Humor day in the Senate; Scary single payer & a halt to Alaska energy projects

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Single payer? A vote today on an amendment that Montana Sen. Steve Daines hopes will pout Democrats on record for such a scary idea. (YouTube photo)

Mark Trahant / Trahant Reports

Today is humor day in the Senate. But at least the healthcare debate will go on and on without a conclusion. And no matter what happens today and Friday there is still a long way to go.

The Senate has at least ten more hours of official debate on a House bill that’s been substituted with language that neither we nor senators have yet seen. (Leading to great theatrics by the Senate Democrats who said they’d offer no more amendments until there was an actual bill with, you know, like words in it.) But even without an actual bill Democrats sent the framework of the so-called “Skinny Repeal” to the Congressional Budget Office for a score and the answer is more of the same, the number of uninsured would increase from 28 million to 44 million in a decade.

Nonetheless by Friday there will be some sort of proposal that’s designed to get 50 votes so the legislation will go to a conference committee with the House. This Skinny Repeal strips the individual mandate (causing a mess in insurance) but leaves Medicaid alone. For now. Basically this means the House will get its way and senators will be forced to vote for that approach or nothing. It’s a risky strategy when the Republican majority is so slim. Actually in both houses.

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Via a Tweet from Pat Bagley, editorial cartoonist at The Salt Lake Tribune.

Today the Senate will consider a proposal for universal health care, Medicare for all. Consider is not the right word here because the proposal is already doomed. But Montana Sen. Steve Daines wants Democrats on record voting for this scary, scary idea. But as Pat Bagley, the cartoonist for The Salt Lake Tribune tweeted yesterday, not one country that’s gone down the single payer path has reversed course. It’s the United States that is the outlier with our incomprehensible health care “system.” Even Bernie Sanders, who is for Medicare for All, said he won’t vote for this amendment because it’s a ruse.

Daines won’t be voting for his own amendment either. That’s not the point. Daines told the Helena Independent Record Wednesday night “It’s time for every senator to go on the record on whether or not they support a single-payer system.”

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So, while we are at it, let’s be clear about what Single Payer could do for the Indian health system. Indian Health Service funding would jump by at least 40 percent in a Medicare for all approach. The agency (and the tribal and nonprofit operations) would be equal with other healthcare providers; getting paid for every patient instead of worrying about appropriations or tracking down insurance payments from companies, Medicaid, and other third-party payers. So it would be a financial boom. Big time.

But as I said: Medicare for all is really not on the table. The Senate vote is just supposed to frighten Democrats. So. Be careful. Or Congress will give you health care. Aye.

Speaking of bad jokes, I laughed at the Trump administration’s threats to Alaska Sen. Lisa Murkowski. According to the Alaska Dispatch News, Interior Secretary Ryan Zinke warned Murkowski that Alaska energy projects could suffer because of her vote (and her leadership) against the GOP health care proposals. (I do think she could lose her Energy Committee chairmanship, but that, too is a silly move by Republicans in a narrowly divided Senate.)

So the Trump administration that wants Energy for All is telling a Senator who’s pro-energy that Alaska development is in trouble because she’s against their destruction of health care. Now that’s some weighty logic. Nonetheless Alaska Senator, Dan Sullivan reported this threat with a straight face. He told the Alaska Dispatch News that it’s a “troubling message … I’m not going to go into the details, but I fear that the strong economic growth, pro-energy, pro-mining, pro-jobs and personnel from Alaska who are part of those policies are going to stop.”

So oil companies be warned. You could be punished. As will we all. Be afraid. And remember universal care for all is up today.  So keep the children away from the Senate TV.

Mark Trahant is the Charles R. Johnson Endowed Professor of Journalism at the University of North Dakota. He is an independent journalist and a member of The Shoshone-Bannock Tribes. On Twitter @TrahantReports

Reposting or reprinting this column? Please credit: Mark Trahant / TrahantReports.com

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The new deal for tribes: Resource extraction & toxic waste (minus the jobs)

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No coal here. The Native Village of Tyonek, Alaska, celebrated the suspension of a project by PacRim Coal. The tribal community is located some 45 miles west of Anchorage. PacRim estimated the project would have mined some 242 million tons of coal. (Trahant file photo)
Mark Trahant / Trahant Reports

A couple of years ago a tribal leader showed me an abandoned lumber mill near the village of Tyonek, Alaska. The company promised jobs. And, for a time, for a couple of decades, there were those jobs. But after the resource was consumed, the mill closed, the company disappeared, and the shell of the enterprise remains today.

This same story could be told in tribal communities across North America. Sometimes the resource was timber. Other times gas and oil. Or coal.

The lucky communities were left with a small toxic dump site. More often there was major cleanup work required after (plus a few more jobs). And in the worst case scenario, a Superfund site was left behind requiring government supervision and an even greater restoration effort.

But all along, and in each case, the accompanying idea was that jobs would be a part of the deal.

There would be construction jobs to build the mine, pipeline, or processing plant. Then there would be truck driving jobs moving materials. A few executive jobs (especially in public and community relations) and, of course, the eventual supervision of the cleanup (especially if the tribal government had its own environmental protection agency.)

