Ken Salazar wants windmills in the ocean, but first he'll have to save the Interior Department
On January 21, Ken Salazar walked into the Department of the Interior headquarters in Washington, D.C., and found a crush of employees waiting for him. It was his first day on the job, less than 24 hours after President Barack Obama's inauguration and the Colorado senator's own speedy confirmation as Secretary of the Interior. He'd expected a cordial reception, but nothing quite like this.
There were "literally thousands of people" lined up to greet him, he recalls, bunching up along the grand staircase at the entrance and forming a gauntlet along the muraled corridors. They clapped and cheered and reached out to shake his hand. It was like a scene from one of the Rocky movies or the frenetic climax of Mr. Smith Goes to Washington — the put-upon workers welcoming a new champion, a liberator.
The emotion of the moment wasn't lost on Salazar. These people, he told himself, are ready for a change. After pressing the flesh, he eventually made his way to the Secretary's suite, where another bit of symbolism awaited him: the 100-square-foot executive bathroom, recently renovated by his predecessor, Dirk Kempthorne, at a reported cost of $236,000. Complete with shower, fridge, floor-to-ceiling wood paneling and gleaming commode, the imperial crapper had made headlines in the last days of the Bush presidency, a lavish token of his administration's estrangement from the average citizen.
Facing a legacy of crumbling parks infrastructure, ravaged public lands and stunning mismanagement, the new Secretary had bigger worries than the bathroom flap. But Salazar also knew that the DOI's numerous ethics scandals would have to be his first order of business; he'd vowed during his confirmation hearing to "clean up the mess" and restore integrity to the department.
Eight days into the new regime, he flew back to Colorado, determined to send the right message. He met briefly with employees at the Lakewood office of the Minerals Management Service, an obscure agency that happens to be one of the most vital sources of income for the federal government, second only to the IRS; last year MMS collected $23 billion in oil and gas royalties from companies drilling on federal lands or offshore. Then, decked out in a light suit, with trademark cowboy hat and bolo tie, Salazar strolled into a bone-chilling wind to hold an outdoor press conference. He was calling for further review of disciplinary actions resulting from a sex-and-drugs probe at the Lakewood office, he said, and instituting a new code of conduct for all agency employees.
"We are no longer doing business as usual," he declared. "There's a new sheriff in town."
Flanking Salazar on his right was his ethics czar, Tom Strickland — the former U.S. attorney who'd joined DOI as chief of staff and would soon be nominated as the Assistant Secretary of Fish, Wildlife and Parks. To his left was Earl Devaney, the DOI inspector general whose investigation of MMS had uncovered "a culture of substance abuse and promiscuity," including a supervisor who allegedly pressured employees for cocaine and blow jobs, and others who accepted gifts, booze, meals, trips and, in some cases, sex from executives of oil and gas companies ("Crossing Over," September 18, 2008). Devaney had been a voice in the wilderness during the Bush years, telling Congress in 2006 that, "short of a crime, anything goes at the highest levels of the Department of the Interior." By the time of Salazar's press conference, several DOI officials had been prosecuted for actual crimes, including two MMS employees, and Devaney was about to become the overseer of the new administration's $787 billion stimulus package.
The press conference was a masterful piece of theater, right down to the cowboy hat and the "new sheriff" line. What better way to declare that America's natural resources are going to be handled differently than by denouncing those unfaithful stewards who'd actually been in bed with the energy industry? What better means to present the new Secretary as a man of gumption and grit, ready to chase the varmints out of town?
The substance behind the script, though, wasn't quite so obvious. The new code of conduct that Salazar's people unveiled has a great deal in common with the old code, except for a stringent ban on even minimal-value gifts. And the bad behavior it's supposed to address seems insignificant compared to the greater scandal inside MMS: the billions of dollars that the government has lost in unpaid royalties because of the agency's sweetheart contracts and inadequate auditing procedures ("Fighting Mad," November 16, 2006). For example, the Lakewood employees Devaney investigated were assigned to the "Royalty in Kind" program, which allows companies to pay a substantial portion of their royalties in the form of actual oil and gas production rather than cash; a 2008 General Accounting Office analysis found that the self-reporting "honor system" used in the program is far less reliable than traditional audits and is part of a larger data-management problem that could be cheating taxpayers out of huge sums.
