Turning national parks into corporate profit centers

Given the corporatization of ever more commons, we may yet be visiting Golden Arches National Park or Disneyland Dinosaur National Monument. Even if the most extreme right-wing plans to auction off public lands don’t ever come to fruition, ongoing neglect can only promise creeping corporate colonization of the United States National Park system.

Commercialization is still relatively minimal in national parks, but worrying signs are there. Infrastructure improvements in Glacier National Park in Montana, for example, have been accomplished through funds raised by the Glacier National Park Conservancy, which gets much of its funding through “business partners.” The list of businesses are mostly local and likely are motivated by a desire to maintain the park so as not to damage a tourism-dependent local economy. Such a motivation is not unreasonable, but if the underfunding of parks like Glacier gets more severe, the temptation of such private conservatories to reach out to bigger and more powerful national corporations is not likely to be avoided.

Giant corporations are likely to see “donations” to parks as a marketing ploy. Will we begin to see corporate logos in the parks? Outright corporate sponsorship of parks, in the manner of sports stadiums? Will the parks be expected to show a profit? This may sound outlandish, but we are talking about the United States here: A country in which governments ask for advertising dollars and borrow money rather than taxing corporations or the wealthy, and where pervasive corporate ideology insists that “private enterprise” runs everything better.

Aftermath of a fire in Yosemite Park (photo by Pete Dolack)

Aftermath of a fire in Yosemite Park (photo by Pete Dolack)

The idea that a park should generate a profit actually already exists. In New York City, the Brooklyn Bridge Park along the waterfront near downtown Brooklyn actually is expected to be profitable. This is not a joke: A high-rise luxury condominium building is being built inside the park to pay for its maintenance.

When the government runs something for the common good, it doesn’t need to generate a profit as a private enterprise does — privatization, or creeping “public-private partnerships,” inevitably make a good or service more expensive. And a favorite tactic of right-wing ideologues is to starve a government service of funds so it doesn’t work well, then demand it be taken over by a corporation (and usually sold at a fire-sale price).

Whatever the reasons may be, the neglect of national parks has gone on for so long that the backlog of deferred maintenance is now $11.5 billion. To put that figure in perspective, the entire fiscal year 2015 budget for the National Park Service is about $2.6 billion.

This neglect is bipartisan — the maintenance backlog reached $5 billion under Bill Clinton and ballooned to $9 billion under George W. Bush. The Bush II/Cheney administration instructed park superintendents to use language like “service-level adjustments” instead of “budget cutbacks” in public. The National Park Service budget suffered more cutbacks under Barack Obama — from 2010 to 2015, the National Park Service budget was cut 12 percent in inflation-adjusted dollars, including a reduction of more than 60 percent to the construction budget.

White House offers crumbs, Congress takes them away

The Obama administration is proposing an increase in parks funding for fiscal year 2016, in deference to the service’s 100th anniversary; an increase that would put nothing more than a small dent in the maintenance deficit. Unfortunately, this increase includes more money for a “private-public partnership” challenge — more corporate money. But Congress shows no sign of agreeing even to this modest funding increase. The House of Representatives Appropriations subcommittee that oversees park operations proposes to provide $680 million less than what the Obama administration asks and the Senate’s equivalent subcommittee proposes only $50 million more than the House.

So are we going to see corporate branding in our national parks to make up for such losses of funding? The signs are not good. In a commentary, Jim Hightower notes that opponents of public services want to convert the parks into “corporate cash cows.” He writes:

“First in line was Coca-Cola. In 2007, the multibillion-dollar colossus became a ‘Proud Partner’ with Park Service by donating a mere $2.5 million (tax-deductible, meaning we taxpayers subsidized the deal) to the Park Service fundraising arm. In return, not only did Coke get exclusive rights to use park logos in its ads, but it was allowed to veto a Park Service plan to ban sales of bottled water in the Grand Canyon park. Disposable plastic bottles are that park’s biggest source of trash, but Coke owns Dasani, the top-selling water, so bye-bye, ban. Public outrage forced officials to reverse this crass move, but the Park Service’s integrity has yet to recover.”

Nor has The Coca-Cola Co. or other bottled-water companies such as Nestlé S.A. given up. On their behalf, Republicans have slipped an amendment into a budget bill that would prohibit the National Park Service from instituting any prohibitions on bottled water, such as plans to provide spigots to re-fill bottles in place of buying new bottles. (No surprise there, as Nestlé’s chairman believes water should be a market commodity rather than a human right.)

Corporate sponsorship, however, is not the worst of it. Demands to allow more resource extraction on public lands, extraction that is a windfall for energy companies, continue to be insistent. Oil and gas royalties charged by the U.S. government are among the world’s lowest, unchanged since 1920, and are lower than any U.S. state charges for extraction on state-owned lands. Already, extraction sometimes comes right up the borders of parks. The National Parks Conservation Association, an advocacy group, notes that fracking is occurring right outside Glacier National Park. In its report, “National Parks and Hydraulic Fracturing,” the association wrote:

“[N]ational parks in relatively undeveloped regions have also seen fracking arrive at their doorstep: From Glacier National Park’s eastern boundary, visitors can throw a stone and hit any of 16 exploratory wells and their associated holding tanks, pump jacks, and machinery that is capable of forcing millions of gallons of pressurized fluids into energy deposits hiding thousands of feet beneath the earth. … Visitors heading east from Glacier National Park encounter road signs urging caution against the poisonous gases that fracking operations emit.”

