and local traffic density,” another 2000 API memo warns. “Although these publications have had little impact to date, the emphasis on ‘Children’s Health’ may cause these concerns to resurface.”

“This is indeed a battlefront for the oil industry,” said Peter Infante, a former director of the office that reviews health standards at the Occupational Safety and Health Administration, who has studied benzene for 40 years and now testifies for plaintiffs in benzene litigation. He has worked on a handful of cases involving children sickened by leukemia.

“It’s in the industry’s economic interests to refuse to acknowledge the relationship between benzene and childhood leukemia,” Infante said.

In May, in a sign of the chemical’s continuing threat, the U.S. Environmental Protection Agency estimated that 5 million Americans — excluding workers — face heightened cancer risks from benzene and 68 other carcinogens spewed into the air by the nation’s 149 oil refineries. The EPA has proposed a rule that would require refinery operators to monitor for benzene, in particular, along their fence lines.

Aimed at curbing “fugitive” emissions from equipment leaks and similar releases, the proposal would set a fence line limit for benzene of 3 parts per billion — a fraction of the 10 ppb the agency recommends as the maximum chronic exposure level for the chemical.

Industry groups are pushing back. In written comments, the API’s Matthew Todd called the proposal “a major and significant Agency action [that] will dramatically increase the paperwork and recordkeeping burden on refineries. It includes several precedent-setting proposals, will cost our industry hundreds of millions of dollars per year, increase safety risk [and] may impact fuels production and cost …. Production outages will likely occur.”

The EPA also heard from the people the rule is designed to protect. “We live near a refinery, and as a result my son can’t breathe,” a woman from Fontana, California, wrote in Spanish. “My cousin had respiratory problems while living near a refinery for more than 10 years,” a woman from Houston wrote, also in Spanish. “Unfortunately, he died 2 years ago from bone cancer. We believe this was a result of the ambient air where he lived.”

In June, California officials lowered the long-term exposure level for benzene from 20 ppb to 1 ppb — among the lowest in the country — setting the stage for further emissions cuts at refineries and bulk-oil terminals in that state. Officials say such regulatory actions aim to protect children, who are more susceptible to benzene’s toxic effects than adults because their cells aren’t as developed. California is considering classifying benzene not just as a human carcinogen, but as a “toxic air contaminant which may disproportionately impact children.”

“The fact that benzene impacts the blood-forming organs when you’re a developing child is a big deal,” said Melanie Marty of the state’s Office of Environmental Health Hazard Assessment.

Hidden menace

ill McElheney agrees. A warm, garrulous mother of five who has schooled herself in the health effects of pollution, she has spent the past 16 years seeking the cause of her son’s leukemia. She has filed open-records requests and contacted state and federal agencies, piecing together a history of gasoline spills and diesel-fuel leaks at Southeast Terminals. She can cite endless details about lingering benzene contamination on terminal property — extensively catalogued in state enforcement files — located “a stone’s throw away” from the trailer park where her family lived for seven years.

Jeff, Jarrett and Jill McElheney stand in the former site of the Oakwood Mobile Home Park, where the family was living when Jarrett was diagnosed with a form of childhood leukemia. Phil Skinner for the Center for Public Integrity
Now vacant and overgrown with brush, the former site of the Oakwood Mobile Home Park lies across a residential street from Southeast Terminals, its tanks rising above a thicket of pines and oaks. All day, every day, trucks drive in and out of the facility’s gates, filling tankers with gasoline and other products.

What can’t be seen is the plume of benzene that has worked its way into the groundwater beneath the tanks. “It’s not like Cancer Alley, with smokestacks belching crap in your face,” Jill said. “It’s hidden — literally.”

When she and Jeff moved to Oakwood in 1992, they saw the 14-trailer community as something of an oasis — quiet, tight-knit. Nestled under shady trees, near churches and schools, it seemed like the perfect location. Even the park’s water supply, drawn from an unpermitted well dating back decades, appeared idyllic: Its pump house served as a beacon on park property, visible for all to see — including, court depositions later confirmed, terminal employees.

“We saw Oakwood as an opportunity,” recalled Jeff, a mustachioed, genial man who operates a roofing company and managed the park for his father, its previous owner.

Jarrett McElheney, center, with 3 of his 4 siblings. Courtesy of the McElheney family
Jarrett arrived two years later and, by his fourth birthday, had grown into an adventurous boy with an abiding love of water. His parents remember him splashing in the tub for hours. Often, he swam in an inflatable pool in their yard, dressed in what he called his “little blue [wet] suit.” He slurped on Kool Aid and popsicles made from well water whose purity his parents never questioned — until his 1998 diagnosis of acute lymphocytic leukemia, or ALL, a form of the blood cancer found overwhelmingly in children.

Within days of hearing the news, Jarrett’s parents tested their water. Samples from the Oakwood well revealed a brew of such chemicals as carbon tetrachloride and 1,2-dichloroethane, sparking a state investigation. The Georgia Environmental Protection Division (EPD) found benzene in the water of Oakwood’s well at levels up to 13 ppb — 26 times higher than the federal safety standard. In response, the agency shuttered the well and connected residents to public water.

Over the next year, state geologists worked to identify the contamination’s source. They dug monitoring wells and collected soil samples. Their initial investigation linked at least one pollutant in the park well — not benzene — to nearby abandoned grain silos. Geologists eventually eyed Southeast Terminals as a likely source of the benzene contamination, records show.

“The terminals are certainly suspects for the benzene detected in the [Oakwood] well,” one posited in a 2000 email. “The probable path is deep ground water.”

Another noted the presence of “a possible plume (with benzene) moving by Oakwood … and within a few hundred feet of the [park]’s former well, [thus] too close for comfort for a public-water supply well.”

Two years later, EPD investigators were still documenting high levels of benzene, ranging from 8,000 to 12,000 ppb, on terminal property — as well as the likelihood that, one 2002 EPD memorandum states, “the benzene contamination found in the trailer park well came from the Southeast Terminals.”

Ultimately, though, the state’s two-year, nearly $200,000 investigation yielded few answers. By 2008, groundwater monitoring results revealed only trace amounts of benzene at Oakwood. Today, EPD officials say they lack definitive proof tying the well’s benzene pollution to any source.

For Jill McElheney, the outcome of the inquiry was anything but satisfying. “It just seems to me that when you’ve got benzene in a well and a major source of it next door, you’d make the connection,” she said.

In fact, Jill already had been seeking answers elsewhere. In 2000, she turned to the federal Agency for Toxic Substances and Disease Registry, or ATSDR, petitioning it for a public health assessment. Instead, the agency launched a less-thorough public health consultation, meant to ascertain the risk to human health posed by the contaminated well water at Oakwood.

The results brought little clarity. In a 2001 report, the ATSDR determined that “the groundwater contaminant plume” initially sampled in the Oakwood well “is a public health hazard.” At the same time, it singled out a pollutant other than benzene as the threat. For benzene, the agency found that “the likelihood someone would get cancer as a result of their exposure is very low.”

In a 2000 draft filed with the state, however, the ATSDR concluded that the highest concentrations of benzene in the water were of concern. “This risk DOES exceed an acceptable risk level,” the draft states, “and may result in an elevated risk of cancer for exposed individuals.”

An ASTDR spokeswoman did not respond to requests for comment.

Mounting evidence on benzene and leukemia

The science linking benzene to cancer — particularly leukemia, in all its forms — has preoccupied the petrochemical industry for more than half a century. As far back as 1948, the API’s toxicological profile of the chemical discussed “reasonably well documented instances of the development of leukemia as a result of chronic benzene exposure,” cautioning that “the only absolutely safe concentration … is zero.”

Later, as scientific evidence of benzene’s hazards accumulated and regulatory limits on workplace and environmental levels tightened, the industry took a different stance. By 1990, the API and member companies such as BP, Chevron, Mobil and Shell had launched a research program meant to keep further restrictions at bay — or, minutes from an API meeting in 1992 state, research “that will be most useful in improving risk assessment and influencing regulation.”

Within months, the API task force overseeing the program was enumerating “developing issues.” Topping its list, according to minutes from a meeting in 1993, was this notation: “link to childhood leukemia?”

That possible link appeared on the industry’s radar again in 2000, documents show. At the time, API representatives were drumming up financial support for an unparalleled study of workers exposed to benzene in Shanghai, China, delivering what amounted to a sales pitch for the project. They touted what one 2000 API overview described as its “tremendous economic benefit to the petroleum industry” — helping to combat “onerous regulations” and “litigation costs due to perceptions about the risks of even very low exposures to benzene.” Childhood leukemia was mentioned explicitly.

Five years later, industry representatives grew concerned enough to bankroll their own research. Documents show the API task force approved funding for what minutes of one meeting in 2005 dubbed a “benzene regulatory response,” comprising a “childhood leukemia review” and “child-to-adult sensitivity to benzene” analysis, for a total of $30,000.

By then, the scientific evidence on benzene and leukemia in adults was well-established. Throughout the 1960s and early 1970s, studies of Italian shoe and leather workers indicated a relationship between the chemical and the cancer. Then, in 1977, the National Institute for Occupational Safety and Health, part of the Centers for Disease Control and Prevention, launched a seminal study of two Goodyear plants in Ohio that made Pliofilm, a thin rubber wrap. The research quantified for the first time the leukemia risk for workers exposed to benzene, prompting OSHA to work on a stricter standard that took effect in 1987.

In years since, the science has solidified. Recent research has shown lower and lower levels of the chemical — less than the OSHA limit of 1 part per million — can cause leukemia as well as other blood and bone marrow disorders.

By contrast, experts say, the research on benzene and childhood leukemia isn’t as conclusive. Multiple studies have indicated that children whose mothers were exposed to benzene-containing solvents during pregnancy experience elevated risks of developing the disease. Others have shown that children living near gas stations or highways — breathing in benzene in the air — face heightened risks. One 2008 study reported a significant spike in the rate of the disease in Houston neighborhoods with the highest benzene emissions.

