Climate Change Blog Environmental Justice Blog Healthy Communities Blog Latest Updates Oil and Gas Blog Public Lands Blog

The Interior Department Is Using Faulty Logic to Justify New Oil Projects

The Beaufort Sea along Alaska’s north coast is bitter cold, packed with marine life, and underlain with millions of gallons of oil. Since the 1980s, oil companies have targeted a shallow area five miles from shore—between Prudhoe Bay, once North America’s most productive oil field, and the coast of the Arctic National Wildlife Refuge, the largest wildlife refuge in the country—to build an oil and gas production facility, the first in Alaska’s federal waters. But they were stymied by technical problems, ever-expanding budget estimates, and regulatory concerns.

Now, as the Trump administration pursues oil and gas development with fervor, drilling there might finally happen. In October, after Houston-based Hilcorp Energy Company acquired a lease to the land, the Bureau of Ocean Energy Management, or BOEM, signed off on a plan to develop the site, known as the Liberty Energy Project. If Hilcorp decides to go forward with the project, the company will build a nine-acre gravel island six miles offshore to base their operations and bury a seven-mile pipeline under the seafloor to connect the extracted oil and natural gas to the Trans-Alaska Pipeline System.

To gain approval for major energy projects like this one, U.S. law requires that BOEM take stock of how the project would affect the environment. The resulting document, known as an environmental impact statement, details the risks that proposed infrastructure and a potential oil spill might pose to the region’s caribou herds, breeding shorebirds, polar bears, and passing bowhead whales, as well as the project’s impact on water and air quality, including climate change.

However, if you look carefully at the section on the environmental consequences of greenhouse gas emissions for the Liberty Project (on page 4-52), the agency draws a surprising conclusion: That extracting 120 million barrels of oil from beneath the Arctic Ocean over the project’s 15-to-20-year lifetime would reduce global carbon emissions, and by no small amount. According to the agency, developing Liberty would save more than 25 million metric tons of carbon dioxide—or the equivalent carbon pollution emitted by 5.3 million cars over a year. In other words, the report determines that transporting and dumping gravel in the ocean to construct an artificial island, drilling into the seafloor to capture buried oil, and extracting some 70,000 barrels of the stuff each day at peak production is better for Earth’s climate than doing nothing at all.

Endicott Island is a 45-acre manmade gravel island, constructed in 1987, used as an offshore drilling platform off Prudhoe Bay in state waters in the Beaufort Sea. If Hilcorp Energy goes forward with the Liberty Energy Project, the company would construct a similar, but smaller, nine-acre gravel island to drill for oil beneath the seafloor in federal waters. Photo: James P. Blair/National Geographic Image Collection

“That’s just a crazy, crazy analysis,” says Jeremy Lieb, an attorney at Earthjustice, a non-profit legal firm that focuses on environmental issues. Last month, the Center for Biological Diversity and a host of other conservation groups represented by Earthjustice filed a lawsuit against the Department of Interior, which oversees BOEM, on the grounds that the agency’s environmental analysis of the Liberty Project distorts the damages associated with drilling and ignores basic economic principles. “It appears to be a convenient way for agencies to rationalize that any individual project will have essentially no effect on global greenhouse gas emissions,” Lieb says.

The use of a model that undersells carbon emissions appears to be a directive coming from inside the Department of Interior. When Audubonasked Frances Mann, a BOEM biologist who worked on the environmental impact statement for the Liberty Project, about the climate analysis, she said, “we used the models that we were required to use.”

The BOEM report reasons that in place of oil coming out of the Arctic, nearly the same amount of oil would be produced elsewhere in the world from places with “comparatively weaker environmental protection standards” and “increased emissions from transportation,” according to the federal document.

A Spectacled Eider lifts off from the Arctic National Wildlife Refuge, where the Trump administration is aggressively pushing plans to drill for oil and gas. In a recently released environmental impact statement for that project, the Interior Department used debunked models for calculating the climate impact of the project, an effort one economist described as an intentional obfuscation. Photo: Peter Mather/National Geographic Image Collection

This assumes that any oil not extracted in the Arctic would be replaced with foreign oil that uses dirtier methods and costs more to transport, ultimately emitting more carbon. That logic requires some economic gymnastics, says Gilbert Metcalf, an economist at Tufts University who specializes in energy and climate policy. “I just don’t find it credible,” he says. It’s more likely that Arctic oil would be replaced by oil from fracked wells in the United States, like those common in North Dakota and Texas, rather than overseas oil, Metcalf says. What’s more, producing oil in the Arctic is no pristine operation—it emits more carbon than oil produced in the Gulf of Mexico, according to a 2015 report released by the Carnegie Foundation, because of the difficulties of extracting oil in such harsh conditions.

The analysis makes another error, says Peter Erickson, a senior scientist at the Stockholm Environment Institute, an international research and policy non-profit organization. Basic economic models show that when more oil is produced in the United States, more oil is bought and combusted internationally. That’s because when there’s more oil on the market, prices drop—simple supply-and-demand economics. The Liberty Project analysis, and others, don’t fully take this effect into account, he says; they ignore the fact that the extraction of fossil fuels actually increases global carbon emissions.

“The underlying assumption is very common,” Erickson says. For years, including before Trump took office, government reports failed to account for the likely increase in consumption. Erickson first flagged the error in the analysis of the Keystone XL Pipeline, writing in a 2014 Nature Climate Change report that the State Department underestimated the project’s overall emissions—the difference between releasing up to 27 million tons of carbon dioxide annually and up to 110 million tons. “There was this sort of giant blind spot,” Erickson says.

BOEM also miscalculated carbon emissions in its draft analysis of Arctic and Atlantic offshore oil drilling in 2016, he says. After that, though, the agency seemed to learn from its mistakes. In November 2016, a BOEM report found that halting new drilling projects over five years would lower foreign oil consumption by billions of barrels. This could decrease global carbon emissions by up to 2.3 billion tons, Erickson estimates, more carbon than the entire U.S. transportation sector emits in a year.

If Hilcorp goes forward with the Liberty Project, it will bury a seven-mile pipeline under the seafloor to carry extracted oil and gas to the Trans-Alaska Pipeline System, shown here. It takes around 12 days for oil and gas to move from Prudhoe Bay through more than 800 miles of above-ground pipe built in Alaska’s wilderness to the endpoint at Valdez Marine Terminal. Photo: Dermot Tatlow/Panos Pictures/R​edux

This argument has held up in court. In 2017, a federal judge struck down another flawed emissions analysis conducted by the Bureau of Land Management on a coal project in Colorado. “She said very specifically [that] it’s irrational to say increase in supply is not going to increase consumption,” Erickson says.

Yet despite increased recognition of the problem, the Liberty Project environmental impact statement relies on debunked reasoning to conclude that developing the site would result in lower carbon emissions. This is an intentional move on the part of the Interior Department, Erickson says. “It’s not a misguided model; it’s a purposeful misuse of the model,” he says. “It’s enabling their decision and their allowance to expand the fossil fuel supply.”

Federal agencies continue to use the same flawed model in analyses of other new energy projects. A draft report detailing how drilling for oil in the Arctic National Wildlife Refuge would impact the environment, released December 20 by the Bureau of Land Management, also failed to account for the global increase in emissions from development. “It appears as if [the Bureau of Land Management] is purposefully obfuscating the question of the global oil market and CO2 emissions implications,” Erickson told Audubon over email.