Asked about the program at the MMS press conference, Salazar punted. "All of the royalty issues need to be looked at," he said. "We will be putting together a major effort to look at what changes we need to make. Hopefully, in the next month or so, we'll be able to be more specific."
Comprehensive royalty reform isn't the only daunting challenge confronting Salazar as he tries to reshape one of the federal government's most factionalized, troubled and critical institutions. Some of the crises he faces are a direct result of the dramatic policy shifts of the past eight years by an administration determined to turn the DOI into an energy-industry Big Lots. Others are built into the 160-year-old agency's contradictory mission, which involves finding some mythical "balance" between the protection and exploitation of the country's public lands and natural resources. Certain quandaries, such as the gross mismanagement of Indian trust accounts, have been brewing for decades, while others — plants and wildlife on the brink of extinction, the impact of climate change and the quest for renewable energy sources — are being grappled with belatedly, having been strenuously ignored by previous administrations.
Neglect seems to go with the job. The Secretary of the Interior has long been one of the least scrutinized cabinet positions, even though it amounts to being king of an empire of riches that exceed the wealth of most countries on earth. The DOI controls one-fifth of the land mass of the United States, and that land contains half of the country's coal and a third of its oil and natural gas. The Secretary is supposed to manage all of this for the benefit of backpackers and energy producers, ranchers and miners, wilderness advocates and off-road enthusiasts, hunters and mountain bikers, while protecting the air and water, soil and plants and wildlife — and also tending to the Outer Continental Shelf, a vast repository of minerals and fossil fuels stretching over more than a million square miles of ocean.
With his thoroughly Western resumé — a background in ranching and water law, involvement in a host of environmental issues as Colorado's natural-resources director and attorney general, then as a U.S. senator — Ken Salazar would appear to be better prepared than most for the demands of the office. Indeed, he's already presented glimpses of the kind of multi-layered agenda not seen since the dawn of the New Deal, couched in JFK-like phrases.
He talks about "taking the moonshot of energy independence" and achieving a New Energy Frontier, with wind towers in the oceans and solar panels across the desert. He's promised to open thousands of jobs to young people in national parks and elsewhere by creating something like the Civilian Conservation Corps of the Great Depression. He wants to preserve the "historocity" (a word that exists only in the Secretary's dictionary) of the DOI's most famous sites, from the Grand Canyon to Ellis Island, and fund a new wave of conservation planning through a national version of Great Outdoors Colorado, a program he helped to launch in his home state that funds parks and open-space projects through lottery proceeds.
Salazar's first two months in office have been a whirlwind of such pronouncements — but with few specifics. With some discomfort, energy interests have watched his zigs away from the wide-open drilling schemes of the Bush years, while environmentalists have been startled by his zags toward a rapid ramp-up of renewable-energy development.
"It's too soon in the semester to give him a grade," says Marc Smith, executive director of the Independent Petroleum Association of Mountain States (IPAMS). "This is probably the toughest job in Washington. Despite the title, he's actually the de facto Secretary of Energy, and that involves a number of very difficult decisions."
Smith's group has disagreed with several of Salazar's decisions so far, including his voiding of a drilling-lease sale near national parks in Utah that the Bush administration conducted, under heavy protest, in December. But the IPAMS director expects traditional producers, particularly the natural-gas industry, to play a significant role in Interior's energy plans. "Our role, hopefully, is to continue to work with the administration and Congress and help them plan holistically," Smith says.
Environmental activists say they, too, are cautiously optimistic about Salazar, even though many of his policy initiatives seem to auger intensive development of public lands. "If his top priority is energy independence, I believe he's on the same page as Dick Cheney," says Jeff Ruch, executive director of Public Employees for Environmental Responsibility (PEER). "Our concern is that, at the end of the day, we might end up with just as many oil and gas platforms — but they'll all have windmills on them. It sounds like 'Drill, baby, drill, and we'll throw in some geothermal, too.'"
But as Salazar seeks to strike his own version of balance, former DOI officials and veteran employees say that his greatest task will be to reform the toxic culture inside the sprawling bureaucracy. The department has long been subject to internecine feuding and inertia, they say, and the Bush administration only compounded the problem with its mania for secrecy and covert efforts to ignore or manipulate science in its push for energy development.
"I don't think any individual decision is nearly as important as the cultural change," says Sally Stefferud, a retired fishery biologist for the Fish and Wildlife Service. "Eight years of secrecy has really changed things. Even without it, every step takes so much time — and we're dealing with species that are going down rapidly."
Salazar says he's confident that he can take the DOI in a new direction. He remembers fondly the crowd that greeted him that first day on the job. "The employees of the Department of the Interior are good people, and they want to do a good job," he told Westword. "They're open to doing things in a new way. My major priority, the New Energy Frontier, cuts across each of the agencies, from the Bureau of Land Management to the Bureau of Reclamation, the United States Geological Survey, the National Park Service. These cross-cutting themes will help us break down some of the walls."
Two weeks into his presidency, George W. Bush handed the job of reshaping national energy policy to a new task force chaired by Vice President Dick Cheney. Environmental groups soon cried foul, charging that the group was meeting in secret with major oil and gas executives — many of them large donors to the Bush campaign and longtime colleagues of Bush and Cheney in the oil business — and releasing almost no information about its activities.
Coverage of the super-secret task force soon faded, lost in a maelstrom of more pressing news: the September 11 attacks, the war in Afghanistan, the war in Iraq. Despite lawsuits and some dogged reporting by the Washington Post, few details about the group's meetings and the decisions reached have ever come to light. But subsequent events suggest that the task force played a critical part in developing the administration's master plan for domestic energy and particularly for the Department of the Interior.
The plan was audacious yet stealthy, multi-faceted yet single-minded. It repudiated not only the so-called "elitist" environmental policies of the Clinton era, but also the concept that public lands should be managed for the benefit of many different constituencies. The Bushies spoke favorably of multi-use in public while privately pursuing one higher, relentless purpose.
Bush's choice for Interior Secretary, Gale Norton, was a former Colorado attorney general, like Salazar. But Norton had also served as lead attorney for the enviro-baiting Mountain States Legal Foundation, launched by James Watt, Reagan's famously combative point man at the DOI ("Grazin' Hell," April 7, 2005). Norton departed in 2006 for a job at Royal Dutch Shell, but during her tenure, several key appointed positions at the department were filled with former energy lobbyists — including Deputy Secretary Steven Griles, a member of Cheney's task force, who resigned in 2004 and was later convicted of obstruction of justice in the Jack Ambramoff scandal.
Among regional managers, there was little doubt that DOI policy was being forged in the White House. "The oil and gas program became the predominant program in the Bureau of Land Management," recalls Ann Morgan, a former state director for the BLM who left in 2002 and now works for the Wilderness Society. "Everything else — water and air quality, wildlife — took a back seat."
Long known as the "Bureau of Livestock and Mining," the BLM had been nudged toward a stronger role in conservation and wilderness planning under the Clinton administration. But Norton soon struck a deal in a dispute with Utah officials that virtually halted the BLM's ability to make recommendations for wilderness designation on its lands; the deal trashed years of costly wilderness studies and opened BLM lands across the West to possible development. And a series of internal memoranda issued during Bush's first term made it clear that the agency was now expected to crank out a record number of energy leases on its 256 million acres, which comprise 40 percent of all the land managed by the federal government. The memos directed land managers "to proceed with leasing even while applicable land use plans were being revised," to suspend lease stipulations and grant exclusions to environmental laws whenever possible, and to figure out how to fit more wells on existing leases, with less time allotted for public comment and protest.
