Polluters should pay for harm done

On March 26, 2024, a cargo ship from Singapore, the Dali, lost power for three minutes, and rammed into Baltimore’s Francis Scott Key Bridge, snarling traffic for the Washington-Baltimore metropolitan area, killing six, bringing Baltimore’s shipping industry to a standstill, while disrupting shipping up and down the East Coast.

Instead of a cargo ship, imagine one of the supertankers that carry billions of gallons of crude oil and refined petroleum products through Washington’s Salish Sea losing control for a few minutes and ramming into a bridge or grounding, much as one of Washington’s ferries recently did. But instead of annoyed passengers spilling out, millions of gallons of black crude spill into the Sea.

Could it happen?

One analysis has determined there is a 10% chance of a “worst case” spill and a 42% chance of an “average case” spill in the next 50 years. Indeed, it has happened before:  In March of 1964, a tugboat towing a barge loaded with gasoline from the Ferndale refineries lost control of a barge carrying over 2 million gallons of gasoline, diesel, and stove oil. The barge ran aground near the Quinault Indian Reservation. The penalty paid by the shipping company for this accident which destroyed fish and wildlife for miles? A mere $8,000. In fact, we know such accidents have happened at least 12 times since 1964, with similarly paltry cash settlements paid by the companies responsible.

Newly released data from the Maryland Chamber of Commerce found that 64% of small businesses around Baltimore County say they lost revenue due to the collapse, a loss of around $15 million per day. The cost to restore the bridge is expected to exceed $1.7 billion. The families who lost their loved ones? That loss can never be repaid.

The natural capital of our area is one reason tourists come from miles around to enjoy what Port Townsend has to offer: Clean air, clean beaches, sparkling waters and views of snowcapped peaks. Our natural resources are priceless. Yet every day, we are forced to accept the unacceptable risk that all of this may be lost and that, if it is, we will all pay while the polluter will pay minimally or perhaps declare bankruptcy. It doesn’t have to be this way.

At Center for Sustainable Economy, we have proposed a commonsense policy remedy for the routine externalization of risks by the fossil fuel industry onto the public: We call the policy “fossil fuel risk bonds.” Now being put in place in Multnomah County, Oregon, and King County, Washington, and being considered for statewide adoption in Washington, this policy remedy would force the fossil fuel industry to internalize the risks now externalized on us all.

These risks take place at every step of the process from extraction of fossil fuels, where earthquake and toxic pollution risks are common, to transportation to storage to combustion, in the form of air pollution and climate change. These uncompensated physical and economic damages to land, air, and water that communities routinely absorb associated with leaks, spills, accidents and abandonment of that infrastructure is a hidden subsidy we all pay at great cost to our health and wellbeing.

In 2022, the International Monetary Fund calculated that the U.S. subsidized fossil fuels with $757 billion in subsidies. The vast majority of that amount, $754 billion, comes in the form of implicit subsidies, such as the negative health impacts and environmental degradation mentioned above.

In 2023, the fossil fuel industry made over $100 billion in profits; the industry requires neither explicit nor implicit subsidies.  Instead, if we are to make the kind of rapid shift we must make in the age of dangerous climate change, we need to insist that the fossil fuel industry pay its fair share of the economic damages climate change and dirty infrastructure is imposing on all of us. . And that is what fossil fuel risk bonds begin to do without passing on those costs to consumers

Daphne Wysham is a Fellow at the nonprofit Center for Sustainable Economy, which is based in Port Townsend. For more information, write info@sustainable-economy.org.

Business, environment safety compatible

Recently, President Biden launched the second phase of his attack on domestic oil and gas production by effectively blocking leases in Alaska’s National Petroleum Reserve (ANPR). That follows last year’s reimposed ban on exploration in the Alaska National Wildlife Refuge (ANWR). Washington state benefits from Alaska oil leasing.

Both federal actions are ill-advised.

In the Wall Street Journal (WSJ), Alaska Sen. Dan Sullivan (R) quipped: “the Biden Administration has imposed more sanctions on Alaska than it has on Iran.”

The Interior Department just blocked new oil and gas leasing on 13.3 million acres in Alaska’s National Petroleum Reserve. Congress expressly set aside the region in 1923 for oil and gas development, but Biden ignores this saying drilling would disturb the Arctic’s ‘natural wonders,’ Sullivan added.

Energy development and environmental protection are not mutually exclusive. In fact, they are compatible and concurrent.

On Alaska’s North Slope, exploration and construction take place during the winter, over roads built on sheets of ice. When the ice melts, the roads disappear. Drilling and production have strong and long-standing environmental safeguards.

ANWR is not a place with towering snow-capped peaks and lush green forests. It is 19 million acres of frozen desert which is larger than the states of Massachusetts, New Jersey, Hawaii, Connecticut, and Delaware combined. 

Although the 1.5 million acres in ARWR, called the coastal plain, were set aside for future leasing in 1980, drilling would occur on less than 2,000 acres. That is like a small dot on an 8x10 inch sheet of paper. 

“The U.S. Geological Survey estimates this sliver of land contains at least 10.4 billion barrels of recoverable oil and 8.6 trillion of natural gas, and those estimates are probably conservative,” the Wall Street Journal editorialized last year. By comparison, Alaska’s second-biggest oil field, Kuparuk, holds about 2.5 billion barrels.

In fairness to Biden, in 2023 he greenlighted leases in the Willow area, a 500-acre site inside ANPR. When in production it is estimated to produce 180,000 barrels of oil daily---an amount equivalent to 27 percent of Washington’s refinery requirements.

“Meantime, the Russians, and Chinese are increasing investment in Arctic oil, gas, and mineral development,” Sullivan noted in the Journal.

Allowing new oil and gas leases would help our country long term, particularly Washington refineries, workers and state and local economies. Current crude supplies from Alaska’s North Slope are declining and refiners have looked elsewhere for replacement stocks, i.e., oil-by-rail from North Dakota and tanker shipments from foreign countries, many of whom are hostile to America.

Washington’s five refineries provide 4 percent of our nation’s processing capacity. With our state accounting for 2 percent of national petroleum consumption, in-state refineries produce quantities more than sufficient for Washington’s needs. Those refineries processed crude oil into 13 million gallons of gasoline, diesel, jet fuel and finished products each day.

Alaska crude comes to our refineries in double-hulled ocean-going tankers. Since the Exxon Valdez incident Prince William Sound in March 1989, state-of-the art redundant marine safeguards are aboard ships. Tanker crews have extensive safety and response training.

The crude, which is 12,000 ft. below ground, would be extracted by a widely used technique known as horizontal drilling. Production wells would be spaced a dozen feet apart yet would reach out for miles in different directions underground. The oil would then be piped to Prudhoe Bay and sent 800-miles south via the existing Trans Alaska Pipeline.

“With a multiplier of 12 percent, the total impact of our refineries was 25,000 jobs and $2 billion in personal income, according to The Washington Research Council.

That is good for our state and country..

Don C. Brunell is a business analyst, writer, and retired president of the Association of Washington Business. He is based in Vancouver, Washington, and can be contacted at theBrunells@msn.com.