Delays to energy infrastructure projects and bans to natural gas development by “keep it in the ground” activists have cost more than $91 billion in foregone economic impact, according to a new report by the U.S. Chamber of Commerce’s Global Energy Institute.
“This new analysis by the Chamber’s Global Energy Institute underscores the economic damages being shouldered by the hard-working men and women who build our nation’s energy infrastructure,” Terry O’Sullivan, President of the Laborers’ International Union of North America (LIUNA), said in a statement. “The obstruction we’re seeing from activist groups is costing our members jobs and the entire country opportunities.”
The “keep it in the ground” movement is championed by well-known environmental activists such as 350.org’s Bill McKibben and groups including Greenpeace and WildEarth Guardians and aims to prevent the construction of infrastructure projects as a de facto means of depressing oil and gas extraction and development. The campaign manifests in actions like on-site protests and legal and regulatory challenges, resulting in years-long delays in construction.
“This campaign has significant costs: Power plants that are cancelled mean fewer job opportunities for blue collar workers and potential challenges for electric reliability,” the report reads. “Pipelines that aren’t built mean higher energy prices, as residents in the Northeast have discovered during frigid winters. Delaying or altogether blocking energy infrastructure means foregone tax revenue that would pay for public services, schools, emergency response, and roads.”
The report also found that these actions have cost more than 720,000 jobs and $20.3 billion in federal, state and local tax revenue.
The report focused on 15 major projects, including pipelines and export terminals, and assesses the impacts of New York State’s ban on hydraulic fracturing.
Among the highlighted projects is the Jordan Cove LNG export terminal, which would transport natural gas from Colorado to Coos Bay in Oregon to export to international markets. The project has faced years of delays at the hands of the Federal Energy Regulatory Commission (FERC) despite having bipartisan support, including that of Senators Cory Gardner (R-Colo.), Michael Bennet (D-Colo.), Ron Wyden (D-Ore.) John Barrasso (R-Wyo.) and Mike Lee (R-Utah).
“It was a disappointment for the West Slope when FERC denied the application,” Bennet said in a 2016 video to the Grand Junction Economic Partnership. “We understand the significance of this project to your communities and to Colorado, and we are writing to FERC to describe its value to our state and to push for a rehearing.”
The report estimates that the lost economic opportunity of the Jordan Cove project totaling at $9.4 billion and nearly 85,000 jobs.
“Club 20 has been supportive of the Jordan Cove project and it’s completion is critical to the future exports of Western Slope natural gas products and the economy of Western Colorado,” Christian Reece, Executive Director of Club 20, told Western Wire. “The long term nature of the contracts that have been obtained would provide long term stability for local producers, something that could help to stabilize local economies and allow them the opportunity to diversify into other industries and sectors.”
The Chamber also analyzed the impact of delays to the Keystone XL Pipeline, which developers planned to build from Canada through Montana, South Dakota and Nebraska. The project gained notoriety in 2011 when protests by groups like the Sierra Club and 350.org captured national attention, culminating in the Obama Administration’s ultimate rejection the project. The report estimates that the pipeline’s six-year delay meant a loss of $12.4 billion and nearly 75,000 jobs in addition to $3 billion in lost tax revenue.
“This report just goes to show that when Democrats thwart domestic energy progress, American jobs and livelihoods suffer as a result. We cannot afford to keep valuable resources in the ground, nor limit our potential as an energy exporter,” House Natural Resources Committee Deputy Press Secretary Rebekah Hoshiko told Western Wire.
Much of the economic costs associated with the “keep it in the ground” activism can be attributed to project delays. In the report, the Chamber advocates for changes to the permitting processes “that are abused to obstruct the development of vital projects.”
“Special interest groups increasingly view [the National Environmental Policy Act (NEPA)] less as a means to ensure environmental protection and more as a weapon to stop infrastructure development and land management activities in their tracks by creating uncertainty, delays, and escalating project risks and costs as outlined in this report. This is not the intended purpose of NEPA,” the report reads.
NEPA has been criticized by officials from both sides of the aisle for being too cumbersome and time intensive, delaying some projects for years, if not decades. The process allows for interested parties to challenge projects at multiple phases of development, leading to lawsuits, legal delays, judicial review, additional environmental reviews and thousands of pages of paperwork.
“One of the things that was very clear is that over time, the process of NEPA had gotten out of hand. Where, under its pure application early on, it was very straightforward on how you gathered the environmental information you needed to help make the decision and the process moved itself forward to get the answer in a reasonable amount of time… it’s now gotten extraordinary,” Ann Bartuska, Vice President at Resources for the Future and former Deputy Under Secretary for Research at the U.S. Department of Agriculture during the Obama Administration told a panel discussion hosted by the Wilderness Society earlier this year.
Legal experts have called the policy “broken” while legislators are openly discussing ways to “de-weaponize” the process.
“The National Environmental Policy Act environmental review process is broken,” James Coleman, an assistant professor at the Dedman School of Law at Southern Methodist University told the House Natural Resources Committee in April. “The average time to complete an environmental impact statement under the Act is now over five years. Whenever an investor considers building U.S. infrastructure that would require a federal permit and impact statement, he or she must consider whether it is worth waiting five or more years. Will markets change over that time? Will the permit be further delayed by court challenges? Would it make more sense to invest in another country?”
The Chamber’s report cites the White House Council of Environmental Quality in stating that an average of 100 legal challenges are filed per year that allege violations of NEPA.