During Bush's first term, the number of oil and gas permits issued by the BLM more than tripled. By 2007, the number of domestic wells being drilled was the highest since the Iraq-Iran war of the early 1980s. Yet all of this activity failed to make any perceptible dent in rising energy prices.
The BLM may have been in the crosshairs of the new plan, but it wasn't the only agency affected. President Bush had promised to make the national parks more hospitable to a wide range of users and to eliminate the parks' backlog of maintenance projects, from unsafe roads to collapsing historic buildings, estimated at $4.9 billion in 2001. Yet by the time he left office the backlog had increased and the cost virtually doubled, to $9.7 billion. The chief of the park police had been fired for talking to a reporter about staffing shortages. And demoralized park employees had been pressured to implement a series of controversial, sometimes nonsensical decisions, from bison slaughters and increased snowmobiling in Yellowstone to an eleventh-hour regulation allowing loaded, concealed firearms in the parks (recently thrown out by a federal judge).
Over at the Minerals Management Service, the President's vow to run government more like a business resulted in fewer audits of the royalty collection process, even as oil and gas production skyrocketed. Several auditors complained that energy companies were defrauding the public out of millions of dollars. One whistleblower, Bobby Maxwell, soon found himself out of a job and decided to pursue a claim against Kerr-McGee for underpaid royalties — without the government's help. Last fall, right around the time Devaney was releasing his scathing reports on the un-businesslike relationships between MMS regulators and energy-industry officials, a federal appeals court reinstated a jury verdict Maxwell won against Kerr-McGee that could be worth as much as $40 million.
Perhaps the greatest upheaval was inside the Fish and Wildlife Service, where the policy shift amounted to an assault on science itself. As the lead agency responsible for the protection of endangered species, the FWS relies on its field researchers and scientists to determine the impacts of development projects on plants and wildlife. But it soon became apparent that the new leadership was chiefly interested in science that achieved the desired political outcomes.
Sally Stefferud, a twenty-year veteran of the FWS, was asked to study whether a proposed water-diversion project in Arizona would pose a risk to native fish, including a rare minnow. In 2002 Stefferud prepared what is known as a jeopardy opinion — a worst-case scenario, basically, that concluded the project would jeopardize the survival of the species. She quickly discovered that the new regime was no longer accepting jeopardy opinions.
"When I submitted the draft to my supervisor in Phoenix, he told me, 'Dale Hall says you can't do this,'" Stefferud recalls. (Hall, then a regional administrator in Albuquerque, became Bush's director of FWS in 2005.) "I said I had two months to go until retirement and I didn't care what Dale Hall says. This is what the science says."
The opinion was killed. Stefferud soon left the agency and watched from the sidelines as research budgets shrank and scientific papers were re-evaluated and re-interpreted to say exactly the opposite of what they really meant. The focus had shifted from science-based enforcement of the Endangered Species Act to all-out efforts to take species off the endangered list that were interfering with timber, grazing, energy and development interests. (Among the few newcomers to the list in the Bush years were six varieties of threatened or endangered penguins, none of which can be found in the United States.) A 2005 survey of FWS scientists revealed that more than half the respondents knew of instances in which their findings had been altered to suit the needs of development projects.
The perversion of science at the agency eventually led to two sprawling reports on the matter from inspector general Devaney, the latter of which was released last December. Both reports dealt primarily with the heavy-handed interference of Julie MacDonald, a DOI deputy sssistant secretary who, in Devaney's words, "injected herself personally and profoundly" in numerous endangered-species issues. The investigation revealed that MacDonald had the unflagging support of her superiors in her efforts to achieve pro-development decisions and squash dissent.
MacDonald took extraordinary measures to get the results she wanted, including packing expert review panels with her own handpicked minions and deep-sixing contrary findings. Her micromanaging became so commonplace that staffers turned her name into a verb — "getting MacDonalded," they called it. In her zeal to keep dwindling numbers of greater sage grouse off the endangered list, she declared that the bird didn't need sagebrush to survive — a statement that her perplexed panel didn't know how to integrate into its report, since it had no basis in fact.
