Missing the game


Fourteen oil-and-gas producing states have joined Indiana in supporting the country’s major oil companies in their effort to fend off a climate change litigation begun by the cities of San Fransisco and Oakland.

Alaska is not among them though the potential threat to state oil revenues is huge. The Alaska Department of Law says it isn’t participating because it never got invited to intervene. 

The two California cities want BP, Chevron, ConocoPhillips, Exxon Mobil and Royal Dutch Shell to establish a fund to pay the costs of repairing local infrastructure that might be affected by global warming. The costs could be in the billions in California alone.

Chevron, the lead defendant in the case, tried to get the suit dismissed on the grounds it targets oil and gas production when the real issue in the climate debate is carbon dioxide emissions from the use of those fuels.

“CHEVRON’S LAWYER, SPEAKING FOR MAJOR OIL COMPANIES, SAYS CLIMATE CHANGE IS REAL AND IT’S YOUR FAULT,” The Verge headlined after U.S. District Judge William Aslup held a March hearing.

Since then, more communities and counties around the country have trooped into the federal courts with lawsuits mimicking those filed by San Fransisco and Oakland. Boulder and San Miguel counties in Colorado last week sued Exxon Mobil and Suncor, a Canadian oil company, claiming the Western snowpack was shrinking, hurting the state’s water supply and agriculture, and threatening its $5 billion ski industry.

The litigation is similar to that filed against tobacco companies years ago. San Fransisco and Oakland argue the oil companies knew about global warming and yet continued to produce oil and gas in a way that constitutes “a ‘public nuisance’ that the federal judiciary should enjoin.”

To amend for willfully contributing to global warming, the pioneering lawsuit argues, the companies should be required “to fund a climate change adaptation program for San Francisco consisting of the building of sea walls, raising the elevation of low-lying property and buildings and building such other infrastructure as is necessary for San Francisco to adapt to climate change.”

The suit argues the oil companies “borrowed the Big Tobacco playbook in order to promote their products.” At the Aslup hearing in March, The Verge reported, Peter Frumhoff, chief climate scientist at the Union of Concerned Scientists, charged that “tobacco companies for years said that ‘We’re just making the cigarettes; people are choosing to smoke.'”

Courts backed that argument, Frumhoff added, until they were overwhelmed by public opinion.

Costly and complicated

Tobacco, however, doesn’t power the national economy.

Two days after the Boulder case went to court, the attorney general for the state of Colorado joined with Indiana in its friend-of-the-court brief in opposition, arguing that the implications of any ruling against the oil producers could set a precedent reaching far beyond their operations.

“As utility owners, power plant operators and generally significant users of fossil fuels, states and their political subdivisions themselves may be future defendants in similar actions,” the Colorado brief argued.

The Denver Post aggressively weighed in on Friday. It offered this warning in an editorial:

“Without fossil fuels, transportation would stagger to a halt, agricultural productivity would plummet, millions would suffer from cold, heat and hunger, and untold legions would suffer premature death.

“That’s why any comparison between fossil fuel companies and the tobacco industry, whose product is a health disaster with no redeeming economic value, is so wide of the mark. And yet officials from the city of Boulder, Boulder County and San Miguel County who are seeking damages in a recently filed climate lawsuit against ExxonMobil and Suncor had no trouble invoking this false equivalence in defending the litigation.

“Such lawsuits are especially unfortunate in a state like Colorado where tens of thousands of people work in a vibrant energy industry and understandably do not consider themselves engaged in a malignant occupation. And yet when the companies they work for are stigmatized and even demonized for engaging in commerce still critical to our economy, by extension so are they.”

Vice offered the opposing view when the San Fransisco-Oakland suit was first filed in 2017:

“Successful litigation could help drive Big Oil out of business, accelerate the rise of low-carbon competitors and remove a major source of global emissions – things that would make us considerably less screwed when it comes to climate change.”

Oil-free Alaska

Alaska would appear to be the state with the most to lose if oil companies are hit with big costs to fund climate-change remedies. Most of the 49th state’s budget is funded by oil revenues, and those revenues would decline significantly if oil companies were ordered to pick up billions of dollars, or hundreds of billions of dollars, in climate-change costs across the country.

And if Big Oil went out of business, as Vice envisions, Alaska would be in a world of hurt.

Aware of the potential dangers, Texas, Oklahoma, Louisiana, and Wyoming are all parties to the litigation. But Alaska has been a non-participant in most national, legal action of late.

Anchorage Attorney General Jahna Lindemuth indicated earlier this month the state was staying out of the national tussle over the Affordable Care Act because she couldn’t decide which side to  join.

Spokeswoman Marie L. Bahr had a simpler explanation for the latest decision to stay on the sidelines as the courts argue a case with potentially huge implications for the 49th state.

“Alaska was not asked to join this lawsuit,” Bahr messaged.

It is an election year and Lindemuth’s boss – Gov. Bill Walker – is walking a tightrope in his bid for re-election.

In September, he rolled out a 20-member Climate Action for Alaska Leadership Team to confront climate change in Alaska. But he has also advocated for more Alaska oil drilling, a costly proposition for the oil companies in the 49th state, because of Alaska’s dependence on oil revenues.

“We are in a significant fiscal challenge. We have villages that are washing away because of changes in the climate,” Walker told BBC News in 2015.

“I don’t see anyone putting together contribution funds to help move [the village of] Kivalina; that is our obligation, we stand by that — we need to figure out how to do that. But those are very expensive — we have about 12 villages in that situation.”

