US Chamber of Commerce Blog
We’ve heard lots of rhetoric during this campaign from anti-energy candidates and “Keep It in the Ground” activists about their desire to restrict or even ban oil, gas, and coal production on federal lands and waters. The U.S. Chamber of Commerce wondered what would happen if they got their way. And the results aren’t pretty.
A new report from the Chamber’s Institute for 21st Century Energy titled “What If Energy Production Was Banned on Federal Lands and Waters?” found that banning energy development on federal lands would cost the United States $11.3 billion in annual royalties, 380,000 jobs, and $70 billion in annual GDP. Nearly 25% of America’s oil, natural gas, and coal production would grind to a halt.
It would be particularly devastating to energy-producing states out west and in the Gulf of Mexico region. For instance, Wyoming would lose $900 million in annual royalty collections—which represents 20% of the state’s annual expenditures.
New Mexico would lose $500 million—8% of the state’s total General Fund revenues. Colorado would lose 50,000 jobs. The Gulf States, including Texas, Louisiana, Mississippi, and Alabama, would see 110,000 fewer jobs.022998_tjd_commentary_banningenergy_atf.gif If energy production was banned on federal lands and waters...
Does that sound like a prescription for economic success, enhanced global competitiveness, lower prices, and greater national security?
Unfortunately, this is the road we’re headed down. Since 2010, the share of energy production on federal lands has dipped because of increasing regulatory hurdles from the Obama administration. The White House even imposed a blanket moratorium eliminating the leasing of coal on federal lands. More than 20 lawmakers in the Senate and the House support the Keep It in the Ground Act, which would ban oil, natural gas, and coal leasing on federal lands as a first step toward banning fossil fuel production everywhere. As our report indicates, massive job losses, a substantial decline in royalties, and slower growth are the logical outcomes of these policies.
The Energy Institute’s report is the first in its Energy Accountability Series, which takes a substantive look at what would happen if energy proposals from candidates and interest groups were actually adopted. We believe that it’s important for the public to understand the real consequences of such proposals.
We hope that our reports will prompt voters to ask questions and pay attention to the stances that candidates have taken on energy. A “Keep It in the Ground” agenda like some advocate for would force our country to surrender the enormous domestic benefits and global competitive advantages that increased energy development here at home has made possible. Visit EnergyXXI.org to learn more.
Passions haven’t simmered down at a North Dakota construction site for the Dakota Access Pipeline.
Energy opponents continue to use water and cultural concerns to mask their true, anti-energy agenda.
One of those national leaders, Jane Kleeb, who fought the Keystone XL pipeline in Nebraska, wants to replicate her “success” in North Dakota. Only her idea of success means less energy for her fellow Americans.
The involvement of a man who has written, “We have to keep 80 percent of the fossil-fuel reserves that we know about underground,” shows us what this protest is really about.
It isn’t about water or cultural concerns. It’s about making it so hard to get energy from where it’s produced to where it’s consumed that production stops. “Block the infrastructure, block the development,” Rob Port wrote last month.
It’s simply a “keep it in the ground” strategy involving arrests and destruction.
McKibben, Kleeb, and their friends don’t like the shale boom at all and want to take us to a fantasy world where fossil fuels aren’t used. But that’s ignores history. These energy sources have lifted billions of people out of poverty, fueled our economic prosperity, and allowed so many of us to live healthy lives. Abandoning politically incorrect energy will leave many of us living shorter, harsher, more-miserable lives.
Blocking energy infrastructure like the Dakota Access Pipeline holds America back at a time when we’re enjoying an energy renaissance, as Matt Koch of the U.S. Chamber’s Institute for 21st Century Energy explains:
Yet we run the risk of losing the advantages due to the politicization by environmentalists of the pipeline and transmission line projects needed to move energy to where it is needed. Many areas in the U.S. are already missing out on the full benefits of our energy revolution because it has been difficult to move our energy from where it is produced to where it is needed.
Along the pipeline’s construction route, August was marred with arson and threats of violence—all the while law enforcement and security personnel displayed tremendous patience and restraint.Officer Helps #NoDAPL Protester Eat, Drink
Things continued to be ugly over the Labor Day weekend, NPR reports:
In a statement, the Morton County Sheriff's Department said protesters marched from their encampment onto private lands, where the pipeline is being constructed.
"Once protestors arrived at the construction area, they broke down a wire fence by stepping and jumping on it," the sheriff's office said. "According to numerous witnesses within five minutes the crowd of protestors, estimated to be a few hundred people became violent. They stampeded into the construction area with horses, dogs and vehicles."
Morton County Sheriff Kyle Kirchmeier said it "was more like a riot than a protest."
Protesters hit dogs with sticks and clashed with security guards, and Green Party presidential candidate Jill Stein acted very unpresidential by vandalizing construction equipment. A warrant for her arrest has been issued.
An important detail to this is construction is happening on private land, not on a reservation.
[To get up to speed on the issue, The Bismarck Tribune has a timeline of past stories.]
Tensions are so high that the National Guard will provide backup for law enforcement as we wait for a federal judge to rule on injunctions that may or may not delay construction or protests.
UPDATE: A federal judge denied the Standing Rock Sioux's request for a temporary injunction to stop work on the pipeline.
In the meantime, the protest has turned into a cause celebre. Movie stars make a blurry video supporting the pipeline protesters. Protesters are collecting hundreds of thousands of dollars in donations to support a long-term protest: propane; water; food; and blankets.