That was the deal. But it’s one that is no longer true. Now the resource is extracted, pipelines are built, and toxic waste is left behind … while the promised jobs are limited to the initial construction jobs.

The renewed effort to build the Keystone XL pipeline is a classic example of this shift. When President Donald J. Trump signed the executive order to approve the project he promised “thousands of jobs.” That’s true enough for the construction phase, but only 35 employees would be needed to operate the pipeline, according to the State Department report.

Keystone, at least, is prospective jobs. New ones. But the bigger challenge for the Navajo Nation, the Crow Nation and some thirty tribes with coal reserves or power plants is that new deal for resource-based plants and extraction does not create as many jobs.

The numbers are stark.

The U.S. Energy and Employment Outlook 2017 shows that electricity from coal declined 53 percent between 2006 and 2016. Over that same period, electricity from natural gas increased by 33 percent and from solar by 5,000 percent.

Coal is still a major source of energy. But it’s in decline. Coal and natural now gas add up to two-thirds of all electricity generation in the U.S. And that’s expected to remain so until at least 2040 when the market share declines to a little more than half.

But because it’s a market that’s going down it means that tribes that develop coal will not share in the rewards of either major profits or in a spike in jobs.

The only hope for this shrinking industry is to export the coal to other countries (something that will be extremely difficult because so many other nations have already agreed to the Paris climate targets). As Clark Williams-Derry has reported for the Sightline Institute:

“Robust, sustainable Asian coal markets were never a realistic hope for US coal exporters: the transportation costs were too high, the competition too fierce, and the demand too unstable. So the coal industry’s PR flacks may continue to spin tales about endless riches in the Asian coal market, the financials are telling a much more sobering story: that the coal export pipe dream continues to fade away, leaving a bad hangover on the coal industry’s balance sheets and a lingering bad taste in the mouths of coal investors and executives alike.”

On top of all that, Derry-Williams points out that China’s coal consumption has fallen for three consecutive years.

And the international context is that coal is the most polluting of the three types of fossil fuels. More than 80 percent of the world’s known coal reserves need to stay in the ground to meet global warming targets.

There are jobs in the energy field, but, as the Department of Energy report puts it: “Employment in electric power generation now totals 860,869 … (and) the number of jobs is projected to grow by another 7 percent but the majority will be in construction to build and install new renewable energy capacity.”

graph of U.S. net electricity generation and coal production, as explained in the article text

The green economy is taking over. (Trump or no Trump.)

The extractive economy (much like the farm economy a generation ago) reached its peak, probably back in 2014. Oil and gas employed 514,000 people. Today it’s 388,000. Coal and extraction related jobs peaked at 90,000 and now that number is about 53,000.

Then Indian Country’s development of coal (or not) has been the story so far in the Trump era.

Last month Interior Secretary Ryan Zinke signed a memorandum lifting restrictions on federal coal leasing. He said the “war on coal is over.” Then he quoted Crow Tribal Chairman Darrin Old Coyote saying, “there are no jobs like coal jobs.”

A day later the Northern Cheyenne Tribe filed suit. The tribe said the Interior Department did not consult it prior to lifting the restrictions. “It is alarming and unacceptable for the United States, which has a solemn obligation as the Northern Cheyenne’s trustee, to sign up for many decades of harmful coal mining near and around our homeland without first consulting with our Nation or evaluating the impacts to our Reservation and our residents,” Northern Cheyenne Tribe president L. Jace Killsback said in a news release. There are 426 million tons of coal located near the Northern Cheyenne and on the Crow Nation.

Meanwhile in Alaska, another coal project was put to rest in a tribal community. The village of Tyonek has been opposed to the Chuitna Coal Project. (Previously: Mother of the Earth returns to Tyonek) After a decade of planning, PacRim Coal suspended the project last month because an investor backed out.  The project could be brought back to life. But that’s not likely. Because coal is a losing bet for any investor.

According to Alaska Public Media that meant a joyful celebration in Tyonek.  The president of the village Native Council, Arthur Stanifer said, “What it means for us is our fish will continue to be here for future generations, also our wildlife, like the bears and the moose and the other animals will be secure and they’ll be here. They’ll have a safe place to be.”

And what of the jobs? That’s the hard part. The prospects for extraction-related jobs are about to be hit by even more disruptive forces. For example in the oil fields of North Dakota one of the great paying jobs is truck driving. Moving material back and forth. But already in Europe companies are experimenting and will soon begin the shift to self-driving vehicles. It’s only a matter of time before that trend takes over because it fits the model of efficient capitalism. Self-driving trucks don’t need rest breaks, consume less fuel, and fewer accidents. That same disruption of automation is occurring across the employment spectrum. Jobs that can be done by machines, will be.

So if jobs are no longer part of the equation, does natural resource extraction benefit tribal communities?

The answer ought to include a plan where the United States government and tribes work together to replace these jobs: Retrain workers and invest in the energy sector that’s growing, renewable fuels. But that’s not likely to happen in Trump Era.

