• Onshore, the federal government has drastically cut back on new mineral leases on the American people’s land. In fact, the rate of newly leased federal lands contracted nearly 90 percent to fewer than two million acres per year in 2010, down from more than twelve million acres in 1988. The federal government is far from running out of land to lease for energy production, however. Out of all the undeveloped oil remaining on federal lands, 62 percent is inaccessible, according to a 2011 Interior Department study.35 Fully 91 percent of undiscovered resources on federal lands onshore are either inaccessible or restricted.36 So the drop in leases is due not to a shortage of land to lease but to government policy reducing the number of permits allotted and a bureaucratic process so complicated that energy developers have opted to pursue development on private land. It takes more than three hundred days to get a permit to develop on federal land, compared with just a few weeks in the states where energy production is booming.
This restriction amounts to completely irresponsible management of the public’s land, robbing the American people of jobs and money that could have been kept at home instead of sent overseas. The government is ignoring a huge source of non-tax revenue, too, which could be used to reduce our federal budget deficit. A study by Noble Royalties determined that bringing federal leasing back up to 1988 levels would generate an additional $421.3 billion over the next thirty years. The failure to responsibly develop the natural resources on federal lands is a hidden tax on the American people.37
Apart from outright bans on development and the failure to issue new leases, a regulatory assault spanning three decades has increased the burden on energy producers, making it difficult to develop American resources on either public or private land. In the next chapter, we will see how the aggressive regulatory state, pushed by a movement of “green” prison guards, is fighting with all the means at its disposal to limit the energy future Americans could enjoy. One small example: Excessive regulation is the reason the United States has not built a major new refinery since 1976. Yet without increasing our capacity to refine crude oil into gasoline, all the new supplies that pioneers like Harold Hamm have discovered won’t make it to the gas pump, won’t drive down prices, and won’t create jobs.
My friend Scott Noble, the founder and president of Noble Royalties in Dallas, came up with a useful way to describe the effects of a hostile regulatory regime on energy development (or any other sector of the economy). He calls it “regulate-restrict-destroy.”
Ask yourself if most of the regulations we have seen in this chapter (or indeed, in this book) ensure that an economic activity is conducted safely, or if they are designed to restrict or even eliminate the activity itself.
It’s clear that the effect of U.S. energy policy in the past three decades has been to restrict and destroy energy development rather than enable it to be done safely. The fracking revolution occurred on private lands, avoiding some federal restrictions, but even private development is coming under assault. As we will see in the next chapter, this “restrict and destroy” energy policy is designed primarily to please radical environmentalists, but it was given a veneer of nonideological practicality by the peak oil myth. If we were about to run out of oil and gas anyway, the argument went, then we needed to hasten the transition to new sources of energy. Continued oil and gas development would make that transition harder.
So federal energy policy, which was based in part on peak oil theory, caused the peak oil model to come true—at least for a time. The resulting diminished production, in turn, reinforces the peak oil model and makes it even more difficult for us to break out.
Today, that mindset and the policies it justified are obsolete. The world has changed, and we must break out of the prison of that costly, false idea. But as we are about to see, the prison guards seeking to destroy the breakout in American energy aren’t giving up without a fight.
CHAPTER FIVE
THE GREEN PRISON GUARDS
Restrictions for Reptiles
The University of Texas and the Texas A&M University systems are the beneficiaries of an endowment of $30 billion.1 Among university endowments only Harvard’s is larger. This vast wealth keeps tuition at the systems’ flagship universities, UT Austin and Texas A&M, at about $10,000 a year for state residents.
The university students, professors, and administrators of Texas owe their good fortune to the transfer of a million supposedly worthless acres to the universities in 1883. That land was in a region of west Texas known as the Permian Basin, which a few decades later became the largest onshore oil-producing region in the United States.
The Permian Basin is also home to a tiny brown reptile known as the dunes sagebrush lizard. No more than three inches long, the lizard lived unnoticed in the desert sands until recent decades. Not long after the unremarkable creature was classified as a species of its own in the 1990s, it attracted the keen interest of a small group of academic researchers.
In 2006 and 2007, graduate students and research assistants from Texas A&M’s Department of Wildlife and Fisheries Sciences began traipsing through the dunes, looking for the sagebrush lizards. Their aim, apparently, was to document where the species lived. But actually spotting them was difficult, since they are only about the size of a human thumb and are camouflaged to blend in with their surroundings. The sand dune lizards are flighty, too, known to run away when danger approaches. Even if the lizards were there, it was nearly impossible to find them.2
The graduate students visited twenty-seven sites among the west Texas dunes, and after looking around a bit, spotted the lizards at only three of them. The researchers’ method for determining the presence of lizards—stomping around the dunes and asking, “See any lizards?”—hardly seems a model of scientific rigor, yet it led to a conclusion that the population had declined.