This comes at a time when the world needs to reduce carbon emissions to avoid a climate catastrophe, according to a recent United Nations report—and yet emissions continue to accelerate. Halting fossil fuel expansion is the only way to reduce carbon emissions in a meaningful way, Erickson says. “The climate problem is a fossil fuel problem. There’s no debate around that.”

This story was originally published on Audubon.org. Audubon is a nonprofit dedicated to saving birds and the places they need today and tomorrow. For more stories from Audubon magazine or to learn about Audubon’s conservation work, visit the Audubon website.

Posted by
Climate Change Blog Environmental Justice Blog Healthy Communities Blog Labor Rights and Worker Protections Blog Latest Updates Oil and Gas Blog Public Lands Blog Sustainable Forests Blog Transportation and Infrastructure Blog

Senate Committee Pushes McNamee FERC Nomination Forward, Driven by Millions in Fossil Fuel Money

Members of the Senate Energy and Natural Resources committee voted on Tuesday to push the controversial nomination of Bernard McNamee for Commissioner of the Federal Energy Regulatory Commission (FERC) to the full Senate, on a mostly party-line vote.

McNamee currently leads the Office of Policy at the Department of Energy, where he helped to roll out Energy Secretary Rick Perry’s failed attempt to bail out the coal and nuclear industries. His resume reads like a who’s who in the fossil fuel industry and the far-right political crowd.

McNamee has deep ties to the Texas Public Policy Foundation, the Koch-funded organization that has provided a pipeline of Trump nominees, including the former nominee to the Council For Environmental Quality that even Republicans agreed was unqualified for the job. It was there that McNamee spearheaded “Life: Powered,” a project launched by the group in 2015 “to combat the Obama-era Clean Power Plan,” according to TPPF’s 2017 annual report. He also served as a senior advisor and counsel to Sen. Ted Cruz (R-TX). This past Earth Day, he authored a love letter to fossil fuels that implored Americans to remember how “the responsible use of America’s abundant resources of natural gas, oil and coal have dramatically improved the human condition.”

Joe Manchin joined Republicans in voting for McNamee, 13-10, even in spite of a recent video that shows McNamee criticizing renewable energy and expressing strong support for the sole use of fossil fuels – as well as describing environmental advocacy as “tyranny.” This vote serves to underscore a continuing problem in Washington: that a nominee who, on the record, has showed significant bias toward the fossil fuel industry, is lauded and promoted by Senators to lead the very agency where he is expected to remain impartial.

The 13 Senators who voted in the Committee to move McNamee’s nomination forward have taken a combined total of nearly $10 million from the fossil fuel industry – bought and paid for by an industry that accelerates the climate crisis and only cares about protecting their profits. It is evident that fossil fuel money is both crippling our democracy and destroying our climate, influencing the structural branches of government that regulate our nation’s infrastructure and energy supply.

The key numbers breakdown:

Combined fossil fuel contributions to Senators voting for McNamee: nearly $10,000,000
Average lifetime dirty energy money per Senator voting for McNamee: $755,219
Average lifetime dirty energy money per Senator voting against McNamee: $88,682

That works out to more than 8 times the dirty energy money taken by those voting in favor of McNamee’s nomination than the average of those voting against the clearly fossil-biased pick. Today’s vote moving McNamee’s nomination forward shows that the industry’s grip on Washington politics is still suffocating our democracy. McNamee will go before the Senate next month for a full vote on his nomination, where we will have one more chance to push against the industry’s influence and prevent McNamee from becoming the next Commissioner of FERC.

 

Posted by
Climate Change Blog Environmental Justice Blog Healthy Communities Blog Labor Rights and Worker Protections Blog Latest Updates Oil and Gas Blog Public Lands Blog Sustainable Forests Blog Transportation and Infrastructure Blog

EPA Clouds Transparency for Environmental Impact Statements

The Environmental Protection Agency has decided to stop the combination of letter and numeral grades for evaluating Environmental Impact Statements prepared by the federal agencies. The two-factor grading system graded both the quality of the analysis and the actual level of environmental impact. This change will dim the transparency of the federal agencies’ work. This new policy will make it much harder for the public or press to judge early-on the seriousness of environmental impacts of the project and the quality of the agencies’ analysis of that impact. There’s a simple analogy: What if we got rid of grades in schools?

Teacher Ben:
“Well class, as you requested, we will no longer grade your final examinations. However, we will continue to put comments in the margins of your exams where we think more work is needed. We will not send a letter grades to your parents but will send them a copy of your final essay with our comments in the margins.”
Who does this help? Bueller?

Since 1984 EPA have evaluated environmental impact statements of federal agencies for both the adequacy of the NEPA documentation and the actual level of environmental impacts. They also make specific comments to the environmental analysis.  They will continue with specific comments but no longer have a clear summary grade.

The EPA website lists the grading options (reprinted before the material is deleted from the EPA website):
EPA has developed a set of criteria for rating a draft Environmental Impact Statement (EIS). EPA rates the draft EIS on an alpha-numeric system and includes the designated rating in EPA’s comment letter. In general, the rating is based on the lead agency’s preferred alternative. The rating system provides a basis upon which EPA makes recommendations to the lead agency for improving the draft EIS. The alphabetical categories listed below signify EPA’s evaluation of the environmental impacts of the proposal: 
LO (Lack of Objections)
EC (Environmental Concerns)
EO (Environmental Objections)
​EU (Environmentally Unsatisfactory)
The numerical categories listed below signify an evaluation of the adequacy of the draft EIS: 
1 (Adequate)
2 (Insufficient Information)
3 (Inadequate)
The rating of the draft EIS consists of one of the category combinations shown below:
LO
EC-1, EC-2
EO-1, EO-2, EO-3
​EU-1, EU-2, EU-3, or 3
https://www.epa.gov/nepa/environmental-impact-statement-rating-system-criteria
(October 26, 2018)
The combined letter-numerical system was simple, edifying and useful to the press and public.

On October 22, however, EPA announced it would end the grading policy. Before announcing this abrupt change of this Reagan Administration policy, EPA did not talk to environmental advocates, project sponsors, states, tribes or other affected groups. EPA did get input from—using my analogy—the students—the federal agencies, who thought dropping the grading system was a swell idea. Better to hide inadequately prepared environmental reviews as well as the seriousness of the likely environmental impacts? Agencies argued that grading was inconsistent among EPA Regions but that issue exists in almost all grading that are not true-false or multiple choice. 

The National Environmental Policy Act is a foundational environmental statute meant to give the public a chance to comment and understand what the federal government is doing an action that may significantly impact the environment or their community. Making this material accessible is very important. The Trump administration and EPA Administrator Andrew Wheeler, evidently think differently. Now, affected communities will not have a heads-up from environmental experts at EPA on the seriousness of the environmental threat unless they trudge through the high technical comments of the EPA and the often-technical language in the environmental review.

EPA is still required by Section 309 of the Clean Air Act to evaluate and send comments on the EISs to the agency responsible. Under law, EPA must still forward projects that would have an unsatisfactory environmental impact to the Council of Environmental Quality but the memo announcing this new policy noted that such a referral would be “rare.” The original plan, outlined in President Trump’s Infrastructure Plan, was to repeal the Clean Air Act provision thereby eliminating both the EPA review and consequently the referral to CEQ for projects that had an unsatisfactory environmental impacts. Removing the grading system is their Option B.

