A Trump Oil Boom Could Transform This Rocky Mountain Landscape

Emails reveal administration officials want to shelve environmental policies to speed oil and gas development

By: Zack Colman, E&E News
July 13, 2018

Ten thousand feet up, it’s possible to see the whole North Fork Valley from Dan Stucker’s plane. As the aircraft glides over sloping mesas with snow-dusted mountains, the land below resembles a vintage pioneer landscape.

If President Trump has his way, a new feature could arrive on this vista: oil and gas pumps. His administration is opening vast stretches of public land to energy companies, and among the forests and fields under Stucker’s plane, up to 95 percent of the valley could be available to drillers.

The administration’s new policies would bring sweeping changes to this Rocky Mountain landscape, facilitated by a growing bond between federal officials and the oil and gas industry. Emails and other communications between government employees obtained by E&E News reveal directives and orders by Trump officials to shelve environmental policies to speed energy development.

In one instance, Interior Secretary Ryan Zinke courted oil and gas drillers in private by assuring them that changes to federal land policy would make their companies more profitable.

Documents show that some career employees in the Bureau of Land Management questioned whether drillers were being penalized adequately for major violations of environmental regulations. Interior Department staffers also pushed back on efforts by political appointees to put federal land up for auction before scientific assessments on the potential damage drilling could inflict on wildlife were finished.

At other times, federal officials voiced concern that Trump’s drilling goals were more aggressive than oil industry wishes. One federal official was asked whether it would be possible to rejigger data to make it look like the government would sell more leases because she was worried about how companies’ lack of interest in drilling would look to administration bigwigs, according to an email E&E News obtained.

These policies will set the nation on a future course of reliance on fossil fuels that cause climate change, more air and water pollution in rural areas, and new threats to endangered species. In return, the government charges oil companies as little as $2 per acre to lease the land for drilling.

Once a coal town, Paonia has transformed itself over the past few decades. It’s now known for wineries, boutiques, galleries and organic farms that draw tourists from nearby ski resorts. Perhaps most symbolic of its economic conversion, the town now hosts a major company, Solar Energy International, that trains solar panel technicians.

But Paonia’s shift away from its fossil fuel roots could be reversed under the Trump administration’s new policies.

Stucker, the pilot, represents the more traditional side of this region. He said his family arrived here on covered wagons in 1893. Dutch people, then Coloradans. That’s how they distinguish things in this valley—you’re either a fifth-generation son of the Western Slope like Stucker, or you’re an organic-farming hippie. Waves of them came in the 1970s.

“I have friends who are liberals, and what I love about that is we have wonderful arguments,” said Stucker, a self-described libertarian who favors drilling here. “I do not want us to become Boulder, where you have to get permission to screw a lightbulb in.”

VAST ACREAGE FOR OIL COMPANIES

Trump feels the same way.

The president’s plans to expand fossil fuels seem as boundless as the tracts of wilderness below. He wants to open millions of acres across the West, all owned by taxpayers, to private oil and gas companies. Last year alone, his administration put 11.9 million acres on the auction block. It was the most in nine years. In sheer size, that’s twice as big as Vermont.

Colorado’s North Fork Valley is now destined to become part of that statistic. Earlier this month, BLM announced it would offer 7,903 acres in the valley to drillers in December.

The move underscores how the Trump administration has sidelined science to promote energy development. Trump revoked a policy that required Interior, which oversees BLM, to consider how its actions could contribute to climate change.

Interior officials wanted to make the business case for drilling on federal land to oil executives at a March 2017 meeting of the American Petroleum Institute’s board of directors at the Trump International Hotel in Washington, D.C., according to documents obtained through the Freedom of Information Act. An email from then-Interior official Megan Bloomgren—who now works for the oil lobby group—to colleagues clarified the message that Zinke wanted to deliver. The upshot is that Bloomgren wanted to persuade them that drilling on federal land would be easier under Trump than President Obama, in turn increasing companies’ revenues, returns for taxpayers and U.S. energy production.

“He’s saying, ’When you buy a lease from us now it’s a junk bond. We want to move that over so we take on more burden and get return on investment with right market conditions. That way you have a higher probability of success. That way lease value and taxpayer return goes up. I’d like to sell product. We’re looking at how to price royalties and rents right now,’” she wrote in a March 22, 2017, email. “What can he say to back up that he wants to ensure federal lands are just as profitable as private land?”

Coordination with industry has at times been overt. In an audio recording obtained by watchdog group Documented and shared with E&E News, Interior energy adviser Vincent DeVito detailed his courtship of energy companies at an event sponsored by Americans for Prosperity. The conservative group is linked to fossil fuel billionaires David and Charles Koch. Another brother, Bill Koch, owns the last operating coal mine in Paonia.

In the recording, DeVito asked energy executives whether they would drill more if the department lowered its fees.

“We met with the investors and were like, ‘Listen, if we do this, will you participate? Because there is no sense in taking the hit for lowering royalty rates unless you guys do this,’” he said in the recording. “Money from a low royalty rate is better than no money at all. And that’s exactly what we’re trying to do. You know, we are prioritizing production, we are prioritizing revenue, which creates jobs, right? So when we lower that royalty rate, and we did the lease sale last week, we got folks to come to the table and invest.”

Some energy experts say the Trump administration is trying to lease lots of federal land that oil companies don’t even want. Of the 11.9 million acres offered by the administration in 2017, 792,823 received bids, considerably less than the 921,240 acres out of 1.9 million under the Obama administration in 2016.

Onshore oil, gas, coal and other hardrock mining on federal lands generated about $496 million for the U.S. Treasury in fiscal 2017 and $1.4 billion for states. Most of this came through royalties. Critics note that royalty rates and fees for renting federal land haven’t increased in decades. The Government Accountability Office suggested that raising royalty rates could increase revenues for taxpayers between $5 million and $38 million.

Royalty rates for onshore production are currently 12.5 percent, the lowest allowed by federal law. Energy-rich states such as Wyoming, New Mexico, Colorado and Utah have higher rates.

“Federal onshore oil and gas revenues have increased 87% in just the first year of the Trump Administration, as well as an overall increase in federal energy revenue around $1 billion,” Interior spokesman Alex Hinson said in a statement. “With historic tax cuts and smart regulatory reform, we look forward to continual growth. That means more money for conservation and to rebuild our National Parks.”

The 87 percent increase reflects an additional $167 million generated for the federal government from lease sales last year.

The oil industry and Trump’s supporters say the president is swinging the pendulum back to energy after Obama conserved a record amount of federal land, some of which Trump has undone. They say Obama suppressed energy production through cumbersome permitting and heavy-handed regulation.

But internal emails obtained by Rocky Mountain Wild and shared with E&E News illustrate a complication with Trump’s policies: Energy companies didn’t want to lease a lot of the federal land, and that was problematic for BLM leadership because Trump and Zinke had instructed the agency to hold quarterly lease sales.

“It doesn’t look like Colorado will have a March 2018 Lease Sale,” Rachel Vaughn, a BLM official in Colorado, wrote to colleagues in Washington, D.C., on March 6, 2017. “We don’t have any new [expressions of interest] for the field offices in that rotation and we don’t have any old deferrals that can be brought forward at this time.”

Read more at Scientific American.

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