SOURCE: AP/David J. Phillip

In this Wednesday, March 16, 2011, file photo, exhaust rises from smokestacks in front of piles of coal at NRG Energy's W.A. Parish Electric Generating Station in Thompsons, Texas.

Endnotes and citations are available in the PDF version of this issue brief.

Super pollutants are one of the most underappreciated but dangerous contributors to climate change. Also known as short-lived climate pollutants, or forcers, super pollutants are potent noncarbon-dioxide global warming contaminants. They are also dangerous for human health and diminish agricultural productivity.

Reducing carbon dioxide—the primary greenhouse gas emitted from the burning of fossil fuels for energy and transportation—is necessary for achieving the long-term greenhouse reductions we need. However, it is impossible to achieve the total greenhouse gas reductions scientists agree are necessary for avoiding dangerous temperature increases without also limiting super pollutants.  Not only are super pollutants shorter-lived, but they also remain in the atmosphere for a shorter time than carbon dioxide; therefore, reducing these pollutants now can help reduce temperatures in the near term. In addition, the reduction of super climate pollutants can be easier than the reduction of carbon dioxide since none of them, unlike CO2, are a byproduct of our primary sources of energy.

This background brief focuses on three super pollutants that are some of the largest contributors to global warming: methane, black carbon, and HFCs. It explains the sources of these pollutants, their prevalence, and why fast action to reduce them is imperative for protecting public health and avoiding the disastrous impacts of global warming.

Super pollutant global warming potential and lifetime

The best way to understand the comparative global warming effects of super pollutants versus carbon dioxide is to understand their global warming potential, or GWP. GWP is a measure of the relative warming potency of a greenhouse gas over a period of time compared to carbon dioxide. HFCs, for example, have a global warming potential of between 140 and 11,700, meaning they are more than a hundred times and up to tens of thousands of times more potent than carbon dioxide.

But even though they are much more powerful than CO2, super pollutants lose their warming power in the atmosphere much faster than CO2. Half of CO2 pollution continues to cause increased temperatures for 50 to 100 years after being emitted, and 20 percent remains for thousands of years. In comparison, black carbon is hundreds to thousands of times more potent than CO2 as a contributor to global warming, yet it leaves the atmosphere in a matter of days or weeks. HFCs only stay in the atmosphere for 15 years on average, yet they can be tens of thousands of times more potent than CO2.

The following table lists the GWP and atmospheric lifetime of the three main super pollutants.

While these pollutants account for far less of the total amount of annual greenhouse gas emissions than CO2, they nonetheless cause 40 percent of warming, or “radiative forcing.”

Why are super pollutants important?

Warming is having real and deadly impacts, particularly as a driver of trends in extreme weather. Global average temperatures have already increased more than 0.8 degrees Celsius over the past 100 years, and most of this increase has been a result of human-induced emissions since the industrial revolution. The internationally accepted goal to limit temperature increase caused by humans is to hold the increase to a rise of no more than 2 degrees Celsius, or 3.5 degrees Fahrenheit, over preindustrial levels; scientists agree this is necessary to avoid the worst impacts of global warming.

While long-term temperature stabilization is dependent on reductions in CO2, immediate reductions of super pollutants can provide rapid relief from extreme climate-related impacts by creating measurable decreases in temperature in the short term. Even if aggressive actions to cut CO2 were taken tomorrow, they would not have an impact on temperature decrease for many decades.

For example, a January 2012 study published in Science by an international team of 24 scientists and led by NASA climate modeler Drew Shindell, estimated the effects of initiating 14 methane and black carbon control measures. Combined with other greenhouse gas reductions, the study concludes that these measures would reduce total projected warming by half a degree, prevent 0.7 million to 4.7 million annual deaths, and increase annual crop yields 35 million to 130 million metric tons due to ozone reductions in 2030 and beyond.

According to the study, rapid reduction of other super pollutants, primarily HFCs, could significantly increase these temperature savings. These reductions can be achieved at a relatively low cost. Reducing a metric ton of methane, for instance, costs around $250, while the benefit is worth $700 to $5,000.

Sources of super pollutants

Black carbon is a component of soot, the common term for PM 2.5 pollution—particulate matter that is 2.5 micrometers in diameter or smaller, which is about 30 times smaller than an average human hair.

In 2005 the United States emitted 64,000 tons of black carbon, representing about 8 percent of the world’s total black carbon emissions. Global emissions are approximately 8.4 million tons, making the United States the eighth-largest global emitter. Domestic sources of black carbon—a product of the incomplete combustion of fossil fuels, biofuels, and biomass—are broken down by the following:

• 52 percent of black carbon emissions are from mobile sources—mainly trucks—and 93 percent of that total is from diesel engines.
• About 35 percent is due to biomass burning—wildfires, agricultural and prescribed burning, residential heating and cooking, wood-fired boilers, and charbroiling.
• About 7 percent is emitted from the generation of energy and power, primarily natural gas combustion.
• 1 percent is from industry, and 3.6 percent comes from residential sources such as woodstoves and furnaces.

Soot is one of the deadliest forms of widespread air pollution. Long-term exposure to soot when it enters the lungs and bloodstream is linked to heart attacks, strokes, respiratory problems, cancer, higher incidence of infant mortality and low birth weight, and premature death.

Black carbon leads to decreased agricultural productivity because it influences the formation of clouds and disrupts rainfall patterns. It is estimated that black carbon may be the second-leading contributor to global warming after CO2. Black carbon is also a significant driver of the rapid depletion of year-round ice formations in the Arctic Ocean. Soot deposits on ice reduce the natural albedo effect, whereby the white surface of the arctic ice reflects solar radiation. As a result, those parts of the Arctic Ocean that are polluted the most by black carbon will melt faster.

Methane is a greenhouse gas that is 20 times more potent than carbon dioxide, but it only remains in the atmosphere for about 12 years after it is emitted. The United States emitted 587.2 million metric tons of CO2 equivalent of methane in 2011. According to the U.S. Environmental Protection Agency, or EPA, this accounted for approximately 9 percent of U.S. greenhouse gas emissions in 2011.

Natural gas and petroleum industries are the largest emitters of methane in the United States, accounting for 30 percent of U.S. emissions. Enteric fermentation from livestock accounts for 23 percent of U.S. methane emissions, and landfills account for 17 percent. Coal mining, manure management, and wastewater treatment also contribute to U.S. methane output. In addition, methane contributes to the creation of tropospheric ozone, which can dramatically reduce crop yields.

In April 2012 the EPA issued new regulations that will limit methane emissions from natural gas wells. The EPA estimates that once the rules are fully implemented, they will result in an annual methane reduction of about 19 million to 33 million tons of CO2 equivalent and save $440 million from “climate-related benefits such as avoided health impacts, crop damage, and damage to coastal properties.” 

Hydrofluorocarbons are greenhouse gases that are hundreds to tens of thousands of times more potent than carbon dioxide. The average atmospheric lifetime for most commercially used HFCs is less than 15 years. HFCs, unlike other super pollutants, are manufactured by humans and not found in nature. They are most commonly produced for refrigeration, air conditioning, insulating foams, solvents, aerosol products, and fire protection.

HFCs are the fastest-growing greenhouse gas in the United States and globally. Fluorinated gases, including HFCs, perfluorocarbons, and sulfur hexafluoride, made up 2 percent of U.S. greenhouse gas emissions in 2010. HFCs are projected to grow by nearly 140 percent through 2020 in large part because they are being used as substitutes for ozone-depleting substances, or ODS, that are being phased out under the Montreal Protocol on Substances that Deplete the Ozone Layer. According to the EPA, U.S.-fluorinated gas emissions increased by about 61 percent between 1990 and 2011. The increase was driven by a 249 percent increase in emissions of HFCs since 1990 after they became a common substitute for ozone-depleting substances.

Why the United States should act now

By reducing the release of super pollutants, the United States has the opportunity to accomplish the following: quickly decrease global warming pollution; limit temperature increase caused by climate forcers; improve health impacts caused by soot and extreme heat conditions; improve global annual crop yields; and buy some time on passing the 2 degree Celsius threshold.

The United States has fortunately been a leader on advancing international agreements to reduce super pollutants. For the past four years, the United States, Mexico, and Canada have proposed a plan to phase down emissions under the Montreal Protocol. In February 2012 the United States helped launch the Climate and Clean Air Coalition to Reduce Short Lived Climate Pollutants, which now includes the European Union and 30 countries that are working together to share the best solutions to reduce these gases. But more international support is needed to advance these efforts. In addition to engaging foreign governments at a leadership level on these measures, the most important thing that the United States can do is to lead by example.

The United States has made some progress in reducing super pollutants. Corporate Average Fuel Economy, or CAFE, standards encourage low global warming potential substitutes for HFCs by allowing car and light truck manufacturers to generate credits toward compliance by using alternative refrigerants for model year 2012–2016 vehicles. There are several voluntary programs in place that allow state and local governments to work with companies and the EPA to reduce methane emissions. Natural Gas STAR, for example, encourages oil and natural gas companies to adopt technologies and practices that reduce methane emissions. As a result of voluntary methane partnership programs, total U.S. methane emissions in 2005 were more than 11 percent lower than emissions in 1990.

Advancing domestic initiatives to reduce these gases now could encourage more international cooperation on super pollutants, which would result in a rapid decrease of atmospheric warming and a reduction of the risk of extreme climate impacts. The saved lives and improved agricultural production that results from reducing super pollutants provide ample reason to act now.

Rebecca Lefton is a Senior Policy Analyst at the Center for American Progress. Thanks to Andrew Light and Mari Hernandez for their contributions. 

SOURCE: AP/Evan Vucci

President Barack Obama shakes hands with Chinese President Xi Jinping at the Annenberg Retreat at Sunnylands as they meet for talks Friday, June 7, 2013, in Rancho Mirage, California.

Endnotes and citations are available in the PDF version of this issue brief.

This past weekend the White House announced the signing of a new agreement between the United States and China on hydrofluorocarbons, or HFCs, which are highly potent greenhouse gases commonly used in air-conditioning units and refrigerators. During their two-day presidential summit at the Sunnylands estate in Rancho Mirage, California, U.S. President Barack Obama and Chinese President Xi Jinping jointly signed the following pledge:

Regarding HFCs, the United States and China agreed to work together and with other countries through multilateral approaches that include using the expertise and institutions of the Montreal Protocol to phase down the production and consumption of HFCs, while continuing to include HFCs within the scope of UNFCCC and its Kyoto Protocol provisions for accounting and reporting of emissions.

This new agreement is very big news. The United States has been pushing for years to get Chinese support for a global phase down of HFCs under the Montreal Protocol Treaty on Substances that Deplete the Ozone Layer, which was originally signed in 1987 to curb the use of ozone-depleting chemicals. Amending this treaty to include curbs on the production and use of HFCs would eliminate the equivalent of 90 billion tons of carbon dioxide by 2050 and avoid half a degree Celsius of warming by the end of the century. This is critically important given that the global goal now is to limit temperature increase caused by humans at 2 degrees Celsius and we have already warmed the planet almost 1 degree Celsius.

Hydrofluorocarbons were one of the substitutes brought onto the market through the Montreal Protocol phase-down process. HFCs were brought in to replace hydrochlorofluorocarbons, or HCFCs, which are older refrigerants that damaged the ozone layer. The problem, however, is that at that time, no one realized that although HFCs are ozone friendly, they are also one of the most potent greenhouse gases, thus potentially accelerating global warming much faster than carbon dioxide.

Over the past few years, air-conditioning use has exploded in developing countries—particularly China and India—and many of the new units manufactured and sold in those countries are utilizing HFCs. If that trend continues, the global-warming impact could be astronomical. Experts predict that if the current trend in the use of HFCs continues, those compounds could account for 20 percent of global greenhouse-gas emissions by 2050.

Fortunately, the Montreal Protocol also allows for using its mechanisms to reduce substitutes to ozone-depleting substances, when those substitutes turn out to have adverse environmental or climate impacts. This provision provided room for the United States, Canada, and Mexico to create a joint proposal (the “North American proposal”) calling on the parties to the Montreal Protocol to once again band together, this time to phase down HFCs and replace them with new chemicals that would be safe, not only for the ozone layer but also for global warming. The United States, Canada, and Mexico have submitted the proposal on an annual basis since 2009. More than 110 other countries support the proposal, but China, India, and Brazil do not and their objections have kept the proposal from moving forward.

China’s objections have been particularly important because it is a major global manufacturer and exporter of HFCs. Chinese delegations to the Montreal Protocol have offered a variety of legal and diplomatic reasons for why they do not support incorporating HFC phase downs into this treaty. Chinese representatives, for example, often state that since HFCs are greenhouse gases, an HFC phase down is a climate change issue, rather than an ozone-protection issue, and as such it should be discussed under the auspices of the United Nations Framework Convention on Climate Change, or UNFCCC—such as through the UNFCCC’s Kyoto Protocol—along with other global warming issues. Chinese representatives also complain about the uncertainty regarding the price and availability of HFC substitutes.