Mark Trahant is the Charles R. Johnson Endowed Professor of Journalism at the University of North Dakota. He is an independent journalist and a member of The Shoshone-Bannock Tribes. On Twitter @TrahantReports

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#NativeVote16 – North Dakota’s three statewide challengers pitch to voters

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Chase Iron Eyes in Fargo for state’s congressional debate. He said: “We are creating a 21st century North Dakota.” (Photo via Facebook)

Mark Trahant / Trahant Reports

We’re about a month away from this election season being over — and so there is a lot going on in the #NativeVote16 universe. (Previous: Make no mistake, Standing Rock is on the ballot.)

Let’s start in North Dakota where three Native American candidates are on the ballot statewide, plus five more for state legislative offices. Chase Iron Eyes, Ruth Buffalo and Marlo Hunte-Beaubrun are essentially running as a team. Almost a Indigenous version of the Democratic Party (which says something about the regular party). To me this race shows how much better our politics would be if campaigns were publicly funded because then it would only be a debate about the issues. And there would be a more equal platform for that discourse.  As it stands: Iron Eyes and his colleagues are campaigning by selling t-shirts and small donations. While their opponents have all the resources they need (plus a very Republican state as a base of support). On Facebook, Iron Eyes posted, “Congressional races are just as important as the presidential race. If I can hit you up for 5$ go here www.ironeyesforcongress.us I need some basic ads to make this real.”

Last week the one moment of equality was Face To Face: North Dakota US House Debate on Prairie Public Broadcasting. This was important because the difference between U.S. Rep. Kevin Cramer, R-North Dakota, and Iron Eyes could not be more stark. Cramer was pitch perfect in his support of big oil and the Dakota Access Pipeline. said that the Standing Rock Tribe did have consultation, nine times, but that was not the same as consent. He said his biggest concern is that the administration changed the rules after they were followed. (My view of that logic in an earlier piece, “Who gets to tell the Standing Rock story about what happens next?”)

“I just think we need to be respecting each other,” Iron Eyes said in the debate. “I just don’t feel we should be putting our water resource at risk … pipelines need to move our oil to market, but Energy Transfers lied to the American people saying this was American oil to be consumed on American soil, and they have since backed away from that.”

Ruth Buffalo is running to be the state’s Insurance Commission. She also debated last week on Prairie Public Television.  She said it’s a critical post because it’s the advocate for the people of North Dakota to hold insurance companies accountable for following through on their promises. Her campaign is largely public appearances (she crosses the state a lot, and that’s not easy in North Dakota) as well as social media. Her campaign manager recently posted on Facebook: “Election day is less than FIVE weeks away! Our page has over 3,000 likes, which is phenomenal! This is a true grass roots effort. Today, and for the rest of the campaign, I am going to ask you a favor: spread the word to your contacts about Ruth and her vision as Insurance Commissioner of North Dakota. If everyone who likes this pages reaches and convinces at least 50 new people, we will have a real shot to bring Ruth’s experience in health and business, as well as her unique and compassionate voice, to the insurance branch of North Dakota.”

Marlo Hunte-Beaubrun is campaigning for the office that would regulate pipelines such as the Dakota Access Pipeline. In a campaign video she said many North Dakotans know that the regulatory process is unfair and she’s like to restore balance. “But I can’t do that alone. I need your vote,” she said. “Let’s give North Dakota a chance at success.”

The world is watching what is happening at Standing Rock. And these campaigns represent a chance for those same voices to have a say in the political process from pipelines to health care. And if you think it’s impossible for the impossible to happen, consider this, with the Trump-implosion, all bets are off. Seats that were supposed to be safe might not be. Elections are all about who shows up.

Mark Trahant is the Charles R. Johnson Endowed Professor of Journalism at the University of North Dakota. He is an independent journalist and a member of The Shoshone-Bannock Tribes. On Twitter @TrahantReports

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#NativeVote16 – A champion for change will be on South Dakota’s ballot

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Henry Red Cloud is the Democratic candidate in South Dakota for Public Utilities Commission. He is an entrepreneur that builds solar energy projects. (Photo via YouTube.)

The Year of the Native American candidate

Mark Trahant / TrahantReports

It’s easy to dismiss this election. Every day there’s more news about something outrageous that was said by a presidential candidate. Grab the remote. Click. It’s gone and and ignore.

But that’s only one way to think about the 2016 election. Flip the narrative and this is the most interesting and exciting election ever. Especially for American Indians and Alaska Natives.

Just look across the country at the sheer number of Native Americans candidates challenging the status quo in races from county commissions to Congress. This much is certain: This is the year of the Native American candidate. If it’s also the year of the Native American voter, well, look out, innovation is ahead.

I have always thought many people with experiences in Native communities have a lot to offer the broader community. I often see creativity and innovation.

South Dakota Democrats nominated Henry Red Cloud as the party’s nominee for a spot on the state’s Public Utilities Commission. Red Cloud, Lakota is the founder and owner of a renewable energy company based in Pine Ridge. “Lakota Solar Enterprises is located on the Pine Ridge Reservation in South Dakota, home to the Oglala Sioux Tribe,” the company’s web page says.  “We believe that reducing our dependence on fossil fuels is important. And on tribal lands, it is imperative. We hope you will join us in helping tribes achieve energy sovereignty.” He calls renewable energy “a new way to honor old ways.”

