Star Tribune editorial called into question

A recent Minneapolis Star Tribune editorial favorable to off-shore drilling may be boosting it’s owners vested intererest in that tehnology.

David Brauer in a long piece on Minnpost.com writes that Avista’s holdings and the Strib’s editorial position could be a coincidence. Writing a pro-drilling editorial isn’t beyond the pale; however, not acknowledging the very specific corporate conflict of interest is.

Editorials are the one place in a paper where the business side formally exerts influence: Publisher Chris Harte (former BJ publisher) sits on the editorial board. And while Harte isn’t an Avista Capital partner, he’s a Strib co-owner – the partners’ partner, in other words.

It should be noted that MinnPost.com is an alternative media to the Star Tribune and Brauer discloses that two ex-editorial board members, Susan Albright and Steve Berg, now write for Minnpost.com but didn't inspire or inform his article..

The editorial said:
: "Though some environmental advocates dispute this, drilling technology has advanced over the past quarter century. Oil companies can drill more efficiently in deeper water with significantly less risk to the environment."

Brauer points out that : "There was one unnoted fact: The company that bought the Strib last year is heavily invested in that technology."

The Strib began overhauling its editorial board nine months ago, the article states, so it shouldn’t surprise that certain editorial positions have changed. In general, the page has shucked its rep as a lefty lightning rod; on some days, it’s hard to find a call to action at all.

But a Sunday, June 29, editorial clearly moved away from the paper’s reliably pro-environment rhetoric. Writers pointedly accused offshore oil drilling opponents of “turning the issue into an ill-informed litmus test of environmental credentials. A knee-jerk ‘no’ has equaled a green candidate. A politician wanting to discuss the issue is derided as a pawn of Big Oil. … The snap judgment approach is unfortunate.”

Even though many economists link surging prices to fundamental supply-demand gaps, with new offshore oil years from market, the Strib breathily declared: “Just the possibility that domestic oil supplies are expanding would likely deter speculators, sending prices down.”

Now, Avista’s holdings and the Strib’s editorial position could be a coincidence. Writing a pro-drilling editorial isn’t beyond the pale; however, not acknowledging the very specific corporate conflict of interest is.

Editorials are the one place in a paper where the business side formally exerts influence: Publisher Chris Harte sits on the editorial board. And while Harte isn’t an Avista Capital partner, he’s a Strib co-owner – the partners’ partner, in other words.

Avista Capital Partners, which raised $2 billion in 2006, has more investments in energy (seven) than its other sectors, health care (six) and media (five). It’s impossible to tell which segment accounts for the bulk of the private company’s revenue, but the company's offshore drilling concentration is undeniable and includes:

Blake Offshore. The Metairie, La.-based company touts itself as “the only remaining privately held Offshore Rig provider left in the United States.” Avista invested $51 million in September 2006.

Frontier Drilling. The Houston-based Frontier operates and manages “conventional drillships, semi-submersibles and floating production, storage and offloading vessels,” its website says. Avista invested $27 million in the company in September 2006.

Peregrine Oil & Gas. Another Houston firm, Peregrine “conducts exploration development and production operations in the Gulf of Mexico.” Avista is listed as one of four primary equity investors who pumped in $160 million, though its share isn't specified.

Geokinetics Inc. A third Houston company, Geokinetics provides shallow-water cable and seismic data “between land and deep marine,” according to its website. Avista invested $100 million in September 2006.

The company’s three other energy sector holdings — Celtique Energie, Manti Exploration and Laramie Energy II — are on-shore companies.

Click on the headline to read Brauer’s article.

Brauer also wrote a profile on Harte in December, 2007. See the profile.