Taken together, the nearly four dozen publications on the topic strongly suggest the carcinogen can cause leukemia as much in children as adults, experts say.

“Children aren’t another species,” said Infante, the former OSHA official who has reviewed the scientific literature for medical associations and governmental agencies. “If benzene causes leukemia in adults, why wouldn’t it cause leukemia in children?”

The scientist behind the API-commissioned analysis would likely disagree. In 2009, David Pyatt, a Colorado toxicologist with long-standing ties to the petrochemical industry, published a journal article about his review, in which he reported examining 236 studies on the relationship between benzene and childhood leukemia. Many of the studies suggesting a link “suffer from the same limitations,” he concluded, such as poorly quantified exposure estimates.

“At this point,” Pyatt wrote, “there is insufficient epidemiologic support for an association or causal connection between environmental benzene exposure … and the development of childhood [leukemia].”

Some say the review reflects a common industry tactic: Compile studies on a subject, and then shed doubt on each one by claiming the data aren’t good enough.

Pyatt did not respond to repeated emails and phone calls from the Center seeking comment; nor did the API.

In depositions, Pyatt acknowledged that he has never testified for a plaintiff in a benzene exposure case. He has worked as a consultant and defense expert for such petrochemical giants as BP, ConocoPhillips, ExxonMobil and Shell, he has said; the API has financed additional work of his on benzene, as has the American Chemistry Council, the chemical industry’s main lobby.

In a deposition taken last year, Pyatt said he wouldn’t discount benzene’s link to childhood leukemia — at least, not to acute myeloid leukemia, or AML, a type rarely found in children.

“There is no reason to think that [children] are going to be protected,” he testified. “So I would certainly think that a child can develop AML if they are exposed to enough benzene.”

In other depositions, Pyatt has conceded no link between benzene and ALL, the type that attacked Jarrett McElheney.

‘They have to stop this practice’

For the McElheneys, the extent of the benzene contamination from Southeast Terminals only came to light years after Jarrett’s chemotherapy regimen had beaten back his leukemia. Yet state and federal enforcement records pinpoint on-site releases of the chemical in 1991, a year before the family moved to the area. At the time, managers of the terminal — jointly owned and operated by BP and Unocal Corp. — discovered a leak of diesel fuel seeping through soil where an underground pipeline was buried.

Terminal employees removed 40 cubic yards of “petroleum contaminated soils,” according to a report filed by BP with the state, and recorded benzene on site at levels as high as 81 ppb. Groundwater samples showed even higher concentrations: 12,000 ppb.

State regulators found such pollution “exceeds our ‘trigger’ levels,” a 1991 letter to the company states, and requested further action.

Under Georgia law, the company was required to develop what the EPD calls a “corrective action plan,” which, among other things, would have delineated the terminal’s benzene plume, as well as identified nearby public water wells.

In a 1991 reply, BP promised the EPD it would file its plan in four months.

Nine years later — after the McElheneys had tested their well water and the EPD had issued a 2000 citation against BP for failing to submit a “timely” corrective action plan — the company finally carried out that requirement, records show.

BP, in charge of the terminal’s daily operations, declined to comment for this article. At different times, Unocal, Louis Dreyfus Energy and TransMontaigne have been BP’s partners at the site. TransMontaigne, its current partner, did not respond to repeated emails and phone calls. TransMontaigne purchased Louis Dreyfus Energy in 1998. Chevron, which merged with Unocal in 2005, declined to comment.

Today, state regulators attribute their own delay in cracking down on the diesel leak to an internal debate over which EPD division had authority over the terminal’s benzene contamination — its underground storage tank program, which has purview over the pipeline; or, its hazardous waste branch. For years, compliance officers in that branch, along with their counterparts at the EPA, had been monitoring the facility’s practice of dumping benzene-laced wastewater on site — a practice later confirmed by terminal employees in court depositions.

In 1990, the EPA issued new rules classifying benzene as hazardous waste and requiring bulk-oil terminals to have permits for discharging the “bottoms water” in petroleum tanks. This wastewater can become tainted by the chemical when mixed with gasoline. Rather than treat the water, Southeast Terminals funneled it through an “oil/water separator” to skim off fuel, and then dumped it into a ditch on the ground.

Company records at the time show that terminal supervisors admitted they drained the wastewater “direct into streams” or “a dike area which eventually drains offsite into a stream.”

“I remember thinking, ‘They have to stop this practice,’” said John Williams, an EPD environmental specialist who inspected the terminal in 1993 and documented the dumping.

Three months later, the EPD issued a notice of violation against Southeast Terminals, forcing supervisors to test the bottoms water. Regulators found benzene at levels four times greater than the legal limit of 0.5 ppb, prompting the EPA to take action.

“We saw an issue there,” said Darryl Hines, of the EPA’s regional office in Atlanta, explaining why officials initiated a 1997 civil enforcement action against the facility.

In its complaint, the EPA accused BP and then-partner Louis Dreyfus Energy of violating federal hazardous-waste law — disposing waste without a permit, and failing to categorize it as hazardous. The agency ordered the companies to shut down the oil/water separator, and implement a plan addressing “any groundwater contamination.”

By the time Jarrett developed leukemia a year later, the EPA had negotiated a settlement with the companies and laid out a series of requirements for cleaning up the benzene. Without admitting fault, BP and Louis Dreyfus agreed to spend at least $100,000 to remove leaking underground pipelines and install above-ground infrastructure. They also paid a penalty of $15,000.

When BP finally filed its long-delayed action plan, it revealed the presence of what EPD project officer Calvin Jones described as a “dissolved hydrocarbon” plume containing benzene — “a bigger problem than we had thought.” The chemical, concentrated at 500 ppb and counting, had spread beyond the immediate spill areas. Of greater concern to regulators, the plan identified “free product” in groundwater.

“There was actually gasoline floating on the water,” explained Jones, of the EPD’s underground storage tank program, who oversaw the facility’s protracted cleanup. Referring to gasoline’s ability to dissolve in water, he said, “You can’t get higher concentrations of benzene … than free product.”

Despite a decade-long cleanup — 35.2 million gallons of contaminated groundwater and 1,009 pounds of benzene were collected — the chemical still saturates much of the nearly 19-acre Southeast Terminals site, records show. Last year, the EPD issued a letter declaring “no further action required,” which released the companies from remediation. At the time, the state-sanctioned benzene count remained at 1,440 ppb.

Over the years, enforcement records show, company consultants and regulators alike have tried to trace the path of the wastewater at the terminal. One company analysis details a trail beginning at the property line and then spilling into adjacent woods before hitting a tributary. Another document, produced by the EPA, depicts the discharge as moving offsite through woods and into a resident’s backyard.

“It’s where the drainage flows,” said Jeffrey Pallas, deputy director of the agency’s hazardous waste division in Atlanta, who oversaw the case against BP and Louis Dreyfus, explaining that the document, complete with photographs, was only intended to verify the hazardous-waste law violations.

“We cannot substantiate from the documentation we have that the benzene left the site,” he said.

Seeking accountability

The McElheneys have seen the evidence they need to connect Southeast Terminals to the benzene in the Oakwood well — and Jarrett’s suffering. They believe all the state and federal enforcement actions have yielded few consequences for the facility’s owners. If Jarrett hadn’t gotten sick, they say, they might never have known about the benzene hazard. “The companies would have paid off their small fines,” Jill said, “and nobody would have been the wiser.”

Seeking some accountability, the family filed a lawsuit three years ago against BP, TransMontaigne and seven other previous owners, alleging that the “illegal discharge and release of toxic chemicals” at Southeast Terminals contaminated the surrounding environment and caused Jarrett to develop leukemia.

In court filings, the companies denied the allegations and dismissed any link between benzene and childhood leukemia. Last year, defense lawyers invoked a familiar tactic: They cited the Pyatt review to support their claims that the chemical couldn’t have caused Jarrett’s illness. The family recently has agreed on a settlement in principle and is working toward resolving the litigation.

“I thought, ‘This is par for the course,’” said Jill, who has read some of the industry documents uncovered by the lawsuit. “The oil industry has fought regulations and lawsuits for workers and adults. Now they’re going to do it with children.”

Jarrett is now a slight, reserved 20-year-old in remission. He remembers his bout with leukemia through a child’s eyes — the “really cool” ambulance rides, the nurses with coloring books, swinging golf clubs in hospital hallways. “I remember being stuck over and over again by needles” while getting a bone-marrow aspiration or a chest catheter or countless blood draws, he said. “But it wasn’t until much later I realized what happened to me didn’t happen to other kids.”

Today, he has had to grapple with cancer’s lasting effects — the feebleness, and the fatigue — as well as its lingering fears. As a leukemia survivor, he is at risk for developing osteoporosis, cataracts, or even another cancer. Sitting in an Olive Garden in Athens, sandwiched between his parents, Jarrett came across as exceedingly shy, uncomfortable in the limelight. Often, his parents did the speaking for him.

Moments earlier, Jill had explained how leukemia had changed her son, taken an emotional toll.

“He had a really loud voice as a toddler but that voice has mellowed,” she said. “I’ll take that voice over anything.”

Maryam Jameel contributed to this story.

Click on the link below to access the original article at the Center for Public Integrity

http://www.publicintegrity.org/2014/12/08/16356/new-battlefront-petrochemical-industry-benzene-and-childhood-leukemia

A dozen dirty documents
Twelve documents that stand out from the Center’s new oil and chemical industry archive

By Kristen Lombardi for The Center for Public Integrity

The Center for Public Integrity, along with researchers from Columbia University and the City University of New York, on Thursday posted some 20,000 pages of internal oil and chemical industry documents on the carcinogen benzene.

This archive, which will grow substantially in 2015 and beyond, offers users a chance to see what corporate officials were saying behind the scenes about poisons in the workplace and the environment.