His company, and associated nonprofit, do that by installing real solar systems into people’s homes. But Red Cloud has said he sees these projects beyond (as important as it is) sustainable energy. He sees this as a route to build a stronger economy within tribal nations.

This is a great story to tell during an election campaign. Voters will be introduced to a creative and innovative energy path that’s creating real jobs now, employing people to build and install solar energy systems. Contrast this with the usual discourse about energy or the nonsense about how climate change isn’t real.

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President Obama honored Red Cloud for his work in 2014 as a “Champion of Change.”

Red Cloud told The Associated Press he is “honored” by the nomination and is “eager to discuss the challenges and opportunities facing consumers and utility companies in South Dakota.”

The South Dakota Public Utilities Commission in January certified the Keystone XL pipeline route through the state. The agency said at the time that if a presidential permit is issued, and then “the pipeline is built, the PUC will monitor the progress to ensure the construction conditions are met.” In other words: This is a critical agency for pipelines and energy planning.

And, unfortunately, this is where that presidential race creeps back into the process. The next president could think differently about Keystone XL than President Obama. Plus there is a new challenge based on free trade.

But this is also why this election is so important. Red Cloud is running for the regulatory post and next door, Marlo Hunte-Beaubrun, is seeking a seat on the three-member North Dakota Public Services Commission.  The Public Service Commission regulates the oil and gas industry as well as telecommunications, weights and measures, and pipelines. In January the agency approved the Dakota Access Pipeline. (Previous: Pipelines, rail cars, and the price of oil.)

Red Cloud and Hunte-Beaubrun are two of five Native American candidates across the country running for statewide office. And on the front lines (or is that the front desk?) of making decisions about pipelines, energy policy and climate change.

Mark Trahant is the Charles R. Johnson Endowed Professor of Journalism at the University of North Dakota. He is an independent journalist and a member of The Shoshone-Bannock Tribes. On Twitter @TrahantReports

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#NativeVote16 – The power of ‘what if?’ Paying tribes to leave coal in the ground

A Montana coal train headed west.
Mark Trahant / TrahantReports

What if? Two words that ought to be the every day language in politics. What if we tried this? What if we did that? What if we imagined?
I have been thinking a lot of “what ifs?” when it comes to coal. Coal is a paradox for several Native American communities. The United Nations says that nearly 90 percent of proven coal reserves are “unburnable” and should be left in the ground. 
Historically the industry has created good paying jobs, but now it’s in sharp decline (Mostly because of market forces, the availability of inexpensive natural gas). Yet stakeholders — workers and even a few tribes — blame the government for too many regulations. And, on the flip side, many of those working to change the energy paradigm demand that coal be left in the ground without thinking through the consequences to families who earn their living digging or shipping coal or even to the governments who rely on the revenue. Previous: The politics of leaving coal in the ground;  Investing in coal (or better a transition away from coal). 

That’s where we begin the “what if?” thinking.

What if we could leave coal in the ground? What if we could still pay tribes for that resource and workers could benefit from the inevitable transition?
Turns out there is a solution that does both. Stephen Kass, a New York attorney who works on climate issues, suggested in the Washington Post last week that the United States buy the entire coal industry and shut it down. “Although it is not possible to estimate accurately the total cost of acquiring all of the several hundred currently operating coal-fired power plants, the Environmental Protection Agency has estimated the net benefits of the greenhouse-gas reductions under the Clean Power Plan at between $26 billion and $45 billion by 2030, not counting the substantial public-health savings from reducing coal plants’ toxic emissions unrelated to climate change,” Kass wrote. “Such savings should go a long way toward making it feasible for the government to purchase or condemn the plants, which are typically almost 40 years old, fully depreciated and only marginally profitable under current and foreseeable market conditions and environmental requirements. Moreover, because Plan A would compensate private owners for the market value of their plants, it would avoid conservatives’ claims of excessive regulation without compensation.”

This is the perfect time to buy the entire coal industry. Many coal companies are in bankruptcy; and across the board, prices are low.

And I would take this idea one step further. Some thirty tribes have coal resources, totaling  at least one third of Western coal, on lands from Arizona to Alaska. So the United States should pay the tribes with coal assets a significant sum to not mine their resource. 

Montana’s Crow Tribe has a reserve of at least 9 billion tons of coal. In making the case for coal, Crow Tribal Chairman Darrin Old Coyote told InsideEnergy: “I don’t want to be dependent on the U.S. government. We have the resources, we have the manpower, we have the capability of being self-sufficient. There’s no reason why we should be this poor.”

What if that resources were purchased? True, the cost of any buy-out would be enormous. Unless the accounting included the even more massive costs associated with climate change. Then the purchase of coal to not mine should be considered as an investment not a cost.There is precedent for paying to take coal out of production. Farmers and ranchers are paid to not farm and ranch in order for the land to recover through several programs, including the Conservation Reserve Program. This would be the same. Tribes (and individual landowners) would be compensated for their resource and the coal would stay in the ground.

