The Chamber Misses, Swinging at KING

The U.S. Department of Interior has been charged by Congress with managing our federal lands and oceans in the public’s interest. The urgency of climate change makes clear what that means for the 21st century: we need to stop subsidizing the past and use these publically owned lands and waters to accelerate—not stymie—the clean energy transition that is creating jobs and cutting pollution. Continued leasing of federal lands for fossil fuel extraction is decidedly out-of-step with these national goals, but climate denial groups like the U.S. Chamber of Commerce pour millions of dollars into maintaining the tragic status quo and blocking progress.

For example, the Chamber recently released a strikingly hollow report that claims to quantify the impacts of a ban on the extraction of fossil fuels from federal lands and waters. Flawed at its core, the study focuses the bulk of its analysis on a strawman characterization of the upstream policy sought by serious climate and conservation advocates. Specifically, we’re not calling for an “immediate” halt to federal fossil fuel sourcing as the Chamber incorrectly suggests. Instead, we are advocating for a phase-out over time as part of a comprehensive climate and energy policy that puts us on the best path to cutting carbon pollution—using wind and solar energy that never runs out, creates jobs, and cuts harmful pollution.

The report suffers from several other fundamental flaws. Most obviously, it does not actually examine how the energy sector and the economy as a whole would respond to changes in policy. It also utterly neglects one side of the cost-benefit equation, including the economic and health benefits of addressing climate change. That’s one reason why the Chamber has had previous studies on climate-mitigating policies wholly discredited by independent media fact checkers. Yet it purports to fact-check the Keep it in the Ground platform with the same fast and loose use of analysis, making it likely to earn it four Pinocchios once again.

A Static Equation: Ignoring Clean Energy

In its analysis, the Chamber of Commerce used a static model that assesses the direct and indirect employment supported by the fossil fuel industry’s utilization of public lands. However, the modeling is static and does not include an analysis of the dynamics of the energy sector’s—or broader economy’s—response to a policy that places limits on leases on federal lands and waters. The implicit assumption that no other sector would grow as a result of this ban is a critical flaw in this analysis. Basic economic theory indicates—and recent studies have confirmed—that limiting fossil fuel supply would accelerate the deployment of clean energy and a dollar invested in renewable energy would create four times as many jobs as one invested in oil. Further, as many major financial institutions have stated, the transition to a clean energy economy is well underway, making any analysis that ignores its growth—and the realities of a carbon constrained future—inherently suspect.

That doesn't mean it will be easy, that it will happen overnight, and that we can ignore the real challenges it will bring to the workers and communities that have helped powered our economy. As a nation, we must continue to invest in creating good paying jobs, right here at home, so that these communities and individuals capture the benefits of the transition.

That said, a solar and wind powered economy is no pipe dream. The solar energy workforce is already 209,000 Americans strong, dwarfing the 77,000 direct and indirect jobs the Chamber estimates fossil fuel production on federal lands supports (all oil and gas activity employed 170,100 in July). This represents an increase of 123 percent in the solar labor force since 2010, and growth is only accelerating. Similarly, the wind power industry employed 88,000 as of the beginning of this year, a 20 percent increase from one year prior.

In fact, clean energy is already a major source of employment in states highlighted by the Chamber report for alleged harm, with 72,000 green jobs in Colorado, 44,000 in Louisiana, 227,500 in Texas, 22,000 in Mississippi, 24,000 in New Mexico, 10,000 in Wyoming, 360,000 in California, 68,500 in Missouri, 54,000 in Alabama, 21,000 in Nevada, and 28,000 in Utah. Smart policies can help accelerate the transition to a low carbon economy and further boost clean energy employment in these states, and nationwide.

Our federal lands can be an essential part of that transition. The Department of Energy estimates that, by 2020, there will be 54,400 GWh of solar on public lands in California under current mandates, enough to power close to five million homes. DOE also estimated that there could be 7,100 GWh on Colorado’s public lands, 5,600 GWh on Nevada’s, 2,700 GWh on New Mexico’s, and 3,400 GWh on Utah’s. That translates to clean energy that reduces air, water, and climate pollution, while preserving our natural heritage and the health of our future generations.

Denying Climate Change and the Cost of Inaction

Maintaining the status quo may be good for Big Oil’s pocket books, but it comes at great cost to taxpayers, the federal budget, and our children’s health and well-being—all of which  the Chamber ignores in its report. Such neglect of the full economic picture is inaccurate and misleading, apparently intentionally so. We and our future generations will be left to foot the bill for the damage the fossil fuel industry has done to our lands and climate, all the while providing billions in annual subsidies that incentivize the expansion of production and environmental harm.

a)    Cost of Inaction on Climate

Climate change is here and no amount of denial can erase the lives lost and economic toll. Rising sea levels. Raging storms. Searing heat. Ferocious fires. Severe drought. Punishing floods. This is what climate change looks like. It threatens our health, our communities, our economy, and our security.

But mitigation pays. The EPA estimates that limiting average global warming to 2°C would, in 2050 alone, result in 13,000 fewer deaths from poor air quality; the avoided loss of 360 million labor hours; up to $2.3 billion in avoided road adaptation costs; up to 4 percent reduction in energy demand and $34 billion in savings in power systems costs; and up to 45 percent fewer severe and extreme droughts and $54 billion in avoided damages due to water shortages.

b)    Cost of Environmental Destruction

The 2010 Deepwater-Horizon oil spill is estimated to have cost the Gulf commercial fishing industry $247 million. The overall impact of lost or degraded commercial, recreational, and mariculture fisheries in the Gulf could be $8.7 billion by 2020. Estimates of lost tourism dollars were projected to cost the Gulf coastal economy up to $22.7 billion through 2013. And the Bureau of Safety and Environmental Enforcement recently expressed that it believes it to be “only a matter of time before our luck runs out” and we see another catastrophic oil spill in the Gulf due to subsea bolt failures.

Meanwhile, onshore, NRDC found that full reclamation requirements have only been met for 10 percent of land disturbed by the coal industry in Wyoming, Montana, and North Dakota. And numerous Government Accountability Office reports (1, 2) have found that the Department of Interior has been unable to enforce oil and gas reclamation requirements, leaving our land scarred. The problem is extensive. A conservative calculation by the Western Values Project estimates the taxpayer liability associated with reclaiming oil and gas sites on federal lands is over $3.5 billion.

c)     Cost of Subsidies

To make matters worse, American taxpayers have been subsidizing the oil and gas and coal industries for a century. In 2014, Oil Change International estimated that the U.S. furnishes $18.5 billion annually to the oil, gas, and coal industries in the form of exploration and production subsidies. There’s also a substantial subsidy granted in the form of leases offered below the market rate. These subsidies incentivize “locking-in” infrastructure, irrationally perpetuating production of –and our reliance on –dirty energy sources, and significantly contribute to global carbon emissions.

A Better Vision

Ignoring the cost of climate inaction and denying the benefits of transitioning to a clean energy economy are certainly major flaws in any analysis purporting to look at the impacts of federal energy policy. However, it also reveals a dangerous pattern of outright denying the growing harm carbon pollution is inflicting on this and our future generations.

There is a better path that can cut pollution, create jobs, and secure a more stable, healthy future for this and all future generations.  

To do that, we must modernize our energy sector, reducing reliance on aging and dirty fossil fuels and replacing them with clean and modern renewables. How we manage lands that are held in trust for all Americans must be part of the solution, not anchored to the fossil fuels of the past.

About the Authors

Franz Matzner

Deputy Director, Federal Campaigns, Center for Policy Advocacy

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