Fracking and fires

Having just spent a week and a half visiting the park, I fortunately didn’t see that — perhaps a function of the smoky haze that filled the air for weeks there. (This smoke was a result of northwestern Montana being downwind from dozens of wildfires throughout the Northwest U.S., augmented by several local fires. There was no denial of global warming in my earshot; several Northwest cities have endured their hottest summer on record, and Kalispell, the nearest major town to Glacier, has suffered through its driest summer on record.)

The association reports that fracking wells near Grand Teton National Park increased from about 500 in 2008 to 2,000 by 2012. Unfortunately, perhaps not willing to upset its corporate benefactors or fearful of offending conservatives, the association shrinks from demanding an end to such incursions, instead offering liberalism of the weak-tea variety:

“National parks are managed under a precautionary principle designed to err on the conservative side of any potentially negative impacts. The same principle should be applied to fracking activities on lands adjacent to our national parks. At the National Parks Conservation Association, our goal is to prevent an unexamined embrace of an oil and gas extraction method that can have far-reaching consequences for America’s most cherished landscapes. Now is the time to investigate the impacts of fracking on America’s national parks.”

As fracking involves forcing a mixture of water, chemicals and sand into wells to create pressure to crack rocks, and results in polluted water supplies, human health problems, disruptions to agriculture and ruined roads from massive truck traffic — damage that adds up to billions of dollars in costs — more studies really aren’t necessary. Are such costs really worth whatever royalties might be collected?

The Good Nature Travel blog gives these grim results from energy extraction near two Western parks:

“Wyoming’s boom in natural gas and oil development is causing habitat fragmentation and the blocking of the pronghorn migration from the Upper Green River Valley near Grand Teton National Park. Concentrated drilling operations in the Pinedale area south of the park have been linked with regional ozone problems, with pollution levels high enough to cause respiratory problems. In Theodore Roosevelt National Park in North Dakota, oil rigs can be seen from several parts of the park, and natural gas flaring has punctured what was once one of the darkest night skies in the entire national park system.”

No parks, no problem

There is a corporate solution to this problem: Get rid of the national parks! I wish this were only a joke, but a Koch brothers-backed outfit calling itself the Property and Environment Research Center is advocating selling them. Reed Watson, the center’s executive director, argues that “land management agencies [should] turn a profit” by removing restrictions on timber and energy development.

To soft-peddle this extremism, the center calls for the selling off of other federal lands rather then openly advocating selling national parks — an immensely unpopular idea across the political spectrum — but that is where the logic of its extremism points. In a paper the center produced, “How and Why to Privatize Public Lands,” the group makes it intentions clear:

“Four criteria should guide reform efforts: land should be allocated to the highest-valued use; transaction costs should be kept to a minimum; there must be broad participation in the divestiture process; and ‘squatters’ rights’ should be protected. Unfortunately, the land reform proposals on the table today fail to meet some or all of those criteria. Accordingly, we offer a blueprint for auctioning off all public lands over 20 to 40 years.”

Note that it says “all” without qualification. And lest we chalk that up to the energy industry’s disdain for the environment, such ideas are being floated at the state level. In Kentucky, the Republican and Democratic candidates for governor both advocate selling of some of Kentucky’s 49 state parks — this in a state that spends a paltry $83 million on maintaining those parks. In Wisconsin, a private contractor operates the reservation system for state parks, forcing fees there higher than neighboring states. Gannett Wisconsin Media reports that a $9.70 reservation fee is added to regular fees, and of that $9.70, all but $1 goes to the private company.

Perhaps as a concession to the neoliberal times, park advocates often present their arguments in terms of economic benefit rather than making the worthy case that parks are a social benefit and necessary havens for wildlife, and a human responsibility to the environment. We really shouldn’t need any further arguments. Nonetheless, the National Parks Conservation Association argues that every dollar invested in the National Park Service yields nearly 10 dollars in economic activity.

A study published in PLOS Biology goes further. The seven authors of the study, “Walk on the Wild Side: Estimating the Global Magnitude of Visits to Protected Areas,” studied visitor records from more than 500 protected areas in 51 countries to determine the economic benefit of tourism to those areas. The authors conclude that $10 billion was spent maintaining these sites but more than $600 billion in economic activity was generated from them — a ratio of 60 dollars returned for each dollar spent.

Calculating such ratios is in reality more complicated, but the idea that parks generate income for local areas and thus — dare we say it? — are profitable in a broader surface economic calculation is hardly unreasonable. That has its own drawbacks, of course, as such areas are often overwhelmed by heavy traffic and environmental impact, associated costs that don’t appear to have been factored into the above calculations and which would therefore reduce those ratios. But, again, a civilized country ought to preserve wilderness and properly maintain parks as a value unto itself, outside any economic considerations.

That profit-and-loss calculations are made on something as basic to life as parks speaks volumes as to the brutality and mindless instrumentalism of capitalism.