In reality, Beijing likely fully recognizes that the Montreal Protocol is well suited for HFC action, and that if the parties adopt a phase-down plan, they can build in sufficient time for chemical companies to dive into the market and compete with one another to produce the substitutes. What has really been happening on the Chinese side is that China’s chemical companies have been lobbying against the Montreal Protocol amendment, and administrative divides between China’s climate and environmental agencies have made it difficult to overcome that lobbying power.

Last weekend China pivoted and for the first time agreed to work jointly with the United States and other countries to phase down HFCs through some combination of multilateral forums that will include the Montreal Protocol and the UNFCCC. The current North American proposal is not the only option for HFC action; other proposals could be put on the table for consideration as well. The exact process still needs to be worked out, but this is a major step forward given that China has so far objected to all international attempts to phase down HFCs under the Montreal Protocol.

The real story behind China’s sudden pivot on HFCs is much bigger than what has been reported in the press surrounding the Sunnylands summit. While the United States has been pushing this issue within the Montreal Protocol over the past few years, major financial and political struggles have been underway in China, and a sudden shift in those struggles is what allowed for this new U.S.-China HFC agreement.

This issue brief will provide the backstory behind China’s new willingness to work with the United States on phasing down HFCs and highlight some of the pitfalls we may face as this important new initiative moves forward.

China’s powerful chemical lobby

Two Chinese industries are heavily impacted by the HFC issue: the chemical industry, which produces HFCs and other refrigerants; and appliance manufacturers that produce air conditioners and refrigeration units that utilize those chemicals.

China’s chemical industry has been the biggest barrier to change on HFCs. When China initially agreed under the Montreal Protocol to phase down HCFCs, China’s state-owned chemical companies invested heavily in the research, development, and production of HCFC substitutes, particularly HFCs. Today, those investments are finally starting to pay off, and the chemical companies have no intention of cutting off that lucrative revenue stream.

Sinochem Lantian, a major Chinese state-owned chemical company, now dominates the Chinese market for HFC-134a, an HFC refrigerant used primarily in vehicle air-conditioning systems. Over the past few years, Sinochem Lantian has ramped up HFC production and raked in huge profits. The company’s net profits from HFC-134a and other Montreal Protocol substitutes rose a whopping 48 percent between 2010 and 2011, and the company is still building out new HFC production facilities. Once those HFC chemical plants are built, they cannot be converted to produce alternative compounds, thus Sinochem Lantian and other Chinese HFC producers have a strong incentive to block the international effort to phase down the use of those products.

And that is exactly what they have been doing. The China Association of Fluorine and Silicone Industry, or CAFSI, has been a steady presence at Montreal Protocol meetings, and the powerful state-owned chemical companies such as Sinochem Lantian also send representatives to make sure that their objections are voiced. At the last big Montreal Protocol meeting in July 2012, for example, Chinese chemical-industry representatives issued an official statement objecting to any consideration of HFC phase downs under the protocol.

Administrative divides further stalled China’s progress on HFCs

HFC progress has been made even more difficult in China due to an administrative divide between that nation’s climate change and pollution regulators.

HFCs are a greenhouse gas included in the Kyoto Protocol. From a Chinese regulatory perspective, that means HFC emissions fall under the authority of China’s powerful National Development and Reform Commission, or NDRC, which has a mandate from China’s State Council (the national cabinet) to combat climate change, to regulate greenhouse-gas emissions, and to serve as China’s representative in international climate negotiations under the UNFCCC.

The fact that the NDRC has domestic regulatory authority over HFC emissions is significant because the agency has major policy clout, particularly on economic issues. If any Chinese agency can find a way around the opposition of China’s chemical industry on HFCs, it’s likely to be the NDRC.

The problem for the international discussions on HFC phase downs, however, has been that the National Development and Reform Commission has limited authority over Montreal Protocol negotiations. The Montreal Protocol was formed to address the ozone layer, and in China that issue has long been considered an environmental protection concern, not a climate change issue.

China’s Ministry of Environmental Protection Foreign Economic Cooperation Office, or FECO, heads up China’s delegations to the Montreal Protocol meetings and takes the lead on implementing the Montreal Protocol phase-down plans. FECO’s role has been a problem on the HFC front because, unlike the NDRC, China’s environmental ministry is relatively weak in the political hierarchy.

This administrative divide has created a major bottleneck on HFC action within China. The NDRC has authority to regulate HFC emissions, but the major international proposal on global HFC regulation has been put forward under the Montreal Protocol, where the NDRC does not have primary authority. While NDRC officials do attend those meetings, they generally do not support signing on for Chinese engagement in a climate change process under an environmental forum where they do not have the leading authority on the Chinese side.

China’s Environmental Ministry has authority to negotiate phase downs of substances under the Montreal Protocol, but the ministry does not have authority to regulate HFCs within China, and it lacks the political clout to face off against China’s powerful chemical industry.

The end result of this divide has been confusion and stalemate. It is a situation that has allowed the Chinese chemical lobby to basically dictate the nation’s international stance on this issue and China’s response to the North American HFC phase-down proposal.

Changing international stance made Chinese progress possible

Over the past few years, however, two changes have contributed to a gradual policy shift within China and, more recently, China’s changing international position on HFCs.

First, international momentum on the HFC issue has finally picked up sufficient speed to change the market prospects for HFCs and the appliances that use them. National-level HFC restrictions are already under discussion in the United States, Japan, and Europe. Some of those discussions are proceeding in fits and starts, but the growing momentum is clear. Even without a Montreal Protocol amendment, many of China’s major export markets are looking increasingly likely to phase down HFCs through some form of national policy action. If these phase downs happen, then Chinese appliance and chemical exporters will have to comply with those new standards, regardless of what happens within China.

Phasing down HFCs on a country-by-country basis has major implications for China’s air conditioning manufacturers and gives that industry a growing incentive to support an international HFC agreement, because standardizing an HFC phase down across borders would make those changes easier to predict and adapt to. Progress on the chemical industry side is slower, but once appliance manufacturers start shifting away from HFCs to alternative replacement chemicals, then the Chinese chemical manufacturers will eventually have to shift as well if they want to maintain market share. Once Chinese chemical companies become convinced that a global HFC phase down is inevitable, they will then have a strong market incentive to invest in the next generation of refrigerants instead of building out more HFC production plants.

At the same time that these changes have unfolded internationally, China’s powerful National Development and Reform Commission has begun to increasingly take on HFC emission reduction as a domestic climate change issue. China’s 12th Five Year Plan for Controlling Greenhouse Gas Emissions (2011-2015) includes a mandate from China’s national cabinet to the NDRC to step up domestic efforts to control HFC emissions. According to Chinese chemical-industry experts, in recent months the NDRC has begun sending increasingly strong signals to the nation’s chemical companies that tighter restrictions on HFC emissions are in the pipeline and that continued refusal to discuss potential pathways for an HFC phase down will not be tolerated.

The NDRC is also now including HFCs among the greenhouse-gas emission categories used to evaluate technologies and determine whether they can fall under the “low-carbon” category in China and thus be eligible for government subsidies and other policy benefits. In other words, HFC emissions are now being regulated in China as a greenhouse-gas problem, and that is a major departure from programs under the Environmental Ministry that have long considered HFCs to be “green” chemicals since they do not damage the ozone layer.

Framing China’s domestic HFC phase down as a climate-related, emission-reduction measure rather than an ozone-protection issue is a major policy shift. Most importantly, it gives the powerful NDRC an opportunity to take more ambitious policy action against China’s chemical industry. Once the chemical industry faces more stringent HFC regulation domestically, it will quickly start to lose the incentives to block international action.

More work still needed: What to watch for going forward

The combination of steady international diplomatic pressure and increasing NDRC leadership on the HFC issue within China has made this new agreement possible, but there is still more work to be done.

Most importantly, we still don’t know whether China will explicitly support the North American HFC phase-down proposal under the Montreal Protocol or whether China will propose some alternative, either under the protocol or in another forum. Due to the internal Chinese administrative divides mentioned above, the only way to get China’s NDRC on board for this new agreement was to draw a clear institutional connection to the UNFCCC, thus the bilateral pledge to “use the expertise and institutions of the Montreal Protocol” while at the same time “continuing to include HFCs within the scope of UNFCCC and its Kyoto Protocol provisions.”

It’s not yet clear exactly how this process will move forward toward a final Montreal Protocol amendment. The United States will certainly press for the adoption of the North American proposal, and China will likely press for more financing from developed countries in exchange for that amendment. This could complicate negotiations, though the Montreal Protocol has been successful in the past at getting all parties behind a common comprehensive package to achieve gas phase downs. Beyond that, the United States will have to keep an eye out for two potential pitfalls.

First, some individuals and agencies within China are likely to continue arguing that the best approach for HFC phase downs is to utilize the UNFCCC as the primary forum rather than the Montreal Protocol. The United States is highly unlikely to support such an approach because the Montreal Protocol amendment is ready to go today while further action by the UNFCCC might not begin to take effect until much later. The parties to the UNFCCC are currently in the process of negotiating a new comprehensive climate agreement, which will include all parties. The schedule is for that agreement to be finalized in 2015 but not take effect until 2020.

The ideal scenario would be to secure international agreement for a Montreal Protocol HFC amendment as soon as possible—ideally in the form of the North American proposal already on the table—and follow that by incorporating the HFC phase downs into the UNFCCC process so that the countries that make HFC phase-down commitments under the Montreal Protocol get some kind of credit for that action in the context of the UNFCCC negotiations.

To do that, however, the Chinese will need to clarify which agency will be in charge of those Montreal Protocol HFC negotiations: the NDRC or the Environmental Ministry. Ideally that agency will be the NDRC, since it has the authority to administer HFC regulations in China and the political clout to make that happen with the chemical industry. Chinese leaders could also set up a special coordination group under China’s national cabinet to manage this process. Either way, Chinese leaders will need to pave a clear path forward on the administrative process side, and that has not happened as of yet. One thing to watch for on that front will be who sits at the table to represent China, and in what rank order, during the HFC discussions at the Montreal Protocol meeting in Bangkok, Thailand, later this month.

Second, China’s chemical industry can be expected to try to slow the process. At present, DuPont (United States), Honeywell (United States), and Daikin (Japan) are the primary producers of HFC-replacement chemicals. Chinese chemical companies have some catching up to do if they want to compete in that market, and they are going to want to buy as much time as they possibly can to ensure that they have a chance to gain a sizable market share in the next generation of refrigerants.

Now that the U.S.-China HFC agreement has presidential sign-off, Chinese chemical-company opposition will not have the political clout to block all progress. Nonetheless, there will be some industry interests within China dragging their heels and trying to slow things down. One way to get around that problem is for the United States to cooperate with China in exploring new HFC alternatives and identifying potential phase-down pathways in both countries. As with former Montreal Protocol phase-down agreements, the North American proposal already gives developing countries extra time to meet their phase-down commitments, and that should also assuage Chinese industry concerns. At a minimum, we should certainly keep a close eye on China’s chemical-industry positioning and do what we can to keep this process moving quickly forward.

Conclusion

Although more work is needed, a major step has been taken. The signing of the new U.S.-China HFC cooperation agreement puts us on an entirely new playing field in the fight to combat global climate change. This new agreement also demonstrates that when the United States steps up to the plate to provide global leadership, other countries will follow, and that can result in major global progress. U.S. policymakers should keep that in mind going forward.

This agreement also serves as a good reminder that although we often clash with China on international climate issues, we should remember that just like here in the United States, China has divided interests on climate policy. There are industry groups within China lobbying to prevent climate action, but there are also progressive voices looking for new opportunities to get around those barriers. When China blocks U.S. climate initiatives at the international level, we should remember this reality and take the time to find opportunities to identify and work with the progressive Chinese voices that could be on our side.

In some cases, such as on the HFC phase-down issue, those voices may even come in the form of powerful government agencies such as the NDRC. Current NDRC Vice Chairman Xie Zhenhua is particularly well suited to take leadership on this issue, and that is exactly what is happening. Although Xie currently serves as China’s top climate change official and is ranked second in the powerful NDRC leadership hierarchy, he previously served on the environmental side as China’s minister of environmental protection, and in that capacity he was heavily involved in China’s previous Montreal Protocol negotiations in addition to being in charge of implementing China’s Montreal Protocol phase-down plans for ozone-depleting substances. As environmental minister, Xie even won the prestigious United Nations Environmental Programme’s Sasakawa Prize, and that award specifically acknowledged his success in implementing China’s Montreal Protocol phase-down programs. The fact that China has a Montreal Protocol expert in Beijing’s most powerful climate change seat at the NDRC has a lot to do with the success reached thus far.