About six months after the group published the results of its “study,” environmentalists in New Mexico petitioned the Interior Department to declare the dunes sagebrush lizard an endangered species.3 By 2010, the Fish and Wildlife Service, relying on the graduate students’ report, proposed adding the reptile to the list of endangered species.4
Species’ populations fluctuate for a variety of reasons, many of them natural and often difficult to identify. But the Fish and Wildlife Service proposal betrays little doubt about what happened to the missing lizards. It devotes 270 words to competition from other species, 430 words to disease and parasites, 470 words to wind and solar development, 700 words to off-highway vehicle use, and 1,200 words to agriculture and grazing in the area. The threat from oil and gas development, however, merits 2,600 words. The report also targets exposure to pollutants, global warming, and changes in the lizards’ habitat, which are all presumably the fault of the oil and gas industry.
“[I]ncreased oil and gas development in the range of the dunes sagebrush lizard, including seismic exploration, has caused direct and indirect effects to dunes sagebrush lizard habitat,” the FWS alleges. “Oil and gas extraction activities have destroyed and fragmented dunes sagebrush lizard habitat and have resulted in population losses.…”5 As evidence, the FWS cites the junk study based on the graduate students’ desert strolls. The proposal deemed the wells, along with the roads, trucks, power grids, and pipelines associated with them, to be grave threats to the species’ continued existence. Furthermore, the listing proposal alleged that geologists’ seismic exploration for oil posed an “imminent threat” to the three-inch lizards.
The Fish and Wildlife Service’s proposal to add the lizard to the list of endangered species was a shot across the bow of the oil and gas industry, noting ominously that more than 50 percent of all the oil production in Texas occurred within the habitat of the sand dune lizard. The FWS extracted “voluntary” conservation agreements from the oil producers that gave the agency far-reaching powers in the areas occupied by the lizard—and even in areas that were not occupied but that the FWS deemed “suitable” potential habitats.
In other words,
the federal bureaucracy, citing a bogus threat to a hitherto unknown and unremarkable lizard, claimed sweeping authority over the majority of oil production in Texas. The FWS conservation agreements gave bureaucrats the power to direct the routes and construction of new roads, pipelines, and power lines and to limit seismic exploration of potential resources.
The threat of having their operations shut down beat the oil producers into submission. As Ben Shepperd, president of the Permian Basin Petroleum Association, put it at the time, the federal government’s position amounted to “We will not list the lizard as endangered if you will cede private and state lands to federal control.”6
In June 2012 the FWS announced it would drop its proposal to list the dunes sagebrush lizard as endangered based on the “unprecedented commitments to voluntary conservation agreements” it had won from the oil and gas producers.7 While that may sound like a good outcome, in fact it proves the FWS had abandoned any pretext of scientific credibility for the endangered species list. The agency used its classification authority as a tool for bureaucratic extortion. Why should energy developers accept “conservation agreements” for a species that no evidence shows is threatened? Either the science shows the lizard is endangered, and the bureaucrats must list it, or the science does not show it is endangered, and they must leave private companies alone.
Although the Fish and Wildlife Service has abandoned its campaign to “save” the dunes sagebrush lizard, it hasn’t quit trying to seize control of state and private land. Now it proposes to list the lesser prairie chicken as a threatened species on similar grounds. The birds inhabit large swaths of Texas, New Mexico, Oklahoma, and Colorado, but the FWS argues that the birds avoid the “artificial vertical structures [that] are appearing in landscapes used by lesser prairie chickens.”8 The proposal is full of such innuendo about the energy industry’s effects on the birds, and a “Lesser Prairie Chicken Interstate Working Group” is developing a conservation plan that oil and gas developers could be pushed to adopt.9 No one seems to ask how threatened a chicken that spans at least four states can be.
These stunts by the Fish and Wildlife Service are outrageous because their purpose is not to protect wildlife (no evidence suggests the animals needed protection) but to harass energy developers and disrupt the production of oil. The lizard and the prairie chicken are merely the bureaucratic prison guards’ pretext for attacking an industry they don’t like. This abuse of power corrupts an honorable function of government, the conservation of genuinely endangered species. Sadly, it is not an anomaly in the federal bureaucracy.
In January 2012 the Justice Department filed criminal charges against a number of oil and gas producers in North Dakota for alleged violations of the Migratory Bird Act, originally implemented in 1918. The U.S. attorney for the District of North Dakota, Timothy Purdon, charged the companies in federal court with “taking” several migratory birds found dead on property near their reserve pits. The criminal charges carried fines and, potentially, prison terms.
Continental Resources was charged with “taking” a single Say’s phoebe, a bird the size of a sparrow. Brigham Oil and Gas was charged with taking two mallard ducks. Newfield Production Company was charged with taking two mallards, one red-necked duck, and one northern pintail duck. None of these species is endangered.10
Were the oil and gas developers guilty of a crime because a few birds found their way into the oil pits? Were the deaths so egregious that the Justice Department had no choice but to stand up for avian welfare? Apparently the administration thought so.
Yet as the presiding judge noted in his order dismissing the case, the department evidently felt no such compulsion to crack down on the wind-energy industry, which kills thirty-three thousand birds in its turbines each year. Nor, as the judge pointed out, does the department consider it criminal to erect a building with windows (which kill at least ninety-seven million birds a year), to drive a car (sixty million birds a year), to keep a pet cat (thirty-nine million birds), to operate cell towers (five million), or to fly an airplane (tens of thousands).11 The Justice Department was obviously interested less in defending the Say’s phoebes than in persecuting an industry the administration doesn’t like. Justice—to say nothing of progress—took a backseat to the prison guards’ ideology.
