Sharpe: The high cost of environmental extremism

Farmington Daily Times


George Sharpe, Merrion Oil and Gas investment manager


If you are a card carrying member of the Sierra Club or EarthJustice or any of the dozens and dozens of environmental obstructionist organizations, at least you are consciously choosing to support their agenda.  If you are not a contributor, don’t kid yourself, you still pay for it.

Whether it is the group that is fighting the leasing near Chaco National Park (apparently a 10-mile buffer doesn’t quite satisfy them) or the conglomeration of organizations battling the Dakota Access Pipeline, their cost to our society is both real and significant.

Let’s take this crazy pipeline issue as an example.  The Standing Rock Sioux Reservation is claiming the pipeline will threaten their water and decimate their cultural resources and spiritual sites.  Ironically, it doesn’t even cross their reservation.  The tribe and their environmental friends sued the U.S. Corps of Engineers, who had approved the line, but the suit was dismissed in District Court.

However, the Obama Administration has recently stepped in to revoke the permit, even though the $3.7 billion pipeline is almost completely built.

The Tribe and the environmental organizations who support their protest and lawsuit don’t want this pipeline optimized or re-routed, they want it stopped.  They aren’t concerned about minimizing the environmental footprint, they want to stomp on its toes until it goes away.  At the end of the day, they are stomping on YOUR toes.  Let’s count the costs, all of which you eventually bear in one way or another.

1. First, there is the cost of complying with existing regulations themselves.  Arguably, the regulations are well meaning and for our collective protection, but they don’t come without some significant costs.  Energy Transfer Partners, or ETP, the company building the line, conducted 559 meetings with communities, elected officials and other organizations to receive input. They conducted archaeological surveys on the entire route, and moved the route 140 times to avoid potential cultural sites.  If the Sioux had a pottery shard somewhere, this line jogged around it.  Finally, they jumped through the significant environmental hoops of the Corps of Engineers before receiving their approval to proceed.  They have spent millions of dollars doing the paperwork permitting dance, only to have their dance partner slap them in the face so to speak, after the dance was literally over.  

2. Second, there are millions being spent by the environmental organizations themselves, not only in support of the protest, but in the numerous accompanying lawsuits; their most potent weapon of choice. Arguably this is a cost born, not by all of society, but only by their financial supporters.  However, to the extent that those financial supporters give to Earth Justice versus, say, feeding a homeless person, those are resources that could be used in a more beneficial way.

3. Regarding the lawsuits, huge sums have been spent defending the project, both by ETP and by the Corps of Engineers, only to have Obama step in and overrule the judge.  As a side note, I wonder what we pay Obama each day to make such decisions.  Add it to the total.

4. Further on the lawsuits, it is death by a thousand cuts.  While the cost of the lawsuits themselves are significant, it is the sheer number and the relentless nature of the extremists that wear a business down.  The environmentalists certainly prefer to obstruct, but if they can’t get that, they will settle for the title of “environmental delayers”.  The pipeline had all approvals and was supposed to start operation on Jan. 1.  Not a chance now.  With $3.7 billion invested, even if their cost of money is a modest 4 percent, the delay is costing ETP almost $3 million per week.

5. According to a Daily Times article, our own Navajo Nation was going to send two busloads of volunteers to join the protest.  I know, I know, the Navajo Nation is sovereign and can spend their money how they choose.  But two-thirds of their money comes from the federal government, so again, we all foot the bill.

6. And what about all those people at the protests?  Apparently none of them have a day job?  Who, exactly, is paying for their food stamps and for their subsidized health care?  Who is paying for the sheriff's officers keeping the peace?  Again, that would be taxpayers like us and ETP, the very company they are protesting against.

7. Worst case scenario, what if the movement succeeds and obstruction happens?  Certainly ETP will sue the federal government for reversing their decision after ETP had already spent $3 billion.  We pay that too, of course.

What WON’T happen is that all the protesters will stop using oil and its products.  No, they will snap shut their plastic computer cases, roll up their nylon tents, and drive their SUVs back to la-la land, just SURE that they have helped save the world from evil “big oil”.  Meanwhile, the oil they demand will still find a way to their gas tanks, now via energy burning, air polluting trains and trucks instead of safely underground in a pipeline.

And they will curse big oil for the higher gas prices.  Oh, the irony!

In closing, the environmental extremists are intent on stopping the production of fossil fuels.  Even if they are not successful, it costs both industry and the government dearly to deal with their protests and suits, all of which you ultimately pay, whether in taxes or at the pump.  So if you think the likes of the Sierra Club or Greenpeace are doing good, it is time to think again. 

George Sharpe is investment manager for Merrion Oil & Gas in Farmington. He writes a monthly column for The Daily Times' Energy magazine.