When we look deeper at the various interests at play within the United States and China, we can almost always find some good opportunities for bilateral cooperation. In this most recent instance, our ability to do just that will almost certainly slow the pace of global warming and help preserve the planet for future generations. That is certainly a heady outcome for the recent presidential summit and a great note for U.S.-China relations to start out on under this new leadership term.

Melanie Hart is Senior Policy Analyst for Chinese Energy and Climate Policy at the Center for American Progress.

Many thanks to Andrew Light for his comments on and contributions to this issue brief.

Chairman Lamborn, Ranking Member Holt, and members of the committee, thank you for the opportunity to testify today on the Offshore Energy and Jobs Act of 2013.

Our nation’s ocean space is one of our greatest treasures. It gives us sustenance in the form of the seafood we consume and two-thirds of the oxygen we breathe. It provides a trade route that brings 90 percent of the material goods we import to our shores. It regenerates our souls with one of our most popular destinations for vacation, rest, and restoration of spirit and mind. And as we are here to discuss today, it also provides much of the energy that fuels our economy.

And in providing all of these services, our oceans and coasts are also fundamental economic drivers. According to the National Ocean Economics Program and the Monterey Institute of International Studies’ Center for the Blue Economy, in 2011 the ocean economy—which consists of construction, living resources, minerals, ship and boat building, tourism and recreation, and transportation—accounted for 2.7 million jobs and contributed more than $250 billion to our gross domestic product.

Particularly in today’s economic environment, we must strive to protect all the sources of revenue we receive from our ocean. The legislation we are here to consider today unfortunately prioritizes one industry over all the rest, to the detriment of both our economic and environmental well-being.

The Offshore Energy and Jobs Act of 2013 focuses on increasing energy production and, to that end, seeks to prioritize job creation exclusively in the energy field. But one cannot truly consider the potential effect of expanded oil and gas production on the economy and on employment without looking beyond just a single industry. The “all of the above” energy strategy espoused by members of both political parties and echoed from both ends of Pennsylvania Avenue must mean exactly that—all sources of energy production must be included. The Offshore Energy and Jobs Act is an incomplete bill for an “all of the above” energy strategy.

The fact is, accelerating offshore oil and gas production in an attempt to create more jobs might be a fine idea if nothing else took place in our exclusive economic zone. But the ocean is a busy place, and prioritizing one industry will surely come at the expense of others.

So the first thing I would ask this committee to consider is a revision of perspective. Instead of asking how to create more oil and gas jobs, take a step back and ask how to create more good jobs in industries that rely on the ocean. The options are suddenly far stronger.

Here is the reality of today:

• Offshore oil and gas production is already a growth industry. According to The Wall Street Journal, “today … offshore drilling is booming in the Gulf of Mexico.” Every year of the Obama administration, there has been more oil produced on the outer continental shelf than the last year of the previous administration, and every year but 2012 saw more production than any year of George W. Bush’s presidency.
• In 2010 the Gulf of Mexico experienced the worst accidental offshore oil spill in the history of the world. Since then, Congress has passed exactly zero laws to strengthen oversight of offshore oil production or increase pathetically low liability limits of $75 million.
• Despite this massive quantity of production, this legislation would stomp on the gas pedal, accelerating production even further and forcing the opening of new areas in the Atlantic, the Pacific, and the Gulf Coast, including areas where local residents resoundingly oppose having their coastlines threatened by oil production.
• In many of these regions, the current economy depends on clean, healthy oceans. The increase in industrial activity and the risk of blowouts, spills, and pollution that comes with offshore drilling would threaten oceans.
• Instead of creating offshore energy jobs by doubling down on dirty energy policies of the 20th century, we should be investing in the future: renewable energy. Shallow water offshore wind is ready for prime time in U.S. waters, and other offshore renewable technologies are right behind.

Michael Conathan is the Director of Ocean Policy at the Center for American Progress.

SOURCE: AP/Gregory Bull

Chris King fills up his truck at a gas station displaying a price of $4.59 for a gallon of self-service regular gas on Friday, February 22, 2013, in San Diego, California.

This article contains a correction.

Nearly 35 million Americans are expected to travel 50 miles or more this Memorial Day weekend to visit family and friends and enjoy the outdoors, according to AAA. Nearly 90 percent of them will likely to drive to their destination, filling up their tanks with expensive gasoline or diesel fuel before hitting the road.

Gasoline prices averaged $3.66 per gallon nationwide on May 21, 2013, which is 2 cents per gallon lower than they were a year ago when the price per gallon was $3.69. But experts predict that prices will plateau or increase throughout the summer, providing little relief at the pump for American families during this vacation season. These high prices enable the five biggest oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—to reap huge profits even though they are producing less oil worldwide than this time last year.

According to the Energy Information Administration, or EIA, the price of crude oil makes up 63 percent of the retail price of regular gasoline. Even though domestic oil production is booming, it has done little to protect Americans from rising gasoline prices because prices are set on the world market led by the Organization of the Petroleum Exporting Countries, or OPEC, cartel.

While U.S. oil production has grown significantly in recent years, domestic refiners are exporting more refined petroleum products so these fuels are unavailable to American drivers. U.S. refiners are currently exporting an average of 2.8 million barrels of petroleum products overseas every day, compared to 1.6 million barrels per day in 2008—less than half of today’s exports. The latest four-week export average included 828,000 barrels per day of “distillate fuel oil,” also known as diesel fuel, and 485,000 barrels per day of gasoline. Tom Kloza, chief oil analyst for the Oil Price Information Service, told the Chicago Tribune that “higher U.S. oil production and lower U.S. demand are being canceled out by exports.”

This Memorial Day weekend is the first big beach weekend since Superstorm Sandy damaged 94 percent of New Jersey’s beaches and dunes nearly seven months ago. Many communities, especially along the New Jersey coastline, are still rebuilding homes, schools, and critical infrastructure. A recent report from the Internal Displacement Monitoring Centre found that 39,000 families in New Jersey remain displaced by the storm.

As a result, coastal communities are scrambling to prepare for visitors who are expected to head to New Jersey’s beaches this holiday weekend. A recent report commissioned for the state’s division of travel and tourism noted that “infrastructure damage to key visitor areas [is] substantial” and that access “is still limited in some areas.” The tourism industry—which brought in $34.7 billion to the state’s economy last year could be impacted by fewer visitors this year as communities are still rebuilding and some beaches have not reopened.

Beginning with the Memorial Day weekend and throughout the summer, Americans will spend their hard-earned dollars traveling to visit family, friends, and the great outdoors. Meanwhile, Big Oil will be making huge profits off of these travel expenditures on fuel, while at the same time fighting for decreased public health and climate-change protections.

Here is a by-the-numbers look at what Big Oil will cost us this holiday weekend:

An expensive holiday weekend ahead for travelers

• 690 miles: Average distance Americans will travel this Memorial Day; 7 percent higher than the 2012 average.
• $105: Gasoline cost for an average trip this Memorial Day weekend.

Big Oil profits increase as Americans face high prices at the pump

• $30.2 billion: Earnings for the first three months of 2013—about $336 million per day—for the five biggest publicly traded oil companies: BP, Chevron, ConocoPhillips, ExxonMobil, and Shell.
• $1 trillion: Combined profits from 2001–2011 for the five biggest oil companies.
• $2.4 billion: Special federal tax breaks received by the big five oil companies in 2011.
• One minute: Big Oil makes more in one minute than what 95 percent of American households earn in an entire year.
• One-third: Proportion of the Big Oil profits used to repurchase their stock, which only serves to pad the pockets of senior executives and the largest shareholders.
• -2 percent: Reduction in worldwide oil production by the big five oil companies compared to one year ago.

Big Oil’s influence machine

• $71 million: Total direct federal campaign contributions from the oil and gas industry in the 2012 election cycle.
• 90 percent: Proportion of direct federal campaign contributions from the oil and gas industry that went to Republican candidates.
• $140 million: Total lobbying expenditures by the oil and gas industry in 2012.
• $50 million: Total lobbying expenditures by the big five oil companies in 2012.*

New Jersey’s tourism sector is essential for state’s economic growth

• $34.7 billion: New Jersey’s annual tourism revenue.
• 62 percent: Estimated percentage of tourism dollars that were spent at the Jersey Shore in 2008.
• 500,000: Number of Americans employed by New Jersey’s tourism industry.
• $1,420: Estimated additional annual tax that each New Jersey household would have to pay in the absence of state tourism dollars, in order to maintain current government revenues.

Climate-change fueled extreme weather impacts tourism

• 94 percent: Proportion of New Jersey beaches and dunes that were damaged by Superstorm Sandy.
• 27 million: Number of cubic yards of sand that the Army Corps of Engineers will replace along the New Jersey and New York coastlines to restore storm-damaged beaches. Thomas Herrington, professor of ocean engineering at Stevens Institute of Technology, said the amount of sand lost to Superstorm Sandy is “unprecedented” and equal to what is typically lost over the course of a decade.
• 4: Number of states with significant wildfires in their national and state forests as of May 20, 2013. (The states: California, Florida, Minnesota, and Montana.) 
• 3,800: Number of acres currently burning through the Los Padres National Forest in California. As of May 20, 2013, the fire was only 25 percent contained.
• 1 million: Estimated annual visitors to the Los Padres National Forest between 2005 and 2009.

Big Oil behaving badly, again

• 210,000: Total number of gallons of tar-sands oil spilled by a pipeline leak in Mayflower, Arkansas, in March 2013. The failure of the nearly 70-year-old pipeline owned by ExxonMobil forced 83 people to evacuate their homes.
• 126,000: Number of gallons ExxonMobil had yet to recover as of early May. The same pipeline ruptured a second time on May 1, 2013 in Ripley County, Missouri, spilling 42 gallons of oil.
• $14 billion: Estimated minimum cleanup costs for BP’s Deepwater Horizon oil spill in 2010 that killed 11 oil-rig workers and gushed 210 million gallons of crude oil into the Gulf of Mexico.
• $75 million: Limit on liability that oil companies currently face for future offshore-oil blowouts regardless of actual damage.

Keystone XL pipeline won’t lower gasoline prices

• 0 (zero, nada, none): Guaranteed percentage of oil transported by Keystone XL to Gulf Coast refineries that will remain in the United States after refining into gasoline or diesel fuel.
• 0 (zero, nada, none): Impact of Keystone XL pipeline on U.S. gasoline prices. Christopher Knittel, professor of energy economics at the Massachusetts Institute of Technology, testified on May 16, 2013, in the House that, “There will be no appreciable changes in the world oil price, certainly not enough to base policy decisions on it.”

Jackie Weidman is a Special Assistant to the Energy team at the Center for American Progress. Daniel J. Weiss is a Senior Fellow and the Director of Climate Strategy at the Center.

* Correction, May 28, 2013: This article incorrectly stated the total lobbying expenditures by the big five oil companies in 2012. The correct figure is $50 million.

SOURCE: AP/Jeff Chiu

Former U.S. Secretary of the Interior Ken Salazar, bottom, signs a bill in front of Gov. Jerry Brown (D-CA), right, and others after a news conference at the Gladstone Institutes in San Francisco, California, Wednesday, March 13, 2013.

Endnotes and citations are available in the PDF of this issue brief.

Presidents and their secretaries of the interior have considerable latitude in how they handle resource development. The secretary of the interior oversees the agency’s Bureau of Land Management, which manages oil, gas and coal development on federal lands. As former secretary Ken Salazar noted in his final public web chat before leaving office last month, presidential administrations can take quite different approaches.

Under President George W. Bush’s administration, former Secretary Salazar said that, “There was an agenda on oil and gas that basically allowed oil and gas to be developed anywhere no matter what the environmental consequences were.” Under President Obama, he said:

We have brought a balanced approach. … There are places that have special ecologies and environmental values and history that we need to protect. That’s the approach we’ve taken, it is the approach we’ve embedded in our rules and regulations and our planning efforts here at Interior.

As important as the changes outlined by former Secretary Salazar are, they remain a work in progress. A report on the Obama administration’s reforms prepared by The Wilderness Society concluded that, “[W]hile important progress has been made under the reforms, additional work is required to make the reforms successful and to provide a lasting ‘fix’ to the onshore oil and gas leasing and development program.”2 This issue brief takes a look at fossil-fuel development on public lands and explores options for how the new secretary of the interior can oversee this exploration in ways that ensure public health and safety and limit environmental damage.

The Obama administration’s oil- and gas-drilling reform efforts

Bringing fundamental change to the way that the Interior Department’s Bureau of Land Management, or BLM, manages energy development was never going to be an easy task. The bureau oversees mineral resources on 700 million acres of public lands and on private lands where the federal government owns the mineral rights. But in some ways and in some places it still has a cultural bias in favor of resource extraction. As a result, some BLM leaders in the West have been less than enthusiastic about the Obama administration’s reform agenda, making implementation of the changes uneven and slower than it should be.

