Canada Pension Plan infuses $300M into Encino, making Ohio the next fracking sacrifice zone

Encino Acquisition Partners, LLC, the oil and gas company slated to frack under Ohio’s Zepernick and Valley Run wildlife areas, is 98 percent owned by a major Canadian retirement fund.

The Canada Pension Plan Investment Board (CCPIB), which serves 21 million Canadian retirees, has invested $300 million into Encino Acquisition Partners, LLC (EAP), a subsidiary of Encino Energy. Encino owns oil and gas leasing rights to about a million acres of land in Ohio.

According to a press release filed online April 22—on Earth Day– $150 million will be funded by the end of April. “The investment supports EAP’s accelerated development of the Utica oil play, one of the highest-return oil growth plays in North America,” said the release.

“We find it difficult to believe the average Canadian retiree knows his or her pension funds are invested in the dangerous and polluting practice of fracking,” said Cathy Cowan Becker, steering committee member of Save Ohio Parks. “We are not okay with Canada turning Ohio into a sacrifice zone, and we don’t think most Canadians would be either, if they knew how their money was being invested.”

Ohio is Ground Zero when it comes to climate change. The Utica-Marcellus Shale region, which includes east and southeast Ohio, ranks second in the U.S. and fourth worldwide in greenhouse gas emissions related to oil and gas production and transportation, according to Climate Trace, a global organization that monitors and inventories greenhouse gases worldwide via satellite, collecting data from more than 80,000 climate scientists.

JobsOhio, the state’s private economic development agency, has a history of supporting gas and oil industry expansion. It reports Ohio is responsible for 85 percent of the growth in U.S. shale oil production since 2011.

Yet continued investment in oil and gas is risky at a time when the world must rapidly phase out fossil fuels to mitigate the worst effects of climate warming. As world energy production shifts toward lower-cost, renewable energy sources like solar, wind and water power, gas and oil profits will become smaller, unreliable, and short-term.

“Any portfolio manager can look at the next few years and determine that a long-term bet on fossil fuels is not only climate villainy, it’s risky and will eventually lead to stranded assets,” said Cowan Becker. “When that happens, you know who will end up footing the bill—retirement investors and average citizens.”

Fossil fuels are not a good bet over time

Yearly returns on the Canada Pension Plan’s portfolio years have averaged 10 percent over the past decade, according to the plan’s 2023 annual report, compared to 12.39 percent over the last 10 years for the U.S. S&P 500, according to BusinessInsider.com.

“Something’s wrong with this picture,” said Cowan Becker. “Fossil fuels are not a great investment when you consider other investments available, especially ones that don’t endanger people’s health, pollute the air, water and land and accelerate climate change.”

Expanding fracking under Ohio’s public lands may prevent the U.S. from achieving its stated goal of cutting greenhouse gas air emissions in half by 2030, she added.

“The climate science is clear,” said Cowan Becker. “We must significantly reduce carbon emissions by 2030 if the world is to avoid catastrophic warming. This means phasing out oil and gas production so we can limit global temperature increases to 1.5 degrees Celsius. Ohio’s state legislators, its oil and gas regulatory agencies and the Canada Pension Plan are moving in the wrong direction.”

Save Ohio Parks and other Ohio environmental groups have been expressing their concerns about fracking to Gov. Mike DeWine and the Ohio Department of Natural Resources’ Oil and Gas Land Management Commission (OGLMC) since January, 2023, when H.B. 507 changed one word in a 2011 law to require fracking under Ohio’s state parks and public lands.

Those concerns include fracking’s effects such as deforestation; animal, plant and insect habitat destruction; freshwater depletion and the poisoning of community aquifers; as well as pollution that increases cancer — including lymphoma in children — asthmas, infertility, and low birth weights.

But those concerns were ignored, and at a raucous November 2023 meeting, the OGLMC voted to accept bids to frack Salt Fork State Park, Ohio’s largest and arguably most beautiful park of 21,000 acres, along with Zepernick and Valley Run wildlife areas. All are located in eastern Ohio.

The politics of fracking in Ohio are pervasive and divisive

Save Ohio Parks has protested the OGLMC’s refusal to allow the public to speak during its meetings, denying the people the right to democratic process.

Last September, a Cleveland.com news article spurred Ohio Attorney General Dave Yost to begin investigating claims that apparently fraudulent, pro-fracking emails were submitted to the OGLMC by Consumer Energy Alliance, a Houston-based public relations firm employed by the gas and oil industry that has previously been investigated for fraudulent activities in Ohio, Wisconsin and South Carolina. That investigation is still unresolved.

A lawsuit filed April 6, 2023, challenging the legality of HB 507, which mandated fracking under state parks and public lands, has also not yet been decided.

Drilling companies seeking leases were identified publicly when the OGLMC approved fracking bids Feb. 26, 2024, with the OGLMC accepting one drilling bid for far under market value.

Since then, two more wildlife areas, Keen in Harrison County, a popular, 85-acre birding and hunting area, and 366 acres of Egypt Valley in Belmont County are also being considered for fracking.

Egypt Valley is 18,000 acres of forest restored over the last 30 years by Ducks Unlimited, the National Wild Turkey Federation. and the Ruffed Grouse Society after years of surface mining. The majority of it was deeded to the ODNR from The Conservation Fund, a nonprofit which claims to preserve land and fight climate change.

Increasingly, the public is becoming aware that some state legislators supporting the mandate to frack Ohio’s public lands did so to obtain revenue to fill a budget hole left by eliminating the state income tax. Eliminating the tax would conceivably enrich wealthy Ohioans and wealthy supermajority political party donors enough that they would donate funds to keep legislators in power in their gerrymandered districts.

A citizen-led petition drive to amend the state constitution to protect Ohioans from this type of manipulation is currently being circulated, with the goal of establishing a fair way to draw voting districts that would end gerrymandering.

“We believe our state parks would not be fracked today if Ohio had fair voting districts and was not run by one supermajority political party,” said Cowan Becker.

The CCPIB and Encino Energy, LLC of Houston, Tex., formed Encino Acquisition Partners (EAP) in 2017, when CPPIB invested $1 billion and Encino committed $25 million to extract oil and gas from U.S. locations.

In 2018, EAP purchased all of Chesapeake Energy’s Utica shale oil and gas assets in Ohio for $2 billion. Chesapeake, once the second-largest natural gas producer in the United States, went bankrupt in 2021 and reorganized in a Chapter 11 filing.

Chesapeake is now back in business, but is postponing a $7.4 billion merger with Southwestern Energy because prices are low in the volatile natural gas market.

Public comments to the OGLMC regarding the nomination to frack Keen Wildlife Area are due April 28 and can be submitted to: Commission.Clerk@oglmc.ohio.gov.