The international goal of reducing greenhouse gasses requires significant changes in energy policy. We need to rethink the energy paradigm across the board from oil and gas production to what it will take to jump start more green energy sources. And all of the changes ahead will be tough politically. So what if we start that effort with a win-win-win? A win for coal owners, including tribes. A win for workers. And, a win for the environment. This is how we leave coal in the ground.

So what if? 

Mark Trahant is the Charles R. Johnson Endowed Professor of Journalism at the University of North Dakota. He is an independent journalist and a member of The Shoshone-Bannock Tribes. On Twitter @TrahantReports

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Pipelines, rail cars and the price of oil

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Could low oil prices help usher in a new era?

Mark Trahant

TRAHANTREPORTS.com

Second in a series

A few minutes before noon on November 6, 2015, President Barack Obama stepped into the White House briefing room to announce that the Keystone XL Pipeline would not earn approval from the U.S. government.

“Several years ago, the State Department began a review process for the proposed construction of a pipeline that would carry Canadian crude oil through our heartland to ports in the Gulf of Mexico and out into the world market,” the president said. “This morning, Secretary Kerry informed me that, after extensive public outreach and consultation with other Cabinet agencies, the State Department has decided that the Keystone XL Pipeline would not serve the national interest of the United States. I agree with that decision.”

One of the reasons cited was a report from the Interior Department that cited “significant concern raised by some tribes in Indian Country regarding the need for protection of treaty rights and fulfillment of the trust responsibility, protection of sacred cultural sites, and avoidance of adverse impacts to the environment, including to surface and groundwater resources.The Department has also received letters from some tribal nations, particularly those located in the Great Plains region, who do not feel there has been adequate government-to-government engagement with them.”

The announcement was hailed as a huge win for Indian Country.

“This is a tremendous victory for all the pipeline fighters who have spent several years fighting the TransCanada “black snake,” Keystone XL! The President’s decision is a clear affirmation of our struggle to defend the sacredness of Mother Earth and to protect the future generations of all our relatives, human and non-human alike,” wrote Dallas Goldtooth, campaign organizer for the Indigenous Environmental Network. “We celebrate this as a win and a powerful step to the greater goals of keeping fossil fuels in the ground and shutting down the tar sands at the source!”

Back at the White House the president used that moment to raise an analytical note: “Keystone Pipeline has occupied what I, frankly, consider an overinflated role in our political discourse. It became a symbol too often used as a campaign cudgel by both parties rather than a serious policy matter. And all of this obscured the fact that this pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane to climate disaster proclaimed by others.”

Oil and gas — and by extension, pipelines — will continue to be built as part of the country’s energy infrastructure. As Obama put it: “Now, the truth is, the United States will continue to rely on oil and gas as we transition — as we must transition — to a clean energy economy.”

Fast forward to January 2016.

The North Dakota Public Service Commission approved a siting permit on January 6 for the Sacagawea Pipeline Project, designed to move crude oil more than 70 miles across the Fort Berthold Indian Reservation and connect to existing pipelines. The idea is that the 16-inch pipeline will transport as much as 200,000 barrels per day. “This is significant new and important infrastructure in a part of the state where truck traffic has been intense,” said Commission Chairman Julie Fedorchak. “We reviewed this project very closely, and the company committed to high standards of construction, operation and reclamation including and especially in regard to the crossing of Lake Sakakawea.”

That’s right. The pipeline will buried 100 feet below Lake Sakakawea.

One of the state’s regulators, Randy Christmann, said, “The use of horizontal diagonal drilling techniques to place this pipeline over 100 feet below the bed of Lake Sakakawea makes this the safest possible alternative for moving oil from one side of that important water body to the other.”

This is just one potential pipeline. The largest, The Dakota Access Pipeline Project would connect a 30-inch pipeline from North Dakota’s Bakken and Three Forks oil fields to Patoka, Illinois, a length of 1,154 miles.

That’s roughly the same distance as the Keystone XL pipeline project. And because the Dakota Access Project doesn’t cross an international border, the approval process is routine.

Dakota Access Partners, the builder of the project, says it anticipates beginning construction this year and to “be in service by the fourth quarter of 2016.” The goal is to move more than a half million barrels of oil per day.

 

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The Dakota Access Project would transport oil from North Dakota to Illinois. The goal of Dakota Access Partners is to have the system in operation by the end of 2016 and to move a half million barrels of oil per day. (Source: Dakota Access Partners map.)

 

 

 

 

 

On January 20, the North Dakota Public Service Commission approved a siting permit. “This project received thorough review which was totally transparent. We received broad public input. We listened and the company listened,” said Commission Chairman Julie Fedorchak. “The permit today provides for a sound, safe project that will provide an efficient and environmentally sound way to transport Bakken crude oil for many decades.”

Indeed, there is an environmental case to make for pipelines. Oil that is not transported through a pipeline is shipped by truck or train. As the environmental think tank, Sightline, reported, the goal of the industry is to ship a million barrels of oil every day by railroad. “If all of the projects were built and operated at full capacity, they would require more than 100 loaded mile-long trains per week to traverse the Northwest’s railway system,” Sightline said. “Many worry about the risk of oil spills along the region’s extensive rail network, particularly in remote locations where emergency response would be challenging.”

Railroad enterprises, like the pipeline, are banking on delivering Bakken/Three Forks oil to markets.

