Friend / Enemy

7/15/14
 
   < < Go Back
 

by Brad Wieners,

from Bloomberg Businessweek,
7/3/14:

Former REI Chief Sally Jewell is Obama’s pro-fracking climate czar. Whose side is she on?

Sally Jewell has just seen a ghost. Several, really. As she enters the aisle between two rows of eight-foot-tall shelving units, the U.S. Secretary of the Interior has come face to face with more than a dozen severed tiger heads. She lets out a quiet “ooh,” somewhere between gasp and sigh. The heads are all taxidermied—jaws open, fangs bared, startled eyes, comprising a gallery of silent roars. A U.S. Fish and Wildlife (USFW) officer tells Jewell how few of these cats remain in the wild; such trophies can fetch thousands of dollars on the black market. Jewell listens and, moving down the aisle, reflects on how values take time to change—until they do. When she was little, she recalls, her gram owned a snow leopard coat. Later, when her grandmother learned it was from an endangered species, she donated it to a zoo.

The policing of poachers, smugglers, and exotic pet owners is but one of the federal functions Jewell supervises, and although it keeps 205 agents busy full time, it’s one of the smaller ones. Interior manages more than 500 million acres, one-fifth of all the land in the U.S., on an annual budget of $12 billion. It controls 23 percent of the nation’s energy supply—mostly oil, gas, and coal on federal lands—and last year disbursed $14.2 billion in energy revenue to federal agencies and state, local, and tribal communities. Interior is also the largest wholesaler of water in 17 Western states, a life-and-death matter for thousands of farms and rural communities. And, of course, it runs more than a thousand parks, monuments, and wildlife refuges, natural and cultural attractions estimated in 2011 to contribute, through tourism, $48.7 billion to the economy. In all, the department estimates that its “value added” economic activity and production contributed $200 billion to the U.S. economy during 2013. (Interior appears to prefer this “value added” figure to straight income because it still spends more than it takes in.)

The agencies that comprise Interior are almost comically at odds with one another. The Bureau of Reclamation operates dams that disrupt fisheries. The USFW endeavors to keep fisheries robust. The U.S. Geological Survey studies rising seas’ impact on coastal areas. The Bureau of Ocean Energy Development facilitates deep-sea drilling permits. The department restores Superfund sites, most notably at the Rocky Mountain Arsenal National Wildlife Refuge, where the U.S. military made sarin gas during World War II. On the Rocky Mountain Front, the department promotes fracking, a drilling technique that environmentalists contend is toxic. “One of the best ways to tell if we’re doing something right is when both sides are ticked off at us,” Cecil Andrus, President Jimmy Carter’s Interior secretary, famously told an assistant.

Jewell, 58, seems uniquely qualified to balance these contradictions. The former CEO of Recreational Equipment Inc., a Seattle-based outdoor gear and apparel retailer, she worked previously as a commercial banker, starting at a regional bank assessing the value of oil and gas reserves as debt collateral.

When asked if her values as an outdoorswoman and conservationist conflict with her fossil fuel expertise, Jewell says, “There’s no reconciling to be done.” It’s the day after her repository tour, and she’s sitting in the lobby of a Hampton Inn & Suites in Las Cruces, N.M. “I’m going to be flying home on an airplane. Planes burn fossil fuels. So I don’t think we can afford to be hypocritical,” she says. “I just think we need to open our eyes and understand that these things have tradeoffs. And we need to apply our ingenuity to a future that we didn’t understand in the ’70s and ’80s, when we were really focused solely on fossil fuels.”

Coming in as an outsider and taking on Interior’s unwieldy portfolio, Jewell has performed admirably, says Bobby McEnaney, deputy director for the Western Lands and Energy Project at the Natural Resources Defense Council. “She’s saying that in exchange for expediting energy permits, she’s going to follow through on safety, inspections, and enforcement, which is a big deal after 30 years of ‘drill first, ask questions later,’ ” he says. That said, McEnaney adds, “We do not share her optimism about responsible fracking. The way it’s being done now is not in a responsible fashion.”

Where Jewell is likely to make her greatest impact is reforming federal land energy development. Her agenda includes reauthorizing the Land and Water Conservation Fund, a 50-year-old program that uses fees from offshore drilling permits to expand national parks or even build local ball fields. Jewell wants the government to continue to raise money from energy producers to pay for sea walls, wetlands restoration, and other measures that will make communities more resilient to climate change. She also wants to reform oil and gas permitting so that industry gets permission faster, while underwriting environmental impact evaluations and inspections Interior can’t afford. And it’s not just for fossil fuels, Jewell says. The U.S. needs the same arrangement—faster permit processing in exchange for fees from industry for safety analysis—from wind and other renewable energy producers.

For offshore oil and gas production, Jewell says, it works. Onshore, it doesn’t. “So we’re criticized for not processing permits fast enough,” she says. “And we have a report from the [U.S. Government Accountability Office] saying we’re not inspecting high-risk wells. And we can’t do that because we don’t have the resources. So we’re working with members of Congress and in the industry to say let’s be rational about matching supply and demand.” She insists it’s not a partisan issue.

Some of those high-risk wells in the GAO report are fracking operations.

Can fracking be done responsibly? “Absolutely,” Jewell says.

“One of the things that I have observed coming in here,” she says, “is that many of the regulations we have go back 30 years. Thirty years ago was the time I was actually working in the industry. So we know that we can employ some new practices that are less impactful on the environment, which is why we are undergoing a lot of review and change in our regulations, particularly around things like fracking, but also methane capture.” The technology exists, Jewell says, to collect both the gas now flared and the methane leaked from the wells—it’s just a matter of cost.

Jewell is cautiously optimistic about the renewal of the Land and Water Conservation Fund. She is working with Democrats and Republicans to get it reauthorized and to tie its appropriations to rural communities that lose out on such things as property tax revenue. “It’s a challenge working through Congress,” she says, “but you find common ground on things that are important to [each of the representatives] and, from there, find a path forward.”

More From Bloomberg Businessweek: