Using the ESA & climate change to block
development of fossil fuels:

What will it cost America?

Imagine if environmental groups were to achieve success in their efforts to list the polar bear, the Pacific walrus, the Cook Inlet beluga whale and numerous other species on the Endangered Species Act (ESA).

What would be the consequences to Alaska’s economy if a new president and Congress were to agree to demands for a moratorium on new oil and gas development onshore and offshore Alaska?

What would it cost the nation’s economy should Congress pass climate change legislation seeking to tax carbon emissions, restrict energy use and production, and impose new regulations and taxes on the production and consumption of energy?

“The piling on of petition after petition, species after species, and lawsuit after lawsuit, goes beyond reason and is part of a broad campaign to block the development and use of fossil fuels,” warned Marilyn Crockett, Executive Director of the Alaska Oil and Gas Association (AOGA). “The implications for domestic energy production, the nation’s economy and Alaska are staggering.”

The Arizona-based Center for Biological Diversity (CBD) has submitted scores of petitions to list a host of species on the ESA. It has also urged several east and west coast states to designate the Atlantic and Pacific as impaired waterbodies under the Clean Water Act, claiming changing sea water chemistry because of absorption of carbon dioxide produced by humans.

All told, CBD has more than 56 legal actions pending, including a lawsuit targeting the city of Perris, California for approving a shopping center without considering the plaza’s carbon footprint.

Last month, the advocacy group WildEarth Guardians filed a lawsuit seeking to protect 681 species all at once, including tiny snails, butterflies and a wide variety of other small critters and plants.

What do these lawsuits, petitions and potential legislation add up to?

In the case of impaired waterbodies, oil, gas, fishing and other activities could be severely restricted, if permitted at all. As for proposed ESA listings, the implications are far more reaching, potentially impacting projects everywhere.

In the case of the polar bear, the CBD cited as the reason for ESA protection a decrease in sea ice coverage due to climate change, thereby, it said, threatening the bears’ habitat.

“With rapid action to reduce greenhouse gas emissions, combined with a moratorium on new oil and gas development and shipping routes in the Arctic, we can still save the Pacific walrus, the polar bear and the Arctic ecosystem,” said Shaye Wolf of CBD. The group admitted its goal is to force through restrictive U.S. policy on climate change.

“It is clear these groups will use any and all means to achieve their ultimate goal of influencing national policy on climate change by utilizing the legal system and existing laws as the hook, as we’ve seen with the Endangered Species Act and now the Clean Water Act,” said Crockett.

Beyond the practical impact on operations, Crockett said a listing would provide additional grounds for advocacy groups to oppose oil and gas leasing and specific projects, particularly with respect to offshore development. Onshore and offshore areas would likely be designated critical habitat, Crockett said, creating new challenges for industry to obtain permits, which would likely be appealed and litigated, stalling or halting operations altogether.

A polar bear listing would mark the first time a healthy species would be considered at risk under the ESA and the first time climate change would be formally labeled a threat to a species. The listing would set a precedent with broad consequences for the listing of other arctic and non-arctic species, Crockett warned.

Immense offshore potential

In February, the second most successful oil and gas lease sale in the history of the nation took place, covering millions of acres in the Chukchi Sea. The sale raised a record $2.7 billion in revenue. Considered the most prolific, undeveloped energy frontier in the U.S. the Chukchi could hold as much as 15 billion barrels of oil and 77 trillion cubic feet of natural gas.

The Beaufort Sea and the adjacent onshore National Petroleum Reserve-Alaska (NPRA) could hold another 15 billion barrels of oil and 125 trillion cubic of natural gas. The Chukchi, Beaufort and NPRA could double America’s oil and gas reserves, not to mention the oil and gas that may exist under the Coastal Plain of the Arctic National Wildlife Refuge, considered the nation’s most promising onshore energy prospect.

Alaska’s offshore waters and onshore prospects hold the potential to fuel the state’s economy for decades and to play a key role in ensuring America has the energy it needs until alternative sources become available on a large scale. Industry as well as state and federal policy makers believe these energy resources can be tapped in a way that mitigates impacts on wildlife.

Outside Alaska, tens of billions of barrels of oil and hundreds of trillions of cubic feet of natural gas are likely in place offshore the west and east coasts, but 86 percent of these areas are closed to drilling. If put into production, offshore deposits could provide clean energy and self sufficiency to heavily populated regions.

A similar situation exists in Florida where massive offshore gas deposits could help transition the state and much of the Southeast toward energy independence.

“For the U.S. it’s the same old offshore moratoria, unless they are lifted, much of this potential can’t be touched,” said M.A. Kaufman, a geologist from Spokane.

In a series of public policy papers on climate change and energy policy, Kaufman urged special consideration for natural gas. “If the U.S. opened up its offshore to drilling, it could be self sufficient in this commodity for many decades thereafter.”

Consequences for the economy

There are those who believe the global climate change threat is so severe that fossil fuel development must cease, no matter the consequences. For Alaska, the economic impacts would be devastating as 90 percent of the state’s unrestricted general fund revenues come from oil production.

The long-term economic feasibility of the proposed natural gas pipeline from the North Slope to the Midwest would be placed in jeopardy if future exploration of prospective gas basins is blocked.

If the pipeline is not built within the next ten years, Alaska would face enormous budget deficits. If new oil development is blocked, the existing oil pipeline would likely be shut down prematurely, wiping out virtually all of the state’s revenue stream.

Ironically, Alaska won its battle for statehood 49 years ago, after Alaskans convinced Congress the territory could support itself as a state using its vast wealth of natural resources as an economic base. Today, Alaska could be on the verge of losing its ability to develop its natural resources.