Here are 12 examples of what the petrochemical industry knew about benzene; the impetus behind industry-sponsored science; and the corporate spin that often occurs when damning evidence against a chemical threatens companies’ bottom lines.

What the industry knew:

The industry knew the dangers of benzene exposure at both high and low concentrations, as illustrated by this 1943 report for Shell Development Company by a University of California researcher.

“Inasmuch as the body develops no tolerance to benzene, and as there is a wide variation in individual susceptibility, it is generally considered that the only absolutely safe concentration for benzene is zero.” That was a conclusion reached in a 1948 toxicological review of benzene prepared for the American Petroleum Institute, a trade association.

Benzene’s dangers known in 1943 (pg 2)
This 1943 report, prepared for Shell, is among the earliest to suggest that any prolonged exposure to benzene may be harmful.

No safe exposure level (pg 4) This 1948 review, prepared for the oil industry’s main trade group, the American Petroleum Institute, continues to torment the industry in litigation alleging benzene can cause various types of leukemia and other diseases of the blood-forming organs. In essence, it says the chemical is so potent that there is no safe exposure level.

A 1950 consultant’s memo to Shell lists benzene as having “established carcinogenic qualities.”

Benzene recognized as a well-known carcinogen (pg 1)

This 1950 memorandum from a consultant for Shell Development Company notes that benzol — an obsolete name for benzene — is a well-known carcinogen. As the author states, the memo was prompted by “an increased concern about the incidence of cancer” among Shell workers.

Motivations for industry involvement in research:

In 1995, a benzene study by the National Cancer Institute caught the attention of Exxon scientists, who closely monitored it.

Industry interest in cancer research (pg 1)
An Exxon scientist, B.F. Friedlander, explains that he and industry colleagues are “monitoring” a series of studies by the National Cancer Institute because of their focus on “health risks at low benzene exposures.” The memo shows the petrochemical industry’s early interest in the work of the NCI, which has examined the effects on Chinese workers exposed to benzene at levels below the legal occupational limit in the United States.

While attempting to gain support for a proposed study of benzene toxicity in Shanghai, China, the American Petroleum Institute cites “a tremendous economic benefit” to companies, which could gain data to combat “onerous regulations.” A project overview explains that publications linking benzene to childhood leukemia may cause concerns about the chemical to “resurface.”

‘Tremendous economic benefit’ from the industry study (pg 1)
The six-page overview touts the proposed Shanghai research as a way for the petrochemical industry to gain an “accurate understanding” of benzene’s health effects, which, in turn, would bring “tremendous economic benefit.”

A 2000 summary of the API’s research strategy, drafted by the group’s Benzene Task Force, explains that the research program “is designed to protect member company interests.” The anticipated results could “significantly ameliorate further regulatory initiatives” to curb benzene emissions.

Protecting industry interests (pg 2)

The summary describes the intent of the API’s research program as being “designed to protect member company interests.”

An email exchange explains how “HSE [health, safety and environment] issues surrounding benzene as well as the litigation claims” against the industry compel companies to participate in the industry-sponsored study.

Motivations for research (pg 2)
An email from one Shell executive argues that the “litigation claims we continue to see” are prime reasons for the company to spend millions of dollars on the proposed Shanghai research.

A PowerPoint presentation from 2001 lists “significant issues of concern” to encourage financial support for the API’s research on benzene-exposed workers in China. Among them is “litigation alleging induction of various forms of leukemias and other hematopoietic diseases.” The study, according to the presentation, could provide “strong scientific support for the lack of a risk of leukemia or other hematological diseases at current ambient benzene concentrations to the general population.”

Significant issues of concern (pg 3)
This PowerPoint slide suggests “significant issues of concern” that the proposed Shanghai research might help combat, which would save the petrochemical industry “millions of dollars in expenses.” The issues include more stringent regulations and litigation from benzene exposure.

“Litigation support” and “risk communication” are listed as goals in this 2007 memorandum describing an API risk management program. Further objectives are to establish current regulations as “protective” and avoid additional action.

Oil lobby’s risk management program (pg 1)
The memorandum details the oil lobby’s benzene “risk management” program, intended to “develop scientific data” for it and its member companies to use for “science advocacy” and “litigation support.”

Corporate spin

An undated litigation defense guide written by a senior Shell attorney acknowledges the 1948 report on leukemia and offers a “comprehensive strategy” on how to respond to litigation, including releasing benzene-related documents only on court order.

Acknowledgement of the science showing no safe levels of benzene (pg 4)

Here the author, Richard O. Faulk of Shell Oil’s legal department, references a 1948 Toxicological Review prepared for the American Petroleum Institute. The review found that “the only absolutely safe concentration for benzene is zero.”

After a draft of an API recruitment brief reminds potential study sponsors of “personal injury claims,” an email exchange among members of the Benzene Health Research Consortium urges deletion of “the reference to legal liabilities.”

Don’t mention the legal liabilities (pg 3)

This email from a Shell executive responds to an attached draft of a 2002 recruitment brief that reminds prospective donors about benzene liability costs. In the email, the executive urges colleagues to delete “the reference to legal liabilities” and emphasizes that “the only reason we are doing this is in support of protecting workers.”

A 2001 email from the consortium’s communications committee explains that the perception of the study “needs to be that this is not being done to protect against litigation”

Controlling the message on benzene (pg 1)

The email shows the companies behind the Benzene Health Research Consortium working hard to control their message. It lays out the “scope of public affairs” for the consortium’s communications committee, which includes countering any “perception” that the Shanghai study was “done to protect against litigation.”

Click on the link below to access original article and archival documents.

http://www.publicintegrity.org/2014/12/05/16361/dozen-dirty-documents

Internal documents reveal industry ‘pattern of behavior’ on toxic chemicals by David Heath for The Center for Public Integrity

Sixty-six years ago, a professor at the Harvard School of Public Health wrote a report linking leukemia to benzene, a common solvent and an ingredient in gasoline. “It is generally considered,” he wrote, “that the only absolutely safe concentration for benzene is zero.”

The report is remarkable not only because of its age and candor, but also because it was prepared for and published by the oil industry’s main lobby group, the American Petroleum Institute.

This document and others like it bedevil oil and chemical industry executives and their lawyers, who to this day maintain that benzene causes only rare types of cancer and only at high doses.

Decades after its release, a lawyer for Shell Oil Company flagged the 1948 report as being potentially damaging in lawsuits and gave out instructions to “avoid unnecessary disclosure of sensitive documents or information” and “disclose sensitive benzene documents only on court order.”

Plaintiff’s lawyers like Herschel Hobson, of Beaumont, Texas, wield such documents in worker exposure cases to demonstrate early industry knowledge of benzene’s carcinogenic properties.

“It shows a pattern of behavior,” Hobson said. “It shows how industry didn’t want to share bad news with their employees. None of this information was made available to the average worker … Most of this stuff kind of gets lost in the weeds.”

No more. Today, the Center for Public Integrity; Columbia University’s Mailman School of Public Health and its Center for the History and Ethics of Public Health; and The Graduate Center at the City University of New York are making public some 20,000 pages of benzene documents — the inaugural collection in Exposed, a searchable online archive of previously secret oil and chemical industry memoranda, emails, letters, PowerPoints and meeting minutes that will grow over time.

The aim is to make such materials — most of which were produced during discovery in toxic tort litigation and have been locked away in file cabinets and hard drives — accessible to workers, journalists, academic researchers and others.

Some are decades old, composed on manual typewriters; others are contemporary. Combined with journalism from the Center — such as today’s story on a $36 million benzene research program undertaken by the petrochemical industry — and articles and papers from Columbia and CUNY faculty and students, the archives will shed light on toxic substances that continue to threaten public health.

Exposed: Decades of denial on poisons

The benzene documents are just the start. In coming months, we’ll be posting hundreds of thousands of pages of discovery material from lawsuits involving lead, asbestos, silica, hexavalent chromium and PCBs, among other dangerous substances. And we’ll be on the lookout for other documents.

The inspiration for the project came when we realized that in CPI’s reporting on environmental and workplace issues, we routinely obtained reams of court documents. Often, these documents hold secrets found nowhere else.

Last year we reached out to William Baggett Jr., a lawyer in Lake Charles, Louisiana, who had acquired more than 400,000 pages of documents from a decade-long case against manufacturers of vinyl chloride, a cancer-causing chemical used in plastics. Baggett agreed to give us all of them.

At the same time, public health historians Merlin Chowkwanyun, David Rosner and Gerald Markowitz were collecting court documents to create a public database and had approached Baggett. We decided to collaborate. Chowkwanyun is currently a Robert Wood Johnson Foundation Health & Society Scholar at the University of Wisconsin-Madison, and will be an assistant professor of sociomedical sciences at Columbia next year. Rosner is Ronald Lauterstein Professor of Sociomedical Sciences and History at Columbia. Markowitz is a professor of history at the City University of New York. Both Rosner and Markowitz have served as expert witnesses in a number of major cases related to these documents and have written Deceit and Denial: The Deadly Politics of Industrial Pollution and other books and articles based on them.

This is not the first database of its ilk. The University of California, San Francisco, maintains a massive collection of documents from tobacco-related lawsuits called the Legacy Tobacco Documents Library, which exceeds 80 million pages.

How to search the documents

Our database allows you to search for a word, combination of words or an exact phrase in any of the documents. You can also:

Do a search that excludes a word by putting a ‘-‘ sign in front of the word.
Do a fuzzy search that includes variations of a word by putting a tilde ‘~’ at the end of a word with the numbers of characters that don’t have to match exactly. For example, ‘planit~2′ will match ‘planet.’
Do a search that optionally contains a word by putting a ‘|’ between the words.
Do a search with a phrase by putting double quotes around the phrase.
Each document will include the court case from which it came, including the case title, case number, court as well as date filed and date terminated. The original complaint for each lawsuit is also part of the database.

