Resource Development Council

From the Tongass to ANWR:

The role of misinformation in blocking development

By Eric Fjelstad

The wise use of Alaska’s resources has been stymied by myths and misinformation. Opponents of ANWR have convinced a considerable segment of the Outside public that development will harm caribou. Yet, the Central Arctic herd has grown from approximately 5,000 animals prior to development of Prudhoe Bay to approximately 67,000 animals today. We see daily ads claiming that there are no standards governing mining, even though a large mine requires dozens of permits to operate.

Misinformation is a potent arrow in the quiver of those who seek to stop resource development. It is easy to spread misinformation, but exceedingly difficult to counter it. Misinformation influences resource development by fueling initiatives to limit access to resources, by threatening existing industries with economic constraints that discourage investment, and by influencing the views of persons who make decisions on resource projects.

Access to resources is critical for the long-term sustainability of any industry. Opponents of resource development have concluded, rightly, that the best way to stop an industry from taking hold, or in hastening its decline, is to withdraw areas from the land base otherwise available for exploration and development. This is playing out right now in the Alaskan Outer Continental Shelf where the real debate is not whether development can occur in a responsible way, but rather, whether there should be any development at all.

In the Tongass National Forest, opponents of timber harvest pursued a sophisticated campaign which led to 90% of the forest being closed to commercial timber operations. The resultant land base was not enough to sustain the industry, leading to a collapse of the industry in the late 1990s. At the federal level, policies to implement marine spatial planning (aka “ocean zoning”) are contemplated in 2010, premised upon beliefs that existing regulatory programs are wholly inadequate to protect marine ecosystems.

Cutting off access to resources is not the only way to stop the wise use of natural resources. Existing industries can be weakened, or even shut down, by undercutting the economics necessary to attract capital.

Tax policy is fertile ground for misinformation, leading to tax regimes that drive capital to more favorable jurisdictions. Another strategy that is gaining momentum is to impose purported “environmental” requirements on industries through legislation or the initiative process. These requirements masquerade as environmental standards – and hence, are difficult to counter – but in many instances have no rational connection to environmental protection and are, instead, designed to impose operational constraints rendering operations uneconomic.

In the case of Alaska’s Ballot Measure 4 mining initiative, the constraints sought by initiative supporters would have made it economically infeasible to develop and operate large hard rock mines. At the federal level, opponents of mining are pursuing a campaign – fueled by misinformation that existing state and federal programs are inadequate to protect the environment – to require mines to be bonded by EPA under Superfund.

Last, misinformation plays a significant role in influencing governmental officials and the decisions they make on natural resources projects and land management decisions. The courts are the final arbiters on many resource projects, and judges bring their own views to bear on the relevant issues.

The “Roadless Rule” case exemplifies the divergent views that judges can have on the same set of facts. In that case, the Ninth Circuit Court of Appeals was faced with the question whether to uphold a regulation, promulgated in the final days of the Clinton Administration, prohibiting development in millions of acres of federal lands. In his decision upholding the regulation, Judge Ron Gould described the purpose of the Roadless Rule as “benefiting the environment, and the public’s interest in preserving precious, unreplenishable resources.” (Never mind that trees are a renewable resource.) The dissent, authored by Judge Kleinfeld from Fairbanks, stated “What we have here is a case where the agency attempted a massive management change for two percent of the nation’s land on the eve of an election …The Roadless Rule does not preserve the status quo. It changes it, massively, for two percent of the entire land area of the United States. And by increasing the risk of forest fires, it threatens additional land and people.”

The Alaska timber industry faced a perfect storm of misinformation in the 1990s, focused on cutting off access to timber, undermining the economics of timber sales and manufacturing facilities, and influencing the agency and judicial officials overseeing key decisions. Although the companies had strong statewide support, employed thousands of workers, and had prospered over a 45-plus year history, the Alaskan industry experienced a rapid collapse over a relatively short six-year period. In assessing the collapse of the Alaska timber industry, several “lessons learned” are clear in hindsight.

First, compromise was not a successful strategy. Efforts to reach peace on land withdrawals led to demands for more withdrawn lands.

Second, misinformation is particularly hard to overcome when critical decisions are made in Washington, D.C. Even though the timber industry harvested only 7% of the old growth timber in the Tongass, there was widespread belief by key decision-makers that little old growth remained.

Last, even the strongest industries are not too big to fail if their economics have been fatally compromised. The withdrawal of lands available for timber harvesting created a situation where there was not enough economic timber to supply manufacturing facilities, which made it impossible to attract capital.

Eric Fjelstad is an attorney with Perkins Coie LLP and serves on the Executive Committee of the Resource Development Council.

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