Oil Prices & Drilling Push, Regulatory "Hit List," Ecuador's Yasuni Fund, Dutch to Probe Shell in Nigeria, AALS (by Bob Percival)

Last week the International Energy Agency (IEA) warned that soaring oil prices may threaten the global economic recovery. The IEA reported that the cost of oil imported by the 34 OECD countries had risen by $200 billion a year to $790 billion annually. “High Oil Prices Pose Threat to Global Economic Recovery” at http://www.iea.org/index_info.asp?id=1737. The American Petroleum Institute (API) has launched a campaign to open more areas of the United States to oil drilling. Even before the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling (Presidential Commission) releases its final report next Tuesday, API is lobbying to lift restrictions on offshore and onshore drilling. API points to a study it commissioned predicting that if drilling were permitted off the east and west coasts of the U.S., the eastern Gulf of Mexico, the Rocky Mountains and the Alaska National Wildlife Refuge (ANWR),150,000 jobs could be directed created by 2025 and another 380,000 jobs indirectly. Ed Crooks, U.S. Oil Groups Seek Easing of Drilling Curbs, Financial Times, Jan. 4, 2011. Meanwhile EPA’s Environmental Appeals Board (EAB) has reversed the granting of air quality permits for offshore drilling in the Beaufort and Chukchi seas off the northern coast of Alaska. The EAB found that the permits were premised on an inadequate analysis of nitrogen dioxide emissions as claimed by environmental groups who challenged the permits.

Last week the Presidential Commission investigated the BP oil spill released a draft chapter whose conclusions sounded remarkably similar to those of previous investigations of BP accidents, as ProPublica’s Abraham Lustgarten reported. Lustgarten compared quotations from the draft chapter with those from a 2007 U.S. Chemical Safety and Hazard Investigation Board inquiry and an internal BP inquiry into an explosion at a BP refinery in Texas, and a 2003 Scottish Environment Protection Agency report into accidents that occurred in 2000 at BP’s refinery in Grangemouth, Scotland. See http://www.propublica.org/article/deja-vu-the-national-commission-report-on-bps-gulf-disaster-echoes-old-find Lustgarten concludes that BP does not seem to learn from its past mistakes.

As newly-elected officials take office, some are acting quickly to change environmental policies. Susana Martinez, the new governor of New Mexico who is a skeptic of climate change, blocked a regulation from taking effect that would have required 3% annual reductions in greenhouse gas (GHG) emissions in the state. She also blocked a regulation to control waste discharges from dairies and dismissed the members of the state’s Environmental Improvement Board. Felicity Barringer, 2 Environment Rules Halted in New Mexico, N.Y. Times, Feb. 6, 2011. Representative Darell Issa, the new chair of the House Committee on Oversight and Investigations, has written a letters to 150 business leaders asking them to identify regulations that should be relaxed or repealed. This is reminiscent of the Reagan Administration’s efforts to compile a regulatory “hit list” through its Vice Presidential Task Force on Regulatory Relief, chaired by George H.W. Bush. That task force also contacted business leaders, including many in the oil industry, and then pressed EPA to abolish limits on the lead content of gasoline. This effort badly backfired once its horrendous health consequences were appreciated and EPA ultimately was able to phase out leaded gasoline.

As reported in this blog on August 9, 2010, Ecuador has agreed to block development of massive oil reserves under its Yasuni National Park if it receives $3.2 billion in compensation over 13 years from the international community. Yasuni is one of the most biodiverse areas on earth with a single hectare of the park containing more species of trees than found in the U.S. and Canada combined. However, less than $2 million has been raised for the UN-administered trust fund to compensate Ecuador for not developing the oil. Ecuador’s government has announced that it will abandon its promise to block oil development if the fund does not receive $100 million by the end of 2011. While Norway has agreed to contribute $1 billion to compensate Indonesia for a two-year moratorium on the issuance of logging permits, it has declined to contribute to the Ecuador fund because the fund is not yet covered by the UN’s REDD (Reducing Emissions from Deforestation and Forest Degradation) program. David Blair, Ecuador’s Novel Plan to Save Rain Forest, Financial Times, Jan. 4, 2011, at 4.

The Dutch Parliament has announced that it will hold hearings on January 26 to probe the activities of Royal Dutch Shell in Nigeria. The hearings, which long have been sought by opposition parties in the Dutch Parliament, will examine widespread oil pollution in the Niger delta. Shell blames most of the pollution on sabotage and oil theft. Guy Chazan, Shell Faces Query on Nigeria, Wall St. J., Jan. 4, 2011, at A10.

Last night I returned from San Francisco where I attended the Annual Meeting of the American Association of Law Schools. At the conference I counted at least five publishers of law books who were holding drawings for free iPads, perhaps an indication that publishers are starting to appreciate the coming shift toward e-readers for law school textbooks. I attended several terrific programs including panels on water law, what future environmental lawyers should learn in law school, and the constitutionality of the Affordable Care and Patient Protection Act. My wife and I also found time to do our own field trips to Alcatraz and a fabulous culinary tour of the Mission District of San Francisco (see www.foodieadventures.com). Photos of these can be viewed online at: http://gallery.me.com/rperci/100765.