Fossil fuel subsidies total trillions of dollars per year

Most of the cost of fossil fuels is hidden because environmental harms such as pollution and global warming are kept outside ordinary economic calculation. Energy companies externalize these costs (among others) — that is, they don’t pay them. The public does.

And we do, to a remarkable extent. When we think of corporate subsidies, we naturally think of taxes not paid, real estate giveaways and other ways of taking money from the public and shoveling it into corporate coffers. Then there are the environmental costs, something prominent if we are talking about fossil fuels. These, too, should be thought of as subsidies since these constitute costs paid by the public. A first attempt at seriously quantifying the magnitude of the totality of subsidies given to fossil fuels leads to a conclusion that the total for 2014 was US$5.6 trillion, a total expected to be matched in 2015.

Yes, you read that correctly: 5.6 trillion dollars. As in 5.6 million million. Or, to put it another way, more than seven percent of gross world product.

A lot of money.

These calculations are, interestingly, the product of an International Monetary Fund working paper, “How Large Are Global Energy Subsidies?” The paper, prepared by economists David Coady, Ian Parry, Louis Sears and Baoping Shang, sought to provide a fuller accounting of the costs of the environmental damages caused by fossil fuels, and found that those costs greatly exceed direct corporate subsidies and below-cost consumer pricing. The authors foresee huge benefits should all fossil-fuel subsidies be eliminated. They write:

“Eliminating post-tax subsidies in 2015 could raise government revenue by $2.9 trillion (3.6 percent of global GDP), cut global CO₂ emissions by more than 20 percent, and cut pre-mature air pollution deaths by more than half. After allowing for the higher energy costs faced by consumers, this action would raise global economic welfare by $1.8 trillion (2.2 percent of global GDP).” [page 7]

Grangemouth oil refinery at sunset (photo by Steve Garvie, Dunfermline, Fife, Scotland)

Grangemouth oil refinery at sunset (photo by Steve Garvie, Dunfermline, Fife, Scotland)

As dramatic as the preceding paragraph is, the International Monetary Fund is not suddenly questioning capitalism. The paper carries the caveat that it is “research in progress” and does not represent the views of the IMF. Nor does the paper devote so much as a single word questioning the economic system that has produced such astounding distortions, not to mention the hideous social effects of massive inequality and power imbalances. Nonetheless, it does present an implicit challenge to business as usual and helps conceptualize the massive costs of profligate energy usage. The paper lays out in plain language the environmental, fiscal, economic and social consequences of energy subsidies, stating that energy subsidies [page 5]:

  • Damage the environment, causing more premature deaths through local air pollution, exacerbating congestion and other adverse side effects of vehicle use, and increasing atmospheric greenhouse-gas concentrations.
  • Impose large fiscal costs, which need to be financed by some combination of higher public debt, higher tax burdens and crowding out potentially productive public spending (for example, on health, education and infrastructure).
  • Discourage needed investments in energy efficiency, renewables and energy infrastructure, and increase the vulnerability of countries to volatile international energy prices.
  • Are a highly inefficient way to provide support to low-income households since most of the benefits from energy subsidies are typically captured by rich households.

Paying for air pollution and global warming

The biggest subsidized cost is air pollution, which the paper’s authors estimate accounts for 46 percent of fossil fuel subsidies. Global warming is the next biggest subsidy, at 22 percent, with corporate and consumer subsidies, foregone taxes and other items accounting for smaller amounts. From this calculation, the authors argue that local benefits from ending subsidies are high enough that doing so should be done in the absence of action in other countries. They write:

“An important point, therefore, is that most (over three-fourths) of the underpricing of energy is due to domestic distortions — pre-tax subsidies and domestic externalities — rather than to global distortions (climate change). The crucial implication of this is that energy pricing reform is largely in countries’ own domestic interest and therefore is beneficial even in the absence of globally coordinated action.” [page 21]

When the costs are broken down by forms of energy, it is no surprise that coal is the most subsidized form. Coal subsidies alone total almost four percent of global GDP, according to the paper, with “no country … impos[ing] meaningful taxes on coal use from an environmental perspective.” Petroleum is also heavily subsidized.

If we could at a stroke eliminate all forms of fossil fuel subsidies, the gains would be significant. The authors believe that global revenue gains would be $2.9 trillion for 2015, a total less than the current cost of subsidies because it accounts for a reduction in energy usage from higher prices and an assumption that some tax money would be used for emission-control technologies. The authors also calculate a $1.8 trillion net gain in social welfare, a gain that could be increased were this gain used to invest in education, health and other public benefits.

So if so much good can come from rationalizing the fossil fuel industry, why does this sound like an impossible dream? Unfortunately, in real world of capitalism, there is very little to prevent corporations from externalizing their costs.

With increased corporate globalization, capital can pick up and move at will, inducing political office holders to hand out subsidies, waive taxes and refuse to enforce safety and environmental laws. They do this because the alternative is for corporations to move elsewhere in a never-ending search for the lowest wages and weakest regulations with an accompanying disappearance of jobs. And this globalization, fueled by “free trade” agreements that arise from relentless competition, aggravates global warming as components are shipped around the world for assembly into finished products that are shipped back, greatly adding to the environmental damage imposed by transportation.