 
Scott Slesinger is Legislative Director of the Natural Resources Defense Council (NRDC).  

Posted by
Environmental Justice Blog Healthy Communities Blog Latest Updates Oil and Gas Blog Public Lands Blog

An Environmental Audit of Trump’s NAFTA Deal

The NAFTA deal between the U.S. and Mexico would encourage further outsourcing of pollution and jobs, offer special handouts to notorious corporate polluters, lock in fossil fuel dependency, and extend Trump’s polluting legacy for years after he has left office. It not only fails to mention climate change – it would prolong NAFTA’s contribution to the climate crisis. Despite progress on a few fronts, the deal fails to adequately protect wildlife, clean air and water, or the health of communities that NAFTA has exposed to toxic pollution.

During the NAFTA negotiations, leading U.S. environmental groups outlined minimum changes that must be made to NAFTA to halt the deal’s environmental damage. See here for these minimum environmental criteria.  

A review of the text of the U.S.-Mexico-Canada deal reveals that it falls far short of these baseline criteria and would pose significant threats to our air, water, and climate. In short, the deal:

Supports further outsourcing of toxic pollution and jobs: The deal’s lack of binding environmental standards would allow more corporations to evade U.S. environmental policies by shifting jobs and toxic pollution to Mexico, where environmental policies are weaker. For example, the lack of any binding lead pollution standards means that corporations would still enjoy NAFTA’s incentives to dump their lead waste in Mexico, which has contributed to job loss in the U.S. and toxic lead poisoning in border communities.
Denies climate change: The deal fails to even mention climate change. This denialism leaves intact NAFTA’s incentives for corporations to dodge the hard-fought clean energy policies of U.S. states by moving to Mexico, eliminating jobs and perpetuating climate pollution. This climate loophole only reinforces the U.S.’s status as the world’s largest outsourcer of climate pollution.
Rolls back the environmental standards of past trade deals: The deal takes a significant step backwards from the environmental protections included in the last four U.S. trade deals by failing to reinforce a standard set of seven Multilateral Environmental Agreements (MEAs) that protect everything from wetlands to sea turtles. The deal includes standard enforcement language for only one of the seven MEAs, while using weak language for two MEAs and failing to even mention four of these essential environmental agreements.
Includes weak environmental terms: The environment chapter is primarily filled with non-binding terms that mirror the weak words of the polluter-friendly Trans-Pacific Partnership. For example, the text “recognizes that air pollution is a serious threat to public health,” but then fails to include a single binding rule to reduce the air pollution that NAFTA has exacerbated. Much of the language appears designed to greenwash the deal, not to rectify NAFTA’s threats to wildlife, ecosystems, or clean air and water.
Copies a failed enforcement system: Even the strongest language will only be effective if enforced. The deal essentially replicates the same failed environmental enforcement mechanism from past U.S. trade agreements. Not once has the U.S. used this mechanism in past trade deals to bring a case against a U.S. trade partner for environmental abuses, despite widely documented violations.
Offers a dangerous handout to Chevron and ExxonMobil: The deal makes progress in curtailing the overreaching corporate rights in NAFTA’s “investor-state dispute settlement” (ISDS) system…but then uniquely offers those egregious rights to notorious corporate polluters. This special handout is available to all U.S. oil and gas corporations that have, or may at some point have, government contracts for offshore drilling, fracking, oil and gas pipelines, refineries, or other polluting activities in Mexico. That means, for example, that Chevron and ExxonMobil – the two largest corporate climate polluters in history and repeat users of ISDS – would be allowed to challenge environmental protections in Mexico by relying on the same broad corporate rights that they have used to successfully challenge public interest policies from Ecuador to Canada.
Encourages fracking: The deal preserves a NAFTA rule that effectively bars the U.S. government from determining whether gas exports to Mexico are in the public interest. This automatic gas export guarantee facilitates increased fracking in the U.S., expansion of cross-border gas pipelines, and growing dependency on climate-polluting gas in Mexico.
Offers corporate polluters a new way to weaken environmental policies: The deal’s “good regulatory practices” rules could give corporate polluters a new way to delay, weaken, or halt new environmental regulations. The rules offer corporations extra opportunities to challenge proposed regulations before they are finalized, and to ask that existing regulations be repealed. These deregulatory rules could make it harder to reverse the Trump administration’s environmental rollbacks once Trump leaves office, which could extend his polluting legacy for years.

 
###

Posted by
Environmental Justice Blog Healthy Communities Blog Latest Updates Oil and Gas Blog Public Lands Blog

The Royalty Policy Committee: What You Need to Know

Looking to Thursday’s Royalty Policy Committee meeting in Denver, Colorado, one thing that is evidently clear is this “federal committee” is now completely and unapologetically at the beck and call of the oil and gas industry. After guiding the swift passing of recommendations over the course of the last three meetings that gifted fossil fuel interests with a hall pass to environmental review, former Chairman Vincent DeVito has left his post at the RPC to take a position with an offshore oil company.

Even further concerning, is the noticeable connection between the RPC recommendations – which are clearly influenced by industry lobbyists – and the recent actions taken by the Bureau of Land Management (BLM). In the days, dare we say minutes following the last RPC meeting in Albuquerque, the BLM released an information bulletin (IB) directing BLM field offices to prioritize approving applications for drilling by finding ways to avoid environmental review and involving the public – undermining the agency’s mission and responsibility to the public. Notably, the committee closed the last meeting by announcing this IB had been posted, shortly after the Onshore Working Group had presented their recommendations which mirrored the BLM’s announcement.

Unfortunately, we are likely to continue to see this industry heavy hand play out in the upcoming RPC meeting, with a recommendation that lets industry dictate where they are going to drill, as opposed to applying for a permit and letting the BLM give them permission. And as if this all could not be enough to handle, the meeting comes amidst a leasing flurry by the Trump administration, including a controversial plan to lease Colorado’s North Fork Valley, a premier sustainable farming region in the state, for expanded fracking and drilling.

Here’s what you need to know ahead of Thursday’s meeting:
What is the Royalty Policy Committee?
The Royalty Policy Committee (RPC) was formed to advise the Secretary of the Interior on royalty management issues and protect taxpayers by ensuring the public receives the full value of the natural resources produced from federal lands.

It was established under the Federal Advisory Committee Act (FACA) which, while recognizing the merits of seeking the advice and assistance of our nation’s citizens, aims to assure that the advice is relevant, objective, and open to the public, and efficient with appropriate records and within reasonable cost. The FACA requires that committee memberships be “fairly balanced in terms of the points of view represented and the functions to be performed.” However, this committee is clearly not, with groups filing a lawsuit against the Trump Administration for violating FACA.
What has happened since the last gathering of the RPC?
The last full committee meeting of the RPC was held in Albuquerque, in June. Here are some of the most noteworthy actions that have happened since then:

