Energy

Alaska conservationists see downsides to Manchin deal that’s being celebrated as a win in climate-change fight

Alaska Dispatch News

National environmental groups are urging swift passage of a newly released Democratic bill designed to combat climate change. But concessions included in the federal legislation would support the oil and gas industry, dampening the enthusiasm of some Alaska conservation groups.

The “Inflation Reduction Act of 2022″ was introduced Wednesday in a surprise deal between West Virginia Sen. Joe Manchin and Senate Majority Leader Chuck Schumer of New York.

The $370 billion measure provides incentives to increase renewable energy and reduce carbon emissions, while raising taxes on big corporations. It’s also designed to help fight inflation.

But in what’s seen as a concession to Manchin, a moderate Democrat who rejected a larger climate change package earlier this month, it creates opportunities for more oil and gas production.

It will reinstate three recently canceled oil and gas lease sales, two in the Gulf of Mexico and one in Alaska’s Cook Inlet, that must take place by year’s end.

It also does not include a measure stopping the oil and gas leasing program in the 19-million-acre Arctic National Wildlife Refuge, something some lawmakers and Alaska conservation groups have sought since Democrats took control of Congress and the White House in 2021.

The Alaska Wilderness League in a statement Thursday called the bill “generally welcome news” to fight climate change and reduce carbon emissions.

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But no bill “should be finalized without a provision to repeal the failed leasing program in the Arctic National Wildlife Refuge,” said Kristen Miller, the group’s conservation director. “We will explore every option to see this provision included in a final reconciliation bill.”

[What’s in, and what’s left out, of Democrats’ inflation-fighting package after deal with Manchin]

Bernadette Demientieff, head of the Gwich’in Steering Committee, advocating for Alaska Native people who hunt the Porcupine caribou herd that often calves in the refuge, said she was disappointed the measure did not take steps to prevent drilling in the refuge.

“I’m glad that they’re addressing climate change,” she said. “But you’ve got to involve the people that are spiritually, culturally connected to these lands when you’re making decisions like that.”

Not a ‘great tradeoff for Alaska’

Nicole Whittington-Evans, Alaska director at Defenders of Wildlife, said the bill has flaws when it comes to Alaska.

“I think the Alaska provisions will really greatly reduce our achievements, in terms of climate, with this deal,” she said.

The won’t allow an offshore lease sale for wind energy projects unless at least 60 million acres of waters are made available for an oil and gas lease sale in the previous year, she said.

“So that is very significant and really, you know, does not seem like a great tradeoff for Alaska,” Whittington-Evans said.

Others were more positive. Dyani Chapman, Alaska organizer with Environment America, said the bill provides “one of the best federal tools to tackle climate change.”

The bill provides billions of dollars in tax credits for solar panels, wind turbines and batteries.

Other measures could benefit Alaska, including funding to clean contaminated sites, she said.

“The bill obviously isn’t perfect from an environmental standpoint,” Chapman said. “But ultimately, this bill will do more to protect our climate than any legislation ever passed.”

Possible revival of Cook Inlet sale pleases industry groups

Kara Moriarty, president of the Alaska Oil and Gas Association, said the industry trade group is glad the Cook Inlet lease sale could return if the measure passes.

“While a lease sale is just the beginning of a very long process, Cook Inlet natural gas production is absolutely essential for keeping the lights on and homes warm during long Alaskan winters,” she said.

Rebecca Logan of the Alaska Support Industry Alliance, representing companies that support oil, gas and mining extraction, said the bill appears to balance support for renewable energy with oil and gas opportunities.

The group supports the call for a Cook Inlet lease sale. If the sale is held this year, oil and gas exploration could open up opportunities for the companies her organization represents, she said.

But she said the resource development industry also faces downsides in the proposal to increase taxes on large corporations to 15% and a fee on methane emissions. With inflation high, it’s a challenging time to put more burden on companies, she said.

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In spite of the Cook Inlet lease sale, Alaska’s Republican U.S. senators did not celebrate the newly announced deal. In an interview on Capitol Hill on Thursday, Sen. Dan Sullivan said he had not read the bill.

“If there’s a mandatory lease sale, I’m almost certainly for it,” he said. Speaking to the bill more generally, however, he said, “big tax increases as we’re heading into a recession is, I think, terrible policy.”

Sen. Lisa Murkowski, who has tested positive for COVID-19, did not respond to a request for comment. Her office on Thursday released a short statement about the nation’s gross domestic product shrinking for a second-straight quarter.

[US economy shrinks for a second quarter, raising recession fears]

“The current economic reality is hurting American families and businesses,” she said in the statement. “This is not the time to spend or tax hundreds of billions more.”

While the bill would increase taxes on major corporations, it does not raise taxes on families or businesses making less than $400,000 a year, the Associated Press reported.

Liz Mering, advocacy director for Homer-based conservation group Cook Inletkeeper, said it’s “very disappointing” that a Cook Inlet sale could be back.

The Biden administration canceled the 1-million-acre sale, and the Gulf of Alaska lease sales, just two months ago, citing a lack of industry interest. Cook Inletkeeper at the time said the decision would keep climate-warming fossil fuel in the ground. The lease sales were widely opposed by the general public nationally, she said.

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“It was a victory because people had their voices heard, and so that makes this feel even harder to have this back on the table,” Mering said.

The Daily News’ Alex DeMarban reported from Anchorage, and Riley Rogerson reported from Washington, D.C.

Alex DeMarban

Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or alex@adn.com.

Riley Rogerson

Riley Rogerson is a reporter for the Anchorage Daily News based in Washington, D.C., and is a fellow with Report for America. Contact her at rrogerson@adn.com.

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