Soon, we will make available a robust set of text-mining tools that will allow researchers to construct chronologies of documents; generate lists of common words, phrases and names; and sort documents in a number of ways. Qualified researchers will also have access to an even larger set of documents that will eventually contain millions of pages.

Robert Proctor, a professor of the history of science at Stanford, has used the UCSF tobacco archive extensively to do research for several books. He called it “an unparalleled treasure” that gives researchers the ability “to look through the keyhole of the mansion of this hidden world and see [corporate officials’] private thoughts, their intent, their ruminations, their jokes, their plans, how they treat their workers, how they treat the public…”

Proctor said he sees value in a similar archive on toxic chemicals. “The internal records of the chemical industry are known only to a tiny group of lawyers and journalists,” he said. “This is going to create a new kind of democracy of knowledge. It also will set the stage for whistleblowers to come forward with documents.”

That’s our hope. The search interface includes options to send us documents or contact us. The ultimate goal, to borrow Proctor’s phrasing, will be to give users “a strong magnet to pull rhetorical needles out of archival haystacks.”

Click on the link below to access the original article at The Center for Public Integrity

http://www.publicintegrity.org/2014/12/04/16330/internal-documents-reveal-industry-pattern-behavior-toxic-chemicals

Benzene and worker cancers: ‘An American tragedy’

Documents lay bare petrochemical industry’s $36 million ‘research strategy’ on carcinogen

By Kristen Lombardi for The Center For Public Integrity

Bloated and bed-ridden, his skin browned by blood transfusions, John Thompson succumbed to leukemia on November 11, 2009.

A carpenter by trade, Thompson, then 70, had spent much of his life building infrastructure for the petrochemical industry in his native Texas — synthetic rubber plants in Port Neches, chemical facilities in Orange. Throughout the 1960s and early 1970s, he often encountered benzene, stored on job sites in 55-gallon drums, which he used as a cleaning solvent. He dipped hammers and cutters into buckets full of the sweet-smelling liquid; to expunge tar, he soaked gloves and boots in it.

Thompson never figured the chemical could do him harm. Not when it stung his hands or turned his skin chalky white. Not even when it made him faint. But after being diagnosed with a rare form of leukemia in 2006, relatives say, he came to believe his exposure to benzene had amounted to a death sentence. Oil and chemical companies knew about the hazard, Thompson felt, but said nothing to him and countless other workers.

“They put poison on his skin and in the air he breathed,” said Chase Bowers, Thompson’s nephew. “He died because of it.”

Thompson died before a lawsuit filed by his family against benzene suppliers could play out in court, where science linking the chemical to cancer could be put on display. Over the past 10 years, however, scores of other lawsuits, most filed by sick and dying workers like Thompson, have uncovered tens of thousands of pages of previously secret documents detailing the petrochemical industry’s campaign to undercut that science.

Internal memorandums, emails, letters and meeting minutes obtained by the Center for Public Integrity over the past year suggest that America’s oil and chemical titans, coordinated by their trade association, the American Petroleum Institute, spent at least $36 million on research “designed to protect member company interests,” as one 2000 API summary put it. Many of the documents chronicle an unparalleled effort by five major petrochemical companies to finance benzene research in Shanghai, China, where the pollutant persists in workplaces. Others attest to the industry’s longstanding interest in such “concerns” as childhood leukemia.

Taken together, the documents — put in context by interviews with dozens of lawyers, scientists, academics, regulators and industry representatives — depict a “research strategy” built on dubious motives, close corporate oversight and painstaking public relations. They comprise an industry playbook to counteract growing evidence of benzene’s toxic effects, which continue to command the attention of federal and state regulators and be fiercely debated in court.

“The conspiracy exists, and the conspiracy involves hiding the true hazards of benzene at low doses,” said Robert Black, a Houston lawyer who represents plaintiffs in toxic tort cases. Since 2004, while handling dozens of lawsuits filed on behalf of workers sickened by leukemia, lymphoma and other diseases associated with benzene, Black has obtained 16,000 pages of internal records detailing the industry’s research tactics, which he shared with the Center. Other lawyers provided an additional 5,000 pages.

The documents may represent the tip of the iceberg. For decades, the petrochemical industry has employed what one litigation guide calls a “comprehensive strategy” for defending against workers’ legal claims. Penned by a senior attorney at Shell Oil, the undated document lays out a coordinated “industry response” aimed at shielding internal company records on benzene. It warns defense attorneys to “avoid unnecessary or inadvertent disclosure of sensitive documents or information,” for instance, and to “disclose sensitive benzene documents only on court order.”

“We don’t know what the health effects are because they’re not going to let us know,” Black said. “It’s an American tragedy.”

What is benzene?
Benzene is a highly flammable, colorless (light yellow at room temperature), liquid, volatile organic compound with a sweet smell. It evaporates into the air quickly and dissolves only slightly in water. It comes from both natural and industrial sources, and can be found in water, air and soil. It is a known human carcinogen.

How common is benzene?
Benzene is the 17th most-produced chemical in the U.S. and is used in the manufacturing of common household items such as plastics, lubricants, dyes, adhesives and pesticides. The main sources of human exposure to benzene are gasoline and cigarette smoke exposure.

How harmful is benzene?
There is an association with leukemia at a chronic exposure level of 10 parts per million, or lower. A worker exposed at 10 ppm of benzene for 40 years is 155 times more likely to die from leukemia than an unexposed worker.

Benzene is found in:
Cigarette smoke
Solvents
Crude Oil
Diesel exhaust
Gasoline
Styrofoam
Ingredients used to make synthetic rubber, lubricants, dyes, detergents, drugs and pesticides

Occupations linked to benzene exposure:
Steel workers
Refinery workers
Printers
Shoe makers
Laboratory technicians
Gas station employees
Firefighters

Five million Americans at risk

Benzene emissions in the United States have declined sharply since 1987, when federal regulators set the occupational exposure limit at 1 part per million. Over roughly the same period, there has been a 66-percent drop in releases of the chemical into the environment. Yet experts say it remains a formidable threat. “You’re still seeing elevated risks of leukemias and lymphomas among occupational groups exposed to benzene,” said Peter Infante, a former director of the office that reviews health standards at the Occupational Safety and Health Administration, who has studied the pollutant for 40 years, “as well as populations being polluted from these benzene sources.”

In May, the U.S. Environmental Protection Agency estimated that 5 million Americans — not counting those with workplace exposures — face heightened cancer risks from benzene and 68 other carcinogens spewed into the air by one such source: the nation’s 149 oil refineries. “We are concerned about benzene,” said Kelly Rimer of the EPA’s Office of Air Quality Planning and Standards, which has proposed a rule that would require refinery operators to monitor for the chemical along their fence lines.

“It’s a known human carcinogen,” Rimer said, “and it’s emitted from lots of sectors.”

One month later, California officials lowered the long-term exposure level for benzene from 20 parts per billion to 1 ppb — among the lowest in the country — setting the stage for further emissions cuts at refineries and bulk-oil terminals in that state. Melanie Marty, of the California Office of Environmental Health Hazard Assessment, said regulatory limits are now “getting lower and lower for [benzene’s] non-cancer risks” — dizziness, rapid heart rate, neurological problems, anemia — and not just its carcinogenic effects.

“We have to make sure we’re not exposing people to things we can do something about,” she said.

A naturally occurring component of crude oil, benzene is used to make household products such as plastics, pesticides and dyes. It remains a key ingredient in gasoline, a source of exposure for workers as well as the public: In 2006, the EPA found benzene to be such a “significant contributor to cancer risk from all outdoor air toxics” that it limited levels in fuel. Even oil executives acknowledge its ubiquity; in documents, they call it “universal” and “a basic petrochemical building block.” Benzene ranks 17th among the top 20 chemicals produced in the United States, according to the federal government.

The petrochemical industry’s decade-long research effort on benzene echoes those launched by other industries — asbestos, tobacco, plastics — that used science to create doubt. These industries have employed a host of tactics to try to convince courts and regulators that a chemical or product causes no harm. At times, they funded their own studies in an attempt to show the lack of adverse effects. Experts say the petrochemical industry has bankrolled more research — at greater cost — than anyone but Big Tobacco, which coined the phrase “manufacturing doubt.”

“The more they feel threatened by the outcome of independent research, the more they will quote-unquote invest in their own,” said Celeste Monforton, a public health researcher and lecturer at George Washington University, who has written about corporate corruption of science. Monforton considers the petrochemical companies’ study of workers exposed to benzene in Shanghai to be the most expensive and elaborate effort by any industry to try to refute damning scientific evidence.

The reason, in her mind, is clear: “Litigation is continuing and potential for environmental exposures is still significant,” she said. “They need to protect their economic interests.”

Underwritten by the biggest names in petrochemicals — British Petroleum, Chevron, ConocoPhillips, ExxonMobil and Shell Chemical — and administered by the powerful API lobby, the Shanghai Health Study purported to examine how benzene exposure affects workers’ health. It consisted of three inquiries: The first investigated the link between benzene and non-Hodgkin’s lymphoma as well as acute myeloid leukemia, or AML; the second, progression of diseases caused by the chemical; and the third, the exposure level at which such biological markers as lower blood cell counts indicate benzene’s toxicity.

But the study’s outcome seemed to some like a foregone conclusion. Documents suggest oil companies set out to counter U.S. government research tying benzene to more types of cancer and at lower exposure levels than previously known. They show how company executives and scientists plotted objectives and “expected” results before the study began, banking on conclusions that would play down health hazards.

“This is just appalling,” said Carl Cranor, a philosophy professor at University of California, Riverside, who has read some of the Shanghai documents. “This does not sound like a scientific inquiry where you’re not sure what the outcome will be.”

Infante, the former OSHA official, who now testifies for plaintiffs in benzene litigation, put it more bluntly: “It’s called potential bias.”

Study’s authors: No bias

Industry representatives and the scientists they paid to do the Shanghai work say such criticism is unwarranted. Some oil executives, they say, may have been seeking an alternative to government research; others may have wanted to better understand benzene’s connection to disease. Whatever the impetus, they argue, scientific integrity was not compromised.