Revolving door spinning between Interior and industry. Vincent DeVito, who was assigned by Secretary Zinke to staff and oversee the Royalty Policy Committee left his role to join an offshore oil and gas company, Cox Oil Offshore LLC. While DeVito was chair of the RPC, the Offshore Oil & Gas Workgroup recommended DOI lower the royalty rate for offshore drilling, despite that taxpayers would lose out on billions over the life of the lease if the rate were lowered. Replacing DeVito is Scott Angelle, the Director of the Bureau of Safety and Environment Enforcement. This agency is tasked with overseeing offshore oil and gas safety, yet Angelle’s past has focused on expanding and increasing offshore drilling, including leading the push to lift the moratorium on Gulf Coast drilling put in place after the BP oil spill. Notably, elsewhere at Interior, Secretary Zinke’s Deputy Chief of Staff Downey Magallanes, who led the agency’s efforts to shrink protected national monuments in Utah, left Interior last month for a position at BP.
DOI starts leasing bonanza. DOI has been setting in motion policies and plans that would grease the wheels for massive, indiscriminate oil and gas leasing on public lands. The results are coming to life this September and December, with millions of acres up for lease, and will have impacts for decades to come. To put the sales into perspective, the proposed 2.4 million acres are about the size of Rhode Island and Delaware combined, or the size of the entire Yellowstone National Park, and may will be sold at bottom dollar prices. Parcels near Petrified Forest National Park in Arizona were leased just this week for only $2/acre.
Arctic drilling moves forward. Arctic drilling moving forward. At a previous meeting, the Alaska Specific RPC Workgroup recommended DOI rush to hold a lease sale in the Arctic National Wildlife Refuge. DOI has wasted no time, initiating scoping for an environmental impact statement on the proposed sale and moving forward with a seismic testing plan. If the seismic plan moves forward, massive ‘shaker trucks’ would be allowed into the Refuge as early as this December to conduct testing, over the objection of Fish and Wildlife Service biologists. It remains unclear if DOI will give the public an opportunity to weigh in.
DOI expected to repeal methane rule, wasting taxpayer dollars. The administration has indicated they will fully repeal the Bureau of Land Management’s Methane Waste and Prevention Rule later this month, which was established to reduce wasted natural gas from oil and gas operations on public lands and estimated to save taxpayers $800 million over the next decade. A group of 24 different conservation organizations have signed onto a letter that was submitted as a public comment for the upcoming RPC meeting. The letter aims to center a discussion on the continuing revenue lost due to natural gas waste on public lands and highlight the fact that the RPC doesn’t have any plans to address this issue.
New BLM guidance mirrors RPC recommendations. At the most recent meeting of the committee in Albuquerque, the RPC reviewed and approved three recommendations to reduce environmental review of oil and gas activities. Notably, one proposal recommended requiring all Bureau of Land Management field offices to issue Categorical Exclusions (CX) from National Environmental Policy Act review for certain drilling activities. Before the ink was even dry on this recommendation, the BLM issued an Information Bulletin to its field offices to expedite the processing of drilling permits and directing that “ to comply with NEPA in the most expeditious and appropriate manner, the BLM should first consider whether other avenues for NEPA compliance are available before preparing a new EA or a new EIS.”

A second proposal recommended that BLM limit environmental review required on wells drilled into federal minerals from private or state land. Existing policy already limits the contexts in which NEPA applies, but also recognizes that the presence of federal minerals may require environmental review, as application of the Endangered Species Act and National Historic Preservation Act. Just a week after the meeting, BLM issued a new instruction memorandum on directional drilling into federal mineral estate from well pads on non-federal locations.
What will the RPC be putting forward as recommendations in Denver?
The recommendations the RPC has entertained to date would benefit companies, not taxpayers, and that will unfortunately continue at the Colorado meeting.

Give industry free reign to drill. The Planning, Analysis and Competitiveness Subcommittee is recommending that DOI create a pilot project to allow industry to simply notify BLM when they want to start drilling rather than have BLM affirmatively approve an application for a permit to drill (ADP) as is the current law. This is similar to a proposal industry is pushing in Congress via H.R. 6088.

As for its rationale for this pilot, the RPC recommendation points to “backlogs” in permitting at two BLM field offices, the Buffalo Field Office in Wyoming’s Powder River Basin and the Carlsbad Field Office in New Mexico. These are two of the busiest field offices in the country. If there is a “backlog” in permitting, it is more often a result of operator caused delays than of BLM staff inaction. Imposing time limits and “streamlining” the process should not help applicants who simply do not submit complete and accurate information to the BLM in the first place. BLM’s analysis of permit times shows that much of the delay is because the operator doesn’t submit a complete application.

Removing government review of site-specific applications puts at risk surface land owners, communities, wildlands and other values that can be harmed by oil and gas infrastructure and development.

Let companies set their own prices. The Fair Return and Valuation Subcommittee is recommending that DOI pursue a rulemaking to transfer the authority to set a value for public minerals from the Interior to private parties, essentially allowing producers to determine their own valuation methods for the coal, oil and gas they are drilling. This would undoubtedly result in the public not receiving fair value for the resources they own and would diminish transparency: producers could simply claim that their valuation methods are proprietary and should be kept secret.

What should the Royalty Policy Committee be recommending?
Current leasing and royalty practices are providing hidden subsidies to fossil fuel companies. This contributes to unfair compensation for the American public, and can tie up federal lands, often for decades—which means they’re neither being developed for energy nor managed for other uses that may be even more suitable for those lands, like conservation or recreation.

To encourage DOI to fix some of these problems, The Wilderness Society submitted a  petition last fall under the Administrative Procedure Act (APA) asking for reform of the oil and gas leasing program. The APA gives citizens the right to request action from a federal agency to issue, repeal, or amend a rule, and entitles them to a prompt response. However, our petition has gone unanswered from the DOI to date.

But, if the Royalty Policy Committee needs a place to start, we recommend they consider our petition, which points out how the current oil and gas leasing system is broken and proposes solutions to protect American taxpayers:

Inadequate reclamation bonds. These bonds should provide funding for cleaning up the damage to public lands from oil and gas development, but the funds required are nowhere near sufficient.
Leasing of low-potential lands. These lands are less likely to be developed.
Lengthy and lax lease suspensions. Federal leases are issued for ten years—longer than most leases issued by states or private parties—so the industry already has ample time to develop leased lands. The current system is simply providing even more ways to extend leases without revenue or development. As a result, BLM has failed to recover more than $82 million of rental payments, with more than 3.38 million acres of federal minerals in suspension.
Below-market royalty rates. Royalty rates are currently only 12.5 percent, far lower than state and private land rates.
Below-market rent. Oil and gas producers pay only a dollar and change annually for each acre leased.
Low minimum-lease bids. At just $2 per acre at a sale, these bids allow oil and gas companies to purchase and tie up lands they do not intend to use. A meaningful bid would incentivize purchases where companies intend to generate energy and revenue for the American taxpayer.
Unjustified reinstatements of lapsed leases. Even after leases are cancelled due to failures to pay rent, it is relatively easy for companies to get them put back in place through a “reinstatement” process, giving them another way to continue to benefit from public lands without either developing energy or providing a return to taxpayers.

 
This article was originally published by The Wilderness Society. 

Posted by
Climate Change Blog Environmental Justice Blog Healthy Communities Blog Labor Rights and Worker Protections Blog Latest Updates Oil and Gas Blog Public Lands Blog Transportation and Infrastructure Blog

5 Recommendations to Speed Infrastructure Permitting Without Gutting Environmental Review

Getty/Justin SullivanWorkers construct scaffolding on a bridge in California, March 2014.