Here is the problem: If the pipeline is built and the train system is upgraded there will be too much transportation capacity at current oil prices. So the railroad companies will have to seek out new customers. Or, as Sightline said, while “the projects are largely designed to transport and handle light shale oil from the Bakken oil formation in North Dakota … the infrastructure could also be used to export heavy Canadian oil.”

The idea of how much capacity — especially given the price of oil — is the wild card in any transportation scheme. Many projects were designed when oil prices were higher than $75 a barrel instead of around $30. Oil is a commodity and traded on international markets. That means it’s subject to the up and down of supply and demand. Currently there is far more oil supply than demand. A report by the International Energy Agency says last year “saw one of the highest volume increases in global oil demand this century, we have long believed that this could not be repeated in 2016. But, with crude oil prices plunging below $30/bbl, must we expect some boost to the rate of growth in 2016? Unfortunately, the New Year has been awash with pessimism about economic growth.”

And that means less economic growth — and less oil consumption. The IEA says that when Iran is fully online selling oil, and if other oil exporting countries maintain current production levels, the demand could exceed demand by 1.5 million barrels a day and “unless something changes, the oil market could drown in over-supply.” So yes prices could go lower.

The way that will impact major projects such as pipelines is that oil companies and those that are in related businesses will need to adjust their spending. Some oil companies have borrowed a lot of money to increase production and now are unable to pay their loans without selling off major assets.

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What goes up? Bureau of Indian Affairs expected oil royalty figures to top $1 billion in 2014. Estimate was before the sharp drops in the price of oil. (Source: Bureau of Indian Affairs)

Indian Country has a complicated relationship with the price of oil. So many of our people (both reservation and urban) drive pickup trucks and the price at the pump becomes a daily worry. On the other hand more than a dozen tribes and several Alaska Native corporations are oil and gas producers. So the low oil prices impact everything from government budgets to the number of jobs available locally. The most recent numbers posted by the Bureau of Indian Affairs estimated royalties at $900 million “and within two years, estimates royalty income will increase to over $1 billion.” And as the report projected a billion was likely exceeded as the 2014 price of oil averaged $93.17. But last year that same average was $48.67.

There are other forces at play.

The Paris agreement on climate change sets a target of “well below” a rise of 2 °C, with “net-zero green house gas emissions by 2100.” That means a stepped up transition away from fossil fuels but it’s worth noting that the agreement also recognizes the “unique role of gas and oil.” That will only happen if there is “significant support for mitigation technologies and approaches” and “energy economics and consumption patterns would need to change substantially, and consumers would need to accept these shifts.”

In some ways that is already occurring. One factor that is contributing to the over-supply of oil is that Americans are driving less — especially the millennial generation. (More about that next week.) But it could be that oil prices are low at exactly the right moment, easing our transition to a new energy framework.

Mark Trahant is the Charles R. Johnson Endowed Professor of Journalism at the University of North Dakota. He is an independent journalist and a member of The Shoshone-Bannock Tribes. On Twitter @TrahantReports

 

NEXT IN THE SERIES: 

  • What replaces extraction?

Why 2016 is the ideal election for a Native presidential candidate

Rep. Tom Cole, R-Oklahoma, could add American Indian issues into the presidential campaign debate.
Rep. Tom Cole, R-Oklahoma, could add American Indian issues into the presidential campaign debate.

Nevada will be the first state where Native voters weigh in

MARK TRAHANT

The first ballots for the 2016 presidential election will be cast in a little more than seven months. That means between now and January there will be a rush of candidates, a winnowing of those who fail to raise money or attention, and, if we are lucky, a philosophical and practical debate about the challenges facing the United States.

In an ideal world that discussion would include American Indian and Alaska Native concerns. But that never happens (unless you read between the lines).

So the Democrats — Former Secretary of State Hillary Clinton, Vermont Sen. Bernie Sanders, former Maryland Gov. Martin O’Malley, and the newest entrant, Rhode Island Gov. Lincoln Chafee (who once was a “liberal” Republican) — campaign on issues ranging from protecting and expanding voting rights to switching the U.S. to the metric system.

And the Republicans? Well, just listing the candidates is kind of like making sure you get all the names right when reporting about a school play. There are so many, you’re bound to miss someone. But here goes (in order of recent polling by Real Clear Politics): Former Florida Gov. Jeb Bush, Wisconsin Gov. Scott Walker, Florida Sen. Marco Rubio, Dr. Ben Carson, Kentucky Sen. Rand Paul, former Arkansas Gov. Mike Huckabee, Texas Sen. Ted Cruz, New Jersey Gov. Chris Christie, Donald Trump, former Texas Gov. Rick Perry, Ohio Gov. John Kasich, former Penn. Sen. Rick Santorum, Carly Fiorina, South Carolina Sen. Lindsay Graham, and Louisiana Gov. Bobby Jindal. And that’s only the 15 “major” candidates. So in order to make noise in that large a field some of those would-be presidents rode Harley’s across Iowa this weekend, revving up their engines and their rhetoric. Hardly the right atmosphere for a discussion about tribal sovereignty.

