Fossil Fuels from Public Lands Costing us Dearly

Last year, WildEarth Guardians called out the U.S. Department of Interior for touting the economic benefits of its fossil fuel management program while completely ignoring the carbon costs.

The omission was significant.  As we estimated, the cost of oil, gas, and coal produced from public lands managed by the Interior Department in 2013 could be in the billions and likely overshadows the economic “benefits” reported.  These costs reflect the economic damages caused by carbon-induced climate changes, in other words, the costs that society absorbs in the form of extreme weather, rising sea level, higher air pollution, etc.

Since the release of our report, however, we’ve come to find out that we seriously missed the mark in our cost estimate.  In fact, the latest studies indicate we underestimated total costs by more than 100%.

As a report published yesterday in the journal, Nature Climate Change, reports, carbon costs are not actually the $101 per ton we relied on in our report, but actually $220 per ton.

The study, completed by Stanford scientists, is a telling revelation that the cost of carbon is getting more expensive than ever as our understanding of climate-related economic damages is refined.  The findings should sound an even shriller alarm over the need to significantly curtail greenhouse gases as quickly as possible.  As a press release from Stanford bluntly points out:

Based on the findings, countries may want to increase their efforts to curb greenhouse gas emissions, said study co-author Delavane Diaz, a PhD candidate in the Department of Management Science and Engineering at Stanford’s School of Engineering. “If the social cost of carbon is higher, many more mitigation measures will pass a cost-benefit analysis,” Diaz said. “Because carbon emissions are so harmful to society, even costly means of reducing emissions would be worthwhile.”

In our July 2014 report, we estimated the total cost of oil, gas, and coal produced from public lands overseen by the Interior Department in 2013 to amount to more than $176 billion.  Based on the latest $220 per ton estimate from Stanford, however, total costs are actually higher than $383 billion.  With the Department of Interior reporting $121 billion in economic benefits, this amounts to a total cost of $262 billion.

In other words, in 2013, the overall cost of oil, gas, and coal produced from public lands was more than double the reported benefits.

On the flip side, this means that every ton of coal, every barrel of oil, and every cubic feet of natural gas kept in the ground is money in the bank.  With carbon costs rising, it means that fossil fuels on our public lands are becoming more valuable in the ground than out.

Unfortunately, with the Interior Department’s Bureau of Land Management claiming that increased oil production was a “major accomplishment” in 2014, the value of keeping fossil fuels in the ground may not be sinking in yet.

For the future, both near and long-term, hopefully that will change.  With carbon costs continuing to rise, the Interior Department can’t afford to keep turning a blind eye to our climate.

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A worthless coal mine surrounded by valuable, undeveloped coal seams in the Powder River Basin of Wyoming. Photo by EcoFlight (ecoflight.org).

 

U.S. Interior Department: Still All About Fossil Fuels

Even as scientists are confirming that it’s time to keep fossil fuels in the ground, the U.S. Department of the Interior continues to open the door for extensive coal, oil, and gas development on our public lands, fueling unchecked carbon pollution at belligerently reckless rates.

The latest step backward occurred earlier this week as Interior’s Bureau of Land Management just gave itself a big pat on the back for approving thousands of new drilling permits and offered to lease nearly 6 million acres of public lands to the oil and gas industry for fracking.

The Bureau was so zealous, they gloat that they offered drilling permits and leasing opportunities “in excess of industry demand.”  

Flaring on well in Lybrook badlands

Flaring, where the oil and gas industry purposefully burns off natural gas while producing oil, is the ultimate waste. Here, flaring at a fracking site on public lands in northwestern New Mexico was condoned by the Bureau of Land Management. Photo by Mike Eisenfeld.

In other words not only is the Bureau of Land Management meeting 100% of industry demands, they’re actually trying to give away even more.

It doesn’t end there.  Last month, Interior reaffirmed its belief that coal is an “important part of our domestic energy portfolio,” offering new guidance to make leasing and mining more “efficient” and “certain” for industry.

Certainly, the new guidance is meant to ensure the American public gets a fair return on coal, especially where it’s exported, and it is likely to spur higher prices for federal coal leases and higher royalties.  However, there’s an ominous omission.  Nowhere has Interior signaled its intent to ensure carbon costs are factored into the valuation of coal.

It’s a simple concept.  Carbon has a price.  If unleashed from the ground (in the form of oil, gas, or coal), that price becomes a cost borne by our economy in the form of the destruction wrought by climate change.  Those costs can add up, erasing any economic benefits otherwise reaped by the production and consumption of fossil fuels.

In the case of publicly owned coal, all signs indicate that carbon costs are, in fact, adding up and overriding any economic benefits.  As reported by our friends at Greenpeace, while a ton of federal coal is brining in $1.03 per ton in revenue, it’s yielding carbon costs of between $22 and $237.

Interior’s new guidance, while providing greater clarity and direction around the valuation of publicly owned coal, continues to turn a blind eye to carbon costs, filling industry’s coffers at our expense.

Ensuring a fair return from coal sales is certainly laudable, but the reality is, no return can ever be fair if it doesn’t fully compensate the American public for the climate damage caused by unleashing more carbon.