"The cloud of MacDonald's overreaching," Devaney wrote, "and the actions of those who enabled and assisted her, have caused the unnecessary expenditure of hundreds of thousands of dollars to re-issue decisions and litigation costs...action is necessary to restore the integrity of the ESA program, and the morale and reputation of the FWS in the eyes of the public and of Congress."
MacDonald resigned from the DOI in 2007. But many of "those who enabled and assisted her" still work there; even some of the political appointees have found ways to burrow into career-service positions. "People think that after the inauguration, everything's going to change," Stefferud says. "But the Bush administration was really good at embedding its people far down in the agency."
In its waning days, the Bush administration quietly introduced new rules that nullified key requirements of the Endangered Species Act, allowing federal projects to proceed without FWS consultation if the lead agency decided there was no threat to a vulnerable species. The move was presented as a way of making the review process less bureaucratic and redundant, but critics protested that the administrative measure would remove FWS expertise from the process and effectively gut the ESA.
On March 3, in conjunction with a ceremony at DOI headquarters marking the department's 160th birthday, President Obama rescinded the new rules. "For more than three decades, the Endangered Species Act has successfully protected our nation's most threatened wildlife," he said. "We should be looking for ways to improve it — not weaken it."
Over the past few weeks, the new administration has put the brakes on a slew of "midnight regulations" dealing with public lands that were hustled into the Federal Register in the last days of the Bush era. Bush's people did the same thing with many end-game maneuvers of the Clinton administration. But Secretary Salazar seemed to take a grim satisfaction in this particular rite of the transition of power, making many of the announcements himself.
In halting the Utah lease sales, he criticized the BLM for failing to consult adequately with park authorities before auctioning oil and gas rights near Canyonlands National Park, Dinosaur National Monument and Nine Mile Canyon. He then scuttled the previous administration's efforts to expand oil shale research and leasing in western Colorado, saying the leases were too large, the royalty rates too low, the technology still unproven. Instead, he offered a slower, more modest phase-in of R&D leases.
He made a similar move regarding energy development offshore, calling for more research and public comment while denouncing the Bush administration's efforts to ram through a new five-year plan for the Outer Continental Shelf — one that spurned his own efforts as a senator to require the DOI to make greater provisions for offshore renewable-energy sources, including wind, wave and tidal power.
"In my view, it was a headlong rush of the worst kind," he said. "It was a process rigged to force various decisions based on bad information. It was a process tilted toward the usual energy players, while renewable-energy companies and the interests of American consumers and taxpayers were being overlooked."
Yet even while offering one rebuke after another to his predecessors and mocking their policy as "drill-drill-drill," Salazar was careful to offer an olive branch to the fossil-fuels crowd. "The oil and gas industry should not see the Obama administration as their enemy," he said, pledging that the industry "will have a seat at the table."
In fact, several of Salazar's myriad press conferences seemed designed to reassure the usual energy players and alarm his green supporters. He affirmed an FWS decision to remove Endangered Species Act protection for gray wolves in the northern Rockies, calling the breed's resurgence "one of the great success stories" since the ESA's creation. And far from supporting a moratorium on offshore drilling, two weeks ago he flew to New Orleans to tour an offshore platform and personally oversee the first major Gulf of Mexico lease sale of the Obama era, which brought in $703 million in bids on prime sites off the shores of Louisiana, Mississippi and Alabama.
Such efforts to appease warring constituencies are characteristic of Salazar's earnest, let's-work-this-out centrism. His entire career has been a search for the elusive middle. In Colorado he served as a bridge between agricultural and development interests, as well as between some of the state's more rural, isolated areas, such as his own native San Luis Valley, and the halls of power. Yet he also injected himself in controversies that offered him little or no political capital — such as trying to mediate a decades-long dispute over community grazing rights on a private ranch, or using his power as attorney general to push for the release of documents related to the Columbine shootings that other law-enforcement agencies wanted to keep sealed. Throughout it all, he seemed driven less by ideology or fear of criticism than a kind of benign pragmatism.