Another part of the Department of the Interior’s energy portfolio is coal production, with the great bulk of it coming from federal lands in the Powder River Basin region of Wyoming and Montana. Here too, the Obama administration has a long way to go in ensuring that the program is consistent with its stated climate change goals and that it is operating in the public interest by providing a fair dollar return to the Treasury Department.

Without a doubt, Secretary Salazar quickly set a different and refreshing tone when he took charge of the Interior Department in 2009. Saying that there was a “new sheriff in town” who would no longer let the oil and gas industry treat public lands as its private “candy store,” Secretary Salazar slammed the brakes on oil- and gas-lease sales on 77 tracts of land in Utah, one of the Bush administration’s most controversial sales. Many of these tracts were close to national parks and other treasured lands.

After scuttling those sales, the Interior Department undertook a formal internal review of BLM’s leasing program, which led to the reforms that were unveiled in May 2010. Those reforms called for a better balance between developing oil and gas resources and the protection of other public lands resources, including nearby parks and refuges, wildlife, and historic and archaeological sites. “There is no presumed preference for oil and gas development over other uses,” states the reform document.

A key element of the reforms was ensuring that BLM would assume more responsibility for identifying parcels of land suitable for oil and gas development rather than ceding that important task to industry. As a result, a new procedure was developed for more comprehensive planning in some areas where large-scale leasing could be expected but has not yet taken place and where conflicts with other resources such as recreation or water supplies are likely. This process enables BLM to review large landscapes in order to identify areas suitable for oil and gas development and areas where other uses such as recreation and protecting wildlife habitat should take precedence.

This new process is similar to the broader, landscape-level approach used by the Interior Department in planning for large-scale development of solar energy in the desert Southwest. It offers the promise of far more cohesive land-use planning driven by science, and it is attentive to other needs and values besides the extraction of fossil fuels. But it has been unevenly applied, with some BLM field offices less willing than others to employ it.

While the leasing reforms represent a good start, the BLM and its parent, the Department of the Interior, can and should do more. Keeping the leasing reform agenda on track ought to be one of the key items on the task list of new Secretary of the Interior Sally Jewell, who was sworn into office on April 12, 2013. It could also help the Obama administration to achieve a better balance between drilling and conservation on the public lands owned by all Americans. So far during the Obama presidency, the administration has won permanent protection for far fewer acres than many of its recent predecessors, and as of the beginning of this year, it had drilled about 2.5 acres for every acre preserved from development. That compares to the 1-to-1 ratios of drilling to conservation by both the George H. W. Bush and Bill Clinton administrations.

Problems in the Colorado state office of the BLM highlight the challenges facing Secretary Jewell. That office has been decidedly reluctant to implement some key elements of the reforms, provoking a number of high-profile controversies. These include plans—recently deferred, at least temporarily—to allow oil and gas drilling close to Mesa Verde National Park and Dinosaur National Monument, as well as in a highly valued agricultural area known as the North Fork Valley. The state BLM office was also moving to permit drilling in a region known as South Park, which is a critical watershed for the cities of Denver and Aurora and is a valued recreation area. The same BLM office recently extended some oil and gas leases in the Thompson Divide region that were about to expire because they had not yet been developed during their 10-year term. That gift to the industry came despite the Obama administration’s rhetorical commitment to making energy companies “use it or lose it” on leases rather than allowing them to sit on lands indefinitely without actually drilling.

Beyond the problems in advancing leasing reforms in individual states, the Department of Interior has also failed to make good on pledges to increase the royalties it collects on publicly owned oil and gas that is developed by private industry. It has been four years since former Secretary Salazar—who can raise royalty rates on his own without congressional approval—said that he would increase the royalty rate of 12.5 percent, but no action has yet been taken. Most of the major oil- and gas-producing states charge significantly higher royalties on energy produced from state lands.

Sticking to the status quo on coal-mining regulations

In contrast to the oil- and gas-leasing program, the Obama administration has shown little interest in altering the status quo when it comes to leasing public lands for the development of coal resources. Most of the leasing of this land occurs in the Powder River Basin region of northeastern Wyoming and southeastern Montana. It accounts for about 40 percent of total U.S. coal production—and about 13 percent of total U.S. greenhouse-gas emissions when burned for electricity. Since 2011 BLM has leased land producing more than 2 billion tons of coal in the Powder River Basin, and approvals
for leases producing another 3.5 billion tons could come relatively soon.

While demand for coal to generate electricity in the United States is on the decline—its share of electricity production has fallen in a decade from about 50 percent to just 37 percent—the industry is increasingly looking to export to Asia and other regions of the world to make up for the decline.

Because of coal’s leading role in climate change and controversy regarding the industry’s recent attempts to build new coal-export facilities on the West Coast, the Interior Department’s coal-leasing program has come under increasing scrutiny. Among the issues at play are whether taxpayers are getting fair value for the sale of publicly owned coal being mined in the Powder River Basin; the incongruity between the Obama administration’s stated commitment to battle climate change and its aggressive selling of leases in the Powder River Basin; and whether coal companies are resorting to accounting gimmicks to avoid paying fair royalties on coal they export.

The United States by law is supposed to receive fair market value on the coal it sells to the industry, but the program has been periodically beset by scandal over the years, and even now there are many who question whether taxpayers are getting a fair return on federal coal sales. Most coal lease sales over the past two decades have drawn only a single bidder. A report issued last year by the Institute for Energy Economics and Financial Analysis in Cambridge, Massachusetts, estimated that this system may have cost taxpayers as much as $28.9 billion over the past three decades. Publication of
that report prompted Rep. Edward Markey (D-MA) to request an investigation by the Government Accountability Office, which last did a thorough audit of the coal-leasing program in 1983, when it uncovered a $100 billion loss to the Treasury Department because of bidding manipulation.

Two other investigations of the coal program are also underway. An Interior Department task force is investigating whether coal companies are ducking fair royalty payments by selling coal cheaply to affiliates, paying royalties based on that low price, and then having the affiliates export it overseas at much higher prices. That investigation was created at the request of Rep. Markey and Sen. Ron Wyden (D-OR) after Reuters published a story looking into the industry practices. In addition, the inspector general’s office at the Department of the Interior is looking into issues of fair market value and royalties.

While the issues of fair market value and taxpayer return are important, ultimately they are less critical than the role that massive sales of publicly owned coal play in carbon emissions and whether the Obama administration will adjust the lease-sale program to square with its rhetorical commitment to fighting climate change.

Conclusion

In his second inaugural address, the president said that, “We will respond to the threat of climate change, knowing that failure to do so would betray our children and future generations.” Less than a month later, he issued an ultimatum to Congress in his State of the Union speech, saying:

[I]f Congress won’t act soon to protect future generations, I will. I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.

The actions that the president and his administration can take, which have been endorsed by the Center for American Progress, include the following.

Adopting a ‘clean resources standard’

The administration should adopt a “clean resources standard” to reduce the dominant role that fossil fuels play in the energy portfolio from public lands. This promises to ramp up the share of overall federal-lands energy coming from renewable sources such as wind and solar to 35 percent by 2035. As detailed in the Center for American Progress’s 2012 report, “Using Public Lands for the Public Good,” about 66 percent of the energy currently coming off of federal lands is from coal, and renewables, including hydropower, are at 15 percent.

Raising royalty rates and leasing rates

If the administration raises both the royalty rates that companies must pay on federal coal and the separate fees they pay for federal coal leases, the prices would better reflect the true economic costs of burning coal. These costs include the very expensive health impacts of coal-fired electricity.

Including the impact on climate change in reviews

The administration should require environmental reviews of federal-land management decisions, including energy developments, to include their impacts on climate change, specifically whether the actions will exacerbate global warming.

More than 20 environmental groups have urged even more dramatic administrative action in a recent letter to Interior Secretary Sally Jewell. They call on her to impose “an immediate moratorium on new coal leasing in the Powder River Basin” and to conduct a “comprehensive review” of the entire coal-leasing program to:

ensure that coal companies do not cheat U.S. taxpayers, existing mines do not endanger our air, water and wildlife and are properly reclaimed, and the greenhouse gas emissions from federal coal leases do not conflict with the Administration’s stated commitment to reduce the country’s contribution to climate change.

Even without imposing a coal-leasing moratorium, there is much that the new secretary of the interior can do to ensure that fossil-fuel development on federal lands is done in ways and with limits that better protect public health, safety, and the environment. Secretary Jewell should start down that road as soon as possible.

Tom Kenworthy is a Senior Fellow at the Center for American Progress.

CAP Senior Fellow Daniel J. Weiss testifies before the Subcommittee on Energy and Power of the Committee on Energy and Commerce. Read the full testimony (CAP Action)

Thank you for the opportunity to testify on “American Energy Security and Innovation: Grid Reliability Challenges in a Shifting Energy-Resource Landscape.”

Discussing electricity security and innovation while ignoring climate change is like discussing personal health while ignoring cigarette smoking, diet, and exercise. Any examination of this shifting landscape must acknowledge that our electricity-generation systems produce much of the carbon pollution responsible for climate change and that the effects of climate change impair electricity reliability. Since coal-fired power plants emit one-third of the climate pollution in the United States, it is irresponsible to assess changes in our electricity system while ignoring climate pollution and its impacts.

Americans understand that extreme weather is related to man-made climate change that costs our economy billions of dollars annually. A recent poll from Yale University and George Mason University found that many Americans believe that global warming caused recent extreme weather and climatic events to be “more severe.”

Extreme weather events—including storms, floods, droughts, heat waves, and wildfires—threaten electricity reliability. The Congressional Research Service concluded that, “[P]ower delivery systems are most vulnerable to storms and extreme weather events.”

CAP Senior Fellow Daniel J. Weiss testifies before the Subcommittee on Energy and Power of the Committee on Energy and Commerce. Read the full testimony (CAP Action)

SOURCE: AP/Jim Cole

Fishing boats are seen at the commercial fishing pier, Wednesday, February 1, 2012, in Portsmouth, New Hampshire.

On May 1, 2013, New England’s groundfishermen began operating under a harsh new set of catch limits that will curtail fishing effort and inflict massive economic pain on an industry that’s already struggling to remain afloat. As fishermen come to grips with their new regulations, and regulators fret about the impact that their unpopular decisions will have on one of America’s most historic industries, we should take a moment to consider the fate of a similar fishery just a few hundred miles northwest.

In 1992 the Canadian government shocked the Newfoundland fishing industry with an announcement that it was imposing a moratorium on cod fishing. The decision incensed the fishing population: 20,000 people lost their jobs overnight. John Crosbie, then-minister of fisheries and oceans, was cornered by a mob of fishermen and infamously proclaimed, “There’s no need to abuse me. I didn’t take the fish from the goddamn water.” Crosbie later called the decision to shut down the fishery the hardest one he ever had to make as minister.

Newfoundland’s moratorium on cod fishing was initially intended to last just two years. But more than 20 years later, the commercial fishery is still closed. It wasn’t until July 2012 that scientists even began to see the first glimmer of hope for a recovery of the depleted cod populations that were once so robust they drew Europeans across the Atlantic centuries before Christopher Columbus ever set foot in the “New World.”

In 1991, just one year before the Newfoundland closure, New England fishermen set an annual record, landing nearly 18,000 metric tons of cod from the Gulf of Maine. For the 2012 fishing year that ended earlier this week, the total catch was approximately 2,300 metric tons—not even two-thirds of the amount the new regulations would have allowed fishermen to harvest. The trend is clear: Gulf of Maine cod populations are dangerously depleted.

There’s no concrete evidence yet that New England’s groundfishery faces the same fate as Newfoundland’s groundfishery, but there’s no reason to think it won’t. Some conservation groups have called for a shutdown of New England’s cod fishery similar to the one in Newfoundland two decades ago. To date, regulators have rejected those calls, but they were legally required to implement new restrictions for the 2013 fishing year that began on May 1. The new catch limit for the once-bountiful Gulf of Maine cod is 814 metric tons—less than 5 percent of the peak harvest level of 17,700 metric tons in 1991 and just 22 percent of last year’s quota, which was set at about 3,700 metric tons.

Back in January, at a meeting of the New England Fishery Management Council, John Bullard, the National Oceanic and Atmospheric Administration’s top official in the northeast region, told the assembled crowd that a “day of reckoning” was coming to America’s oldest fishery. New science had shown that the populations of several fish species were in far worse shape than previously thought, and under the law that meant 2013 would be the first year catch limits would have to reflect this new reality.

Still, NOAA officials have faced increasing pressure from powerful politicians, acerbic journalists, and stalwarts of the fishing industry, who have all demanded that it find a way to circumvent the law and impose less drastic catch limits on several species of fish. On this point, however, the law is clear: Catch limits cannot exceed levels set based on the “best available science.”

