oil rigBy Jessica Wentz and Michael Burger

The Bureau of Ocean Energy Management (BOEM) has proposed a leasing program to continue oil and gas production on the Outer Continental Shelf (OCS) for the next five years. BOEM estimates that the program could result in the production of up to 13,139 million barrels of oil and 39,218 billion cubic feet of natural gas. Unlocking these new carbon reserves could undermine our ability to achieve key climate goals, including the internationally agreed upon target of  limiting global warming to “well-below” 2 °C and preferably 1.5°C. Unfortunately, the draft programmatic environmental impact statement (PEIS) for the lease sale plan fails to address this critical issue.

Earlier this week we submitted a comment letter urging BOEM to consider the following key issues in the final PEIS for the OCS leasing program:

  • Downstream GHG Emissions: The draft PEIS contains no discussion of emissions from the transportation or end-use of oil and gas produced under the proposed program. This is inconsistent with federal guidance and case law requiring agencies to consider such downstream emissions in environmental review documents for projects involving fossil fuel extraction. (See our working paper on this topic). We urge BOEM to include emissions from both transportation and end-use in its GHG inventory and to use this information to decide whether and how to proceed with the leasing program. Accounting for end-use emissions is particularly important given the scale of this action—using data from EPA, we estimate that the oil and gas produced under the program could generate up to 8.3 billion metric tons of CO2 when combusted. This is equivalent to the GHG emissions generated from 1.7 billion passenger vehicles in a year, or the electricity use in 1.2 billion homes in one year.
  • Social Cost of Carbon: BOEM conducted a cost-benefit analysis for the proposed program that is incorporated by reference into the draft PEIS. Without any explanation, BOEM excluded greenhouse gas emissions from its valuation of environmental costs. We urge BOEM to use the social cost of carbon and other available tools to assign a cost value to both direct and indirect greenhouse gas emissions from the proposed program so that these costs are fully accounted for in its decision-making process.
  • Consistency with Federal Policies and Commitments: Our final recommendation is that BOEM consider whether the proposed program, in light of all greenhouse gas emissions, is consistent with federal policies and commitments, including: (i) our Intended Nationally Determined Contribution (INDC) to the UNFCCC, under which we have pledged to reduce economy-wide greenhouse gas emissions by 26-28% below 2005 levels by 2025; (ii) the attainment of the 2 °C / 1.5 °C global warming target (taking into account the fossil fuels that must be left in the ground to meet that target); and (iii) the Clean Power Plan, which will drive a shift towards cleaner fuel sources in the electricity sector.

We also highlight a cross-cutting issue in our comment letter—specifically, that BOEM should use an accurate baseline when evaluating the net increase in greenhouse gas emissions from the proposed program. BOEM has concluded, somewhat counter-intuitively, that additional oil and gas drilling on the OCS will result in fewer environmental impacts than the “No Sale” alternative. This conclusion is based on predictions about how energy demand will be met if the program is not approved. Using the EIA’s 2015 Reference Case, BOEM predicts that, under the No Sale alternative, most of the foregone OCS oil and gas would be replaced with other fossil fuels, including domestically produced coal and oil and gas imports.

The problem with the EIA Reference Case is that it does not account for present and future actions aimed at reducing fossil fuel production and consumption in the United States, such as the Clean Power Plan and the federal moratorium on new coal leases. In fact, it reflects a scenario in which we would completely fail to meet our domestic and international climate goals. To illustrate this point: under the Reference Case, the United States will have 445% higher greenhouse gas emissions than the level we have committed to in our INDC. As summarized by one author, “BOEM is dismissing the climate impact of drilling for fossil fuels… because its model assumes we will not act on climate and we will accept a catastrophic level of climate change.”

The goal of all of these recommendations is to ensure that BOEM conducts a complete and accurate assessment of greenhouse gas emissions from the proposed program and the corresponding policy implications. While BOEM is not legally required to act on this information, such an assessment could certainly influence its decisions about how and whether to proceed with the leasing program. Perhaps as importantly, such disclosure would inform the public about the full extent of the program’s potential climate impacts.

There is ample precedent for federal and state agencies undertaking downstream emissions analysis. Downstream emissions have factored or are currently factoring into several government decision-making processes, including:

  • Keystone XL: In the EIS for the proposed Keystone XL Pipeline, the State Department evaluated downstream emissions and concluded that the lifecycle emissions from production, transportation, refining and end-use of the transported oil would total 147-168 million tons CO2e per year. President Obama rejected the proposal, stating that: “ultimately, if we’re going to prevent large parts of this Earth from becoming not only inhospitable but uninhabitable in our lifetimes, we’re going to have to keep some fossil fuels in the ground rather than burn them and release more dangerous pollution into the sky.”
  • Coal leases on federal lands: Earlier this year, the Department of Interior announced a moratorium on new federal coal leases pending a programmatic environmental review of the coal leasing program, which will include an assessment of downstream emissions. This decision was no doubt motivated by significant public outcry about the government’s failure to fully account for downstream and cumulative emission impacts from federal coal leases as well as several court decisions requiring agencies to conduct this type of analysis.
  • The Colorado Roadless Rule: In 2015, the US Forest Service released a revised draft EIS for a rule that would open 20,000 of protected lands to coal exploration and mining activities. The EIS was revised to include downstream emissions and the social cost of those emissions, pursuant to a court order. Based on the new analysis, the Forest Service concluded that the “no-action might be the preferred alternative” due to the global impacts of the emissions that would be generated as a result of the proposed action. The agency has yet to make a final decision about the proposal (and some analytical problems remain in the revised EIS, as detailed in this blog post)—but this statement is nonetheless promising, insofar as it demonstrates a greater level of deliberation and caution about the potential impacts of the proposal on climate change.
  • Coal export facilities: Last month, Cowlitz County and the Washington State Department of Ecology published a draft EIS for the proposed Millennium Bulk Terminals-Longview, a coal export terminal on the Columbia River. The agencies estimated emissions from the transportation and end-use of the coal exports (taking into account the impacts of exports on price and energy demand) and concluded that the project would result in a total net increase of 37.6 million tons of CO2e under a mid-range scenario, and up to 442 million tons of CO2e under the upper bound scenario. Notably, unlike BOEM, the agencies did account for the impacts of the Clean Power Plan on energy demand and fossil fuel substitution. The draft EIS concluded that, even with greenhouse gas mitigation measures, the coal terminal’s projected contribution to greenhouse gas emissions would be significant and adverse. Again, the agencies have yet to issue a final decision, but this statement may affect their deliberations.

More information about how agencies account for greenhouse gas emissions and climate change in environmental reviews is available on our Environmental Impact Assessment Resource Page.

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