Hill Heat

Originally posted at the Wonk Room.

After years of delay, Secretary of the Interior Dirk Kempthorne made a landmark decision on whether global warming pollution is regulated by the Endangered Species Act (ESA). Kempthorne ruled that the polar bear should be classified as a “threatened species” due to the decline of polar sea ice, critical to its survival. Kempthorne stated:

They are likely to become endangered in the near future.

The Department of Interior, under Secretary Dirk Kempthorne, fought for several years in the courts since 2005 to avoid making a decision on whether the precipitous decline in Arctic sea ice due to global warming is making the polar bear an endangered species. Fish and Wildlife Service director Dale Hall testified in January that there was no significant scientific uncertainty in the endangerment posed by global warming to polar bears—the only legal justification under the Endangered Species Act for a delay.

Kempthone’s decision to follow the science is in marked contrast to Environmental Protection Agency Administrator Stephen Johnson’s action to override his staff in refusing to regulate tailpipe greenhouse gas emissions.

However, Kempthorne also argued vigorously that his decison does not compel the Bush administration to construct a plan to regulate greenhouse gas emissions, repeating President Bush’s entirely spurious claim that would be a “wholly inappropriate use” of the Endangered Species Act. The Interior news release announces, “Rule will allow continuation of vital energy production in Alaska.” Kempthorne claimed that the Marine Mammal Protection Act (MMPA) is “more stringent” than the ESA, despite the court ruling that compelled him to make today’s ruling stating that “the protections afforded under the ESA far surpass those provided by the MMPA.”

Witnesses

• Tim Williford, Chairman Government Affairs Committee, Plumbing-Heating-Cooling Contractors – National Association (PHCC)
• Gary Gilberti, Chesapeake Rehab Equipment
• John Urbanchuk, Director, LECG, LLC
• Michael J. Graff, President & CEO Graff Trucking, Inc.
• Vincent F. Orza, Jr., Dean, Meinders School of Business, Oklahoma City University

09/04/2008 at 10:00AM

Dirk Kempthorne has not confirmed attendance.

Witnesses

• The Honorable Dirk Kempthorne, Secretary, U.S. Department of the Interior (INVITED)

• Dr. Douglas B. Inkley, Senior Scientist, National Wildlife Federation
• Kassie R. Siegel, Director of the Climate, Air, and Energy Program, Center for Biological Diversity
• William P. Horn Esq., Birch, Horton, Bittner & Cherot

02/04/2008 at 10:00AM

The Subcommittee will review recommendations from policy experts, the Government Accountability Office and the Inspector General’s office for improving the Federal oil and gas royalty system in light of the recent report to the Minerals Management Service’s Royalty Policy Committee entitled “Mineral Revenue Collection from Federal and Indian Lands and the Outer Continental Shelf.”

Witnesses

Panel 1

• Mr. Earl Devaney, Inspector General, Department of the Interior
• Mr. David Deal, Vice Chair, Royalty Policy Committee, Department of the Interior
• Mr. Frank Rusco, Acting Director, Natural Resources and Environment, General Accounting Office

Panel 2

• Hon. C. Stephen Allred, Assistant Secretary, Land and Minerals Management, Department of the Interior
• Mr. Randall Luthi, Director, Minerals Management Service
• Mr. Larry Finfer, Deputy Director, Office of Policy Analysis, Department of the Interior
• Ms. Linda Stiff, Acting Commissioner, Internal Revenue Service
• Mr. Dennis Roller, Royalty Audit Section Manager, Office of the State Auditor, North Dakota

11/03/2008 at 10:00AM

At the hearing, Chairman Feinstein will call for passage of legislation she has sponsored to close a loophole that has allowed oil and gas companies to pay no royalty payments for drilling on the Outer Continental Shelf for leases negotiated in 1998 and 1999. This measure to close the loophole was stripped from the FY2008 Interior Appropriations bill.

Under this provision, the companies who have not renegotiated their existing contracts will have a choice.

• They can keep their existing leases royalty-free if they so choose, but be barred from bidding on new contracts, or
• They can agree to renegotiate these leases in good faith and be able to participate in the bidding for new leases.

Witnesses

• C. Stephen Allred, Assistant Secretary for Lands and Minerals Management, Department of the Interior
• Randall Luthi, Director, Minerals Management Service

26/02/2008 at 10:00AM

Randall Luthi, the controversial chief of the Department of Interior’s Minerals Management Service, will be testifying at a Senate Appropriations subcommittee tomorrow morning. His decision to hold the Chukchi Sea drilling lease sale two weeks ago, the first offshore sale in over a decade, while the Fish & Wildlife Service continues to delay its ruling on the endangerment of polar bears, has garnered protests from government scientists, environmental groups and Congressional Democrats.

Sen. Feinstein, the chair of the subcommittee, released the following statement:

At the hearing, Chairman Feinstein will call for passage of legislation she has sponsored to close a loophole that has allowed oil and gas companies to pay no royalty payments for drilling on the Outer Continental Shelf for leases negotiated in 1998 and 1999. This measure to close the loophole was stripped from the FY2008 Interior Appropriations bill.

Feinstein has been pushing for this legislation at least since 2006, since the loophole in 1998 and 1999 leases issued under the Deep Water Royalty Relief Act of 1995 was discussed in Congressional hearings.

