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Report Finds U.S. Interior Department's Fossil Fuel Program Costing Climate Billions

On Heels of "Benefits" Report, a New Look at Carbon Reveals Oil, Gas, and Coal Costing American Public Dearly

Denver—The climate costs of publicly owned oil, gas, and coal produced under the oversight of the U.S. Department of Interior could be in the hundreds of billions, a report by WildEarth Guardians has found, calling into question recent claims by the federal agency that its management of America’s fossil fuels has yielded billions in benefits.

“Interior is quick to point to the ‘benefits’ of producing oil, gas, and coal, but sadly refuses to take any steps to quantify and disclose the costs of these fossil fuels to our climate,” said Jeremy Nichols, WildEarth Guardians’ Climate and Energy Program Director.  “Our basic assessment of carbon costs shows the expense of fossil fuel production overseen by Interior may outweigh any benefits, sharply contradicting the agency’s claims that its fossil fuel oversight is a gain for the American public.” 

On July 11, 2014, the Interior Department released its Draft Fiscal Year 2013 “Economic Report,” disclosing its assessment of the economic contribution of its management programs. The Department manages vast acreages of public lands and publicly owned minerals in the U.S.  It manages one-fifth of the United States and millions of acres of coal and oil and gas, both onshore and offshore. 

Interior highlighted that sales of millions of barrels of oil, trillions of cubic feet of gas, and millions of tons of coal produced more than $120 billion in benefits.  While acknowledging potential costs associated with adverse environmental impacts, often referred to as “external costs,” no effort was made to quantify them.

Yet costs can be quantified using the Social Cost of Carbon protocol, a method for assessing the cost of climate change impacts associated with carbon pollution that was developed jointly by several federal agencies. 

Using the Social Cost of Carbon protocol, Guardians estimated the total cost of oil, gas, and coal produced under the watch of the Interior Department in FY 2013 may exceed $129 billion.

This estimate, however, is based solely on an estimate of carbon pollution from oil, gas, and coal combustion, which amounted to 1.2 billion metric tons, equal to the annual emissions from 315 coal-fired power plants.  Taking into account indirect emissions of carbon, particularly methane leaks from natural gas development, total carbon costs may exceed $179 billion.

“Without an assessment of carbon costs, Interior’s assessment of fossil fuel benefits is completely off base and worse, is misleading to the public,” said Nichols.  “It’s time for the Department to come clean with Americans, to honestly account for the climate impacts of its fossil fuel management program.”

Guardians’ report also comes as the Interior Department is increasingly under pressure to disclose climate impacts associated with its public lands and minerals management activities.  In a recent federal court ruling in which WildEarth Guardians was a plaintiff, the Department’s decision to sell millions of tons of coal in western Colorado to Arch Coal was found to be illegal on the basis that carbon costs were overlooked.

Although the report acknowledges uncertainties, such as around the precise value of carbon emissions, the amount of methane leakage, and the amount of overall carbon pollution associated with fossil fuel development, such uncertainties underscore the need for thorough accounting, according to Guardians.

The report recommends that the Interior Department start quantifying carbon costs when assessing the benefits of the fossil fuel development it oversees to ensure that benefits, if any, are accurately disclosed to the American public. 


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