The early primary campaign season is not ideal for a serious discussion about Indian Country’s issues. The election calendar starts with Iowa, New Hampshire and South Carolina in late January.

Nevada will be the fourth state to vote — and the first state with a significant tribal population. There are more than thirty reservation communities, urban residents, and a total Native American population of about 1.6 percent. More important, Nevada remains a caucus state. So if a large number of Native Americans show up in the right locations, well, all bets are off. (Only 33,000 Republicans voted in the last Nevada caucus out of some 400,000 G.O.P. voters.)

And what if there was a Native candidate as a draw? This ought to be the year to make that so.

A Native American candidate could take advantage of a nasty, undemocratic (but legal) structure. The law allows secret donors to spend unlimited sums of money to benefit a single candidate. So what if a few of the wealthy tribes, and, yes, I do mean casino tribes, raised a lot of money for such a super PAC? (Even though the money cannot go directly to a candidate, it still has been used to boost candidates. In 2012, for example, former House Speaker Newt Gingrich was on the receiving end of more than $15 million from casino owner Sheldon Adelson and his wife.)

Coming up with a super PAC candidate from Indian Country is a tough sell for Democrats. Even though there are many folks who could (and should) be candidates, there are too few with a large enough political footprint. And taking that much money from a single source runs against what many grassroots type candidates believe anyway.

But on the Republican side, there is someone who has that credibility right now, Rep. Tom Cole of Oklahoma, a member of the Chickasaw Tribe.

Cole is as conservative as his Oklahoma voters yet he is often the voice of reason in the House of Representatives. He’s said that new revenue — meaning taxes — might be needed to get past the sequester and that repealing the Affordable Care Act might not be possible as long as a Democrat is in the White House. This alone distinguishes him from the other fifteen Republican candidates running for president.

He’s championed tribal sovereignty and was a key player in the House vote for the Violence Against Women Act. Let me be clear here: Cole fits the orthodoxy of the Republican Party. He supports pipeline construction and increasing oil and gas production. Cole also wants less federal spending and votes for budgets that would have negative impact on tribal communities. But for a Republican primary, and for a Republican candidate, Indian Country would still come out ahead, if he were running and raised the issues in Indian Country that call out for a larger debate.

The down side of a Cole candidacy is that he would have to give up his seat in the House — and his seniority and influence. That’s probably too high a cost for an improbable presidential quest. But this might be the year to try something outrageous.

Mark Trahant is an independent journalist and a member of The Shoshone-Bannock Tribes. For up-to-the-minute posts, download the free Trahant Reports app for your smart phone or tablet.

Updates: Medicaid expansion in Alaska, Montana — and oil prices.

MARK TRAHANT

Montana will be the next state to expand Medicaid. Gov. Steve Bullock is expected to sign the bill authorizing expansion into law on Wednesday at noon.

Remember this is a Republican-controlled legislature — so I think it demonstrates that when people really look at the numbers, the number of jobs, the number of people insured, the reduction in uncompensated care for health facilities, the case for expansion is overwhelming.

The Montana Budget and Policy Center reports that there remains work to be done. From the Center’s post: “Next, the state will have to submit a section 1115 waiver to the federal government to expand coverage and receive increased federal funds. Section 1115 waivers allow states to pursue experimental, pilot, or demonstration projects that promote the objectives of Medicaid, namely to keep low-income families healthy. (It’s called “1115 waiver” for short, because of the section in the Social Security Act where this flexibility is provided.)” That process will require approval from the Centers for Medicaid and Medicare Services (or CMS). “The 1115 waiver process is an important step, and we will be closely following it. 70,000 Montanans are depending on it.”

The Montana Budget and Policy Center also submitted an op-ed for publication. I’ll post that shortly.

Western Native Voice reports: Native Americans working for progressive change in Montana Indian communities will rally before the Medicaid expansion bill signing ceremony Wednesday, April 29th, at 11:30 AM on the stairs of the Capitol. Coming together to celebrate Medicaid expansion and all the other important legislative achievements for Montana Indians, the rally will also focus on the road ahead to building civic power in Native communities

In Alaska the outcome over Medicaid expansion is still unknown. The Alaska Legislature has not been keen on expansion despite a push from the Gov. Bill Walker.

The Republican strategy against Medicaid expansion focuses on reimbursement rates for Medicare, pitting seniors against those eligible for Medicaid (including the Alaska Native medical system). What’s interesting to me is that the job picture has not been a part of the debate when the evidence in every other state that has expanded Medicaid is that new jobs were added.

Two other Montana legislative developments: Enacting a water rights settlement and improving the funding for tribal colleges. The new law authorizes an 8% increase to the per-student funding that tribal colleges receive for non-Indian resident students, subject to appropriations, changing the distribution rate from $3,024 to $3,280 per non-Indian student. This is the first increase to the statute since 2006.

“In Montana, tribal colleges and universities benefit the state economy and provide an affordable option for quality post-secondary education,” said Laura John, State-Tribal Policy Analyst for the Montana Budget and Policy Center. “House Bill 196 takes us one step closer to reaching adequate funding levels needed to support Montana’s non-tribal students.”

The governor called the legislature back into special session. So there will be more twists and turns ahead.