The law does include a provision allowing for “interim measures” to be imposed for one year that allow catch limits higher than scientists recommend in cases such as this one, where new science shows a dramatic change in the health of a fish population. NOAA and the fishery-management council took advantage of that clause in setting the catch limits for 2012. Industry members and their advocates lobbied the agency unsuccessfully, asking it to impose a second interim year for the 2013 fishing year and basing their argument on a somewhat convoluted interpretation of the law.

Despite the pain these cuts will inflict on fishing and affiliated shoreside businesses, NOAA was right to reject the desperate appeals and adhere to both the letter and intent of the law. These cuts are not arbitrary: They reflect a reality of what is happening to fish populations in the ocean. Some fishermen still claim they’re finding areas where cod are abundant, and thus they believe the science must be wrong. But research by the independent Gulf of Maine Research Institute has shown that this evidence is simply anecdotal. Cod congregate in groups so it often appears that the population is healthy, but the number of areas where these groups can be found is shrinking each year.

The science is right: Fish populations are decimated. As of April 24, six days before the end of the 2012 season, fishermen had caught just 61 percent of their annual total allowable catch of Gulf of Maine cod. And these guys are the best in the business: New England fishermen have been able to find fish for centuries, and their expertise has been passed down from generation to generation. If the fish were out there, the New England groundfishermen would find them. And yet they haven’t even been able to land two-thirds of the amount they’ve been allocated.

So, if we accept that the science at least approximates reality, that means allowing fishermen another year of interim regulations that allow them to take more cod than the population can replace, which at best only serves to delay the ultimate pain of further reductions—and at worst it could cause irreparable harm to the fish stock.

The fishermen confronting John Crosbie on the pier in 1992 insisted that the collapse of the fishery wasn’t their fault. At a rally earlier this week in Boston, fishery leaders and their political supporters made the same claim: It’s not the fishermen’s fault, they said. Fishermen have stayed within their catch limits since implementation of the latest plan to rebuild groundfish stocks in 2004.

Unfortunately, the root of this problem runs deeper than that. Overfishing was rampant in the North Atlantic for decades prior to the creation of the rebuilding plan. And because of the fishery-management structure in place in this country, industry members played a key role in setting those catch limits. Until changes in the law took effect in 2010, the council was allowed to set those caps far higher than scientists recommended.

It is true that fishermen can’t be blamed for the entirety of the current state of affairs—climate change, pollution, and other environmental factors have undoubtedly also played a role—but it is disingenuous to suggest they carry no fault at all.

Still, pointing fingers and assigning blame doesn’t put anyone back to work or help fish populations rebuild. To do that, the industry will need money and creativity from policymakers and bureaucrats alike. NOAA recognized this when it declared the fishery a disaster last fall, making it eligible to receive federal funding. And as Sen. Elizabeth Warren (D-MA) said during this week’s rally, “A disaster is a disaster whether we’re talking about crops or we’re talking about fish. Washington rushes in to help our farmers. Washington needs to rush in to help our fishermen.”

Don’t hold your breath, Sen. Warren. Following last week’s sudden burst of legislative efficiency to resolve the sequestration-related Federal Aviation Administration furlough problem that caused widespread flight delays—on the cusp of a congressional recess when many members usually fly home to their districts—it seems Congress is only willing to provide funding for programs that make its members’ lives easier.

Guess how many of the 535 members of Congress are commercial fishermen? Zero. So, while advocates such as Sen. Warren and other members of the New England delegation continue to fight for relief dollars, NOAA must step up and make some changes of its own. The agency has already taken a first step by announcing it will pick up the tab for the cost of the observers who fishermen must bring along on a certain percentage of their trips to ensure rules are followed and fishery data is collected.

NOAA has already spent millions on the New England fishery since the council voted to implement a new management system in 2010. But with money running dry, it will need to reach deeper into its bag of tricks and find creative ways to cut through red tape, allow fishermen greater flexibility to create efficiencies with new gear types and fishing practices, and find more opportunities for them to cooperate with scientists and help bring greater clarity and accuracy to the stock assessments that will define the future of this fishery.

Today is a day of reckoning for America’s first fishery. For too long, managers—including the industry members who sit on the fishery-management council—put off doing the right thing and set catch limits that made it difficult for fish populations to rebuild. While the latest cuts will inflict substantial pain on fishermen and their communities, they represent the best chance for this fishery’s future. If we want our most historic fishery to survive its latest challenge and avoid the fate that has befallen fishermen in Newfoundland, we had all better hope it’s not already too late.

Michael Conathan is the Director of Ocean Policy at the Center for American Progress.

SOURCE: AP/Paul Sakuma

A customer pumps gas at a gas station in Menlo Park, California. Even though many middle-class programs are facing cuts, the big five oil companies continue to enjoy huge profits and tax breaks.

View data on Big Oil’s first-quarter profits (.xls)

Middle-class families have gotten some relief at the pump this spring due to declining gasoline prices. AAA reported that U.S. drivers paid an average of $3.55 per gallon of gasoline in April, the least expensive average for this month since 2010. Gasoline prices are now almost 35 cents lower than they were one year ago, when gasoline cost an average of $3.89 per gallon.

Despite lower prices at the pump, the biggest publicly traded oil companies in the world have raked in billions of dollars in profit over the past three months. According to their earnings reports released today, the big five oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—earned a combined $30.2 billion during the first quarter of 2013, or $331 million per day. Cumulatively, Big Oil profits were 6 percent lower than the first quarter of 2012 due to lower gasoline and oil prices, but these companies still earned a combined $229,832  every minute from January through March. This is more than what 95 percent of American households earn in an entire year.

Nearly one-third of these profits were used to repurchase companies’ stock, which only serves to pad the pockets of senior executives and the largest shareholders. The big five oil companies are also sitting on $82 billion in cash reserves, according to reports from the Securities and Exchange Commission for each company. While making these huge profits, BP and Exxon are the culprits in ongoing major oil disasters that are affecting the Gulf Coast and Arkansas.

Big Oil behaving badly again

April 20, 2013, was the third anniversary of BP’s Deepwater Horizon disaster that killed 11 oil-rig workers and gushed 210 million gallons of crude oil into the Gulf of Mexico over the course of 87 days. Three years later hundreds of Gulf Coast residents are still experiencing serious health effects from this spilled oil, along with the nearly 2 million gallons of toxic chemicals dumped into the Gulf of Mexico to disperse oil during the haphazard cleanup process. There is growing evidence that the oil and dispersants are also harming sea life.

Congress has yet to pass a single law to strengthen federal oversight of offshore oil and gas production. A year ago a Center for American Progress column, “The Lasting Impact of Deepwater Horizon,” highlighted the need for Congress to raise the preposterously low $75 million limit on liability that oil companies currently face for future oil blowouts. The cleanup costs for the 2010 BP disaster rang in at more than $14 billion at the end of 2012, according to the Congressional Research Service. This demonstrates the huge financial and environmental risks that face Americans if these liability limits remain so artificially low and the companies responsible for future disasters refuse to pay for cleaning up their messes.

On land, meanwhile, fellow oil giant ExxonMobil’s most recent spill dumped 500,000 gallons of tar sands crude oil near Mayflower, Arkansas, in late March 2013. The spill forced the evacuation of two dozen homes, and a massive cleanup is currently underway. Because this tar sands oil from Alberta, Canada, is classified under the Superfund law as “diluted bitumen,” this and similar kinds of oil are exempt from the 8-cents-per-barrel fee that conventional oil must pay into the Oil Spill Liability Trust Fund. This fund, created under Superfund in 1980 and paid for by levying this tax on oil companies, pays for the oil-spill cleanup should a mishap occur. Exxon gets to avoid it.

This terrible oil-pipeline spill spewed tar sands oil similar to the oil that could be transported through the Keystone XL pipeline if it is approved by President Barack Obama and Secretary of State John Kerry. Pipeline discharges are a common event. NPR reported that, “Federal data show that on average over the past decade, nearly 3.5 million gallons of oil spilled from pipelines each year.” If Keystone XL moves forward, not only will Big Oil profit from its operation, it could eventually add to this spill tally.

Big Oil skimps on corporate taxes and receives billions of dollars in wasteful subsidies

The biggest three publicly owned U.S. oil companies—ExxonMobil, Chevron, and ConocoPhillips—also paid relatively low federal effective tax rates in 2011. Reuters reported that their tax payments were “a far cry from the 35 percent top corporate tax rate.” It estimated that ExxonMobil’s effective federal tax rate in 2011 was 13 percent, Chevron’s was 19 percent, and ConocoPhillips’s was 18 percent.

The oil and gas industry gave more than $70 million in federal campaign contributions during the 2012 cycle, with a whopping 90 percent going to Republican candidates. The big five oil companies spent nearly $50 million on lobbying Congress in 2012, or more than one-third of the entire oil and gas industry’s expenditures. A major goal of these political activities is to retain special tax breaks for the oil and gas industry, which add up to $40 billion over a decade. Despite ranking as some of the most profitable companies in the world, the big five oil companies receive $2.4 billion in tax breaks from Congress each year, according to the Congressional Joint Committee on Taxation. U.S. taxpayers should no longer foot the bill for antiquated, 100-year-old fossil-fuel subsidies that, upon conception, were meant to help a then-fledgling industry grow.

Big Oil argues that it needs these tax breaks for oil exploration and development. Yet the big five oil companies produced 2 percent less oil in the first quarter of 2013, according to their recent financial statements, compared to the same time last year. These companies each have several hundred idle offshore leases that could produce oil if they were to be developed, according to an analysis for Rep. Ed Markey (D-MA). Instead, these companies leave the leases undeveloped while sitting on billions of dollars of cash reserves.

Big Oil benefits from low federal royalty rates on public lands

In addition to special tax breaks, Big Oil companies drill for oil and gas on public lands owned by all Americans while paying relatively little for what they produce from these areas. Oil companies pay a royalty for the oil and natural gas that they extract from these federal places: A law from the 1920s requires the oil and gas industry to pay “not less than” a 12.5 percent royalty on oil and gas produced from onshore public lands. This rate has not been permanently increased in nearly 100 years, despite the fact that there is nothing preventing Congress or the Obama administration from doing so.

The federal royalty for oil and gas production on public lands is much lower than what is paid to some states and private landowners for oil taken from their lands. The state of Texas, for example, assesses up to a 25 percent royalty for oil produced from its lands. North Dakota has a royalty of 18.8 percent, while Wyoming’s rate is at least 16.6 percent. Royalties for oil taken from private landowners nationwide are estimated to average 18.8 percent.

Higher royalty rates on federal public lands would ensure that Americans receive more compensation for oil companies’ use of their lands and minerals, which is all the more important in this time of fiscal uncertainty. The Department of the Interior should finalize plans to significantly raise the royalty rate for oil and gas produced on public lands.

Conclusion

The five biggest oil companies are making tens of billions of dollars in profits, while paying artificially low effective federal tax rates and low royalties for taking and producing oil and gas owned by all Americans. In addition, companies can evade payments into the oil-spill cleanup fund based on specific categorizations of different kinds of petroleum. Meanwhile, the five largest public oil companies continue to make billions of dollars in profits every quarter while receiving special tax breaks from Congress.

None of this makes sense, especially when sequestration is forcing steep automatic across-the-board cuts in college assistance, cancer research, and other middle-class programs. It’s time to ask the huge profit-making big five oil companies to pay their fair share.

Daniel J. Weiss is a Senior Fellow and the Director of Climate Strategy at the Center for American Progress. Jackie Weidman is a Special Assistant to the Energy team at the Center.

Thanks to Jessica Goad, Manager of Research and Outreach for the Public Lands Program at the Center for American Progress.

Daniel J. Weiss is a Senior Fellow and Director of Climate Strategy at the Center for American Progress. Jackie Weidman is a Special Assistant on the Energy team at the Center.

SOURCE: AP/Greg Baker

A man cycles past cooling towers of the coal powered Fuxin Electricity Plant in Fuxin, China.

SOURCE: AP/Richard Drew

A man peers into the closed Bowling Green Subway Station in New York, October 30, 2012, after Superstorm Sandy hit the East Coast.

Endnotes and citations are available in the PDF version of this issue brief.

View data on federal disaster-relief and recovery (.xls)

Superstorm Sandy devastated New Jersey, New York, and other areas along the eastern seaboard six months ago on October 29, 2012. It took at least 72 lives in the United States and caused nearly $50 billion in damages. Congress eventually provided $60 billion in disaster relief and recovery aid after weeks of deliberating and partisan bickering. These recovery efforts continue to this day.

Sandy was the worst natural disaster in the United States in terms of destruction and deaths since Hurricanes Katrina and Rita in 2005, but it wasn’t the only one. In 2011 and 2012 alone, the United States experienced 25 floods, storms, droughts, heat waves, and wildfires that each caused at least $1 billion in damages. Combined, these extreme weather events were responsible for 1,107 fatalities and up to $188 billion in economic damages.

The Center for American Progress conducted an analysis and found that the federal government—which means taxpayers—spent $136 billion total from fiscal year 2011 to fiscal year 2013 on disaster relief. This adds up to an average of nearly $400 per household per year.