“There could have been the best intentions or the worst intentions,” said Harvey Checkoway, an epidemiology professor at University of California, San Diego, who served on a scientific review panel created by the petrochemical companies to review the study. “We set that aside for the research.”

Richard Irons, one of the study’s two principal investigators and now head of a consulting firm that does research for the petrochemical industry, said that “if you’re ignorant, it’s a logical conclusion” to view the work as biased. “But it’s an accusation not founded in fact.” Irons acknowledged that he has never testified for a plaintiff in a benzene exposure case. The API has financed his work on benzene since the early 1990s, documents show. Irons said he’s no longer receiving money from the institute but has gotten $100,000 for a small benzene project from the American Chemistry Council, the chemical industry’s main lobby group.

Defenders of the Shanghai study stress the independence of its design. Scientists, they say, have operated under the guidance of not just the scientific review panel, but of two Chinese government ministries and two university boards, all ensuring a proper inquiry. Many of the results — positive and negative, they say — have been published in peer-reviewed journals.

“The results don’t support the presumption of bias,” Irons said, explaining that, so far, the research has confirmed benzene’s association with AML as well as myelodysplastic syndrome, or MDS, a cancer of the bone marrow.

The study’s co-principal investigator, Otto Wong, who directed the work on AML and non-Hodgkin’s lymphoma, said, “I was interested in doing a cutting-edge study and I was confident I had control over our [portion]. The rest is really not a concern.” Wong acknowledged that he has never testified for a plaintiff in a benzene exposure case. His ties to the oil industry date to the 1970s. Now retired, Wong said he has “no contact with the API people at all.”

Representatives of BP, Chevron and ConocoPhillips all declined to comment for this article, referring questions to the API, which did not respond to repeated interview requests. In a one-paragraph statement, Shell said the company’s financial “support for the study reflects our ongoing commitment to health, safety, and product stewardship,” stressing that “the study was wholly independent of Shell.”

ExxonMobil, whose scientists participated in the Shanghai study, said in a written statement that it “supports scientific research through funding and technical support,” painting its involvement in this project — as well as a 2012 ExxonMobil-sponsored study of benzene-exposed workers showing adverse health effects at levels below legal occupational limits — as part of a longstanding corporate commitment to better understanding the chemical. The 2012 results in particular prompted ExxonMobil to “voluntarily reduce allowable benzene exposure limits to one-half of OSHA legal limits” at its workplaces, it said — or 0.5 ppm for an eight-hour shift.

By contrast, the National Institute for Occupational Safety and Health (NIOSH), part of the Centers for Disease Control and Prevention, recommends that workers limit their benzene exposure to an average of 0.1 ppm during a shift.

“Our conservative approach to setting workplace benzene exposure limits is influenced by the most up-to-date scientific evidence, which includes the 2012 study,” ExxonMobil said, noting that its short-term limit is five times lower than OSHA’s.

As the Shanghai findings seep into the scientific literature and, ultimately, the courts, the petrochemical industry generally admits that benzene causes AML and MDS at higher doses. But other blood and bone marrow cancers continue to kill — at lower and lower exposures to the chemical.

On February 27, 2012, Michael Boley, 68, died of a disease Shanghai researchers say can’t be tied to benzene: chronic myelomonocytic leukemia, a form of MDS, combined with another bone-marrow condition known as “myeloproliferative disease.”

Strong and industrious, with a knack for avoiding even the flu, Boley spent 23 years at a Goodyear Tire & Rubber plant in St. Marys, Ohio, site of a seminal benzene study by NIOSH in the 1970s. The research quantified for the first time the leukemia risk for workers exposed to the chemical in the plant’s Pliofilm unit, prompting OSHA to work on the benzene standard that took effect in 1987.

Boley didn’t make the benzene-soaked rubber film for which the unit was named; rather, he was a plant electrician, supervisor and engineer who worked there for an hour or two daily. Still, he knew benzene was in the air: While in the unit he noticed “Authorized Personnel Only” signs for Pliofilm workers who, he testified in a deposition, “were monitored on a regular basis.” At times, he complained about the unit’s “sweeter-than-gasoline” smell. Once, Boley asked a supervisor if he could have the same blood test the company administered to Pliofilm workers.

“His comment was, no, we wouldn’t require monitoring,” Boley testified. “Our levels would be safe.”

Four decades later, after enduring the fatigue, feebleness and shortness of breath accompanying a diagnosis of chronic monomyelocytic leukemia, or CMML, Boley sued Goodyear and its benzene suppliers, including ExxonMobil. “He wanted them to know what had happened to him,” said his widow, Cheryl. But the suit went nowhere: In 2011, Boley settled the litigation in a confidential mediation. His still-pending workers’ compensation claim has seen little traction.

“He couldn’t prove it,” Cheryl said, alluding to the companies’ claims that benzene couldn’t have caused her husband’s illness. Those claims were supported by Irons and other scientists affiliated with the Shanghai study, who reported in a journal article last year that “benzene exposure does not appear to be a significant predictor of CMML.”

Only safe level ‘is zero’

The petrochemical industry has known about benzene’s dangers since the turn of the last century. As far back as 1948, the API’s toxicological profile of the chemical discussed “reasonably well documented instances of the development of leukemia as a result of chronic benzene exposure,” cautioning that “the only absolutely safe concentration … is zero.”

Later, as scientific evidence of benzene’s hazards accumulated and regulatory limits on workplace and environmental levels tightened, the industry took a different stance. By 1990, the API and member companies such as BP, Chevron, Mobil and Shell had launched a research program meant to keep further restrictions at bay — or, minutes from an API meeting in 1992 state, research “that will be most useful in improving risk assessment and influencing regulation.”

Within years, the catalyst for the Shanghai Health Study appeared. In 1995, company representatives turned their attention to work by the National Cancer Institute, which was repeating the Pliofilm study in China to examine the effects on workers exposed to benzene at levels below the OSHA limit. Exxon, which had yet to merge with Mobil, even sent company scientists on a fact-finding visit to interview government researchers.

“We are monitoring the NCI studies,” an Exxon memo explained, “because of their potential impact concerning the health risks at low benzene exposures.”

In 1997, the NCI published a landmark study on benzene-exposed workers in Shanghai. The results reinforced past research showing the chemical causes leukemia, said Richard Hayes, a former NCI epidemiologist and the study’s lead author, but “what moved the science forward” were two findings: That workers with chronic benzene exposures had an increased risk of developing MDS and non-Hodgkin’s lymphoma — i.e., diseases other than leukemia — and that such effects could be triggered by doses of the chemical as low as the OSHA limit.

In 2004, the NCI released the results of a second study. It found that Chinese shoe makers inhaling benzene in amounts below the OSHA limit had fewer white blood cells than unexposed workers, suggesting the chemical has no safe threshold.

“In general,” Hayes said, “we found benzene was a larger problem than we originally thought.”

The industry quickly attacked the NCI’s work. Documents show that the API commissioned a $25,000 “critical review” of the government research from California epidemiologist Wong. In a 10-page paper, Wong challenged the NCI study from every conceivable angle. “The findings,” he wrote, “are unreliable.”

Wong insists today that his corporate funding had no influence on this conclusion. “My critique of the NCI study was comprehensive and specific,” he said. “I was responsible for every comment.”

For the industry, the review had the desired effect: It cast enough doubt on the NCI’s first study to convince the EPA, in 2000, not to rely on the research for estimating benzene’s carcinogenic effects. “We thought there were methodological issues that might be questionable,” said Bob Sonawane, of the EPA’s Office of Research and Development, who has overseen agency assessments of benzene’s health risks. The agency did use the NCI work to assess non-cancer effects in 2002, Sonawane said.

By then, industry representatives were already thinking beyond conventional critiques. Wong remembers reaching out to Chinese scientists about a possible benzene study before broaching it to industry contacts. “I knew quite a few people at API and member companies,” he said. “We just started a conversation.” The campaign to finance an alternative study in China was kicked off in earnest in the late 1990s, when the API approached Irons, then a pathology professor at University of Colorado, Boulder. Irons said API officials asked him to visit Shanghai in 1999 and consider doing a study similar to the NCI’s, which examined workers’ diseases and estimated their benzene exposures after the fact and “had some provocative findings.”

Irons went to China. Upon his return, he urged the API to instead conduct what he calls “a real-time clinical study,” in which researchers examine workers’ diseases as they occur. Within a year, he, Wong and ExxonMobil scientists had drafted proposals for the Shanghai study, which the API circulated among its members to drum up financing.

API representatives went from company to company, giving what amounted to a sales pitch for the Shanghai study. They laid out just what executives might anticipate in return.

A 2001 document listed the following “expected” results:

Provide strong scientific support for a lack of a risk of leukemia … at current ambient benzene concentrations to the general population.

Establish … current occupational exposure limits do not create a significant risk.

Refute the allegation that Non-Hodgkin’s lymphoma can be induced by benzene exposure.

Other documents show that the industry was counting on such findings to combat stringent regulation and stave off “tremendous” costs that would come from having to cut benzene emissions. “Significant issues of concern” identified in a 2001 PowerPoint include potential requirements to reformulate gasoline and “control emissions from stationary sources.”

Liability also was a worry. Documents warned of “litigation costs due to perceptions about the risks of even very low exposures to benzene” and lawsuits “alleging induction of various forms of leukemia and other hematopoietic diseases,” including more commonly diagnosed lymphomas.

For some in the industry, the bait proved enticing.

“Given the magnitude of [health, safety and environment] issues surrounding benzene as well as the litigation claims we continue to see, I believe it would be worthwhile to participate,” a Shell executive wrote in an email in 2000, a year before the company and its four counterparts formed the Shanghai study’s official sponsor: the Benzene Health Research Consortium.