Now, more than ever, Interior should be exercising massive restraint when it comes to development of fossil fuels on our public lands.  Sadly, they’re not.  The list of new coal, oil, and gas projects slated for approval in the coming months continues to swell.  Here’s just a sampling of what’s in the queue:

And this is just a fraction of what’s planned for approval in the next year.  It’s like a tsunami of carbon threatening to be unleashed.

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55,000 acres of public lands are slated to be auctioned off for fracking in southern Utah. The prospect of more fossil fuel development portends disaster both for our climate and our public lands.

Of course, with Sally Jewell, the Secretary of the Department of Interior, actively advocating for more fracking (and even dismissing the notion that fracking should be banned or otherwise curtailed), perhaps there’s little chance of a shift.

If that’s the case, the Obama Administration needs to fire Sally Jewell.  After all, she’s the one who said climate denial has no place at the Department of the Interior.

 

New Greenhouse Gas Data: Carbon Creeping Up and Methane Still Underestimated

The U.S. Environmental Protection Agency yesterday released its annual report on greenhouse gas emissions from the nation’s largest sources of pollution, revealing that we still have enormous progress to make in cutting carbon.

The big bombshell was that in 2013, greenhouse gas emissions actually increased.  That’s right, increased.  Not only that, but the increase was tied to increased coal burning.

It’s a shameful reminder of how the fossil fuel industry continues to dig our nation deeper into climate debt.  With the Intergovernmental Panel on Climate Change (IPCC) calling for a 40-70% reduction in carbon emissions below 2010 levels by mid-century, the last thing we need is an increase in emissions.  It underscores that the fossil fuel industry’s resistance to limiting its pollution needs to be countered more fiercely than ever if we have any hope of making progress.

This is especially the case with regards to methane.  Sure, the EPA yesterday hyped its claim that methane emissions from fracking have decreased 73% since 2011.  But as Bobby Magill at Climate Central noted, the agency’s report fails to fully account for methane leaks at oil and gas wells, which studies have found can approach 12% in some regions.

What’s more, EPA’s data relies on a faulty assumption that methane has a global warming potential of 25.  The global warming potential is a measure of how potent a greenhouse gas is compared to carbon.  Yet as we reported before, the latest findings from the IPCC indicate that over a 20-year timeframe, methane actually has a global warming potential of 86.

In other words, the world’s leading body of climate scientists say that one ton of methane equals 86 tons of carbon dioxide.

For EPA’s report, it means that estimates of carbon dioxide equivalency associated with methane are more than half a billion metric tons too low, an error of 70%.  The EPA may be correct that there was a reduction in methane since 2011, but with such grossly inaccurate emissions reported, it seems like the hole we’re trying to dig out of is just getting deeper (this is confirmed by the latest studies finding that more fracking for gas not only won’t reduce carbon emissions, but will also undermine renewable energy).

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Total methane emissions reported by EPA in 2013 and carbon dioxide equivalency based on a global warming potential of 25 and 86. The difference is more than half a billion tons of carbon.

Another bombshell is that underground coal mine methane emissions increased by nearly 25% between 2012 and 2013.  The industry reported methane emissions equal to 41 million metric tons of carbon in 2013 (of course, with a global warming potential of 86, it would actually be more than 141 million metric tons).

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Coal mine methane emissions increased by nearly 25% between 2012 and 2013.

No matter how you slice it, though, the data shows that coal mines are responsible for nearly 20% of all methane emissions in the U.S., a staggering figure.

In case you’re wondering, where these gassy coal mines are located, the majority are in Appalachia, but a few mines in the West–namely the San Juan mine in northwestern New Mexico, the Westridge mine in Utah, and Arch Coal’s West Elk mine in Colorado–made the top 20.  The top emitter, the Walter Energy mine in Alabama, reportedly released nearly 5 million tons of carbon dioxide equivalent.  That’s more than an average coal-fired power plant.   Here’s the full list of gassy mines >>  

More than anything, the latest greenhouse gas reporting data confirms that we can’t afford to delay carbon reductions.  It’s why last week, WildEarth Guardians joined a coalition of organizations in calling on the Obama Administration to stay firm in its commitment to curtail methane from oil and gas operations, and it’s why we’re digging in more aggressively than ever on our challenges to more coal mining and burning, and more fracking, in the American West.

We have major challenges ahead, but also major opportunities.  It’s time to step it up.

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The San Juan Generating Station in northwestern New Mexico is fueled by the San Juan coal mine, one of the top emitters of coal mine methane in the United States. WildEarth Guardians just filed an opening brief in federal court to stop an expansion of this mine.

Interior Department: Carbon Costs “Misleading”

In July, the Obama Administration was called out over its utter hypocrisy in curtailing carbon pollution in the U.S.

On the one hand, the Administration says that delaying carbon clean up will cost us billions.  On the other, the U.S. Department of Interior, head by Secretary Sally Jewell, is selling millions of tons of coal in the American West and not only refusing to account for carbon costs, but defending their decisions in spite of the climate impacts.