Nearly all of this disaster spending was for relief and recovery from these and other smaller natural disasters. Most of these disasters are symptomatic of the man-made climate change resulting from massive amounts of carbon emissions and other pollutants in the atmosphere, which warm the oceans and the Earth. As climate change accelerates, so will federal spending on disaster relief and recovery, which will ultimately be paid for by taxpayers.

The nearly $400 per household spent annually over the past three years could be the beginning of a very costly future as climate-related extreme weather multiplies. This issue brief explores federal spending on disaster relief and offers up recommendations for how we can respond to the potential growth in these expenditures.

Climate change exacerbates extreme weather and damages

The warming air and water temperatures due to climate change exacerbate the frequency and/or severity of extreme weather events. The National Oceanic and Atmospheric Administration, or NOAA, determined that the United States experienced the second-highest amount of extreme weather on record in 2012. NOAA similarly concluded that, “2011 [was] a year of extreme weather and climate change.”

The National Climate Assessment draft conducted by the federal multiagency U.S. Global Change Research program and released in January 2013 reiterated these findings. It determined that:

Some extreme weather and climate events have increased in recent decades, and there is new and stronger evidence that many of these increases are related to human activities.

Human-induced climate change has already increased the frequency and intensity of some extremes. Over the last 50 years, much of the U.S. has seen an increase in prolonged stretches of excessively high temperatures, more heavy downpours, and in some regions more severe droughts.

The National Climate Assessment draft also warns that future extreme weather events threaten infrastructure, agriculture production, and public health, among other impacts. It argues that because climate change will lead to more frequent and/or extreme weather events, the damage resulting from these events will also increase.

Infrastructure across the U.S. is being adversely affected by phenomena associated with climate change, including sea level rise, storm surge, heavy downpours, and extreme heat.

Human-induced climate change is projected to continue and accelerate significantly if emissions of heat-trapping gases continue to increase. Heat-trapping gases already in the atmosphere have committed us to a hotter future with more climate-related impacts over the next few decades.

Many [climate-related changes] will be disruptive to society because our institutions and infrastructure have been designed for the relatively stable climate of the past, not the changing one of the present and future.

Planning and managing based on the climate of the last century means that tolerances of some infrastructure and species will be exceeded. For example, building codes and landscaping ordinances will likely need to be updated not only for energy efficiency, but also to conserve water supplies, protect against insects that spread disease, reduce susceptibility to heat stress, and improve protection against extreme events.

As with past severe natural disasters, the federal government must continue to provide disaster aid for families and businesses severely harmed through no fault of their own by climate-related extreme weather events. Since additional federal recovery assistance is rarely offset by budget cuts or revenue increases, this aid will likely add to the federal budget deficit. This means that the $60 billion appropriated for recovery from Superstorm Sandy could be a harbinger of future federal spending.

The federal government underestimates the cost of natural disasters

As destructive climate-related extreme weather events increase in frequency and/or ferocity, government officials and the public should be informed about how much money the federal government spends on disaster relief and recovery. This will enable government officials to more accurately budget for such events, and it will give the public a better grasp on a major cost of climate change that they will have to pay.

As part of the Budget Control Act of 2011, the Office of Management and Budget was required to report to Congress on “ disaster relief spending … over the previous 10 years.” It determined that, “The average funding provided for disaster relief over the previous 10 years (excluding the highest and lowest years) is $11.5 billion for fiscal year 2011.” Because the highest and lowest spending levels were excluded in order to derive the average, the $37 billion spent in FY 2005 on recovery from Hurricanes Katrina and Rita, as well as other disasters that year, was not included. This annual average was significantly lower than the $60 billion appropriated for Superstorm Sandy recovery.

We believe that OMB’s estimates for 2001 to 2011 did not fully account for all federal disaster spending and that these estimates are less than actual spending because OMB could have omitted some important relief and recovery programs and agencies. The estimates included spending from 26 agencies or programs in 11 federal departments, but our analysis identified a total of 96 agencies or programs in 19 departments that appear to provide some sort of disaster assistance to the American public. OMB estimated that actual disaster-relief spending in 2011 was $2.5 billion. We estimate that the federal government spent $21 billion on disaster relief and recovery in fiscal year 2011.

More significantly, our analysis could not identify a more recent comprehensive estimate of federal disaster-relief spending that included fiscal years 2012 and 2013. This is a serious omission given the 25 weather events that each caused $1 billion or more in damages in fiscal years 2011, 2012, and 2013. (FY 2013 includes relief for Superstorm Sandy even though it occurred in calendar year 2012.) In addition to the $60 billion for Sandy, CAP identified another $76 billion in disaster spending since fiscal year 2011, for a three-year total of $136 billion. And this is a conservative estimate because disaster-spending figures for some federal disaster programs were unavailable.

Community-resilience efforts save money

Many communities are undertaking efforts to make their buildings, shelters, water treatment, electricity, roads, and other vital infrastructure more resilient to damage from extreme weather. Such efforts are expensive, particularly for cash-strapped communities and states that are still recovering from the Great Recession. But making these investments can help save money in the future, when storms, floods, heat waves, droughts, and wildfires will become more frequent and/or more devastating. The Federal Emergency Management Agency, or FEMA, estimates that “a dollar spent on [pre-disaster] mitigation saves society an average of $4” in lower damages.

After a devastating flash flood in 1984, for example, Tulsa, Oklahoma, crafted a resilience program to control flood damages by relying on natural systems and other methods to improve water drainage. The Tulsa city government reports that:

Tulsa’s floodplain and stormwater program is based on respect for the natural systems. It includes comprehensive watershed management, dedicated funds for maintenance and operation, a prototype alert system, and a $200 million capital improvements program.

We’ve stopped creating new problems. Since the City adopted comprehensive drainage regulations 15 years ago, we have no record of flooding in any structure built in accord with those regulations.

The city is also partnering with local businesses to develop contingency disaster-recovery plans to help businesses quickly recover and reopen after floods or other extreme weather.

Napa County, California, created a flood-control-protection project to limit flood damage. The project is paid for in part by passing a half-cent local sales-tax increase to fund the local share of this project. The project’s goal is to achieve “a savings of $26 million annually in flood damage costs.”

It is imperative that the federal government provides technical and financial assistance to the most at-risk communities; such efforts are an excellent economic investment. Because the federal government pays for a major share of disaster recovery, investing in resiliency now will help protect taxpayers from more deficit spending in the future.

The federal government invests less in community resilience

Despite the myriad benefits of investments in community resilience, federal assistance for resilience, or “pre-disaster mitigation,” has actually declined over the past decade. Rep. Lois Capps (D-CA) and 37 other representatives wrote a letter to President Barack Obama in February urging him to appoint a blue-ribbon panel that would:

Develop a comprehensive plan to help local communities prepare for the anticipated impacts of increased climate-related extreme weather.

Estimate the financial support necessary for communities to develop and implement plans to increase their resilience to floods, severe storms, droughts, heat waves, sea level rise, wildfires, and day-to-day economic impacts.

Identify federal programs that already provide funding for resilience efforts.

Recommend a dependable revenue stream to provide additional resources for local pre-disaster mitigation planning.

As of this writing, the Obama administration has yet to respond to Rep. Capps and her colleagues. The administration’s proposed FY 2014 budget, however, does have an enhanced focus on community resilience. The budget:

Includes $200 million for “Climate Ready Infrastructure” that build enhanced preparedness to extreme weather and other impacts of climate change in their planning efforts, and that have proposed or are ready to break ground on infrastructure projects to improve resilience.

These investments will support a broader Administration commitment to help communities become more resilient through direct technical assistance, provision of useful data and tools on projected impacts, and support for planning.

In addition, technical-assistance grants for community-resilience projects are available through the Department of Housing and Urban Development’s Sustainable Communities program. These efforts are an important start, but they provide only a small amount of the revenue that is essential for building more resilient communities across the nation.

Recommendations for responding to potential disaster growth

Data from the past 60 years reveals an increase in both presidential disaster declarations and extreme weather events that cause $1 billion or more in damages. (see Figure 1)

If this trend continues at the same rate, the United States will experience more frequent and severe extreme weather events in the years to come, meaning that the federal government will have to spend more and more funds on disaster-relief efforts, leaving taxpayers with the bill. There are several policies and actions that the federal government can pursue now to address this situation and prevent it from spiraling out of control.

Determine the cost of extreme weather to the government and taxpayers

President Obama should require the Office of Management and Budget to conduct an annual—and complete—accounting of funds spent on every disaster-relief and recovery program in the previous fiscal year. This would enable public officials and citizens to better understand the true cost to taxpayers of unchecked extreme weather.

Develop a community-resilience fund to help communities protect themselves

The government can create a dedicated source of revenue to help communities develop and implement plans to become more resilient to future floods, storms, droughts, heat waves, and wildfires. CAP endorsed a proposal by former senior FEMA officials to annually provide an average of the three previous years of federal disaster spending for this resilience fund.

Pay for the resilience fund by levying a user fee on fossil fuels

Rep. Capps and CAP proposed that President Obama appoint a blue-ribbon commission to identify a dedicated revenue source for this resilience fund. The panel members could then advocate that Congress create the fund by levying a very small tax on some or all fossil-fuel production, pollution, or use to reflect some of the external costs of their production and combustion, such as damages from more extreme weather or premature deaths from additional smog.

Slash the carbon pollution responsible for climate change

Scientists have recommended limiting carbon pollution to 450 parts per million or less by 2050, saying that this is essential to avoiding the worst impacts of climate change such as extreme weather. Carbon dioxide emissions were at 397 parts per million in March 2013, according to NOAA. In 2009 President Obama pledged to meet a 2020 carbon-pollution-reduction goal of 17 percent below 2005 emissions levels. The Environmental Protection Agency just determined that in 2011 emissions were 7 percent below 2005 levels. To meet the 2020 goal, therefore, President Obama must establish significant pollution reductions from existing power plants, oil refineries, and other major industrial sources.

Conclusion

The Government Accountability Office just included “climate change risks” in its biennial assessment of events that pose a risk of significant uncontrolled government spending. Yet we believe that the federal government does not have a comprehensive account of the current costs of extreme weather and other climate change impacts. We are flying blind into a future with more costly disaster-relief and recovery spending.

The debate over solutions to the federal budget deficit has dominated Washington since Republicans took control of the House of Representatives in 2011. Nonetheless, these same House leaders continue to ignore the current and potential future explosion in federal spending for disaster recovery due to climate-related extreme weather events.

Extreme weather events continue to plague the United States in 2013. Together, the March tornadoes iin Indiana, Kentucky, and Ohio created the first event that caused $1 billion in damages identified by NOAA this year. The drought in the Southwest is expected to continue through another costly year. Recovery from the flooding along the Mississippi River will likely draw on federal relief funds. All the while, the cost of extreme weather continues to grow.

Sir Francis Bacon long ago observed that “knowledge is power.” Currently, public officials lack complete knowledge about annual federal spending on disaster relief and recovery—a major omission at a time when extreme weather will likely increase in frequency and/or severity due to climate change. Gathering this cost information should strengthen the case for assisting communities with their resilience plans, which will reduce future damages and taxpayer spending for recovery. Knowledge about the household share of disaster spending should empower people to join efforts to attack the harmful effects of climate change.

Daniel J. Weiss is a Senior Fellow and Director of Climate Strategy at the Center for American Progress. Jackie Weidman is a Special Assistant on the Energy team at the Center. The authors would like to thank Cathleen Kelly, Senior Fellow, Mari Hernandez, Research Associate, and Mayhah Suri, intern, all at the Center, for their contributions to this analysis.

Methodology

This Center for American Progress analysis compiled natural-disaster-related spending data from multiple sources. We identified the list of federal programs with disaster-relief and recovery functions based on a review of related departments’ annual “budget in brief” reports for FY 2011 through FY 2014. Other disaster programs were included in Congressional Research Service reports and the Catalog of Federal Domestic Assistance. The spending data in the attached spreadsheet for each agency and program identifies the source of the information. We used the “budget authority” or “obligation” figures in nearly all cases since they reflect the amount of revenue Congress set aside to pay for relief and recovery.

We also gathered spending data from three supplemental appropriations bills: P.L. 112-77, the Disaster Relief Appropriations Act of 2012; P.L. 113-1; and P.L. 113-2, the Disaster Relief Appropriations Act of 2013. These bills allocated $8.7 billion, $9.7 billion, and $50.7 billion, respectively, for the National Flood Insurance Program and other disaster assistance following Superstorm Sandy and severe flooding in the Midwest. These figures do not include the impact of sequestration on the FY 2013 accounts. For a complete list of programs and funding, please refer to the attached spreadsheet.

Inevitably, this compilation of federal disaster spending has gaps, but we believe it includes all the major programs that fund disaster relief and recovery annually. We welcome any documentation for corrections.