ExxonMobil, the world’s largest company by both revenue and market capitalization, has a place on the world stage comparable to a major nation-state (only 23 nations in 2006 had a GDP greater than Exxon’s revenues of $347 billion, which rose 7% in 2007). Only 31 nations exceeded its annual greenhouse gas emissions in 2004 [UN MDG indicators, ExxonMobil CDP response]. If end-use emissions of ExxonMobil’s products are included, its carbon footprint of 1 billion metric tons of CO2 equivalent is exceeded only by five nations.

David Sassoon at Solve Climate asked Mario Lopez-Alcala, a senior analyst with Innovest Strategic Value Advisors, to estimate how the Kyoto Protocol impacts the company. Lopez-Alcala made some counter-intuitive discoveries.

Turns out that under Kyoto, Exxon is responsible for abating only 9 million out of the 138 million tons of its carbon footprint—about 6.9% of its absolute exposure. Mario arrived at this figure by compiling a weighted average of the emissions targets affecting all Exxon operations around the world. His estimate for what it costs Exxon to abate those emissions, assuming it had to purchase carbon credits? About $1 billion a year. (He calculated net present value for the 2008-2012 Kyoto compliance period and applied a standard oil industry discount rate to arrive at the figure, based on an expected price of $28 per ton of carbon. He also had to add in to the calculation, abatement costs for reducing emissions to a baseline year.)

$1 billion annually is not a terribly large liability for a $400 billion company.

Furthermore:

There’s also another aspect to Exxon’s carbon footprint: the 129 million tons of emissions that it is not required to reduce. It is an enormous carbon asset in a world in which carbon has a price, and it presents a tangible opportunity for enhancing profitability – even beyond $40.6 billion. By reducing those emissions – most simply through reduced flaring, co-generation, heat recuperation, and carbon capture and sequestration – Exxon could reap profits from selling carbon credits it generates. Mario reports that BP is the leader in the sector in taking advantage of these opportunities, which are tangible and positive already.

Sassoon concludes that from an investor (as well as moral) standpoint, ExxonMobil’s storied resistance to the science of climate change is a poor corporate position.

Senate Hearing

In today’s Senate Environment and Public Works Committee hearing on the Fish and Wildlife Service’s now-illegal delay in ruling whether polar bears are an endangered species, Sen. Boxer (D-Calif.) sharply rebuked the FWS director Dale Hall. She noted that the Alaska field office sent a recommended decision to Hall on December 14th of last year. Hall refused to discuss the recommendation, saying it would be “inappropriate” to discuss internal deliberations.

Hall gave as his only reason for the delay past the January 8 deadline the need to present a “high-quality” decision that responds in full to the voluminous public comments received. He stated that there was no significant scientific uncertainty in the endangerment posed by global warming to polar bears, the only reason for delay the Endangered Species Act permits. Under repeated questioning from Sens. Boxer and Lautenberg (D-N.J.), Hall said he wanted to present a decision, if possible, by February 6th.

Hall noted that in many ways the Marine Mammals Protection Act provides stronger protection than the Endangered Species Act for polar bears even if a finding of endangerment were made – a claim criticized by Andrew Wetzler of NRDC, who noted that the MMPA does nothing to protect critical habitat, the matter which would affect the planned sale of drilling rights in the Chukchi Sea.

MMS Speaks

On that front, Ben Gemen reports for E&E News that Minerals Managment Service director Randall Luthi said any delay of the scheduled February 6 sale of Chukchi Sea leases would prevent any oil-and-gas exploration in 2008. However, he also stated that the agency position is that:

there is no need for a delay, regardless of what FWS decides. He said that even in the absence of a listing, energy development is accompanied by several layers of environmental review and safeguards, including collaboration with FWS and the National Marine Fisheries Service.

Kerry Moves to Block

Meanwhile, Sen. Kerry (D-Mass.) introduced legislation yesterday that would block lease sales in the Arctic until Endangered Species Act decisions are made on the polar bear and its critical habitat, mirroring Rep. Markey’s (D-Mass.) proposed legislation in the House.

Internal Emails Show MMS Staff Outcry

Finally, Public Employees for Environmental Responsibility has released over the past week communications from MMS scientists pleading with the political appointees to delay the lease sale (contrary to Luthi’s January 17th testimony) and DOI directives forbidding MMS scientists to consider the possible threat of invasive species from opening the seas to drilling.

Witnesses

Panel I

• FWS Director Dale Hall

Panel II

• Andrew Wetzler, Natural Resources Defense Council
• Margaret Williams, World Wildlife Fund
• Brendan Kelly, University of Alaska
• Richard Glenn, Alaskan Arctic resident and sea ice geologist
• J. Scott Armstrong, University of Pennsylvania Wharton School

30/01/2008 at 10:00AM

Rep. Edward Markey (D-Mass.) has released the text of legislation which, if enacted, would forbid the sale of off-shore drilling rights in the Chukchi Sea, which includes polar bear habitat, until the U.S. Fish and Wildlife Service makes its long-delayed determination whether the polar bear is endangered and what its critical habitat is.

At today’s hearing, FWS director Dale Hill made it clear that he recognizes that the polar bear is definitely losing habitat and has been delaying his determination to make it “clear”; he also stated, “We need to do something about climate change starting yesterday.”

Minerals Management Service Director Randall Luthi admitted that if the lease auction goes forward, it would be impossible to revoke the leases even if they are found to be in conflict with a later endangerment listing of the polar bear.