I also wrote a few weeks ago about price of oil and its impact on Keystone, the tar sands, and other debates over energy policy versus the environment.

Two pieces are worth looking at. First, a Brookings report that says low oil prices are here to stay. (The reason is simple: Excess capacity, reduced consumption and lots of oil being pumped by every concern.) As the report points out: “The U.S. and its neighbor Canada have both increased oil output, and their response to the fall in oil prices has been to reduce the pace of production growth by reducing capital investment, but output and capacity continues to grow.”

Today Bloomberg posted five charts that tell the story quickly.  “Before deciding prices will race back to $100, here are five charts worth keeping in mind.”

Oil is cheap … so leave it in the ground and address climate change

People are driving less -- as is oil consumption. So this might be the ideal time to address climate change because even oil companies have an incentive to leave oil in the ground. (Trahant photo)
People are driving less — as is oil consumption. So this might be the ideal time to address climate change because even oil companies have an incentive to leave oil in the ground. (Trahant photo)

MARK TRAHANT

Could we be nearing the moment to really address climate change?

A quick answer is “no.” Of course not.

The Republicans in Congress are hell-bent on pretending that climate change does not exist let alone agree to any shifts in policy. So they continue to fight for the approval of the Keystone XL pipeline. As the House Energy and Commerce Committee tells the story, the pipeline expansion “would carry up to 830,000 barrels of oil per day 875 miles from Alberta, Canada to Steele City, Nebraska. From there, the oil would go to refineries in the Midwest and Gulf Coast. The new pipeline would also transport some of the rapidly-increasing oil production from the Bakken formation in North Dakota and Montana.”

But here is the thing: There is already a glut of oil and the idea of adding more makes no sense.

As National Public Radio reported last week “there has been some concern that the U.S. will run out of places to put it all. Some analysts speculate that could spark another dramatic crash in oil prices.” How big a decline is an unknown. NPR quotes a Citigroup analyst saying $20 a barrel is possible. Others predict a continued fall in oil, to, say, $35 a barrel. Oil is a commodity and traded on public markets. So the price depends on perception about its supply and scarcity.

One reason why there is so much oil out there is that people are using less. The Nation recently wrote that the Energy Information Administration “projected that global oil demand would reach 103.2 million barrels per day in 2015; now, it’s lowered that figure for this year to only 93.1 million barrels. Those 10 million “lost” barrels per day in expected consumption may not seem like a lot, given the total figure, but keep in mind that Big Oil’s multibillion-dollar investments in tough energy were predicated on all that added demand materializing, thereby generating the kind of high prices needed to offset the increasing costs of extraction. With so much anticipated demand vanishing, however, prices were bound to collapse.”

Report by USPRIG Education Fund says driving habits of Americans are unlikely to return to the free wheeling days.
Report by USPRIG Education Fund says driving habits of Americans are unlikely to return to the free wheeling days.

I happen to think the decline in consumption is a long-term trend. There are a couple of reasons for that. The first is that people drive less after 40 years old — and the Baby Boom is long past that. A New Direction Our Changing Relationship with Driving and the Implications for America’s Future, a 2013 report by the U.S. PIRG Education Fund found that “Americans drive no more miles in total today than we did in 2004 and no more per person than we did in 1996.”

And, while Baby Boomers are less inclined to drive, the Millennial generation is thinking about transportation differently, “driving significantly less than previous generations of young Americans. Millennials are already the largest generation in the United States and their choices will play a crucial role in determining future transportation infrastructure needs.”

Even if gas prices stay low these trends are not likely to reverse. As the New Direction report points out:  “If the Millennial-led decline in per capita driving continues for another dozen years, even at half the annual rate … total vehicle travel in the United States could remain well below its 2007 peak through at least 2040—despite a 21 percent increase in population.”

Of course Indian Country is unlikely to be included in this data. Too many reservations require driving because there are few other alternatives. And the price of gas determines how much we’ll have to spend on everything else.

And the idea of cheap gas could help sell climate action. If it’s not profitable to pump oil right now, perhaps, oil companies will find a reason to delay investments in new projects. That means leaving carbon products in the ground for a better return on investment.

This is already happening in Canada. TransCanada is giving up on plans for a new energy port and delaying one of its pipeline projects.

On Tuesday the White House said the U.S. will double the pace of carbon reduction from 1.2 percent per year on average during the 2005-2020 period to 2.3-2.8 percent per year on average between 2020 and 2025. “This ambitious target is grounded in intensive analysis of cost-effective carbon pollution reductions achievable under existing law and will keep the United States on the pathway to achieve deep economy-wide reductions of 80 percent or more by 2050,” the White House said.

And Keystone XL? I don’t see how the White House could justify this project on economic or climate grounds. And especially now because the only way to reach those targets (which most experts say is only a modest improvement) is leave oil right where it is. And now, for a moment at least, it’s the interest of oil companies to do the same.

So long live $20 oil. And let’s leave it in the ground.

Mark Trahant serves as the Atwood Chair at the University of Alaska Anchorage. He is an independent journalist and a member of The Shoshone-Bannock Tribes. For up-to-the-minute posts, download the free Trahant Reports app for your smart phone or tablet.