SOURCE: AP/Alex Brandon

The sun rises over the Pacific Ocean in Kailua, Hawaii in December 2009.

It should come as no surprise that a president who grew up in Hawaii and has been known to enjoy the occasional vacation on Martha’s Vineyard would prioritize policies that result in the improved management of America’s oceans and coasts. In the past few weeks, President Barack Obama has met such expectations. His administration released a final implementation plan for the National Ocean Policy that he established by executive order in 2010. It also finalized a budget for the National Oceanic and Atmospheric Administration, or NOAA, which, even in a time of sequestration and fiscal austerity, asks for an 11 percent boost from current funding levels.

Both actions show that the administration understands the challenges facing our marine resources and is willing to prioritize them. President Obama’s National Ocean Policy has drawn fire from Capitol Hill, primarily from congressional Republicans who have painted it as yet another example of government intrusion. House Natural Resources Committee Chairman Doc Hastings (R-WA) has decried it as an imposition of a new “job-killing regulation.” Rep. Hastings and his colleagues peppered administration witnesses at a 2011 hearing on the National Ocean Policy, concerned that the policy might constitute a jurisdictional overreach that could make life more difficult for agriculture and other industries with “upstream impacts”—and apparently unwilling to accept the idea that the policy neither creates any new regulations nor kills any jobs.

Message received, Chairman Hastings. The updated implementation plan released earlier this month includes new language asserting in no uncertain terms that the concerns of pro-small-government Republicans have been heard. “The Policy does not create new regulations, supersede current regulations, or modify any agency’s established mission, jurisdiction, or authority. Rather, it helps coordinate the implementation of existing regulations and authorities … in the interest of more efficient decision-making,” it reads. As a result, the policy received endorsements from both the National Corn Growers’ Association and the American Soybean Association, the latter of which called out the plan as a “serious and thoughtful” example of “regulatory streamlining.”

Overall, the National Ocean Council did a bang-up job of taking notes, internalizing comments, and taking them into consideration before finalizing its implementation plan. And it didn’t just pay attention to members of Congress, but also to the folks who commented on the draft plan or raised issues with the policy in general.

One aspect of the plan that drew a great deal of consternation is its call for comprehensive ocean management on a regional scale—in effect, the development of regional plans to prioritize certain ocean activities in appropriate areas. Many coastal regions in this country are already participating in what the implementation plan calls “regional planning bodies,” which are coordinated management entities among neighboring states. In fact, several of these regional ocean partnerships predate even the first draft of the National Ocean Policy released in 2010.

While the final implementation plan clearly articulates the benefits of a regional approach to ocean management and planning, it also recognizes that differences in priorities, problems, and ecosystems exist across different areas of the country. In the Northeast, for example, plans aim to resolve conflicts between future offshore-wind-energy development and existing fishing interests, while the Pacific Coast’s priorities will differ since offshore wind cannot be developed there at this time because of technological limitations. Alaska has resisted implementing any of the principles of comprehensive ocean planning at all, prompting sharp criticism from its congressional delegation of the draft implementation plan that would have required regional planning bodies to be developed in all regions. Many Alaskans viewed this imposition as top-down government meddling in what they consider to be state affairs.

Recognizing the need for each region to come to its own conclusions about how best to manage the areas that it knows best, the final implementation plan stresses that regional ocean-planning efforts are voluntary, not mandatory. “States … may choose to participate on regional planning bodies,” reads the final version, which goes on to say that, “Should all states in a region not choose to participate … a regional planning body will not be established.”

Even with these changes to the regional ocean-planning structure, the plan received a lukewarm reception from Sen. Marco Rubio (R-FL), the newly minted ranking member of the Senate Subcommittee on Oceans, Atmosphere, Fisheries, and Coast Guard. During a hearing earlier this week, Sen. Rubio expressed his concern about the plan, saying that, “Too often the administration puts forth ‘voluntary’ … documents like the National Ocean Policy that, when all is said and done, we’re faced with a new regulatory regime with questionable value and severe economic consequences.”

Fishermen, particularly recreational fishermen, also balked at the lack of attention the initial draft of the National Ocean Policy paid to their issues. Commercial fishermen have been plying our waters since before the nation was founded, and anglers comprise arguably the most populous group of ocean users at more than 12 million strong, according to NOAA. Many feared that the National Ocean Policy would infringe upon their access to fish, even spawning a conspiracy—briefly reported by ESPN as news—that it was the Obama administration’s goal to shut down America’s waters to fishing.

The final implementation plan should help assuage these unfounded fears, as it specifically states that one of its goals is to “ensure continued access” for recreational fishermen and another is to improve the “science that supports increased sustainable fishing opportunity.”

If that’s not enough to convince fishermen that this administration has their back, they need look no further than the president’s fiscal year 2014 budget request for NOAA. At a time when squeezing pennies out of the federal government is nearly impossible, this budget actually calls for an 11 percent increase in the agency’s funding from current levels. This includes boosts to fishery stock assessments, surveys, and monitoring—programs critical to ensuring that fishery managers have the best possible data with which to set catch limits and other fishery regulations that ensure maximum possible access for fishermen today and into the future.

Increased ocean funding isn’t just good news for folks who enjoy trips to Hawaii and Martha’s Vineyard. The National Ocean Economics Program has found that ocean-related industries generate more than $258 billion of our gross domestic product, or GDP, and employ more than 2.7 million Americans, with 1.9 million of those jobs in the recreation and tourism industries. This research was fundamental to the establishment of CAP’s Blue Economy Initiative, which seeks to better define the economic value of healthy oceans and coasts. Protecting and sensibly managing our oceans and coasts is more than a ticket to a few nice vistas and vacation spots—it’s an economic imperative. And these recent actions by the Obama administration prove that they get the message.

Michael Conathan is the Director of Ocean Policy at the Center for American Progress.

SOURCE: AP/Matthew Brown

A shovel prepares to dump a load of coal into a 320-ton truck at the Black Thunder Mine, located within Wyoming's Powder River Basin, the nation'€™s most productive coal region.

Endnotes and citations are available in the PDF version of this issue brief.

In his second Inaugural Address, President Barack Obama promised significant action on climate change during his second term, noting that, “The failure to [address it] would betray our children and future generations.” Secretary of State John Kerry echoed that commitment in his remarks last month, calling attention to the ramifications of inaction on climate change and of continuing an “energy policy that results in acidification, the bleaching of coral, the destruction of species, the change in the Arctic because of the ice melt. … The entire system is interdependent, and we toy with that at our peril.”

In addition, the Obama administration has made good initial progress on new policies to decrease greenhouse-gas emissions, such as the adoption of the first-ever limits on carbon pollution from cars and trucks. While the administration’s renewed commitment to addressing one of the most pressing problems of our time is encouraging, the quantity and pace of fossil-fuel development on our federal lands and waters is at odds with the president’s goal of further reducing carbon pollution to prevent the worst impacts of climate change.

In light of this reality and in the face of a do-nothing Congress, the executive branch must find ways to use its authority to curb the greenhouse-gas emissions that fuel climate change, especially when the pollution is derived from public lands and waters.

The president can use his authority under existing law to take another important step in his quest to combat climate change: The National Environmental Policy Act, or NEPA, gives him the tools to require federal agencies to evaluate any possible carbon pollution or emissions and their effects for proposed federal projects.

This statute, signed by President Richard Nixon in 1970, is one of our strongest and most effective environmental laws. It requires government agencies to assess the environmental impacts of their activities and also requires public participation such as public-comment periods and public meetings. This, in turn, often leads agencies to alter their projects to lower the potential environmental damage even as the projects proceed.

It is important to note that the National Environmental Policy Act does not mandate specific pollution controls or prohibit certain federal activities. Additionally, despite the claims and rhetoric of some members of Congress, using this authority will not “regulate” greenhouse-gas emissions. Rather, NEPA already requires agencies to assess the full environmental impacts of individual projects as part of holistic decision making, a process that includes considering less harmful alternatives. Ignoring climate change—the gravest environmental threat our planet faces—is a substantial and unacceptable omission.

Federal agencies are not currently required to explicitly account for the carbon pollution generated by activities under their jurisdiction, even though NEPA gives the federal government the authority to require such analyses. Unless an agency chooses to calculate the carbon pollution generated by a proposed project, the public and government officials have no way of knowing its impact on the climate. This means that proposed projects that generate significant amounts of carbon pollution, including coal mining on public lands, drilling for oil on the outer continental shelf, or construction of a new highway, are not consistently assessed for their anticipated carbon-pollution contribution. It is critical, however, that these impacts be considered and made public.

In February 2010 the White House Council on Environmental Quality took a first step toward addressing the lack of climate consideration in federal decision making by releasing draft NEPA guidance on the “Consideration of the Effects of Climate Change and Greenhouse Gas Emissions.” The document proposed providing federal agencies with a blueprint to account for carbon pollution and climate change when assessing the environmental impacts of a proposed project. Yet despite being released for public comment more than three years ago, the council has yet to finalize the guidance.

The National Environmental Policy Act requirement that government agencies report on the environmental consequences of proposed actions serves an important public-education purpose. Given the extraordinarily serious threat posed by climate change, government agencies should be required to report to the public on the likely greenhouse-gas emissions that will result from their decisions on public land and water management, particularly when it comes to fossil-fuel development. They must also evaluate alternatives that could accomplish the same goal while producing less pollution. This would be a critical decision-making tool for the federal government to help minimize its contribution to additional atmospheric pollution.

And, as we discuss below, this would help streamline the process by avoiding duplication, easing implementation, and assuring consistency across agencies.

This issue brief makes the case for including climate change in future NEPA analyses and for calling on the Council on Environmental Quality to finalize its draft guidance. It also urges President Obama to issue an executive order making the guidance mandatory for agencies rather than voluntary. Finally, this brief focuses on one of the greatest shortcomings of the 2010 draft guidance—its failure to include the public land and water-resource-management agencies—and explains why this needs to be changed.

Why carbon pollution should be accounted for in federal environmental reviews

The National Environmental Policy Act currently does not explicitly require carbon pollution to be calculated or assessed during environmental analyses of government projects and actions. In the decades since NEPA became law, scientific knowledge regarding the impact of greenhouse gases on accelerating climate change has increased significantly. NEPA implementation guidance must be modernized to address this shortcoming, and agencies should be directed to assess the potential climate impacts of a proposed activity when developing environmental-impact statements, the comprehensive environmental reviews of proposed actions.

In 2008 the Center for American Progress urged the forthcoming president to issue an executive order that would require federal agencies to include global-warming impacts when assessing the environmental consequences of federal projects. The report, “Full Disclosure: An Executive Order to Require Consideration of Global Warming Under the National Environmental Policy Act,” noted that:

… the U.S. government currently lacks a systematic process for evaluating the consequences of federal actions for greenhouse gas emissions or vulnerability to changing climatic conditions. This situation contributes directly to a critical gap in information needed to make decisions about the costs and consequences of federal actions for global warming.

Including greenhouse-gas emissions in federal environmental analyses is critical for multiple reasons. First, NEPA requires a “hard look” at the impacts of agency actions on issues from water and air quality to local species and their habitats. Ignoring the potential for contributing to climate change in this review process is a tremendous shortcoming that ignores the fundamental basis for this law, which is to understand the long-term environmental implications of the federal government’s decisions. This oversight must be corrected.

Closing this information gap would also provide the public with facts about the greenhouse-gas emissions generated by proposed federal activities. Americans are concerned about the impacts of unchecked global warming on their health, communities, and way of life. Ultimately, the public has the right to know whether and to what extent the actions the federal government plans to take may contribute to climate change and its effects, including extreme weather, smog, or sea-level rise.

Finally, a comprehensive understanding of how the federal government and its activities contribute to climate change will allow agencies to better plan and assess ways to reduce such emissions. It would also enable federal managers to redesign proposed projects and activities to minimize their climate impact.

Including greenhouse-gas emissions in federal environmental analyses is not unprecedented. In 2011 for instance, the U.S. Department of the Interior’s Bureau of Land Management issued a final environmental-impact statement on the Hay Creek II coal lease in the Powder River Basin north of Gillette, Wyoming, which included about 277 million tons of coal. The impact assessment included a relatively thorough discussion of the impacts the sale would have on carbon emissions and the role that the leasing of federal coal from the Powder River Basin has on overall U.S. greenhouse-gas emissions. It concluded that the coal mined and combusted as a result of the lease sale would almost double annual carbon pollution generated by the mine. It also revealed that total coal production in the Powder River Basin accounted for more than one of every eight tons of U.S. carbon pollution in 2008.