Environment doesn’t count in orthodox economics

Not only is the environment an externality that corporations do not have to account for, thereby dumping the costs on to the public, but orthodox economics doesn’t account for the environment, other than as a source of resources to exploit. The same capitalist market that is nothing more than the aggregate interests of the largest and most powerful industrialists and financiers is supposed to “solve” environmental problems. A Monthly Review article by sociologists Richard York, Brett Clark and John Bellamy Foster, “Capitalism in Wonderland,” puts this contradiction in stark perspective:

“Mainstream economists are trained in the promotion of private profits as the singular ‘bottom line’ of society, even at the expense of larger issues of human welfare and the environment. The market rules over all, even nature. For Milton Friedman the environment was not a problem since the answer was simple and straightforward. As he put it: ‘ecological values can find their natural space in the market, like any other consumer demand.’ ” [May 2009, page 4]

From that perspective, it follows that present-day environmental damage is of minimal concern to capital and future damage of no concern. The industrialists and financiers who reap billions today won’t necessarily be around when the environmental price becomes too high to avoid. The “Capitalism in Wonderland” authors write:

“[T]he ideology embedded in orthodox neoclassical economics [is] a field which regularly presents itself as using objective, even naturalistic, methods for modeling the economy. However, past all of the equations and technical jargon, the dominant economic paradigm is built on a value system that prizes capital accumulation in the short-term, while de-valuing everything else in the present and everything altogether in the future. …

[H]uman life in effect is worth only what each person contributes to the economy as measured in monetary terms. So, if global warming increases mortality in Bangladesh, which it appears likely that it will, this is only reflected in economic models to the extent that the deaths of Bengalis hurt the economy. Since Bangladesh is very poor, [orthodox] economic models … would not estimate it to be worthwhile to prevent deaths there since these losses would show up as minuscule in the measurements. … [E]thical concerns about the intrinsic value of human life and of the lives of other creatures are completely invisible in standard economic models. Increasing human mortality and accelerating the rate of extinctions are to most economists only problems if they undermine the ‘bottom line.’ In other respects they are invisible: as is the natural world as a whole.” [pages 9-10]

Tinkering versus analyzing the structure

The International Monetary Fund paper does offer a brief discussion of social disruptions should fossil-fuel subsidies be removed, suggesting a need for “transitory” programs such as worker retraining and protection of vulnerable groups. [page 31] But their proposed program centers on environmental taxes as a way to align fossil fuels with their costs to make energy prices “efficient.” Certainly, polluters and causers of global warming should be required to absorb those costs. But given that market forces tilt overwhelmingly in favor of large polluters, the fact of massive imbalances in power, and that governments have handcuffed themselves in terms of confronting capital (a trend itself a product of market forces), it is unrealistic to believe such a program is currently politically feasible.

The disruptions to a capitalist economy with a forced large reduction in energy usage are also significant. It is not only that a capitalist economy can’t function without growing (and a growing economy uses more, not less, energy, especially because of ever more complex machinery and lengthening supply chains), but that a capitalist economy doesn’t offer millions of workers who lose their jobs new work in new industries. Every incentive under capitalism is for more energy usage; thus “the market” will object to dramatically higher energy prices, no matter how rational those higher prices.

Ultimately, the authors of the IMF paper are trapped in the same inability to imagine anything outside the present capitalist system, similar to those who claim that stopping global warming will be virtually cost-free. Their paper has done a necessary service by providing the first real quantification of the gigantic costs of fossil fuels and the massive subsidies they receive. Subsidies for renewable energy, in comparison, are minuscule. The massive subsidies for nuclear energy, which is a complete failure on any rational economic basis before we even get to the physical dangers, demonstrate that nuclear is no solution, either. These should also be eliminated.

The size of the social movement that would be necessary to eliminate all these subsidies would be enormous. Why should such a movement ask for mere reforms that fall well short of what is necessary, worthy as they would be. Energy is too important not to be put in public hands. The trillions of dollars of fossil fuel subsidies are the logical product of allowing private interests to control critical resources for private profit and leaving “the market” to dictate outcomes.

We can’t make what is unsustainable sustainable through a better tax policy. That the enormous scale of reform proposed by the IMF paper still falls far short of what is actually necessary to create a sustainable economy demonstrates the severity of the crises we are only beginning to face.

Canada targets tar sands critics in new criminalization of dissent

Canada’s Harper régime has invented the new crime of being a member of an “anti-Canadian petroleum movement,” and equating such a stance with terrorism. Evidently believing it is in danger of losing the fight against pipeline projects intended to speed up Alberta tar sands production, its response is to place environmentalists under surveillance.

A secret report prepared by the Royal Canadian Mounted Police, the country’s national police agency, claims that public activism against the problems caused by oil and gas extraction is a growing and violent threat to Canada’s national security. The report goes so far as to challenge the very idea that human activity is causing global warming or that global warming is even a problem. At least 97 percent of environmental scientists agree that human activity is causing global warming. The basis on which a police force can declare otherwise is surely not clear.