There is significant bipartisan agreement that the need to fix the nation’s crumbling infrastructure is critical. However, the environmental review process for permitting these infrastructure projects often becomes the scapegoat for any delays. Because of this, there have been a number of efforts to amend, weaken, and even scrap federal environmental review requirements over the years. But this review is critical—not only because it protects clean air and clean water for U.S. residents but also because it allows for public input to be collected and considered, ensuring that affected communities have a chance to weigh in on project alternatives.
Over the past six years, Congress has acted on three separate occasions to address common permitting challenges, passing the Moving Ahead for Progress in the 21st Century Act (MAP-21) in 2012, the Water Resources Reform and Development Act (WRRDA) in 2014, and the Fixing America’s Surface Transportation (FAST) Act in 2015. These bills provide the federal government with an array of tools to expedite permitting processes, without sacrificing environmental considerations and community input. But with President Donald Trump’s issuance of Executive Order 13807 in August 2017, environmental review is again on the chopping block.
Instead of asking Congress to cut corners and gut cornerstone environmental laws, here are five ways that federal agencies and their partners can use the tools already at their disposal to speed infrastructure permitting.

1. Fully implement existing permitting reforms and authorities that were enacted in the FAST Act, the WRRDA, and MAP-21
The three pieces of legislation noted above provided a number of new tools to federal agencies to speed environmental review. But the Trump administration continues to point to the permitting process as the main cause for project delays. Limited existing data, however, show that delays are more often the result of a lack of funding, failure to govern, and even politics.
As one way to address this, Congress directed the U.S. Department of Transportation to establish a public-facing online tracking system of projects in the permitting process. Project sponsors and the public are now able to use the tracking system—known as the Federal Infrastructure Permitting Dashboard—to expedite projects and understand the true causes of any delays. The permitting dashboard is still very much a work in progress, but it has significant untapped potential that could be improved through an investment in resources to ensure that it is upgraded on a regular basis.
Additionally, extensive and rigorous training components for subject matter experts across the government on how these new tools and authorities affect their work would ensure that the tools are being effectively employed. The Annual Report to Congress for Fiscal Year 2017 from the Federal Permitting Improvement Steering Council (FPISC) shows that each agency has at least one updated online training tool. Leaders of permitting in the Executive Office of the President (EOP) should prioritize developing a strong community of practice across the government so that practitioners can regularly share case studies, training tools, and data needs.

2. Appoint people with collaborative project implementation and permitting expertise across the government
It is impossible for environmental review, and therefore permitting, to be streamlined without appropriate staff to do the work. Yet President Trump has failed to appoint people to key positions that could help accelerate project delivery, including positions within the EOP that are integral to coordinating reviews. In 2015, the FPISC was established to bring agencies together to discuss review challenges and share best practices, as well as to provide a connection to the EOP and the president. Yet the Trump administration has still not appointed anyone to lead the FPISC, which indicates a lack of high-level investment in permitting. The administration should make it a priority to fill these positions if it wants to see expedited permitting timelines.

3. Fund environmental review through implementing existing fee authority for cost recovery and regular appropriations
The FAST Act allowed the FPISC to create “a fee structure for project proponents to reimburse the United States for reasonable costs incurred in conducting environmental reviews and authorizations” for certain projects. The FPISC, however, has taken far too long to begin implementing this provision given the relative priority the Trump administration claims to place on expedited permitting. This new source of funding could help substantially, as permitting under the FAST Act only applies to the most complex projects.

4. Study and collect data on environmental review contracting practices
Federal agencies frequently turn to outside firms to conduct environmental reviews. For example, the Bureau of Land Management (BLM) has contracted with Environmental Management and Planning Solutions Inc. to do the environmental review for oil and gas development in the Arctic National Wildlife Refuge in Alaska. The contract award is for $1,667,550.44, and information from the General Services Administration shows that the federal contractor bills $214 per hour for a senior scientist’s time. While this may be a bargain for taxpayers, it is difficult to say for certain given the lack of data and other information on the frequency, cost, or efficacy of outsourcing essential environmental analysis. To address this, Congress should work with the U.S. Government Accountability Office to study and gather information about federal contracting practices for environmental review across the federal government.

5. Remove political influence from the environmental review process
The permitting review process must be objective and free from the political interests and conflicts that can so easily stall, delay, or even derail infrastructure projects. But the administration’s handling of the Hudson Tunnel project, an infrastructure proposal to modernize the bridges and tunnels that ferry more than 200,000 commuters per day to and from New Jersey and Manhattan, lays bare the current level of political meddling in the review process. Since a bipartisan meeting in September 2017, the president has refused to fund the project unless the Senate agrees to fund the southern border wall. The Trump administration points to burdensome environmental reviews as the culprit for delay—yet recently, an administration official was quoted as saying that the administration is “slow-walking” the completed review’s release.

Conclusion
Already, there is evidence that these tools, when used, can ensure that environmental review of major infrastructure projects is efficient. Instead of rushing headlong into further gutting the statutes that provide for public input on infrastructure and that protect clean air, clean water, and wildlife, the administration should put its existing toolkit to use.
Christy Goldfuss is the senior vice president for Energy and Environment Policy at the Center for American Progress. This article was originally published by the Center for American Progress. 

Posted by
Climate Change Blog Environmental Justice Blog Latest Updates Oil and Gas Blog Public Lands Blog

On the U.S. Army Corps’ Aug. 31 Decision on the Dakota Access Pipeline

 

The U.S. Army Corps of Engineers issued a brief decision on Aug. 31, 2018, affirming its original decision to issue a construction permit for the Dakota Access Pipeline.

The decision comes a year after a federal court decision finding that the Army Corps decision violated federal laws and failed to consider the risks and impacts of oil spills.
Earthjustice attorney Jan Hasselman explains what happened.
 

https://earthjustice.org/sites/default/files/files/dapl-remand-decision.pdf

What action was just taken by the Army Corps of Engineers?

The Corps released a review of its original decision to grant permits to the Dakota Access pipeline to cross the Missouri River just upstream of the Standing Rock reservation.The review concludes that the original decision was lawful and adequate and that no further environmental review is necessary. (Read the Corps’ decision.)

How did the Standing Rock Sioux Tribe respond?

 

Mike Faith, Jr., Chairman of the Standing Rock Sioux Tribe, issued this statement: “The Army Corps’ decision to rubberstamp its illegal and flawed permit for DAPL will not stand.

“A federal judge declared the DAPL permits to be illegal, and ordered the Corps to take a fresh look at the risks of an oil spill and the impacts to the Tribe and its Treaty rights. That is not what the Army Corps did. Instead, we got a cynical and one-sided document designed to paper over mistakes, not address the Tribe’s legitimate concerns.

“The Tribe has worked in good faith every step of the way to develop technical and cultural information to help the Corps fully understand the consequences of permitting this pipeline. They took our hard work and threw it in the trash.

“The Tribe will be reviewing this decision closely, and determine how best to proceed in close consultation with our membership, staff, and advisors. In the meantime, we will continue to extend an open hand to the Army Corps to continue an honest dialogue about the impacts of this pipeline to the Standing Rock.”

Why did the Corps conduct a review of its original permit decision?

 

After Donald Trump reversed the Obama administration’s decision to effectively deny DAPL its permits at the Missouri, the Standing Rock Sioux Tribe, represented by lawyers at Earthjustice, filed a new lawsuit against the Army Corps of Engineers.

Among other things, the lawsuit alleged that the Corps failed to consider the risks of an oil spill, the impacts of a spill for the Tribe’s treaty rights, and the “environmental justice” implications of the permit.

In June of 2017, a federal judge in Washington, D.C., agreed with the Tribe on these issues, finding that the Corps violated the National Environmental Policy Act by failing to give appropriate consideration to these matters.

