IEEFA response to the U.S. Chamber of commerce analysis of the “keep it in the ground” movement
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Key Findings
From the outset, the Chamber’s complaint seems quite peculiar because the environmental movement is not the sole proponent of keeping fossil fuels in the ground. In fact, prominent coal analysts and coal industry leaders have, during the past few years, called for the closing of mines.
Current environmental opposition to fossil fuel facilities, driven in large part by climate-change issues, has changed the traditional notion of regulatory risk. Regulators must now consider a broader dialogue, more severe scientific assessments and the existence of new alternatives.
It is virtually impossible to press a meritless environmental claim through this system of checks and balances.
Executive Summary
The U.S. Chamber of Commerce has issued a facts-on-fire report entitled Infrastructure Lost: Why America Cannot Afford to ‘Keep it in the Ground.’ The report amounts to a complaint that opposition to fossil fuel projects by the environmental movement, and in particular by the Keep it in the Ground (KIITG) movement, has cost the economy to lose GDP, jobs and taxes. As evidence, the complaint cites 15 examples of organized opposition to ports, pipelines and power plants, and also examines the New York State fracking ban. The report calls for streamlining the environmental regulatory oversight process to curb what it sees as an abuse of those laws and rules.
The report asserts that delay or cancellation of projects was caused by campaign activities that were independent of and separate from any financial considerations:
The fundamental aim of KIITG represents a sharp departure from decades of environmental advocacy and policy that sought to ensure the production and use of energy resources was carried out as safely and cleanly as possible. The KIITG movement rejects this longstanding tenet of environmental responsibility in favor of the complete elimination of natural gas, oil, and coal from our diverse energy mix.
Furthermore, it aims to do so through any means necessary, employing a broad range of tactics (public relations, litigation, permitting and regulatory processes, divestment pressure, civil disobedience, and “direct action” campaigns) to block a broad range of projects (leasing, production, transport, use, manufacturing and refining, exports, etc.), regardless of the actual merits of any safety or environmental concerns associated with those projects.
This loose-on-the-facts approach is designed to spur policy action in Washington to further weaken environmental rules. In response, the Institute for Energy Economics and Financial Analysis (IEEFA) uses an energy and financial lens to examine the Chamber’s report and its efforts to affect policy.
IEEFA finds that the Chamber’s analysis fails to grasp the changing nature of political and economic risk for fossil fuel projects in the U.S. It does not recognize how the growth of low-priced renewable energy is influencing energy markets, and lacks a fundamental understanding of how local communities may find it in their best interests to reject industry plans. Finally, we find that even if the Chamber succeeded in its goal of eviscerating environmental protections, it would not be able to overcome the market forces that threaten the profitability of the fossil fuel sector in general, and many fossil fuel projects in particular.
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