The administrator of the Environmental Protection Agency’s Region 6 (Texas and four adjoining states) was forced to resign in 2012 when his candid description of prison guard tactics was made public: “[T]he Romans used to conquer little villages in the Mediterranean. They’d go into a little Turkish town somewhere, they’d find the first five guys they saw, and they’d crucify them. And then, you know, that town was really easy to manage for the next few years…. [T]hat’s our general philosophy.”12
Bureaucratic despotism—just the model to keep America the world’s most dynamic economy on top in the twenty-first century! It’s not exactly the attitude that the Americans rebelling against King George III intended to instill in a free government of free citizens.
Emmy Award–Winning Lies
The HBO documentary Gasland aired in 2010 with great fanfare. It purports to reveal the environmental havoc that fracking is wreaking on small, hardworking towns across the country. Throughout rural America, the film suggests, evil corporations are injecting poison into the ground, cracking open underground aquifers, and destroying drinking water and surface streams for miles around.
Gasland confirms what lots of cultural liberals on the coasts were already inclined to believe about this fracking they’d heard about. It sounds dangerous, and everyone knows that energy companies are up to no good. In any event, it produces more fossil fuels, which means more CO2 and therefore more global warming. Every polite person opposes it.
“With its jolting images of flammable tap water and chemically burned pets, New York theater-director-turned-documentarian Josh Fox’s Sundance-feted shocker makes an irrefutable case against U.S. corporate ‘fracking,’” raved the Village Voice.13 The film won the Sundance Film Festival’s special jury prize and an Emmy for its director. It was nominated for three more Emmys and an Academy Award.
The most dramatic scene in the documentary depicts the kitchen of a Colorado man who lives in an area dotted by gas wells. Over his sink is a handwritten sign warning guests, “Do Not Drink This Water.” As cameras roll, the man approaches his faucet with a lighter and turns on the tap. The water flowing out explodes within seconds, covering his sink in flames. “I smell hair!” the man says as he withdraws his singed arm. “That one was kinda spooky. That even surprised me, and I’ve been lightin’ that water quite a bit.”
Practically every review of the movie mentioned this scene, usually including photographs of the flaming tap water or a short video clip of the explosion. The New York Times review was headlined “The Costs of Natural Gas, Including Flaming Water,” and the online edition included an excerpt of the scene, with a caption explaining that the film “explores the effects of a type of natural gas drilling on residential water supplies.”14 The Huffington Post included the video, too, under the headline “‘Gasland’ Documentary Shows Water That Burns, Toxic Effects of Natural Gas Drilling” and claimed the faucet clip “shows tap water contaminated with combustible gases from nearby natural gas wells.”15 The scene was so widely distributed and the claim so often repeated that it was probably the first thing many Americans ever heard about fracking.
There is just one problem—the burning tap water had nothing to do with fracking. The investigative journalist Phelim McAleer looked into the claims and discovered that people in the area had known for decades that natural gas contaminated their water, long before fracking began in the region. The methane deposits just below the surface were a common natural phenomenon there. (McAleer later made a film of his own, FrackNation, rebutting Gasland.) When he confronted Josh Fox, the filmmaker, Fox conceded he was aware of reports dating back to 1936 of people who could set their water on fire.16 Even with the methane, moreover, the wa
ter is perfectly safe for human beings to drink. But the film discloses none of this information, and in fact blames fracking for the contamination. Gasland’s punch line, the scene millions of people read about, is a lie.
Energy in Depth, the research and education arm of the Independent Petroleum Association of America, has revealed several other deceptions in Gasland. Dead fish shown floating in a Pennsylvania creek, supposedly casualties of fracking, were killed by an algae bloom. The documentary asserts that fracking caused residents of a Texas town to display increased benzene toxins in their blood; in fact, the state had investigated and found normal levels except in smokers, which was expected. Gasland blames fracking for a decline in populations of three “endangered” species. Yet none of the species is endangered, and all are doing fine.17
Even though much of Gasland is simply misinformation, the journalists and reviewers who wrote glowing reviews of the film’s shocking scenes never bothered to check up on the claims themselves. The truth about the methane in Colorado water supplies, for instance, would have been easy to discover. When McAleer, an independent journalist, finally forced the facts into the open, the media’s coverage of the errors did not match the intensity of their original coverage of the documentary. Indeed, many outlets didn’t follow up at all. To this day, many people believe that fracking produces flammable drinking water.
One of the radical environmentalists who colluded with Josh Fox in Gasland was Alfredo Armendariz, then a teacher at Southern Methodist University. Shortly after his appearance in the film, he was appointed regional administrator of the EPA in Texas—the same official who would later resign after comparing the EPA’s enforcement techniques to “crucifixion.”18
Breakout: Pioneers of the Future, Prison Guards of the Past, and the Epic Battle That Will Decide America's Fate Page 10