Later, as consortium members tried to plug an ever-increasing budget gap — boosting the research’s price tag from $19 million in 2001 to more than $35 million in 2008 — their argument turned repeatedly to economics. One 2003 script for a CEO-level phone call states, “This study will positively impact our global business concerns.”

Critics say such documents expose the Shanghai study for what it is: An industry attempt to buy scientific evidence. “It’s all about influencing science to get what industry wants,” said Myron Mehlman, formerly chief toxicologist at Mobil, who became a whistleblower in 1989 after the company fired him for complaining about benzene levels in its gasoline. He sued Mobil, winning a $7 million judgment.

Mehlman remembers hearing about the Shanghai study in 2005 and immediately firing off letters to 45 executives at sponsoring companies. “I knew the scientists would do whatever it takes and whatever the industry needs done,” he said. In response, he said, he got a consortium form letter that “just re-confirmed how the study is being done for a single purpose — to get desirable outcomes.”

Industry-funded researchers bristle at the science-for-sale accusations.

“I didn’t see refuting anything as my charge,” said Irons, the study’s co-principal investigator, “and I wouldn’t have responded favorably to that.”

In depositions, however, Irons conceded that oil companies had a vested interest in the project.

“The oil companies … expected … it would be used for regulation, litigation, and for understanding the health effects of benzene,” he testified in 2010, adding that he didn’t believe a “funding source or the amount of money necessarily impacts on the [study’s] objectivity.”

Wong sounds a similar note. “We didn’t know what the results were before the study began,” he said, claiming he wasn’t privy to “any discussion” among the sponsoring companies. He considers it “just unthinkable” that critics would suggest “all those outside scientists, together with us, tried to create some results.”

Noting that the study relied on actual cases from 29 Shanghai hospitals, Wong explained, “It’s very difficult to argue that we have influenced our data one way or another.”

Members of the Shanghai study’s scientific review panel echo this sentiment. They saw no signs of overt bias in the design, they say, no way to yield preconceived results. “That wasn’t my experience,” said John Cherrie, a former panelist now heading occupational health research at a British nonprofit that has worked for the petrochemical industry. “The studies were designed to investigate the true situation without any obvious bias.”

Some would-be funders weren’t so sure, documents show.

In 2002, consortium members landed a meeting with seven scientists from Dow Chemical Company to pitch the Shanghai study. The meeting came after the scientists had voiced what one described as “specific technical concerns” about its design. Dow eventually opted not to contribute.

In a deposition two years later, Dow’s head of epidemiology, James Collins, testified that the company feared the study could generate inaccurate risk estimates and thus “be biased.”

‘Independent’ review panels

Documents suggest the Shanghai study’s sponsors were keenly aware of such perceptions. To deflect criticism, they set up “independent” review panels consisting of 10 ethicists and scientists, reputable leaders in fields like epidemiology, clinical medicine and bio-statistics. By 2001, panelists were meeting investigators and reviewing protocols — “essentially quality control,” said Jerry Rice, who chaired the scientific panel. Advisory in nature, the boards have remained involved in nearly every aspect of research.

Industry representatives viewed the boards as essential for lending credibility to the study. “There are going to be people out there who will want to misinterpret and criticize the study,” one argued in a 2003 email. “It is important that ‘the integrity’ … be maintained” with the panels.

Panelists insist the boards weren’t simply for show. They say industry representatives routinely encouraged them to offer criticisms and recommendations, and they obliged. Documents show investigators incorporated so many panel suggestions that research costs soared $3 million in one year alone.

“I never felt there was any desire to muzzle or tone down criticism,” said Rice, formerly with the World Health Organization’s International Agency for Research on Cancer, who oversaw the agency’s evaluations of chemicals for carcinogenic risks from 1996 to 2002. At IARC, Rice had come to know oil industry executives, who recruited him for the panel. “If there had been any of that, we’d have all quit.”

Still, company executives maintained tight control over the study. Documents indicate the consortium operated like a corporation, replete with committees governing research, finances and communications. Once a year, it hosted a meeting of 50 or so participants, flying American and Chinese scientists as well as review panelists to a two-day retreat to discuss the work as executives observed. Twice a year, consortium members combed through detailed progress reports filed by investigators.

The consortium also required industry review of draft manuscripts until 2005, when Irons penned his first. In it, Irons announced preliminary results linking a previously unrecognized form of myelodysplastic syndrome — MDS — to benzene exposure. The draft set off debate within ExxonMobil and Shell, both of which alerted the EPA — as the law required — to what was vaguely described in a consortium email as “health findings reported in a draft publication.”

At the time, Irons expressed reservations over the manuscript-review requirement.

Consortium members dropped it but kept the review boards. For years, panelists kept circulating “ready-for-submission manuscripts” for “feedback,” documents show.

Consortium members have worked especially hard on controlling their message. Before the Shanghai study began, the communications committee was crafting its marketing strategy. Documents reveal reams of “if asked” statements and media-relations plans, listing objectives such as “counter activists’ negativity.” Among the committee’s tasks, according to a 2001 email:

perception needs to be that this is not being done to protect against litigation

use a consulting attorney to address these issues of perceived motivation

Consortium sales pitches to prospective contributors, expressed in recruitment briefs, “call sheets” and “adaptable” slideshows, epitomize this corporate spin. Publicly, members have claimed altruistic motives for backing the Shanghai study. During a presentation in 2002 at PetroChina, a Chinese oil firm targeted for sponsorship, one Shell scientist proclaimed, according to a company email, “We believe it is important to understand the hazards of the products we make and sell, and we believe it is the right thing to do!”

Privately, consortium members betrayed less charitable motives. A draft of a 2002 recruitment brief reminded potential sponsors that “there is continued concern with the potential health effects of benzene as it relates to worker exposure … and personal injury claims.”

In response, a Shell executive urged colleagues to “delet[e] the reference to legal liabilities” and emphasized that “the only reason we are doing this is in support of protecting workers.”

Widows like Carolyn Wright have trouble processing such statements. Her husband, Eric, was a consummate company man whose closets brimmed with Shell awards, buckles, hats and magnets. Wright spent 34 years, from 1976 to 2010, working on offshore vessels for five oil companies — 18 at Shell. A trained “gun shooter,” he repaired sonar equipment, breaking down air guns. He soaked parts in benzene-laced solvents in a diesel-engine room, breathing in the chemical at exposures estimated to be two to five times greater than the legal limit.

Wright died, at 63, of leukemia in 2010, exactly five months after receiving an MDS diagnosis. Most of that time he remained hospitalized, beset by body sores, eye infections and a failing gall bladder. Within weeks, he couldn’t feed or bathe himself; eventually, he couldn’t hold up his head. Carolyn remembers leaving her husband’s bedside twice — first, to get clothes and then to visit a funeral home.

“They took away my best friend,” she said, referring to Shell and eight other petrochemical companies she and her husband sued 14 days before his death. “They were responsible because they made the benzene.” She settled the case for an undisclosed amount, most of which went toward her husband’s outstanding medical bills and legal fees. Shell admitted no liability.

“I’d rather have my husband,” Carolyn said. “There is not another one like him.”

Seeding the literature

The petrochemical industry’s research strategy had another key component: publication. Oil and chemical companies have long seeded the scientific literature, paying consultants to publish in peer-reviewed journals. They often use the published articles to advance their positions in regulatory and legal arenas. Infante, the former OSHA official, considers benzene “a good example of how the general scientific literature is being polluted by people working for industry.”

A 2002 Shell summary of the Shanghai project defined a “Key Measure/Indicator of Success” as a “Cost effective study reported in public literature … [that would] support … advocacy.”

By the time the research consortium disbanded in 2009, Irons and his colleagues had released results in 20 journal articles as well as at an “international benzene symposium,” in Germany. Industry-funded scientists have added to the literature since; according to Irons, the consortium’s dollars have yielded a total of 30 papers.

Such publications can play a critical role in benzene litigation. The Shanghai study has helped companies deny liability by casting doubt on causation, the central issue in a toxic-tort lawsuit. One tactic the industry has employed — with aid from the study — is to separate cancers into subsets, making it harder to prove a specific link between benzene and the disease. David Eastmond, a toxicology professor at University of California, Riverside, said that the petrochemical industry “gets sued on a fairly regular basis” over “a wide range of diseases.”

“If [it] could narrow down which subtypes are caused by benzene,” he explained, “the industry could eliminate a number of lawsuits.”

Industry-funded Shanghai researchers found that only certain subtypes of MDS and AML are significantly linked to benzene.

Now, in claims involving auto mechanics, gas station attendants and printers, plaintiff’s lawyers are seeing this claim play out in court. There is the case, for example, of a contract worker for southeast Texas refineries and chemical plants who washed his tools in benzene and later developed MDS. Citing a 2009 article by Irons, defense lawyers argued that the worker didn’t have the subtype of MDS associated with benzene exposure. The worker’s family resolved the case under terms that remain confidential.

In another case, a refinery technician who used benzene in laboratory experiments developed the very MDS subtype the 2009 article tied to the chemical. In testimony, however, defense experts used the Shanghai research not to affirm this link, but rather to debate whether his MDS was, in fact, properly diagnosed. The case settled in 2010 as part of a confidential agreement.

Some find such defenses scientifically disingenuous. Hayes, the former NCI scientist, who is now head of epidemiology at New York University’s medical school, explained that scientists cannot eliminate a disease subtype simply because a study doesn’t show an association with benzene exposure. “It doesn’t mean there isn’t any effect,” he said. “The end result is to sow the seeds of doubt.”

Wong said that all he and his fellow researchers can do is report their findings — positive and negative. “I’m sure some people use the results in their own way,” he said, referring to defense lawyers. “I can’t really speak to that.”

Acknowledging that “no study can prove a negative,” Irons defends the Shanghai research as “the best available evidence” benzene causes only certain disease subtypes. That “doesn’t reduce the fact that benzene is associated with MDS,” he said — or, for that matter, AML. And ultimately, some say, these findings aren’t as conclusive as oil executives may have wanted.