Thankfully, we’re making some progress in reining in the Department’s unwillingness to share in the responsibility to combat climate change.

Just yesterday, a federal judge overturned a coal leasing decision in Colorado over the agency’s failure to assess the social cost of carbon emissions associated with the leasing.  The order comes on the heels of a June ruling where the court held Interior illegally refused to use the “social cost of carbon” protocol, an interagency method of assessing the cost of carbon emissions, when analyzing the environmental and economic impacts of leasing more coal.  The judge was especially perturbed that the agency touted the supposed economic benefits of more mining while completely downplaying (actually, outright denying) the climate costs, which the court noted could be as high as $1 billion (as the court observed, “in effect the agency prepared half of a cost-benefit analysis”).

Cognitive dissonance doesn’t even begin to explain the disconnect here.  What the Interior Department is doing is completely (and literally) undermining our efforts to combat climate change.  Even as President Obama empowers the U.S. Environmental Protection Agency to reduce greenhouse gases, Sally Jewell’s coal decisions are unleashing massive amounts of carbon.

Either President Obama isn’t really serious about curtailing carbon or the Department of Interior is completely out of line.  It doesn’t take a genius to know where the problem lies.

The federal coal leasing program has been called the “elephant in the room” that, unbelievably, has yet to be noticed.  Yet all indications are that Interior is well aware that coal leasing is detrimental to our climate.  What’s worse, everything indicates that they are deliberately turning their backs on the issue, going so far as to continue denying carbon costs.

Case in point, on August 15, the Interior Department’s Bureau of Land Management approved 15.75 million tons of new coal mining in the Powder River Basin of Wyoming.  Coal is mined for one reason, to be burned, and when burned, this coal stands to unleash 26 million metric tons of carbon pollution (in case there’s any question about the significance of this amount, it equals the annual carbon emissions of 5.4 million cars according to the Environmental Protection Agency’s handy carbon calculator).

So what did the agency have to say about the cost of these carbon emissions?  Complete denial.

In fact, in response to concerns over carbon costs, Interior not only argued that the social cost of carbon protocol is inappropriate for assessing the impacts of coal leasing (an assertion rejected by the federal court in Colorado), but argued that such an analysis would be “unbalanced” and “misleading” (see their decision at bottom of page 2 to page 3).

It gets worse.  For instance, while the Department argued that they are not required to do a cost-benefit analysis, and therefore not obligated to assess carbon costs, they actually did prepare a cost-benefit analysis that again, only touted the purported economic benefits of mining.  In the underlying Environmental Impact Statement for the lease, they estimated hundreds of millions increased revenue and dozens of new jobs (see Environmental Impact Statement at p. 3-160).  In other words, they put together the same “half of a cost benefit analysis” overturned by the federal court in Colorado.

Adding absurdity to the mix, they assert that the social cost of carbon impacts would be “negligible” when compared to the costs of carbon from coal nationwide or globally.  Of course, no actual analysis was completed to support this “negligible” claim and, not surprisingly, they didn’t take such a big picture view when assessing the supposed benefits of more coal mining (after all, using Interior’s logic, wouldn’t the addition of dozens of jobs be “negligible” when compared to all the jobs provided by other industries nationwide or globally?).

To underscore the absurdity, assuming the 26 million metric tons of carbon is produced in 2015, this would lead to costs as low as $260 million and as high as $2.8 billion (for 2015, estimated carbon costs range from $11 per metric ton to $109, depending on the discount rate).  Put another way, Interior is actually claiming that a cost of $2.8 billion is negligible.

Topping it all off, the agency continued to stand by its claim that, “The tools necessary to quantify climatic impacts from projects such as a lease modification are presently unavailable” (see Environmental Assessment at p. 27).  Yet the federal court in Colorado affirmed that there is a tool, the social cost of carbon protocol (see ruling at p. 17).

Why would Interior argue such deceit?  It’s unclear, but the only reason for the agency to describe a social cost of carbon analysis as “unbalanced” and “misleading” is because it would show that the cost of leasing coal isn’t worth it.

Ultimately, the Department of Interior is either one of America’s most dangerous climate deniers or the they’re truly of the mind that they must lease coal at any cost.  Either way, it’s clear that the agency has no intention of stepping up to address the carbon impacts of coal leasing.

To put it bluntly, the U.S. Interior Department isn’t ignoring the elephant in the room, they’re simply trying to hide it.

We’re making progress in cutting carbon, but so long as Sally Jewell and the Department of Interior keep flouting our nation’s commitment to safeguarding the climate, it’s clear we can never fully succeed.

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Saving our climate is as easy as keeping carbon underground, something the U.S. Interior Department has yet to embrace.

UPDATE:  On October 6, 2014, WildEarth Guardians filed its statement of reasons challenging the Interior Department’s latest coal leasing plans in the Powder River Basin.  Among other things, the appeal challenges Interior’s completely arbitrary and unsupported assertion that disclosing carbon costs would be misleading.  The statement of reasons calls on the Interior Board of Land Appeals to overturn the decision and compel a rational and accurate analysis of climate impacts.