The Alberta tar sands (photo by Howl Arts Collective, Montréal)

The Alberta tar sands (photo by Howl Arts Collective, Montréal)

Whether police officials truly believe they understand the global climate better than scientists who are expert in the field or are merely providing “intelligence” [sic] that the government of Prime Minister Stephen Harper wants to hear, I will leave to others more familiar than I with the Royal Canadian Mounted Police. Regardless, the RCMP report, leaked to Greenpeace, makes for amusing reading. For example:

“[T]here is an apparent growing international anti-Canadian petroleum movement. In their literature, representatives of the movement claim climate change is now the most serious global environmental threat, and that climate change is a direct consequence of elevated anthropogenic greenhouse gases which, reportedly, are directly linked to the continued use of fossil fuels.” [page 5]

And whom might the police rely on for that statement? No, not those pesky scientists who refuse to say what is demanded of them by oil and gas companies and the right-wing governments who love them. Instead, the RCMP quotes the Canadian Association of Petroleum Producers, cites a poll commissioned by a foundation connected to the oil industry, and a columnist at the Toronto Sun, a hard-right tabloid in the Murdoch mold. The Sun columnist, as quoted in the police report, said “environmental radicals” seek “to undermine the development of Canada’s oilsands — an insignificant contributor to global greenhouse gas emissions.”

Actual experts in the field would disagree. A Scientific America analysis that quotes several climate scientists reports that if all the bitumen in the Alberta tar sands were burned, 240 billion metric tons of carbon would be added to the atmosphere. The total amount of carbon that has been thrown into atmosphere by humanity in all of history is estimated at 588 billion tons.

Are going to believe the police or your lying eyes?

The Globe and Mail of Toronto quoted a Royal Canadian Mounted Police spokesman denying any intention of spying on peaceful protestors:

“There is no focus on environmental groups, but rather on the broader criminal threats to Canada’s critical infrastructure. The RCMP does not monitor any environmental protest group. Its mandate is to investigate individuals involved in criminality.”

But the newspaper’s report noted that the spokesman “would not comment on the tone” of the report, which even The Globe and Mail, a leading establishment publication, found difficult to accept as it earlier in the article noted the RCMP report’s “highly charged language.” Moreover, Canadian human rights organizations filed complaints earlier in February over spying on opponents of the proposed Northern Gateway pipeline, a project intended to move tar sands oil from Alberta to a port in northern British Columbia, passing through hundreds of miles of environmentally sensitive lands.

Environmentalists and Indigenous peoples have been subjected to spying by the RCMP and the Canadian Security Intelligence Service, according to a complaint filed by the British Columbia Civil Liberties Association. The association is also opposing a new measure, the Anti-terrorism Act 2015, or Bill C-51, intended to “dramatically expand the powers of Canada’s national security agencies.” The association reports:

“Bill C-51 makes massive changes to many aspects of Canada’s spying and security system. Any one of the changes – making it easier to lock people up without charge; criminalizing expression; vastly expanding the powers of Canada’s spies; gutting privacy protections – is significant, raises constitutional questions, and must be the subject of serious debate. Lumping them all together into one bill, and proposing to speed that bill through Parliament, virtually guarantees that democratic debate on these proposed measures will be insufficient.”

Such speed is consistent with the Harper government’s attitude toward activists. A previous environment minister, Peter Kent, called parliamentary opponents of tar sands “treacherous” and had a long history of dismantling every regulation he could. The current environment minister, Leona Aglukkaq, while less inclined to frontal attacks, nonetheless also doubts climate change.

From smoking is good for you to the weather is just fine

Global-warming denialism is well-funded, with oil and gas companies often the heaviest contributors to “think tanks” that specialize in doubting scientific evidence on behalf of their corporate benefactors. An excellent roundup of these deniers, written by physics professor John W. Farley for the May 2012 edition of Monthly Review, noted that Exxon Mobil Corporation, the Koch brothers and other special interests have spent tens of millions of dollars.

One of these corporate-funded “think tanks” is the Heartland Institute, which began life as a Big Tobacco outfit issuing reports denying links between smoking and cancer. Another global-warming denial outfit, The George C. Marshall Institute, originated as lobby group for Ronald Reagan’s crackpot Strategic Defense Initiative, more commonly known as the “Star Wars” program. Another was the now-defunct Global Climate Coalition, which included major oil companies, the U.S. Chamber of Commerce and automobile manufacturers; it actually operated from the offices of the National Association of Manufacturing.

A scientist who is often trotted out by global-warming deniers is Wei-Hock (“Willie”) Soon, who was recently revealed to have taken more than $1.2 million from the fossil-fuel industry. The New York Times reports that at least 11 papers Dr. Soon has published since 2008 omitted disclosures of this funding and at least eight violate the ethical guidelines of the journals that published him. The Times reports:

“[D]ocuments show that Dr. Soon, in correspondence with his corporate funders, described many of his scientific papers as “deliverables” that he completed in exchange for their money. He used the same term to describe testimony he prepared for Congress.”

The world is facing an environmental catastrophe as it is; increasing production from the Alberta tar sands will only hasten it. The capacity of railroads to ship oil is reaching its limit (and in itself is dangerous as a recent flurry of crashes demonstrate). Thus pipelines are critical for tar sands expansion. Not only the Keystone XL pipeline across the United States, but the Northern Gateway and other proposed pipelines that would cross Canada to eastern ports. U.S. President Barack Obama’s February 24 veto of a congressional bill designed to force Keystone construction by no means puts that issue to rest; the State Department’s inaccurate claim that the pipeline would not add to global warming and falsehoods that tens of thousands of jobs would result remain an official document.