The Court ordered the Corps to study these issues further and make a new permit decision. This review is known as a “remand.” (More on the 2017 ruling.)

What is the National Environmental Policy Act?

 

Often referred to by its acronym, “NEPA,” the National Environmental Policy Act is one of America’s landmark environmental laws — it is sometimes known as the “Magna Carta” of environmental law.

This law requires that, before a federal agency takes any action (such as a permit) that has significant environmental implications, it must fully disclose and consider all the risks and benefits of that decision — as well as alternatives with less environmental harm. The document for doing so is called an ”environmental impact statement.”

But the Army Corps never performed an environmental impact statement for the Dakota Access pipeline, finding that its effects were too insignificant to warrant that close study.

The remand document reaffirms that core finding, which the Tribe continues to believe is illegal.

Is the pipeline currently operating?

 

DAPL commenced operations in early June 2017, a few weeks prior to the Court’s decision finding that the permits were issued unlawfully.

The Court subsequently asked the parties for additional argument on whether the pipeline should be shut down while the remand was underway. In October, the Court answered that question in the negative. However, the Court later imposed some measures to increase pipeline safety and accountability.

Did the Tribe participate in the remand process?

 

The Tribe worked hard to participate in the remand process so that it could work collaboratively with the Corps and ensure that the government understood its concerns.

Its technical experts prepared an extensive report on the risks and oil spills. The Tribe repeatedly asked for meetings and for technical documentation from the Corps and DAPL.

However, the Corps refused to share any of the technical information on which it relied, in violation of its own consultation policies and severely undercutting the ability of the Tribe to comment effectively on DAPL’s incorrect and self-interested technical materials.

What specifically did the remand document conclude?

 

Remarkably, the Corps’ memorandum of decision is only two pages long. It concludes, without explanation, that:

The pipeline will not adversely impact the Standing Rock Tribe’s treaty resources because “the risk of an incident is low;”
Does not implicate any environmental justice considerations, even though the project was routed at the doorstep of the Standing Rock reservation; and
Rejected the Tribe’s technical input and finds that there is not a significant controversy over the project’s impacts.

The memo points to an analysis that the Corps informed the Court was not being released at this time due to a confidentiality review. However, the Tribe believes that every one of these conclusions is incorrect.

What comes next?

 

The Tribe, together with its technical and legal teams, will be meeting in the weeks ahead to discuss options.

The Court still retains jurisdiction over the case and may put a deadline on the Tribe to decide whether it will bring a new lawsuit against the remand decision. Those decisions will be made in the next 4–6 weeks.

The Tribe will make a public announcement when it takes the next step in the process.

 

Posted by
Climate Change Blog Latest Updates Oil and Gas Blog Public Lands Blog

Congress Curtails Public Input on Public Lands

This week in D.C., Congress, in alignment with the wishes of the oil and gas industry, move again to undermine one America’s best ideas: public lands. Specifically, the House Natural Resources Committee are marking up a set of bills that would effectively eliminate the public’s right to participate in most decisions regarding public land use for oil and gas extraction. These bills also align with a drastic new policy from the Bureau of Land Management (BLM) that significantly curtails public participation. These actions are the products of a persistent effort by the oil and gas industry to bulldoze any federal impediments to maximal profit, whether endangered species habitat, safeguards against catastrophic accidents, or the right of Americans to be involved in the management of our shared natural heritage.

Our ability as citizens to participate in federal land management decisions and other federally-linked projects that could impact the environment is one the foundations of the National Environmental Policy Act (NEPA). Signed into law by President Nixon in 1970, NEPA is a bedrock environmental law that requires federal decision-making to be conducted deliberately and thoughtfully by taking stock of a project’s potential environmental and social impacts, as well as legal conflicts, using the best available science and considering the positions of key stakeholders and the general public while ensuring the public is informed of federal actions. It establishes processes that require time and expertise to complete, which irks the oil and gas industry, but ensures the U.S. government uses the best information available. In addition to NEPA, in 1976 President Ford signed the Federal Land Policy and Management Act, adding additional measures enshrining the public’s right to participate in how public lands are governed.  

But four pieces of legislation being marked-up tomorrow would keep the public from engaging in many impactful federal land management decisions regarding oil and gas drilling. These bills had their first Congressional hearings on June 6th, where a number of witnesses for the majority championed broad exemptions from NEPA. Coincidentally, on the same day across the country in Albuquerque, a leading oil and gas industry representative with the Western Energy Alliance spoke (see pgs. 10 – 11) at the Interior Department’s Royalty Policy Committee Meeting, recommending BLM issue agency guidance to greatly expand the use of categorical exclusions (CXs) for oil and gas activities, the same type of waivers from NEPA Congress was considering legislating. And if that wasn’t enough of a coincidence, BLM issued an Information Bulletin—no quick task—adopting Western Energy Alliance’s recommendations the same afternoon.

The four bills being marked up tomorrow would strengthen and calcify the recommendations offered by the Western Energy Alliance and adopted with remarkable expedience by the Interior Department. Given how closely all of these processes neatly align, it would be foolish not to construe that the Trump administration and Republican leaders of the House Natural Resource Committee are working in concert with the oil and gas industry to advance these measures designed to eliminate the public’s right to participate on how public lands are managed.

The NEPA elements these policies attack are in place to ensure the lands we, as Americans, all own are managed with our interests in mind. By maximizing the data available to civil servants, they help shepherd good decisions—decisions that could impact a community or an ecosystem for decades—setting a global model for good governance and resource management. But such principles are anathematic to the oil and gas industry, which has powerful allies all too ready to help. Those who care about sustainable use of our natural heritage should stand against these regressive policies.

The bills the House’s Natural Resources Committee is considering tomorrow each take a distinct whack in dismantling key aspects of NEPA:

H.R. 6087 (Rep. Liz Cheney of Wyoming) – Authorizes the Secretary of the Interior to attach a highly burdensome fee for public protests for oil and gas lease sales and other agency actions. The protest process is designed to ensure the public can point out errors in the government’s reasoning and give it a chance to correct. Protest filings that approach a thousand pages have occurred, given that unfortunately the BLM have often failed to include critical data. A thousand-page protest over one lease parcel would incur a fee of over $5,000 under Rep. Cheney’s bill, a.k.a. the Removing Barriers to Energy Independence Act. Clearly, this bill would have a chilling effect on a valuable element of the public input process.  But it would also have the perverse incentive to encourage the agency to issue incomplete decision records, put the financial onus on the public to correct the record.
H.R. 6106 (Rep. Stevan Pearce of New Mexico) – Expands the use of CXs in the Interior Department’s oil and gas leasing program. Rep. Pearce’s Common Sense Permitting Act would arbitrarily expand CX applicability, and, for potentially impactful projects, eliminate the public’s right to participate in the NEPA review as well as BLM’s discretionary ability to implement solutions to avoid needless resource use conflicts.
H.R. 6088 (Rep. John R. Curtis of Utah) – Severely hamstrings the Interior Department’s ability to review applications to drill oil and gas wells on public lands. This is often the only juncture at which the government looks at specific sites closely, a requisite step for BLM to adequately evaluate—and prevent—harm from a new well and associated activities.
H.R. 6107 (Rep. Stevan Pearce of New Mexico) – Eliminates federal oversight of oil and gas activities conducted on non-Federal surface estate to access subsurface mineral estate that is less than 50 percent Federally owned. Even if we are minority owners, those mineral resources still belong in-part to all Americans—the federal government should be allowed to meet its responsibility to manage them in trust for the public interest.