In the Senate, his efforts to build coalitions across the aisle made him seem like a plodder, unable to shift gears with the political winds. Affability in high office is often suspect; when Obama tapped him as Interior Secretary, over more outspoken Bush critics and environmental darlings such as Arizona congressman Raúl Grijalva, the New York Times fretted that Salazar was too mild for the job. "He should surround himself with a core group of dedicated, quality people, and remember that being nice won't cut it," huffed one editorial.
So far, Salazar has been packing Interior with dedicated people — with lots of Colorado connections. In short order he named former Senate candidate Strickland, whom he'd served with on the board of Great Outdoors Colorado, as his chief of staff; Will Shafroth, former executive director of GOCO, as Deputy Assistant Secretary for Fish, Wildlife and Parks; and Chris Henderson, Denver mayor John Hickenlooper's top financial advisor, to oversee the DOI's $3 billion share of economic stimulus funds. During the confirmation process, Salazar had pledged that the DOI would be an agency that served all of America, not just the West, but he seemed bent on transforming its leadership into a Colorado cabal.
The rapid enlistment of homies may suggest that Salazar isn't yet comfortable in his new, global role. Despite the flurry of public appearances during his first few weeks on the job, he seemed most at ease during trips back home, visiting the Great Sand Dunes or joking with local officials on a tour of the Rocky Mountain Arsenal Wildlife Refuge, many of whom he'd worked with years ago to get the former chemical weapons plant cleaned up. But tapping Strickland and Shafroth also signal that he's serious about using the Great Outdoors Colorado model for revitalizing the Land and Water Conservation Fund, which has been underfunded by Congress almost every year since it was created in 1964.
It's not clear yet how he plans to pay for a massive upgrade in conservation projects — "We're at the conceptual level at this stage," he cautioned in a recent interview. But the likely mechanism will be dedicating a portion of royalty revenues to such projects. An eighth of the revenues from some of the tracts in the recent offshore-lease sale in New Orleans will be set aside for state parks acquisition and other conservation measures, the first time federal royalty funds have been earmarked in that fashion.
Funneling cash to conservation, though, hasn't allayed skepticism about the Secretary's other initiatives — especially his push for a New Energy Frontier. Oil and gas representatives, such as Smith at IPAMS, wonder whether a "double standard" will be applied that opens up public lands for renewable-energy producers while barring others. Environmentalists fear the impact of additional roads and transmission lines on wildlife habitat and migration corridors that have already been badly fragmented by the drilling boom; they point to the not-so-green effects of an army of wind towers in northern California that have killed thousands of birds. And other analysts question the technical feasibility of the whole idea.
"In the rush for green energy, do we destroy the green infrastructure we need?" asks Pete Morton, a senior resource economist for the Wilderness Society. "The cheapest way to get renewables out there is to put them on rooftops that are already connected to the grid. One of the problems of putting a lot of solar in the desert is the estimates of 50 percent or more energy loss in the transmission lines. Yes, there's potential, but what's the net potential?"
For his part, Salazar talks blandly about making tradeoffs. "We will have to deal with impacts to the land and wildlife habitat," he says. "We can do that, I think, in a thoughtful manner...and accomplish both protection of our landscape and development of the renewable resource."
Two critical tests of Salazar's position on the energy-versus-environment debate are looming in the next few months. One involves charges by the superintendent of Grand Canyon National Park that Bush's DOI ignored scientific concerns about imperiled fish in order to lower water flows and optimize hydroelectric power from Glen Canyon Dam. PEER director Ruch says his group pressed Salazar to demonstrate his commitment to science-based policy by restoring the water the park needs — but received no response.