Opposition to the Keystone XL pipelines has not slackened and strong resistance continues against the Northern Gateway, which would not only send oil through sensitive mountains and forests, but would require ocean tankers to travel more than 100 kilometers just to reach the Pacific Ocean from the pipeline terminus in northern British Columbia. From there, the oil would be shipped to Asia. First Nations peoples, who have the right to block projects from crossing their lands, are leading that fight, and vow physical resistance.

TransCanada Corporation, the same company that wants to build Keystone XL to the Gulf of Mexico, is also proposing an Energy East pipeline that would carry tar sands oil to terminals in Québec City and St. John, New Brunswick. This project, if it comes to fruition, would alone produce the same amount of carbon each year as seven million new cars on Canada’s roads, according to 350.org. Some of this project would use existing natural gas lines; these are not designed for oil, a heavier substance, elevating the risk of ruptures.

The RCMP reports asserts that “extremists pose a realistic criminal threat to Canada’s petroleum industry.” Advocating for clean air and water is a crime? The fight against one of these pipelines must be a fight against them all; increased oil profits surely won’t be compensation for drowned cities and farmlands turned to dust bowls.

Ethics and morality at the end of history

Strange, isn’t it, that the system supposedly representing the apex of human development — even the end of history — has no place for ethics or morality.

Perhaps this becomes inevitable when an ideology develops to the point where the economy is considered to be outside the environment. From that dubious — to put it overly modestly — vantage point, the journey to seeing the environment, and the natural resources and life it contains, as nothing more than a cow to be milked at will is not a long one. A forest counts as nothing unless it can be monetized, which often means knocking it down. Clean air? Clean water? Luxury items for those who can afford them, and thereby profits for those who can bottle it and create a market for them.

Photo by Alex Proimos

Photo by Alex Proimos

A thoughtful article in the May 2009 issue of Monthly Review caused me to think more about this. The authors of this article, “Capitalism in Wonderland,” written by Richard York, Brett Clark and John Bellamy Foster, discuss the models used by mainstream economists, which vary only on the degree to which they discount future life. Yes, that is as cold-blooded as it sounds.

Neoclassical economists base their increasingly insane conclusions that global warming is no big deal and, at worse, will cause little economic damage, on the convenient, self-serving assumption that future generations will be wealthier and therefore it will be cheaper for our descendants to clean up our messes than it would be for us.

The authors write:

“Where they primarily differ is not on their views of the science behind climate change but on their value assumptions about the propriety of shifting burdens to future generations. This lays bare the ideology embedded in orthodox neoclassical economics, a field which regularly presents itself as using objective, even naturalistic, methods for modeling the economy. However, past all of the equations and technical jargon, the dominant economic paradigm is built on a value system that prizes capital accumulation in the short-term, while de-valuing everything else in the present and everything altogether in the future.” [page 9]

From that, orthodox economists slide down a slippery slope in which some humans are valuable and others are without value. Such a mentality is exemplified by Lawrence Summers’ infamous memo, written when he was chief economist for the World Bank, in which he wrote:

“I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that. … The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost. I’ve always though that under-populated countries in Africa are vastly UNDER-polluted.”

Summers’ attitude, although usually not expressed in such a direct way, is not out of step with his profession. The “Capitalism in Wonderland” authors lay bare the ramifications of this type of thinking:

“[H]uman life in effect is worth only what each person contributes to the economy as measured in monetary terms. So, if global warming increases mortality in Bangladesh, which it appears likely that it will, this is only reflected in economic models to the extent that the deaths of Bengalis hurt the [global] economy. Since Bangladesh is very poor, economic models … would not estimate it to be worthwhile to prevent deaths there since these losses would show up as minuscule in the measurements. … This economic ideology, of course, extends beyond just human life, such that all of the millions of species on earth are valued only to the extent they contribute to GDP. Thus, ethical concerns about the intrinsic value of human life and of the lives of other creatures are completely invisible in standard economic models. Increasing human mortality and accelerating the rate of extinctions are to most economists only problems if they undermine the ‘bottom line.’ In other respects they are invisible: as is the natural world as a whole.” [page 10]

This is the irrationality and immorality that underlies industrialists’ and financiers’ drive to allow the “market” to make all social decisions. Markets are nothing more than the aggregate interests of the largest and most powerful industrialists and financiers. They in turn, through their stranglehold on the world’s economic heights, are able to have decisive sway over governments, which are not disembodied entities somehow floating above society but rather are reflections of the relative strengths and weaknesses of social forces.

The modern corporation has a legal duty only to provide the maximum profit for its shareholders. In other words, it is expected to act to further its own interest without regard to anything else. The corporation is considered a legal person under U.S. law — one that has no biological limits nor barriers to its growth. Joel Bakan, in the introduction to his book The Corporation: The Pathological Pursuit of Profit and Power, summed up capitalism’s dominant institution this way:

“The corporation’s legally defined mandate is to pursue, relentlessly and without exception, its own self-interest, regardless of the often harmful consequences it might cause to others. As a result, I argue, the corporation is a pathological institution, a dangerous possessor of the great power it wields over people and societies.”