In addition, to the legislation, BLM’s Information Bulletin (IB) IB 2018-61 hews to the same theme, effectively constructing a flow chart for avoiding NEPA analysis of oil and gas leasing and development decisions. Between this policy and a previously updated leasing policy (see Instruction Memorandum 2018-34), federal land managers are now under instruction to:

Preclude public input and skip rigorous environmental review for the majority of oil and gas activities on our public lands. This policy has land managers relying on broad Land Use Plans to check the NEPA box, despite their inadequacy for identifying site-specific resource or human conflicts.
Emphasize the application and issuance of categorical exclusions (versus applying a more rigorous and transparent review process).
Stop reviewing certain CXs for circumstances that should automatically preclude their use under law.  For instance, even if a project might endanger critical lands or endangered species, land managers are encouraged to look the other way. 
Expand use of Master Development Plans to evaluate and approve multiple applications to drill, again foregoing crucial site-specific analysis. And it encourages civil servants to actively avoid opening public comment periods unless they are unambiguously required by law.
Emphasis on the issuance of applications to drill even without a requisite site inspection, which is critical to verify whether wildlife and land resources might be unduly impacted.  Hence, land managers must rely either on inadequate data and/or the word of the oil and gas applicant.

 
Bobby McEnaney is Senior Deputy Director for NRDC’s Western Renewable Project. In his work, Bobby focuses on promoting the sustainable development of renewable energy resources on public lands while working to protect the nation’s lands from the dirtier energy processes that threaten them.
 

Posted by
Climate Change Blog Latest Updates Oil and Gas Blog Public Lands Blog

Of Course, It’s OK, We Are Only Lying About NEPA

There are few principles as basic to Americans as the right to participate in decisions when the federal government is going to affect the environment or economy of a community. Because this is inconvenient for developers they have enlisted the Congress and the White House in trying to cripple that right that is enshrined in the National Environmental Policy Act (NEPA). There have been over 60 separate bills introduced this year to scale it back NEPA and on June 6, 2018, another hearing on weakening NEPA is scheduled. This hearing is based on the theory that oil and gas drilling and fracking on public lands would never have a more than insignificant impact on the environment, ever.

Over the past several months, the propaganda about the required environmental reviews that agencies conduct before projects has been overwhelming. I wrote a blog on one of those misrepresentations here. The major theme of the critics of environmental reviews is that despite its almost 50-year history, government projects, private fossil fuel development, and infrastructure has been stymied, mainly because of the National Environmental Policy Act. This is obviously untrue, based on the growth of our economy that included becoming a net exporter of energy during President Obama’s term. I will use this blog to critique several recent poster children of NEPA and note the misstatements. (Or, if you prefer, “lies.”)
Poster Child #1 Bayonne Bridge
CNBC did a story about the delays President Trump cited for road and highway projects, and, at the behest of the White House, spotlighted the case of the Bayonne Bridge raising, which critics said was slowed because of permitting and environmental reviews. The CNBC investigative tory, if you watch the short clip here, found that weather and continuing the use of the bridge during construction were the drivers of the delays. The claims of a “10-year” review, were off base: It only took 26 months.
Post Child #2 Anderson Bridge
On February 13, in conjunction with its federal infrastructure plan rollout, the White House published a blog post titled “Washington Will No Longer be a Roadblock to Rebuilding America.” The blog uses the long delay of the Anderson Memorial Bridge project in Boston as an example of how federal environmental reviews and federal permitting is hindering infrastructure development across the country. The problem, once again, is that federal environmental permitting had nothing to do with this project. The Anderson Memorial Bridge project was funded completely by the State of Massachusetts and did not alter the existing waterway along the Charles River, so at no point was federal-level environmental permitting needed for this project. The implication is clear: While the White House has come up with a mythical conclusion, it failed to find an example of even one project that fit that conclusion.
Poster Child #3: Dredging the Port of Corpus Christi
This is a typical scapegoating NEPA story. Politicians often get authorization for projects (and local press about the project) but fail to get the Congress to “appropriate” money to build them. Authorizations mean nothing without appropriations. Often, rather than admit they were unable to get real money, members will put the blame on environmental reviews. On March 6, 2018, according to the Corpus Christi Business News, officials representing the Port of Corpus Christi met with their former governor and now Secretary of Energy Rick Perry about the need for federal funding for the dredging of the Port of Corpus Christi. The environmental reviews for this project weren’t mentioned.

However, the following week, Perry testified before the Senate Commerce Committee about the president’s infrastructure package loaded with anti-NEPA provisions. He didn’t urge lawmakers to fund the dredging project, as the port officials had requested. Instead, he claimed the reason the project failed to go forward wasn’t money, but bureaucrats:

“This isn’t a matter of we’re coming up here, or they’re coming up here, and asking for more money, they’re asking for federal agencies to basically get out of the way, to give them approval, so I think that’s one of the things that the president is talking about.”
This will be sad news to the Port which said the problem wasn’t NEPA, but the need for 225 million federal dollars.

Stories like this can be repeated a million times, or rather 97 billion times. A Republican memo to the Transportation and Infrastructure committee about funding of Army Corps of Engineers projects, noted that there are $97 billion of projects ready to go, but the Corps’ construction budget is only $5 billion a year. The problem isn’t NEPA; it’s where is the $92 billion.

NRDC is working to protect NEPA, one of the landmark environmental statutes. The main goal of NEPA is assuring that the federal government looks before it leaps. It requires the federal government, when it is doing something to your community, to allow the public and local officials a chance to comment and these comments often lead to better projects. It should not be gutted as a diversion from the real problem addressing our infrastructure.

I recently was on a podcast with a Nick Goldstein, Vice President of Regulatory & Legal Issues of the American Road & Transportation Builders Association. I was well armed to defend NEPA from attacks by the road builders, but instead found myself nodding along while Goldstein made the same point I did: The real problem with infrastructure is the lack of federal financing.

Scott Slesinger is the Legislative Director for the Natural Resources Defense Council (NRDC). He works with NRDC staff to develop strategies for advancing environmental legislation and lobby Congress on behalf of the organization. 

Posted by
Climate Change Blog Latest Updates Oil and Gas Blog Public Lands Blog

The Royalty Policy Committee: What You Need to Know

 

This week, a federal committee selected by Interior Secretary Ryan Zinke and stacked with industry interests aligned with Interior’s well-known public lands sell out agenda will meet in Albuquerque, New Mexico for the third time since being re-chartered by Secretary Zinke in 2017, to conjure up more ways to exploit public lands for the benefit of fossil fuel interest at the expense of taxpayers, clean air and water and conservation. New Mexico is currently the recipient of the second largest amount of federal royalty revenues and this is an important source of revenue for the state. So, when the RPC makes recommendations to allow more royalty rate exceptions, and to let industry set their own rules, New Mexico feels the impact.

The theme of keeping the public out and industry in will unfortunately continue into this next meeting, with the addition of two folks who have close relations to the Trump administration to closed-door subcommittee meetings and recommendations to cut out public review opportunities, limit evaluation of environmental consequences, and make it easier for companies to be excused from their requirements to pay royalties for offshore drilling. Here’s what you need to know ahead of next week’s meeting:
What is the Royalty Policy Committee?
The Royalty Policy Committee (RPC) was formed to advise the Secretary of the Interior on royalty management issues and protect taxpayers by ensuring the public receives the full value of the natural resources produced from federal lands.