Global climate change & fossil fuels

Despite the fact that 85 percent of all the energy Americans use comes from fossil fuels, environmental groups are waging all-out war against their production and use. At least 48 new coal-fired power plants are being contested in 29 states.

“Our goal is to oppose these projects at each and every stage, from zoning and air and water permits to their mining permits and new coal railroads,” said Bruce Nilles, a Sierra Club attorney.

Coal, which provides over 50 percent of the nation’s electricity, is the nation’s cheapest and most abundant energy source with hundreds of years of reserves still in the ground. Utilities burn more than 1 billion tons of it annually in more than 600 plants. Newer plants are utilizing technology to limit emissions, but carbon-capture technology is at least a decade away.

Many mining companies and utilities point to coal as an alternative to oil imports, and the government projects coal’s share of electricity generation could increase to 60 percent in two decades.

But an ESA listing of animals such as the polar bear under the threat of climate change could radically change that projection. Moreover, all three major presidential candidates favor climate-change legislation.

The impact to the average American household of the various cap-and-trade proposals are uncertain, but some projections point to annual costs of up to $4,500 per family of four by 2015, costing the economy hundreds of billions of dollars each year.

There are over a dozen climate change bills pending in Congress. Hundreds more are being considered at the state and local level. Little economic analysis on their projected costs has occurred, and emission reduction targets set in some bills could ultimately result in de-industrialization, forcing some industries to move overseas. The bill would very likely result in an increased reliance on foreign oil. Moreover, the bills do not promise to alter climate trends.

A moderate bill, supported by Sens. Murkowski and Stevens and introduced by Sens. Bingaman and Specter, is projected to have a modest to moderate impact on the economy. The Low Carbon Economy Act would raise energy costs to Alaskans by 12% in 2030, according to a preliminary analysis.

However, the legislation with traction is the Lieberman-Warner bill. The bill faces a number of hurdles, including the effects it would have on U.S. competitiveness, trade policy, and the economy.

If enacted, the bill would be very costly and result in higher energy prices. A study conducted by the Heritage Foundation indicated single year GDP losses could exceed $400 billion, job losses could approach one million in some years and the annual cost of emission permits to energy users could exceed $690 billion by 2030. To put these numbers in perspective, in 2007 taxpayers spent $43 billion on the Department of Homeland Security and $549 billion on the Department of Defense.

Bill Kovacs, Vice President of Technology, Environment and Regulatory Affairs of the U.S. Chamber of Commerce, warned Lieberman-Warner’s cap and trade approach would demand sharp reductions in carbon emissions before technologies are available that can make it happen in a manner not disruptive to the economy.

“That puts the cart before the horse,” Kovacs said, noting emission reductions should be coordinated with the introduction of new technologies that produce energy.

Kovacs acknowledged emissions should be reduced, but he emphasized it must be done on a global scale to be truly effective.

“After five years, if the U.S. didn’t exist at all, global CO2 emissions would continue to rise,” Kovacs said. “The entire world needs to act, otherwise it is irrelevant what the U.S. does in cutting emissions.”

The sponsors of this and other climate change bills insist they will stabilize an unstable climate and transform America’s economy into one powered by alternatives. Others believe such thinking is pure fantasy.

“Look around you, just where are you and your family, company and community going to wipe out 80-plus percent of your emissions – and thus a large portion of your energy use,” asked Roy Innis, Chairman of the Congress of Racial Equality. “What effect will it have on your living standards?”

If these bills become law, they will give activists, courts and bureaucrats control over virtually every aspect of American life, he warned in a recent speech in Wisconsin.

“Any activity that produces greenhouse gases would be regulated, restricted, taxed and curtailed, including heating, cooling, transportation and manufacturing,” Innis said. “Our lives…will be impacted in countless ways, and to unprecedented degrees that we cannot even begin to imagine. Every one of these bills would inject high-tax, anti-energy arsenic that would send our economy into a tailspin.”

A well-known civil rights leader, Innis said the bills would compel Americans to stop using fossil fuels and force them to switch to “expensive and insufficient alternatives,” which he considers “little more than supplements to fossil fuels.” He said restricted supplies would drive energy costs much higher, forcing companies to lay off workers, shift operations and jobs overseas, or simply close doors.

“If we are to make major sacrifices – to give up our energy, liberties and economic opportunities – we must first be given real, replicable, scientific evidence that we face a real planetary crisis, and that the proposed laws and draconian measures will prevent the crisis,” Innis insisted.

He acknowledges global warming is occurring, but he questions whether the use of fossil fuels is the primary cause.

A consensus of scientists has concluded it is 90 percent certain that global warming is the result of carbon emissions, caused by the burning of fossil fuels. Global warming, the prevailing view indicates, will eventually be stopped should carbon emissions cease.

Meanwhile, other scientists believe global climate change is the result of natural forces and that human activity has little effect on the climate. If so, stringent carbon reduction measures would do nothing to stabilize the climate. These scientists have been harshly criticized for bucking the consensus.

Those who want to do away with fossil fuels advocate alternatives such as wind and solar as a panacea, noted Kaufman, who believes the warming that is now occurring is mainly natural. He said alternatives are viable, but have serious limitations to being dominant power sources.

The dire U.S. energy outlook cannot be overestimated, Kaufman warned. “When one looks at history, the collapse of many great nations and empires resulted from systematic economic failure rather than military defeat, the latest example being the Soviet Union. If the U.S. continues on its current energy policies, there is a real risk of economic breakdown.”

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