Even without “corporate personhood,” however, the relentless competition of capitalism would induce this behavior, and the winners of that competition are those most willing to crush all obstacles, human and environmental, while foisting the costs onto others.

Really, we can’t do better than this?

They frack because clear air and water aren’t profitable

The true costs of resource extraction are never borne by energy and mining companies because they can dump the costs onto society. Those engaged in fracking are not going to act any differently, and can’t be expected to act any differently.

Having government in their pockets means they do it because they can, but the reasons go well beyond that. Pleading for them to act responsibility is of no use as capitalism requires them to act in socially irresponsible ways. Companies with stock traded on exchanges are legally required to earn the biggest possible profit on behalf of their shareholders, regardless of any other considerations. The rigors of competition also mandate this: If a company doesn’t grow, its competitors will and put it out of business.

Photo by Marc St. Gil

Photo by Marc St. Gil

One route to increasing profits is to shed as much cost and liability as possible. Indeed, a company would be shirking its legally mandated fiduciary responsibility were it to accept its responsibilities. For an energy company, these are considerable. Massive oil spills, contamination of water, degradation of soil, destruction of forests, mountaintop removal (with the debris dumped into valley streams), greenhouse-gas emissions — the list is long. But although the profits from these problems accrue to the corporations responsible, the costs aren’t charged to their bottom lines. Citizens pay for this, in many ways.

Hydraulic fracturing — the natural gas extraction process commonly known as “fracking” — promises more of the same. Fracking may prove to be profitable to the energy companies doing it, but what about the cost of ruined water supplies, soil contamination and other problems sure to follow? What is the price of clean air and water?

It doesn’t count as pollution if we say it doesn’t

Fracking is a technique in which hydraulic fluids — a mixture of water, chemicals and sand — are forced into wells to create pressure that cracks the rocks, allowing the gas to escape and flow out of the wells. Although the energy industry claims this technique has been used “safely” for decades, today’s fracking, intended to extract natural gas that until now had been uneconomical to tap, is different than previous techniques. A Food & Water Watch report on fracking says:

“[T]his next generation of horizontal fracking into hard rock is significantly different from traditional vertical well fracking. It is far more powerful — and more dangerous — than drilling methods used in the past. … Economically releasing gas from these tighter hard rock deposits requires more force, new techniques and a potentially toxic brew of chemicals to access the gas. … [D]rillers inject a mixture of water, sand and chemicals (often toxic ones) known as ‘slickwater’ fracking fluid to suspend the sand and prop open the fractures, as well as lubricants to speed the fluid into the well. In 2011, the [U.S. Environmental Protection Agency] estimated that 70 to 140 billion gallons of water are pumped into 35,000 fracking wells annually.” [citations omitted]

Although newly developed fracking techniques represent an intensification, they are largely exempt from oversight. The Energy Policy Act of 2005 exempts fracking from regulation under the Safe Drinking Water Act. This exemption, sometimes referred to as the “Halliburton loophole” and shepherded through Congress by on behalf of his former company by Dick Cheney during the Bush II/Cheney administration, amended the Safe Drinking Water Act to “exclude … the underground injection of fluids or propping agents (other than diesel fuels) pursuant to hydraulic fracturing operations related to oil, gas, or geothermal production activities.’’

Graphic by geologist Mike Norton

Graphic by geologist Mike Norton

The Halliburton loophole also changes the definition of a “pollutant” under the Clean Water Act so that, according to the text of the Energy Policy Act, “this term does not mean … water, gas, or other material which is injected into a well to facilitate production of oil or gas.”

Energy companies have gotten what they have paid for. A study by Common Cause reports that, from 2001 to 2011, companies engaged in fracking spent $726 million on lobbying and another $21 million in campaign contributions to members of Congress. The American Legislative Exchange Council (ALEC), the corporate lobbying organization that writes “model bills” for state legislatures, has its hand in this process as well, Common Cause reports:

“Prominent financial backers of ALEC’s activities include the American Petroleum Institute, ExxonMobil, and Koch Industries, owner of the largest network of natural gas-transmitting pipelines in the country.”

Health and environmental damage from fracking

The health costs of fracking are considerable. A report by Environment America details some of the costs of ongoing fracking operations and potential costs of proposed fracking. Among them:

  • Contamination of drinking water in Colorado and Pennsylvania has cost hundreds of thousands of dollars to mitigate for a handful of homes.
  • If fracking were to degrade the New York City watershed with sediment or other pollution, construction of a filtration plant would cost approximately $6 billion.
  • The inhalation of dust kicked up from silica sand, which is used in fracking, causes long-term health problems, including lung cancer. Dust-induced occupational ailments, including silicosis, imposed $50 million in medical care costs in the United States in 2007.
  • Air pollution from gas drilling in Arkansas’ Fayetteville Shale region imposed estimated public health costs of more than $10 million in 2008.

The environmental group Catskill Mountainkeeper, in a report noting the threat of contamination from floods overwhelming wells — New York state’s Catskills mountains have been hit hard by a series of floods in recent years — said a range of serious illnesses could take root from fracking:

“Fracking wastewater not only contains the toxic and hazardous chemicals used in fracking fluid but also contains contaminants that it picks up from deep within the earth, most notably salty brine and radioactive materials. The documented health consequences of exposure to these toxins include increased rates of asthma, infertility, ADHD, autism, diabetes, thyroid disorders, brain disorders and many types of cancer.”