It was established under the Federal Advisory Committee Act (FACA) which, while recognizing the merits of seeking the advice and assistance of our nation’s citizens, aims to assure that the advice is relevant, objective, and open to the public, and efficient with appropriate records and within reasonable cost. The FACA requires that committee memberships be “fairly balanced in terms of the points of view represented and the functions to be performed.”
What has happened since the last gathering of the RPC?
The last full committee meeting of the RPC was held in Houston, in February, a number of recommendations were put forward. Here are some of the most noteworthy actions that have happened since then:

1. New friends allowed in the room. The Department of the Interior (DOI) has faced significant criticism for making little effort to include the public or taxpayer interests in the committee. In response, DOI has invited the conservative Heritage Foundation and Americans for Tax Reform to attend subcommittee meetings that are otherwise closed to the public. Neither were added to  the full committee or designated alternates nor were they formally named to a subcommittee, as was done for American Petroleum Institute’s Emily Hague. Rather they are both said to be representing the public interest and serving as subject matter experts. Notably, both organizations have nothing on either of their websites about the Royalty Policy Committee or royalty policy matters. Meanwhile, the committee and subcommittees meeting summaries are being posted weeks after the meetings take place, shrouding the process in secrecy and, giving the public little detail into the actions or recommendations that take place.

2. Artic leasing advanced. At the last meeting, the Alaska Specific Workgroup recommended DOI rush to hold a lease sale in the Arctic National Wildlife Refuge. DOI has wasted no time, and in April took its first official step toward holding an oil and gas lease sale on the sensitive coastal plain of the Arctic National Wildlife Refuge by issuing a notice of intent to begin scoping for an environmental impact statement on the proposed sale.

3. Zinke rejected offshore drilling royalty rate adjustment recommendation. The Offshore Oil & Gas Workgroup made a head-scratching recommendation that DOI lower the royalty rate for offshore drilling to not more than 12.5%, the lowest rate allowed by law. This is significantly lower than the current rate of 18.75% which was established during the administration of former President George W. Bush. After public backlash, Secretary Zinke said he would not move forward with the committee’s recommendation.

4. DOI moved forward rule repeals that will waste taxpayer dollars. The administration put forward a proposal to repeal the Bureau of Land Management’s Methane Waste and Prevention Rule, which was established to reduce wasted natural gas from oil and gas operations on public lands and estimated to save taxpayers $800 million over 10 years. New Mexico Attorney General Hector Balderas is leading a lawsuit against the Department of Interior’s actions to roll back the methane rule. 
What will the RPC be putting forward as recommendations in Albuquerque?
The recommendations the RPC has entertained to date would benefit companies, not taxpayers, and that will continue at the Albuquerque meeting.

1. The BLM cut out public review opportunities in certain oil and gas drilling decisions by requiring all field offices to issue Categorical Exclusions (CX) from National Environmental Policy Act review. Similar direction to the agency in the mid-2000s led BLM to approve almost 6,900 oil-and-gas-related activities between 2006 and 2008 without environmental review. The Government Accountability Office (GAO) reported that BLM’s use of these categorical exclusions through fiscal year 2008 often did not comply with either the law or BLM’s guidance. Using a CX would forgo environmental analysis and public review and allow the BLM to rubber stamp development quickly without fully considering the impacts. CXs are generally reserved for extreme circumstances where it is unequivocal that environmental analysis is unnecessary.

2. Limit evaluation of environmental consequences from oil and gas development. Limiting analysis of impacts is inconsistent with the requirements of the National Environmental Policy Act to look at the indirect effects and cumulative impacts. Adopting this recommendation would be irresponsible and expose projects to increased legal challenges.

3. Limit environmental review required on wells drilled into federal minerals from private or state land. Existing policy already limits the contexts in which NEPA applies, but also recognizes that the presence of federal minerals may require environmental review, as application of the Endangered Species Act and National Historic Preservation Act. If adopted, important federal interests in protecting air quality, threatened species, and cultural resources would not be analyzed and protected.

4. Yet another recommendation aimed at making it easier for companies to be excused from their requirements to pay royalties for offshore drilling. The proposal is for BLM to consider a broader set of factors when analyzing royalty relief applications. As Secretary Zinke said when rejecting a previous RPC recommendation on offshore royalty rate reduction: “Right now, we can maintain higher royalties from our offshore waters without compromising the record production and record exports our nation is experiencing.” Yet, the industry continues to use the RPC to make proposals to reduce what it pays the American public for its energy without any analysis of how such reductions would affect taxpayers and states who benefit from royalties.
Where are these recommendations coming from?
A committee rigged to favor industry. Little effort has been made to include the public or taxpayer interests in the committee. For example, the Planning, Analysis, & Competitiveness Subcommittee is Co-directed by Randall Luthi, the President of the National Ocean Industries Association which represents “all facets of the domestic offshore energy and related industries” with 300-member companies. Convenient for him, his subcommittee is tasked with making recommendations on offshore drilling royalty rates and reviewing BOEM’s five-year offshore drilling plan – which proposes to open more than 90% of the OCS to leasing.  At this meeting, offshore energy interests will recommend yet another way to reduce their royalty payments for the public’s energy.
What should the Royalty Policy Committee be recommending?
Current leasing and royalty practices are providing hidden subsidies to fossil fuel companies. This contributes to unfair compensation for the American public, and can tie up federal lands, often for decades—which means they’re neither being developed for energy nor managed for other uses that may be even more suitable for those lands, like conservation or recreation.

To encourage DOI to fix some of these problems, The Wilderness Society submitted a petition last fall under the Administrative Procedure Act (APA) asking for reform of the oil and gas leasing program. The APA gives citizens the right to request action from a federal agency to issue, repeal, or amend a rule, and entitles them to a prompt response. However, our petition has gone unanswered from the DOI to date. But, if the Royalty Policy Committee needs a place to start, we recommend they consider our petition, which points out how the current oil and gas leasing system is broken and proposes solutions to protect American taxpayers:

Below-market royalty rates. Royalty rates are currently only 12.5 percent, far lower than state and private land rates.

Below-market rent. Oil and gas producers pay only a dollar and change annually for each acre leased.

Low minimum-lease bids. At just $2 per acre at a sale, these bids allow oil and gas companies to purchase and tie up lands they do not intend to use. A meaningful bid would incentivize purchases where companies intend to generate energy and revenue for the American taxpayer.

Inadequate reclamation bonds. These bonds should provide funding for cleaning up the damage to public lands from oil and gas development, but the funds required are nowhere near sufficient.

Lengthy and lax lease suspensions. Federal leases are issued for ten years—longer than most leases issued by states or private parties—so the industry already has ample time to develop leased lands. The current system is simply providing even more ways to extend leases without revenue or development.

Leasing of low-potential lands. These lands are less likely to be developed.

Unjustified reinstatements of lapsed leases. Even after leases are cancelled due to failures to pay rent, it is relatively easy for companies to get them put back in place through a “reinstatement” process, giving them another way to continue to benefit from public lands without either developing energy or providing a return to taxpayers.
###

Posted by
The Partnership Project's NEPA campaign is a registered 501 (c) (3) non-profit organization.