Does America need an "All of the Above" energy strategy? Find out here. This Chamber Explainer will get you up to speed.
It’s also not about threats to tribal lands. We know this because after going through public records from the Army Corps of Engineers, SayAnythingBlob.com’s Rob Port reports the Dakota Access Pipeline route nearly matches that of gas pipeline already in the ground:
Before reading this report I had no idea there was another pipeline already running through this area, but there is. It’s called the Northern Border Pipeline. It’s a natural gas line built all the way back in 1982, and the Dakota Access Pipeline follows it often, including through the areas currently being disputed by protesters.
This is no mere coincidence. I spoke with Justin Kringstad at the ND Pipeline Authority who told me that the Dakota Access line “generally follows the same corridor” as the Northern Border line, and that this sort of thing is “not uncommon.” It can be easier to get easements and regulatory approval for a pipeline built where another pipeline has already gone through.
Public Service Commissioner Julie Fedorchak also told me that the Dakota Access line “tried to follow wherever possible the Northern Border pipeline.”
The two routes aren’t exact, but through the area where pipeline construction has sparked violent protests the two lines run side by side according to Energy Transfer Partners.
“We parallel this pipeline for about the last 40 miles” leading up to the Missouri River/Lake Oahe crossing spokeswoman Vickin Anderson Granado told me.
So 30 years ago, did protestors knock down fences and damage equipment when that pipeline was being constructed? Were movie stars joining in solidarity with protestors?
No, in fact, as Port notes, Federal Energy Regulatory Commission records show locals didn’t put up much of a fuss:
Northern Border and Natural [pipeline builders] contacted Native American tribes to elicit any interests or concerns regarding construction of the proposed project, especially as it affects any sites of historic, cultural, or religious significance. Northern Border received responses from the Winnebago Tribe of Nebraska, the Three Affiliated Tribes of North Dakota, the Standing Rock Sioux Nation, and the Peoria Tribe of Indians in Oklahoma. The Three Affiliated Tribes expressed concern about the possible existence of archeological sites at Compressor Stations 5 and 7. No other responses expressed any concerns about the project. Natural has received no response from Native American groups.
As for the Dakota Access Pipeline, it has undergone a thorough, public review process that engaged thousands of people in the region.
Yet the Standing Rock Sioux tribe that is leading the protests didn’t attend any North Dakota Public Service Commission hearings on the pipeline. The tribe did meet with the Army Corps of Engineers numerous times.
Ron Ness of the North Dakota Petroleum Council put it well:
[T]he future of this project is jeopardized by national environmental groups that have latched onto a Native American protest as a last-ditch effort to stop a project that they could not prevent through a regular, orderly review process. These actions attempt to disrupt the very rule of law that was established by these state regulatory organizations.
Energy opponents didn’t like the end result of a public process and so are using uncivil ways to try to stop it.
Their real intentions need to be called out and their uncivil disobedience rejected.
It’s an interesting question. That we’re even entertaining it, however, shows you how far off the rails candidates from Secretary Clinton, to interest groups, to the Democratic Party Platform have gone in proposing to ban energy production on federal lands in one way, shape, or form. It’s easy to spout rhetoric to rally the troops in a campaign season, yet shouldn’t politicians be answerable for the promises they make? We think so.
This week the Institute for 21st Century Energy launched the Energy Accountability Series, designed to do exactly that…hold politicians and interest groups accountable for their proposals.
In this first report, we answer the question: What If Energy Production Was Banned on Federal Lands & Waters? In short, the answer is that America’s economy would lose nearly 400,000 jobs and $70 billion in annual GDP. Considering that we get about 25% of our energy from federal lands, it’s a wonder these numbers aren’t higher. But if you live in a state with lots of federal energy production, the impacts could be devastating.
Take Colorado. It could lose 50,000 jobs and over $120 million in annual royalties, nearly half of which is ear-marked for state education.
Wyoming? It would kiss $9.3 billion in economic output goodbye.
And New Mexico could see almost $500 million in royalties and over 24,000 jobs vanish.
Since states cannot readily borrow the way the federal government can and they also must balance their budgets UNLIKE the federal government, the lost income from a ban would hit especially hard on critical state services like education, roads, and first-responders.
— Energy Institute (@Energy21) August 25, 2016
That’s just for onshore.
Turning our attention to offshore federal production, the impacts of a federal energy ban in the Gulf of Mexico would be even more painful. Oil production from the federal Gulf accounts for just under 20% of total domestic production. Shutting off that spigot would put the country on the wrong track, with less energy security and more job losses.
The Gulf States of Texas, Louisiana, Mississippi, and Alabama stand to lose over 110,000 jobs and $24 billion in lost GDP.
Moreover, a federal law called the Gulf of Mexico Energy Security Act requires the federal government to share a portion of the royalties it collects with the adjacent states that “host” the energy production. While this has been happening on a small scale since 2009, next year it’s scheduled to skyrocket to as much as $350 million annually. That’s a huge chunk of change those states are legally and rightfully entitled to, but they won’t see a dime of it if energy production is banned.
Federal energy production is too crucial to America’s energy security and economic health. Politicians who support banning it should have to explain why.
Unfortunately that has yet to happen, but our new report will ensure that Americans understand the very real consequences of such backward-looking policies.
Editor's note: This originally appeared on The Institute for 21st Century Energy's blog.