True reform at Interior will require coming to terms with deep-rooted political realities that promote abuse of public lands and shortchange the public — the politics of energy leases, for example. Several studies have raised questions about possible collusion in the bidding process, gross undervaluation of the acreage involved, and considerable speculation on the part of bidders who may not have any real incentive to develop the lease. "There's an immense amount of land that's been leased but never developed, and yet they lease more and more," says Baca.

A few years ago, Pete Morton and several other analysts prepared a lengthy report for the Wilderness Society on oil and gas drilling in the Rockies. They concluded that the DOI has wildly exaggerated the estimated energy reserves that could be extracted from public lands, by focusing on oil and gas that's "technically recoverable" rather than those reserves that are economically feasible to develop. At the same time, the government has never taken into account the true "non-market costs of extraction," including the costs of pollution, damage to the land, and loss of wildlife habitat and recreational opportunities. Even when just the usual market constraints are taken into consideration, the amount of economically attainable natural gas in the region is less than 20 percent of the "technically recoverable" estimates. The group calculated that the amount of such gas in sensitive, roadless areas in six Rocky Mountain states is barely enough gas to meet domestic consumption needs for 2.5 months.

Yet the Bush administration continued to push leasing, even in remote areas under consideration for wilderness designation. Morton says the economics of leasing encourages such action, even if the actual energy potential of the lease is negligible. For one thing, current accounting rules for the oil and gas industry allow companies to claim not only proven reserves but undeveloped leases as assets on their books.

New Interior sheriff Ken Salazar with his deputy, Tom Strickland, announces a new ethics policy at the federal center in Lakewood.
New Interior sheriff Ken Salazar with his deputy, Tom Strickland, announces a new ethics policy at the federal center in Lakewood.
Economist Pete Morton contends that the Bush drilling boom, the biggest in twenty years, encouraged energy speculators and cheated taxpayers.
Economist Pete Morton contends that the Bush drilling boom, the biggest in twenty years, encouraged energy speculators and cheated taxpayers.

Details

To read Inspector General Earl Devaney's reports, download them here and here. Read previous Westword stories about the Roan Plateau here.

"There are huge opportunities for speculation," Morton says. "If I'm an investor, and I can lease an acre of public land for as little as $2.50 and sit on it for ten years and put it on my books — there's a lot of reasons why it's worth doing, even if there isn't any real oil and gas potential."

The biggest bidder in last summer's BLM auction of gas leases on the Roan Plateau was Vantage Energy, a little-known Englewood-based company backed by two private-equity firms. Its principal backer, the Carlyle Group, has been a favorite target of Michael Moore and other conspiracy-mongers, in part because of certain former investors in the firm (the bin Laden family) and former advisors (George H.W. Bush and James Baker). Vantage paid $57.6 million for leases on 40,000 acres, which works out to more than $1,400 an acre — a far cry from two bucks an acre, but considerably less than the billion-dollar bonanza some leasing advocates predicted the auction would produce. A company spokesman has said that Vantage still plans to explore for gas on the plateau despite legal challenges and declining prices.

Not that full-scale drilling has to occur for the leasing process to leave its mark. "Even in places where we don't have a lot of drill rigs yet, we have more roads and infrastructure," notes Josh Pollock, conservation director at the Center for Native Ecosystems. "That chops up the migration routes for mule deer, for elk, for all sorts of things. The oil and gas development that raises instant concern is what Front Range recreationists can see while driving or camping, but as long as it's Rifle and farther west, a lot of folks don't realize the price we're paying."

Morton would like to see comprehensive restructuring of the lease process and the royalty system so that they more accurately reflect the real costs of energy development. "Taxypayers are getting ripped off," he declares. "If they're going to run it like a business, then do it. We've dug a big fiscal hole, and one way out is to reform severance taxes and royalty payments and the way we appraise and lease the land, so that we get a better return on our dollar."

Energy companies, he adds, will complain that such costs simply get passed on to consumers. But shifting costs to end users is still better policy than spreading the "hidden costs" of energy to all taxpayers, and it's the speculators who will be most affected by such a move. "The oil and gas industry will say that now isn't the time," he contends. "But when is the time? When they were making record profits, that apparently wasn't the time, either."

A sinking economy will inevitably produce demands to provide jobs and open more lands to energy development. Salazar seems to have anticipated this and tried to shift the terms of the debate, insisting it's high time that the public gets its "fair share" of royalty dollars, whatever that might be. But the administration's initiatives on climate change, including the proposed cap-and-trade arrangement on carbon emissions, also indicate a willingness to make Americans pay more of the hidden costs, environmental and otherwise, of energy production. How this will all play out in the DOI's vast holdings — particularly in Alaska, where the long-running struggle over the oil buried beneath the Arctic National Wildlife Refuge appears to be heating up again — may be the most important battle Salazar faces.

« Previous Page
 |
 
1
 
2
 
3
 
4
 
5
 
6
 
7
 
8
 
All
 
Next Page »
 
My Voice Nation Help
1 comments
stoett22
stoett22

Despite having only recently been appointed Secretary of the Interior, Ken Salazar has ruffled a lot of feathers, such as recently announcing an end to Drakes Bay Oyster Company’s oyster farm lease for environmental concerns. It is not an extremely popular decision, especially since millions of dollars is on the line. But I am glad environmental concerns trumps money, and building offshore wind farm will open doors to innovative types of renewable energy. However, I hope more studies and research are infused into this to determine the severity (if any) of negative impacts on the environment.

 
Loading...