Since then, nothing has changed to alter the situation facing badly located coastal villages in Alaska, and though state oil production has been creeping upward after years of decline, there is no sign the state can produce enough additional oil to fund relocating any villages.

At the moment, the state isn’t collecting enough oil revenue to fully fund its budget. And costs of moving Kivalina alone have been estimated at upward of $100 million or about $250,000 for every resident of the community. 

The costs of moving other villages are similarly staggering, and the state or federal government has to foot the bill because the villages can’t. Even if some entity were to loan them money to move, they could never pay it back because they have no economies.

The lack of economic opportunities in rural Alaska is one of the biggest issues facing the 49th state, but climate change is a topic more often discussed by villagers who sometimes see themselves as victims of the modern world.

Alaska politics

A traditional subsistence economy was shattered by the arrival of firearms, internal combustion engines and cash.

Remote north and western Alaska  – a 395,000 square-mile-area bigger than Japan, Germany and Great Britain – is today home to about 60,500 people who “depend on government for 71 percent of their personal income,”  University of Alaska Anchorage economist Scott Goldsmith reported in 2008. “That share would likely be closer to 90 percent if it also included income that indirectly depends on government spending. Government supports not only public but also many private jobs.”

Economically, nothing has changed in rural Alaska since Goldsmith’s report was written.

Politically, however, that small block of rural Alaskans has become very important. Alaska political strategists from both parties agree Walker, a one-time Republican gone rogue, and Lt. Gov. Byron Mallott, a longtime Democrat, need to sweep rural Alaska to have any hope of winning re-election.

Still, they can’t afford to lose many voters in urban Alaska where the faltering economy is the big issue of the day. And that economy largely revolves around oil.

When Walker rolled out his climate leadership plan last fall, Juneau Empire reporter James Brooks noted that the September 2018 deadline for the group to file its report is “two months before the statewide general election and one month after the state’s primary election.

“Walker identified climate change as an issue when he ran for governor in 2014, and one section of his transition team was tasked with making recommendations to address climate change.

“Despite that, Walker hasn’t taken any significant actions on the topic, and his official state website contains few mentions of the topic.”

The reasons for that are simple. Climate-change is thorny issue for the governor.

Joining the states backing the oil companies in climate change litigation would be popular in urban Alaska, but win Walker no fans in rural Alaska. Joining San Fransisco, Oakland, Boulder and others going after the oil companies to make them pay for rising sea levels would be hugely popular in rural Alaska, but hurt Walker badly in urban parts of the state.

That no other states or cities asked Alaska to get involved in this litigation might be the best thing for which the governor could hope.










11 replies »

  1. Solar, wind and pumped hydro storage are cheaper and a heck of a lot better for the planet and communities than fossil fuels. It’s time for Alaska to move into the 21st century….

    • Cheaper and better than what? Precisely how do you define those terms.

      Solar and wind are far more expensive and far less reliable than coal, natural gas or nuclear. That expense and unreliability leads directly to dead people, usually single income pensioners, elderly, poor and disabled who must choose between not freezing to death or eating. Unfortunately they end up not being able to do both, as the Brits found out. They lost 20,000 more people dead during a harsh winter.

      We are a cold country and heat engines are important. Solar and wind won’t hack it. Cheers –

      • Eco says “fossil fuels” and he could be right, too. We have a lot of cheap natural gas but still don’t know the costs associated with delivering it. Appears like the only way consumers are going to get it “cheap,” is by some huge gasline that needs an export market for it to work and even then its not a done deal.
        I suspect that solar won’t cut it either but who knows about wind IMO?

      • How do we define “cheaper” and “better”? Cheaper means renewable energy costs less to the consumer. Better means renewables are more reliable and do less short-term and long-term damage (including deaths) than fossil fuels.

        In Iceland energy is 100% renewable and costs 5.4¢ per kWh. In Anchorage, energy is 85% gas turbine generated and costs about 20¢ per kWh. Renewables in Iceland support very large server farms which require 100% reliability. My electricity was out here in Anchorage just yesterday.

        You’re obviously pretty far behind in energy costing. It’s changed considerably in the past few years. Lazard Investment Bank does an annual LCOE which shows that even the most expensive wind is now cheaper than the cheapest coal. Grid scale solar, too. And both are cheaper than even gas combined cycle. Nuclear is out of sight expensive!

        And then you claim, “That expense and unreliability leads directly to dead people…”, and back it up with a blog? Really? How about instead we use a couple more reliable sources?

        Iceland and 100% renewable Norway are cold countries too, and they do just fine without fossil fuels.


      • good points, but as always it isn’t that simple.
        Iceland has access to huge geothermal sources, which most places do not, and Norway has damned the shit out of its creeks and rivers, which is a problem in many places in Alaska. we love our salmon.
        there are some workarounds, and we are clearly under utilizing wind-hydro synergy.
        cheaper, meanwhile, is a two-way road with production on one end and consumption on the other. since LEDs appeared and underwent rapid, radical tech improvements, we’ve been reducing a lot of demand in this country.
        coal sucks. no doubt about that. but i’d expect it’s going to be a long time before we have a battery powered snowmachine. fossil fuels are wonderful substances.

  2. Walker has been a Big Oil hater long before he was governor. No surprise he won’t stand with Big Oil now. But no problem, when we give away our gas resources to China for a pittance, all of our fiscal problems will be over. Right Bill?

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