"The only thing that happened was the park superintendent was summoned to Washington and asked how we got the documents," Ruch says. "We would view this as a good opportunity for [Salazar] to put flesh on the bones of what he's saying."
The second test is in Salazar's back yard: western Colorado's Roan Plateau ("Raiding the Roan," January 1, 2004). One of the most biologically diverse areas in the state and a trove of natural gas supplies, the plateau is largely controlled by the BLM, which auctioned gas leases last August after years of protest. The leases are now being challenged in court by environmental groups. Senator Salazar opposed the BLM's plan, favoring a state proposal that would allow a more gradual leasing process; Secretary Salazar has since indicated that he'll review the arrangement and issue a decision within a few weeks.
Natural-gas drilling has dropped off dramatically since the frenzy of last summer, a result of sinking prices and rising reserves. Still, reneging on the Roan leases would be viewed quite differently by the gas industry than halting the Utah sale. "We run the risk of starting to look like Venezuela or Russia when we change the rules of the game midstream," Smith warns. "The Secretary has every right to review decisions. But you've got to be careful to not discourage investment in clean energy across the West. If companies that have valid leases aren't allowed to develop them, that would really send the wrong message."
Yet the Roan auction is also a glaring example of the Interior Department's willingness to bypass the communities most affected by land-use decisions. The BLM received more than 70,000 comments opposing widespread leasing on the plateau — comments not only from environmentalists, but from mayors and county leaders, tourism groups, hunters and other locals. The final plan incorporated almost none of that input.
"The last few years, you wouldn't think the BLM thought that the oil and gas resources belonged to the American public," says former BLM state director Morgan. "It was for industry to take whatever they wanted. If nothing else, I would like to see communities getting more involved in those decisions."
In 1993, Jim Baca became director of the BLM under the Clinton administration. A former journalist and New Mexico land commissioner, Baca was determined to overhaul the agency's good-old-boy dealings with ranchers, mining interests and energy producers.
Baca lasted less than a year. The strong support he'd initially received from Secretary of the Interior Bruce Babbitt quickly evaporated, as Babbitt faced an increasingly hostile Congress and pressure from governors across the West. Many BLM state directors, Baca discovered, had back-door access to lawmakers from those states and were eager to advance their own agendas.
"Out attempt was to make these BLM lands much more than the playground for oil and gas and livestock and mining," he says. "We were going to start with grazing reform. But then everything fell flat because Babbitt didn't have the strength to go fight the Senate — and the relationships between state directors and the senators from their states."
Baca went on to become mayor of Albuquerque and is now New Mexico's natural-resources trustee, a state position appointed by the governor. He has some advice for Salazar: "After eight years, the state directors at BLM are probably ready to go. They should be carefully looked at. That's part of the culture that really has to change."
Salazar has several advantages Babbitt didn't have. He has strong allies in the Senate, a brother in the House of Representatives and considerable rapport, for the moment, with his president, who arrived in Washington as an unlikely, rising-star freshman senator the same year Salazar did. But his early moves have already ruffled some Republican grouse; Utah senator Robert Bennett recently stalled confirmation of DOI Deputy Secretary David Hayes over the canceled lease sale. In an ideal world, it may be possible to base public-land policy solely on science, but Interior is still a highly politicized entity, inside and out.
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.
"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.
If he's worried, he doesn't show it. In a recent interview, he beamed brisk confidence, brushing off a question about how many of his directives to date have been drafted in the White House. "I don't frankly care who gets credit for these agendas, which are important to the nation for generations to come," he said. "I have a great relationship with President Obama and his people, and they're very open to my suggestions. We've had countless meetings to talk about how we'll move forward on energy and climate change. I have the advantage of having worked on these issues in the Senate. All that, I think, helps us move the agenda forward."
Will the crowds still cheer the new sheriff, once he presents them with the bill for cleaning up the place? The question lingered, unasked, as the Secretary broke off the interview, declaring that he had to go meet with the president of Palau — an island republic that, like Salazar himself, enjoys a complex and still-evolving relationship with the Department of the Interior.
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