“In terms of something that would once and forever cause the petroleum industry’s legal liability problems to go away,” said review panelist Rice, “it didn’t do that.”

In fact, some outcomes have hurt defendants in court. In 2004, after 30 years fixing refrigerators at ice-skating rinks and meat-packing plants — receiving a daily dose of petroleum-based products — Brian Milward developed a rare condition known as acute promyelocytic leukemia, or APL. At the time, he was 47 years old.

“You don’t want to find out you have cancer at that age because of somebody else’s wrongdoing,” Milward said, explaining he had no idea the solvents and paints he used to clean and seal pipes contained benzene until after he was diagnosed.

In 2007, he filed suit against Rustoleum Paints and 20 other manufacturers, whose experts argued no epidemiological studies show a link between benzene and APL. Experts hired by Milward countered that evidence linking benzene to AML essentially links it to all subtypes, including APL. The judge disagreed, ruling for the defendants. But the debate has stymied the case, fueling appeals on both sides, and sparking a brief signed by 27 preeminent scientists affirming benzene can cause any leukemia.

Meanwhile, the Shanghai study affirmed the very link Milward’s lawyers tried to draw. In a 2010 article confirming benzene’s tie to “an increased risk of AML,” Wong discussed the relationship by disease subtype. APL was the “most strongly related” to benzene exposure, he wrote.

While the ruling against Milward eventually was struck down, he has yet to appear before a jury. After settling with every defendant but Rustoleum, he has watched the company challenge the science again. This time, defense experts question whether his workplace exposures could have caused his cancer. A second appeal is pending.

Now in remission, Milward must grapple with cancer’s lasting effects. Nearly a decade of chemotherapy, along with diabetes and a rare bowel disorder, have left him battling what he calls “absolutely ridiculous” fatigue. Retired and on disability, he remembers returning to work twice. First, he resorted to napping to endure an eight-hour shift. When his boss assigned him to office duty, pushing paper and making calls, he still fell asleep at his desk.

“I can’t really do anything,” said Milward, 57 — at least, not what he loves: repairing race cars, working in his yard, playing with his grandchildren. “It just sucks when you get a cancer like this.”

‘He never complained’

To family and friends in Deweyville, Texas, a pine-shaded town along the Louisiana border, John Thompson was “John” — a life-long resident, church deacon and carpentry teacher who reinforced souls as much as structures. To Irons, the Shanghai study investigator who charged $600 per hour as an expert witness, he was “John H. Thompson” — deceased, one of three case referrals from a corporate-defense firm, all in lawsuits alleging cancers caused by benzene.

Thompson had built scaffolding for refineries and chemical plants in the 1960s and early ’70s. At the end of most workdays he’d be covered in a thick adhesive known as mastic and would use pure benzene to get it off his hands, clothes and tools. In 2010, three months after Thompson’s death, Irons flew to Houston from China to testify in the benzene litigation, armed with what he has called “the largest single study of AML in history” —the Shanghai study. In a deposition, the scientist touted the research, saying it “inform[ed] with respect to disease specificity to a much greater degree than other previous epidemiological studies.”

“Assumptions and presumptions,” Irons testified, “have to be modified and re-assessed.”

The comment proved prescient in Thompson’s case.

In 2006, the former contract worker was mowing his lawn when he mentioned feeling fatigued. A pillar of a man, Thompson, then 66, had gotten two heart stents without uttering a gripe. “He never complained,” said Chase Bowers, his nephew. Not when he broke both arms on an oil rig, or lost his left eye in a shop accident. Bowers, who, as a teenager, was raised by Thompson and his wife, Carol, remembers watching a tree branch rip open his uncle’s ear. One emergency-room visit and Thompson returned to work.

“That’s the kind of guy he was,” Bowers said.

Within days of the lawn-mowing episode, Thompson learned he had acquired AML — specifically, a subtype of AML known as “inversion 16.”

In the contentious world of toxic-tort litigation, Thompson’s case seems like a classic: The only leukemia the petrochemical industry has admitted benzene can cause is AML — especially at higher doses. According to the Shell benzene-litigation defense guide, the industry might have classified Thompson’s case as “high risk”: He not only suffered from AML, but, as the guide states, “pure benzene is involved,” and his “exposure took place prior to OSHA involvement.” Experts hired by the family estimated Thompson’s cumulative benzene exposures were five times greater than the legal limit.

At trial, however, the case turned out to be anything but a slam dunk. Citing the Shanghai study, Irons worked to debunk a link between benzene and the type of AML afflicting Thompson. The Shanghai research has shown approximately two of the 20 AML subtypes are significantly associated with the chemical, he testified — neither of them “inversion 16.”

“We found many cases of inversion 16,” Irons said in court. “We did not find an association between benzene exposure and inversion 16.” Other scientists disagree, arguing that if benzene causes one subtype of AML, it likely causes all of them.

Keith Hyde, a Beaumont, Texas, lawyer who represents plaintiffs in toxic-tort cases, including the Thompsons, remembers Irons highlighting one Shanghai article after another at trial, raising doubt. “You have doubt here and there through all these industry studies,” Hyde said. “Let’s just say they do their job.”

After two weeks of testimony, the Thompson case ended in mistrial. The suit ultimately was resolved under terms that remain confidential.

In April, Carol, Thompson’s widow, died of liver cancer. In the years after the benzene trial, she rarely mentioned the ordeal — too many painful memories. She had to relive her husband’s death daily in court, watching videos and hearing testimony on his decline. “It was devastating for my aunt,” Bowers said. In his view, she never understood the extent to which oil and chemical companies hid benzene’s hazards and tried to spin the science.

“There’s obvious vested interest here,” Bowers said of the Shanghai study. “If oil companies are willing to spend $36 million to fund research, how much are they afraid of losing?”

Ashley Schwartz contributed to this story.

http://www.publicintegrity.org/2014/12/04/16320/benzene-and-worker-cancers-american-tragedy

Russia Blamed, US Taxpayers on the Hook, as Fracking Boom Collapses

By Ben Ptashnik, Truthout

As Congress removes restrictions on taxpayers bailing out the too-big-to-fail banks, the right is blaming environmentalists and Russia for the demise of the fracking boom. In reality, the banks’ junk bonds and derivatives have flooded Wall Street, and now the fracking bubble threatens another financial crisis.

Collapsing crude oil prices due to oversupply are reaching tsunami proportions, threatening Wall Street banks, investors and a dozen countries, foremost Russia, Iran and Venezuela, where revenue losses have caused severe financial degradation, and economies are about to implode. While Americans are today enjoying $2 per gallon gasoline, Wall Street’s analysts predict that an imminent energy market collapse will bring financial institutions to their knees once again, and taxpayers are being set up for another mandatory bailout.

At the heart of these tectonic shifts in the entire energy sector is the recent expansion of the hydraulic fracturing (fracking) industry, a boom cycle that began in earnest when Congress and the Bush administration passed the Energy Policy Act of 2005, which exempted the new horizontal drilling technology from the Clean Water Act, the Safe Drinking Water Act and the National Environmental Policy Act. By tapping considerable quantities of new oil and gas resources from shale deposits, the fracking boom promised US energy independence, upending the world’s prevailing paradigms around renewable energy and peak oil expectations. Environmentalists fought against the huge Keystone pipeline infrastructure that would deliver the fossil fuels to foreign markets, fearing that exploiting these resources would undermine the struggle for the curbing of carbon emissions.

Fracking also threatened the dominance of Russia and Saudi Arabia as the fossil fuel suppliers of Europe when it became evident that the United States would soon become a net exporter. In the United States, fracking was hyped on Wall Street as a get-rich-quick opportunity, attracting massive capital input, and creating an investment bubble. Bloomberg reported this year that the number of bonds issued by oil and gas companies has grown by a factor of nine since 2004.

“There’s a lot of Kool-Aid that’s being drunk now by investors,” Tim Gramatovich, chief investment officer and founder of Peritus Asset Management LLC, told Bloomberg in an April 2014 article. “People lose their discipline. They stop doing the math. They stop doing the accounting,” he continued. “They’re just dreaming the dream, and that’s what’s happening with the shale boom.”

When gas fracking first popped onto the scene, grandiose claims were made that the United States had 100 years of gas supply in shale, or 2,560 trillion cubic feet. And Wall Street rode that initial estimate. The only downside (beside the environmental disaster left by this toxic industry) was that, like the housing bubble which depended on ever-growing home values to maintain profitability, shale gas wells had to deliver consistent or growing production and profitability to pay back heavy debt interest loans on well driller companies: $3 to $9 million per well. Fracking wells require not just drilling, but also huge injections of energy, water, sand and chemicals to fracture the rocks that hold the oil and gas deposits.

But in fact, no statistical evidence confirmed the hyped claims of a 100-year shale gas supply. In 2011, a study downsized this estimate from 2,560 trillion cubic feet to 750 trillion cubic feet, and by 2013, the US Geological Survey refined that down to 481 trillion cubic feet – less than a 19-year supply based on 2013 rates of production. Nevertheless, huge amounts of capital poured into increasingly marginal operations, and the fracking market was flooded with junk bonds and derivatives as investors piled in.

Meanwhile oil fracking, which is separate from gas fracking, also needed huge injections of capital, but more importantly, oil frackers needed oil prices to stay at $85 a barrel or higher on average to break even. Many of the shale oil wells that have sucked up a huge amount of investment have also turned out to have short lives and their operators required continued infusions of capital to drill new wells to keep afloat, even as prices tumbled due to the glut they themselves created. The Bakken, one of the largest oil fracking plays, is a typical example. It grew exponentially after environmental protections were removed. But since 2008, Bakken has required increasingly larger numbers of wells just to maintain level production and service debt. The industry, already in trouble in 2013, has now endured plunging revenues through a year of oil selling at $60 to $70 per barrel, on average, instead of $90 to $100.