Then there are the environmental costs. Some of these, Environment America reports, are:

  • The clearance of forest land in Pennsylvania for fracking could lead to increased delivery of nutrient pollution to the Chesapeake Bay, which already suffers from a vast nutrient-generated dead zone. The cost of reducing the same amount of pollution as could be generated by fracking would be approximately $1.5 million to $4 million per year.
  • Emissions of methane during well completion from each uncontrolled fracking well impose approximately $130,000 in social costs related to global warming.
  • The truck traffic needed to deliver water to a single fracking well causes as much damage to local roads as nearly 3.5 million car trips. Pennsylvania estimated in 2010 that $265 million would be needed to repair damaged roads in the Marcellus Shale region.
  • The five Pennsylvania counties with the heaviest Marcellus Shale drilling activity saw an 18.5 percent reduction in milk production between 2007 and 2010.

The Star-Telegram newspaper of Fort Worth, Texas, reported in 2012 that the Texas Department of Transportation estimates that repairing roads damaged by truck traffic related to oil and gas drilling would cost $2 billion, money it does not have.

But good luck getting the polluters to pay

Across the United States, federal and state requirements for financial guarantees to cover potential damages are inadequate to protect the public, according to Environment Texas. In most jurisdictions, drillers must provide guarantees to cover the cost of plugging a well but but require nothing toward any environmental damage. An Environment Texas report says:

“Bonding levels are much too low — only eight states require drillers to post bonds of $50,000 or more per well for plugging and reclamation at well depths commonly reached by fracking, despite documented instances in which fracking wells have cost $700,000 or more to plug. In addition, most states have “blanket bonding” options that further reduce the amount of financial assurance a driller must provide — in some cases to less than $100 per well.”

Although the full list of chemicals used by drillers is secret, those most commonly used are known. Dozens of them are listed on FracFocus, the national hydraulic fracturing chemical registry managed by the Ground Water Protection Council and Interstate Oil and Gas Compact Commission, organizations formed by state regulatory agencies. Hydrochloric acid, ethylene glycol (a poison used as an antifreeze), petroleum distillate (which attack the respiratory and central nervous systems), naphthalene (causes liver and neurological damage) and ethanol (a gasoline additive) are among the chemicals commonly used in fracking.

The economics don’t make sense, either

A remarkable level of potential long-term damage — for what? Proponents of fracking argue that short-term financial gains and the release into the market of new natural gas supplies will both be beneficial. But Deborah Rogers, executive director of Energy Policy Forum, in testimony she gave to the U.S. Senate Committee on Energy and Natural Resources, said there is not necessarily a gusher of gas waiting to be tapped:

“Shale wells deplete alarmingly. Overall field declines are running at the troubling rate of 30%-50% per annum. It will take approximately 7,000 new wells every year at a staggering cost of about $42 billion simply to maintain a flat production profile. Moreover, every shale gas play in the U.S., with the exception of the Marcellus, has already peaked and is in decline. Some have gone through almost a complete life cycle in a matter of a mere five years or so, negating entirely the notion of plentiful supply for 30, 40 or even 50 years. Even the Marcellus is showing signs of late middle age.

Financially, shale gas companies are struggling. The popular notion that these companies intend to provide a cheap and abundant product out of the goodness of their hearts to effect a manufacturing renaissance is nonsensical. Companies are in business to make a profit, not provide cheap inputs to the detriment of their own bottom line.”

The economics of natural gas are not robust. The U.S. Department of Energy’s Energy Information Administration reports that the July wholesale price of natural gas (the latest for which it has data) is US$5.54 per thousand cubic feet, while import and export prices are both less than $4 per thousand cubic feet. But the cost of producing gas via fracking is considerably higher. A commentary in The Financial Times says the full cost of finding, developing and operating shale gas wells, paying an average return on capital to investors, requires a spot gas price of $7.50 to $8 per thousand cubic foot.

In other words, to make fracking profitable, natural gas prices will have to rise significantly, thereby canceling the alleged consumer price benefits of producing more gas by any means available.

The good news is that resistance to fracking is steadily increasing. France and Bulgaria have national bans on fracking, grassroots protests are frequent occurrences in Britain, and Germany is considering a ban in certain regions under pressure from brewers. The Czech Republic in 2012 passed a temporary ban, while various local and regional bans are in place in Argentina, Ireland, Switzerland and the United States.

Opponents of fracking face an uphill swim because “market forces” are arrayed against them. Markets are nothing but the aggregate interests of the most powerful industrialists and financiers, and multi-national energy companies hungrily looking for new profits are certainly among them. To them, pollution, environmental destruction and health damage are “external” to their bottom line and they need not, and will not, consider them. Those costs are borne by those affected by their operations, while the profits accrue privately.

Such is the logic of capitalism — of allowing the “market” to decide ever more social questions. Fracking is a continuation of the taking of the commons, the process of privatizing nature and public spaces for private profit. As the proverb says, you can’t eat money when there is no more useable air and water but putting that idea into practice will require a more rational system.