Sunday, February 22, 2009

Salazar's Oil

Even-handed on energy?The appointment of former US Senator Ken Salazar (D-CO) as Interior Secretary provoked some ambivalence in both environmental and industry circles. A strong-willed and outspoken westerner, Salazar is seen as industry-friendly while still being environmentally concerned, although just not enough so to completely please either side. In office, his early actions appear consistent with his reputation. For his part, the Secretary has neither fully charmed nor alarmed. Is he a centrist such as President Obama believes will further his so-called post-partisan approach to governing?

Oil Shale

Salazar, who halted leases for oil and gas development on some federal lands in Utah earlier this month, said that while the administration will focus on energy efficiency and renewable sources, there is still room for conventional fuels. Oil shale, he added, still has "great potential," and he may revise rules on harvesting that energy source "in the near term." "We intend to move forward with a comprehensive energy plan," Salazar told a bipartisan group of Western governors huddled in Washington for a national summit. "You should take away from this conference in Washington that the Obama administration is not against developing any of those resources. … Let's put everything on the table."
Last November Salazar's predecessor as Secretary, Dirk Kempthorne, rushed through regulations under the Bureau of Land Management (BLM) to encourage oil shale development in the so-called Green River Formation, a two million acre tract of federal land straddling Colorado, Utah and Wyoming that optimists in the Fossil Industry think may contain perhaps 800 billion barrels of "recoverable" oil. As I noted at the time, Salazar was strongly opposed, concerned about scarring the land of his home state and calling the projected royalties to the government "a pittance."

He further criticized the hastiness of the decision in light of the failure by BLM to analyze the potential environmental impacts, and the additional and enormous resource contention that would ensue over dwindling water supplies:

These regulations are premature and flawed. The Bush Administration has fallen into the trap of allowing political timelines to trump sound policy. Over and over again the Administration has admitted that it has no idea how much of Colorado’s water supply would be required to develop oil shale on a commercial scale, no idea where the power would come from, and no idea whether the technology is even viable on a commercial scale.
Now he blandly calls the Bush attempt to ramrod rules merely "misplaced" and seeks simply to assess the "legal options" the Interior Department has available to it and to make his own decisions over the course of the next 6 months. Shale shills are pleased to agree: "It's foolish to dismiss any options at this point," says Utah Gov. Jon Huntsman Jr.

Offshore Oil

While giving encouragement to one oil faction, Salazar has disappointed another. Two weeks ago he put the brakes on the offshore oil and gas leasing rules promulgated by the Bush administration on its last day in office:

At a news conference in Washington, Salazar said he will move to slow the "headlong rush" to "drill, drill, drill." Salazar said Bush's midnight five year plan, which covers the years from 2013 through 2017, accelerated by two years the regular process for creating a new plan for the outer continental shelf. It "was a process rigged to force hurried decisions based on bad information," he said. "It was a process tilted toward the usual energy players while renewable energy companies and the interests of American consumers and taxpayers were overlooked." "It opened up the possibility for oil and gas leasing along the entire eastern seaboard, portions of offshore California, and the far eastern Gulf of Mexico - with almost no consideration of state, industry, and community input and, in the case of the Atlantic coast, with very limited information about the nature of offshore resources," the secretary said. Despite the sweeping proposal to open up as many as 300 million acres to new offshore oil and gas leasing, the Bush administration's notice called for the completion of scoping meetings and public hearings on the new plan for the outer continental shelf by March 23 - less than 45 days from today.
As with the oil shale, Salazar also wants a 180-day fact-finding period to reconsider the Bush decisions and intends to re-open the decision to additional comments.

The Bush administration was so intent on opening new areas for oil and gas offshore that it torpedoed offshore renewable energy efforts... This rulemaking will allow us to move from the oil and gas only approach of the previous administration to the comprehensive energy plan that we need.
Notwithstanding the intention to continue the current leasing plan, and to not reinstate any offshore drilling ban, American Petroleum Institute (API) President Jack Gerard whined:

The accelerated Outer Continental Shelf five-year plan process, which the secretary placed on hold today, was designed to address the critical energy concerns facing Americans. The draft plan already received a record 120,000 comments from states, environmental groups, industry, labor groups and members of the public - with 87,000 of those comments supporting expanded and expeditious development... Secretary Salazar's announcement means that development of our offshore resources could be stalled indefinitely.
It's not easy to please Gerard or the API. After 8 years of being given everything they wanted, their response to being told "no" is akin to a toddler denied a 9th consecutive treat. The tantrum is about not getting it right now, rather than tomorrow, as a more responsible parent might do (if he behaves!) Gerard's fear-mongering about the urgent need for energy ignore both the reduced demand at present and the inability of offshore oil to ever amount to more than the proverbial drop in the bucket. It's drill now, ask questions later.

But environmentalists are pleased with the Obama administration's new approach to offshore energy resources. Wesley Warren, director of programs for the Natural Resources Defense Council, said, "By committing to a thorough review, Salazar is demonstrating bold leadership that will offer America a new energy future that provides clean domestic energy and cuts our dependence on foreign oil."


The simple reading that API and others make on these developments is that the Obama Administration is hostile to oil and gas and is using review in the manner that the Bush Administration did: study and delay, doing nothing for as long as possible while greenlighting the activities of preferred industries and friendly businesses.

It's possible that the same plan is underway here, only with the sides reversed, but the approach is already too different for this interpretation. Salazar says his Department of the Interior is acting to fulfill President Barack Obama's commitment to "a government that is open and inclusive and that makes decisions based on sound science and the public interest." Salazar shows a strong preference for deliberate decision-making based on collecting all available information and using the facts to guide an even-handed application of law and policy, a significant departure from the practices of the past 8 years.
In not banning offshore oil outright, and in holding out the prospect of oil shale development, the Obama Administration goes against its supposed joined-at-the-hip environmental allies and offers the Fossil Industry a fair hearing on the merits. They may not have merit (I believe) but there will be an honest appraisal based on science rather than ideological cant. It's refreshing.
Indeed, after more review, there will likely be further offshore drilling. Said Obama:

Offshore drilling as part of a comprehensive energy strategy may make sense. In isolation, it's short-sighted. I hold out for a more comprehensive strategy before I sign off on whole-hog drilling offshore.
Colorado Governor Bill Ritter, long-aligned with Salazar on oil shale says its development should be considered but

...we should just be prudent in how we develop it. It's heartening to me that [Salazar is] going to be thoughtful and that he'll only allow oil shale to be developed when the technology is such that we can also protect our air and our water and our wildlife.
Whether all this amounts to merely a symbolic break with the secretive and science-hostile Bush Administration or a genuine and good-faith open-mindedness remains to be seen. We'll know for sure in much less than the six month period of review.

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