Everyone had expected that in 2014 the Saudis would move to limit supply and maintain stable oil prices by cutting back production, as OPEC has done for decades. But an unexpected shockwave hit the industry in November 2014: The Saudis laid down the gauntlet and announced their intention to continue full production and let oil prices drop.

For the Saudis, this serves two purposes: First, it undermines the expansion of US shale oil by forcing prices down so low that many of the wells have to be shut down or lose money. Second, it punishes their enemy, Iran, whose oil export-based economy has been savaged by the lower prices. The Saudis are sitting pat, with a trillion-dollar war chest savings account accumulated over a decade of $100 per barrel oil. Oil Minister Ali al-Naimi has publicly admitted that the Saudis will wait as long as needed to retain market share, even if prices plunge further.

Falling oil prices will place a huge stress on the world’s junk bond market as energy companies now account for 15 percent of the outstanding issuance in the non-investment grade bond market. The plunge in the prices of crude could trigger a “volatility shock large enough to trigger the next wave of defaults,” according to Deutsche Bank.

This explains why the Obama administration – with complicity of both congressional Democrats and Republicans – managed in the wee hours of the morning to slip a loophole into the supposedly “must-pass” cliff-hanger omnibus budget bill. This toxic Trojan horse, passed in December 2014, now includes a minor footnote provision that might cause taxpayers to pick up the tab on more than a trillion dollars (yes, trillion) if the energy market bubble implodes, which it must if oil stays at half the price it fetched just six months ago.

After last minute, heavy lobbying on the budget bill by Jamie Dimon of JPMorgan Chase and an army of 3,000 Wall Street lobbyists, it appears that once again sufficient insecurity and fear had been spread among the political class regarding destabilization of the financial markets (or withdrawal of campaign financing). They allowed a last minute amendment that killed Dodd-Frank protections, and allowed US taxpayers to be shaken down to cover Wall Street’s shale gambling debacle.

The heavy-handed move by the financial industry has outraged progressives and libertarians alike. It seems that these Wall Street criminals, like junkies attached to their drugs of choice, just could not resist the high of easy cash from Ponzi scheme market bubbles, and so they have stuck it to the US public once again: Preposterously huge bonuses, Porsches, pricey call girls, and million-dollar Manhattan condos were at stake. So hey, why should they kick the habit? After all, not a single one of those con artists went to jail last time.

Wall Street is now flooded with fracking industry derivatives contracts that protect the profits of oil producers from dramatic swings in the marketplace. Derivatives are essentially insurance policies taken out by the oil industry to guard against fluctuations in the cost of fossil fuel supplies. Dramatic swings rarely happen, but when they do they can be absolutely crippling.

Derivatives taken out to ensure prices don’t go down are now creating billions in losses for those who sold such bets on the market; someone is going to have to absorb massive losses created by the sudden drop in oil on the other end of those insurance contracts. In many cases, it is the big Wall Street banks, and if the price of oil does not rebound substantially they could be facing colossal losses.

The big Wall Street banks did not expect plunging home prices to implode the mortgage-backed securities market in 2008, but their current models also did not have $60 oil prices included in projections. The huge losses may send a shock wave into the entire financial industry. It has been estimated that the six largest “too-big-to-fail” banks control $3.9 trillion in commodity derivatives contracts, those same gambling instruments that brought us the 2008 housing collapse. And a very large chunk of that amount is made up of oil derivatives. Combined with the huge flood of shale junk bonds on the market, the derivatives could initiate a bubble burst that could turn into a financial market implosion.

Meanwhile, the global climate change issue and energy market turbulence have morphed into geopolitical tensions over European fracking. Unsubstantiated allegations in a New York Times report by Andrew Higgins claim that the Russians are funding anti-fracking protests to maintain their hegemony over gas markets.

The allegations have infuriated environmentalists and climate justice activists. The last thing they want is to be made scapegoats for the fracking collapse and be played as the neo-Cold War dupes of the Russian empire. But memories of red-baiting suddenly hang in the air as (by seeming coincidence) dozens of right-wing media sites regularly devoted to anti-Soviet slanders or climate change denial immediatelypicked up Higgins’ Times piece, as if on cue.

There are now dozens more of such published reports. Even as the US fracking industry collapses and tensions over control of Ukraine and other former Soviet satellites re-emerge, there seems to be a concerted right-wing effort to label fracking opponents Russian agents.

Vague innuendos dominate this narrative. In the Times piece, for example, former NATO Secretary General Anders Fogh Rasmussen is quoted: “I have met allies who can report that Russia, as part of their sophisticated information and disinformation operations, engage actively with so-called non-government organizations.” Others write, “Some in Sophia believe” or “Those who suspect Russian involvement” or “There’s no smoking gun, yet . . .”

Critics in Romania accused the Times and Higgins of scapegoating environmentalists and acting as partisan players in a renewed Cold War.

“What, exactly, is the grand total of evidence that Russia is financing these anti-fracking protests?” asks American blogger in Romania, Sam C. Roman, in his article, “Pot vs. Kettle,” pointing out that the first anti-Russia allegation came from a politician who owned land that Chevron planned to frack, and is thus losing money from the protests. “Not one allegation against Russia in the entire article is proven by a single document, piece of evidence or other direct proof. All that exists are shadowy insinuations and allegations.” He asserts that accusations by Lithuanian, Romanian and NATO officials against Russia have not yet to be backed up by any proof.

“Add it up,” Roman writes. “You’ve got two former NATO [secretary generals] stumping for Chevron (which competes with Gazprom, a Russian energy company that also conducts fracking operations in Europe) blaming the Russian government for protests. . . . And all of this tied up in a neat little bow by an American journalist who has already been caught publishing anti-Russian propaganda in his newspaper before.”

This all leaves the United States somewhat schizophrenic. On the one hand, the United States and NATO’s foreign policy hawks are delighted by the oil price collapse; it serves to isolate and subdue Russia, expand NATO’s influence in Eastern Europe, and puts pressure on Iran to negotiate on nuclear aspirations. Not to mention that with gasoline at $2 per gallon, consumer spending and economic growth will be enhanced. The US economy grew by a comparatively robust 5 percent in the third quarter of 2014.

According to an article by Larry Elliott in The Guardian, “Stakes Are High as US Plays the Oil Card Against Iran and Russia,” the price drop was an act of geopolitical warfare by the United States, administered by the Saudis. Elliott suggests that US Secretary of State John Kerry allegedly struck a deal with Saudi Arabia’s King Abdullah in September. That might explain how oil prices dropped during the crisis caused by Islamic State in Iraq and Syria, which would normally have caused prices to rise.

It would also explain why the Obama administration allowed the financial industry the amendment to Dodd-Frank that effectively exempts financial institutions from liability associated with derivatives. Though shale derivatives were not specifically mentioned by the Wall Street lobbyists as they pressured their allies in Congress and the White House, it is becoming increasingly clear that the too-big-to-fail banks were beginning to panic as dark clouds gathered on the horizon in the shale derivatives trade.

Most bank customers and voters don’t know that Congress has already written into finance regulations that, in the case of insolvency, financial institutions could grab the assets of depositors and “bail-in” – which means they can save themselves from their losses in gambling operations at their investment divisions by grabbing cash assets of depositors, even those that are FDIC guaranteed, and legally convert them to bank stocks. That means that in the event of another market crash, Chase and Citi could take their depositors’ cash in savings accounts or CDs, and give the customers back a bank stock certificate (of questionable value) instead.

There are also those who scratch their heads and ask, “Why did the TBTF banks push for a deletion of the Dodd-Frank provision now, instead of waiting for the friendlier Republican-controlled Congress to pass this legislation?” The only answer that seems to make sense, and explain their urgency, is that the collapse is imminent.

In the 1990s dot-com craze, every new Silicon Valley start-up company was advertised as the next Microsoft. What followed was the crash of 2000, when the NASDAQ dropped 4,000 points (80 percent) in months. This chart below is what the crash looked like in 2000 to 2002 after the market had reached 5,000 (almost exactly where it stands today).

Having learned their lesson well from the last bailout, and knowing that they will have a much harder time coming to Congress hat-in-hand after a collapse, the TBTF banks probably decided not to wait, pushing their minions in the Beltway to inoculate them as soon as possible from the potential market explosion.

In the meantime, they were probably dumping their own stocks on unsuspecting investors. Based on year-end reports for March 31, 2014, for 127 major oil companies, cash input for the fracking industry was $677 billion, while revenues from operations only totaled $568 billion – a difference of almost $110 billion. And this was before the price of oil started dropping six months ago.

In three out of seven major fracking fields in North America, companies are already reporting losses, with closures particularly acute in Canada. It’s not clear whether economists fully appreciate what’s about to transpire. This decline in rig count is just the beginning. Perhaps the end will come as early as this winter or spring, as fiscal reports for 2014’s fourth quarter are published, operations shut down, crews are laid off, and many unprofitable oil and gas rigs are mothballed.

So, whom will the banks, brokers and investors scapegoat for this upcoming crash? Some predict that they will likely use every available media outlet to blame community activists, Democrats and Obama for stopping the Keystone pipeline and for opposing the fracking industry. And as in the climate change denier movement, the narrative will probably use “communist” and “socialist” rhetoric, which is why the Russian card is so important to play: Hence the Higgins article.

The pundits on Fox will likely play on the patriotism of the right and use their Big Lie ploy (say something enough times, it becomes the truth) to the hilt. Six months from now, while studiously avoiding mention of our “allies,” the Saudis, or the Wall Street banks, they will likely be vociferously defending those poor “beleaguered US oilmen” who could have made our country strong and independent again in energy, but were broken by the Democrats and those “commie environmentalists” working for Putin. The market crash will be blamed on the “climate hoax.”

BEN PTASHNIK

http://www.truth-out.org/news/item/28406-russia-blamed-us-taxpayers-on-the-hook-as-fracking-boom-collapses

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