While some may argue that quantifying the full climate impacts of federal projects is difficult and speculative, the government often analyzes the economic impacts of such projects, which is also a highly speculative process. In the environmental-impact statement for Lease Sale 193 in the Chukchi Sea off Alaska, for example, the U.S. Department of the Interior calculated the projected economic benefit of developing the reserves based on an estimate of how much oil would be produced as a result of the sale—an estimation based on the best available information. In contrast, when it came to analyzing the greenhouse-gas emissions from the lease sale, the agency only estimated the climate impacts of the drilling activities and not the emissions consequences of burning that oil, even though the science was available to make those estimates. The Arctic region is believed to contain 13 percent of the world’s undiscovered oil and 30 percent of its natural gas, according to the U.S. Geological Survey. Exploiting those reserves will contribute to global climate change, and that fact should be acknowledged and made public.

It would also be valuable to standardize agencies’ analyses of carbon pollution from proposed projects. Currently, federal attempts at assessing the impacts of projects on climate change are inconsistent and vary by agency. As a spokesperson from the Council on Environmental Quality put it, “Each agency currently differs in how their NEPA reviews consider the climate change impacts of projects, as well as how climate change impacts such as extreme weather will affect projects.” Agency differences in accounting for greenhouse-gas emissions was also recently seen in the Environmental Protection Agency’s comments on the U.S. Department of State’s draft supplemental environmental impact statement for the Keystone XL pipeline, in which it “commended” the agency for analyzing impacts on the climate but rated the analysis “insufficient information,” which means they do not know enough to fully assess the environmental impacts of a tar-sands pipeline. Without a clear directive from the president and a blueprint for their environmental-review processes, federal agencies will continue their haphazard and often-incomplete assessments.

It is important to note that including carbon-pollution estimates in federal environmental analyses might actually help streamline the process and decrease litigation. Dozens of cases have already been brought against the government alleging its failure to properly assess carbon pollution in NEPA analyses. Clarified guidance to the agencies from CEQ might help decrease the frequency of such lawsuits.

CEQ’s 2010 draft guidance to federal agencies proposed guidelines for including climate change in environmental analyses, including a suggested threshold that agencies conduct such reviews if the proposed project will likely yield at least 25,000 metric tons of carbon-dioxide-equivalent emissions every year.

While the draft guidance is an important first step, CEQ should finalize this guidance as soon as possible as one important way of addressing climate change using existing executive authority. In addition to finalizing the guidance, we recommend—as we did in 2008—that the president add a degree of permanence to the guidance by issuing an executive order requiring all NEPA analyses to fully assess potential carbon pollution from proposed projects. This will ensure that agencies have greater certainty about how to include greenhouse-gas emissions in NEPA analyses.

Public lands and waters must be included

The U.S. Department of the Interior manages approximately 500 million acres of land onshore and more than 1 billion acres of coastal waters, while the U.S. Forest Service under the U.S. Department of Agriculture manages 193 million acres of national forests and grasslands—all on behalf of the American people. These agencies have jurisdiction over whether to lease the publicly owned energy resources in these places to private companies and individuals. In 2011, 43 percent of our nation’s coal, 32 percent of its oil, and 21 percent of its natural gas came from federal lands and waters. These public resources are a major contributor to the nation’s energy mix, but they also represent a significant portion of the greenhouse-gas pollution that is fueling global climate change.

Despite the massive production of carbon-emitting fossil fuels from federally owned lands and waters, the agencies tasked with managing these areas were excluded from CEQ’s draft NEPA guidance. Upon release, the agency stated that:

CEQ does not propose to make this guidance applicable to Federal land and resource management actions, but seeks public comment on the appropriate means of assessing the GHG emissions and [carbon] sequestration that are affected by Federal land and resource management decisions.

A report by Stratus Consulting for The Wilderness Society determined the “ultimate downstream [greenhouse gas] emissions” from fossil fuels extracted from public lands and waters generate a shocking 23 percent of the nation’s greenhouse gases and 27 percent of all energy-related greenhouse-gas emissions:

This estimate does not account for the large number of indirect emissions sources—identified in this report—that span the entire production consumption continuum. … Overall, ultimate downstream GHG emissions resulting from fossil fuel extraction from federal lands and waters by private leaseholders in 2010 are estimated to total 1,551 MMTCO2e [million metric tons of carbon dioxide equivalent].

This amount is comparable to the emissions of 323 million passenger vehicles every year, or 439 coal-fired power plants. For the sake of comparison, there are only about 250 million vehicles and 589 coal-fired power plants in America. Emissions from public lands and waters thus exceed those either from all vehicles in America or three-quarters of all U.S. coal-fired power plants.

Projects on public lands and waters also constitute the majority of the environmental-impact statements undertaken by federal agencies under NEPA. Comments sent to CEQ by a coalition of environmental groups, for instance, note that between May 2007 and May 2010, “973 EISs out of a total of 1,504 in that period were in the category of land and resource management actions.” (This uses a broad definition of federal-resource management actions that includes projects undertaken by the Army Corps of Engineers and other agencies, in addition to the U.S. Department of the Interior and U.S. Forest Service.)

Excluding federal land and resource-management actions from the draft guidance prepared by CEQ is a major loophole that must be closed in the final version. Because they generate such a significant amount of greenhouse-gas emissions and also a significant number of NEPA analyses, federal lands and waters must not be overlooked when it comes to the actions that the Obama administration can take on climate.

Not only is it critical that proposed activities on federal lands and waters are included in required NEPA analyses, but all stages of resource extraction and consumption should also be evaluated. The emissions that stem from fossil-fuel production are an important piece of assessing overall environmental impact, however, the potential climate impact doesn’t end there. Full lifecycle emissions from resource-extraction activities on public lands and waters should therefore be included in the NEPA analyses—not just the production itself but also the downstream uses such as the burning of coal, oil, and natural gas.

As Govs. Jay Inslee (D-WA) and John Kitzhaber (D-OR) recently urged, acknowledging the contributions of federal actions toward climate change would “ensure that we do not simply pass these tough issues on to future generations.”

Conclusion

Climate change poses some of the most pressing health, economic, and security threats of our time. The longer we delay significant reductions in our carbon pollution, the more we ensure that the devastating impacts of climate change—including sea-level rise, raging wildfires, and consistent drought—will continue.

While Congress has shown no signs that it will take action to address the growing threat of climate change, there are a number of executive authorities under existing laws to address the crisis. The National Environmental Policy Act, which requires analyses of the environmental impacts of federal activities, is frequently overlooked in this context but could be an important tool for assessing the potential climate impacts from a proposed project—a key first step in shaping informed decisions.

The Council on Environmental Quality should finalize its draft guidance for federal agencies to include carbon pollution in NEPA analyses, and the president should issue an executive order on this subject to give it more clarity and permanence. Additionally, CEQ must be certain to include federal resource-management agencies in its final guidance. Burning the oil, coal, and natural gas that come from our public lands and waters accounts for nearly a quarter of all U.S. greenhouse-gas emissions. Ignoring the federal mineral estate in the guidance is leaving out a large portion of the federal governments’ activities related to climate change.

As President Obama made clear in his 2013 State of the Union address:

I will direct my cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.

Ensuring that federal agencies—especially the land- and ocean-management agencies—assess greenhouse-gas pollution generated by proposed federal actions when reviewing their impacts is an important step in making this promise a reality.

Jessica Goad is the Manager of Research and Outreach for the Public Lands Project at the Center for American Progress. Kiley Kroh is the Associate Director for Ocean Communications at the Center. 

Thanks to Daniel J. Weiss, Senior Fellow and Director of Climate Strategy, and Tom Kenworthy, Senior Fellow, for their contributions. 

SOURCE: AP/Mark Lennihan

A front-end loader carries scraps of timber as it dismantles the storm-damaged boardwalk in Long Beach, New York, Friday, February 1, 2013. Three months after Superstorm Sandy devastated the coastal areas of New Jersey and New York, Congress finally passed a $50.5 billion bill to rebuild homes, businesses, utilities, mass transit, and other critical infrastructure.

Endnotes and citations are available in the PDF version of this issue brief.

America has begun the hard work of rebuilding our infrastructure. … We need to repair our existing infrastructure, and invest in the infrastructure of tomorrow including high-speed rail, high-tech schools, and power grids that are resilient to future extreme conditions.” — President Barack Obama, in his proposed fiscal year 2014 budget

SOURCE: AP/Mike Derer

A large tractor moves trash and garbage around on top of 1-E landfill in Kearny, New Jersey. The Kearny site is among 21 landfills in New Jersey that convert methane gas produced by decomposing trash into electricity.

Endnotes and citations are available in the PDF version of this issue brief.

The United States currently generates 390 million tons of trash per year, or 7 pounds per person per day. Municipal solid waste, or MSW, commonly known as garbage, gets picked up from homes and businesses on a weekly basis and is usually sent straight to a landfill. At the landfill, a hole is dug in the ground and then lined with a man-made liner. As trash begins to fill the hole, methane is emitted as a result of waste being broken down by anaerobic bacteria. Once the landfill is full, it is capped to limit water from seeping into it.

Although many states have the physical space for trash, it is environmentally unsustainable to take garbage and bury it in the ground at landfills, where it decomposes and releases potent greenhouse-gas pollution. What’s more, some trash has to be transported by diesel trucks or trains to landfills several hundred miles away, further exacerbating its pollution footprint. Though garbage is not something we tend to actively think about on a daily basis, specifically as it relates to climate change, the United States must begin developing policies to limit the environmental consequences that result from our generation of garbage.

There are already some efforts in place to help manage trash creation. Though America’s MSW generation has significantly increased over the past decades as a result of population growth, the country has also seen tremendous improvements in recycling and composting efforts, for example. In 1960 the United States recycled only 5 million tons of garbage, but today America is recycling and composting more than 90 million tons. This increase is largely a result of many state and local governments introducing recycling requirements as well as recycling incentives.

But there is another alternative waste management option that America has not significantly utilized but that could help stem the flow of waste, and thus pollution emissions, in our country: energy-from-waste, or EfW, facilities. These facilities provide a means for waste disposal while also generating clean electricity. EfW plants burn garbage in a controlled environment that generates electricity, which in turn is sold to utilities and then distributed to residential, commercial, and industrial consumers.

SOURCE: AP/ Charles Dharapak

President Barack Obama, accompanied by acting budget director Jeff Zients, speaks about his proposed fiscal 2014 proposed budget, April 10, 2013, in the Rose Garden at the White House in Washington.

President Barack Obama’s budget proposal for fiscal year 2014 would eliminate $39 billion of special tax breaks for Big Oil companies over the next decade as part of comprehensive business tax reform. These companies earned billions of dollars in recent years due to high oil and gasoline prices and do not need additional support from taxpayers. These tax breaks emerged over the past 100 years to help the then-nascent industry develop, and they relieved the oil and gas industry of $466 billion in tax payments to the federal treasury between 1918 through 2009, according to DBL Investors. Now that the oil and gas industry is fully developed and mature, President Obama’s budget would end this century of largesse.

The five largest oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—earned a combined total of $255 billion in 2011 and 2012, largely a result of higher oil prices. Meanwhile, these companies are producing less oil, have $72 billion in cash reserves, and are using one-quarter of their profits to buy back their own stock to enrich their largest shareholders. (see Table 1) Reuters reported last year that Chevron, ConocoPhillips, and ExxonMobil—the three largest American oil companies—paid half or less of the standard corporate tax rate. President Obama’s budget recognizes that oil companies no longer need tax relief.

In contrast, the House of Representatives would continue to provide tax subsidies for one of the richest industries in the world. It passed an FY 2014 budget authored by Rep. Paul Ryan (R-WI) that retains these existing special tax preferences and provides yet another tax break on top of them. What’s more, the House budget cuts the corporate tax rate by nearly one-third, which would provide more than $2 billion annually in additional tax relief to the five largest oil companies.

The American Petroleum Institute, or API, serves as Big Oil’s lobbying arm and is spending tens of millions of dollars on ads and lobbying to pressure Congress to retain these special tax breaks. API equates eliminating special tax breaks with tax increases, when in actuality such legislation would simply make Big Oil pay its fair share of taxes. Economists recognize that tax breaks are simply federal government spending through the tax code, which also contributes to the budget deficit.

Donald Marron, the director of the independent nonpartisan Washington research group Tax Policy Center, explains that “a great deal of government spending is hidden in the federal tax code in the form of deductions, credits, and other preferences—preferences that seem like they let taxpayers keep their own money, but are actually spending in disguise.”

Many influential conservatives also understand that tax expenditures have the same budgetary impact as direct government expenditures. Martin Feldstein, for instance, who chaired the Council of Economic Advisers under President Ronald Reagan, notes that tax expenditures are “those features of the tax code that are a substitute for direct government spending.” And in 2010 Rep. Dave Camp (R-MI), the current chair of the House Ways and Means Committee, observed that:

… we must admit that not all of that spending has been through increased appropriations or expanded entitlements; much of it has been through the back-door proliferation of “tax expenditures”—provisions that technically reduce someone’s tax liability, but that in reality amount to spending through the tax code.

The House-passed Ryan budget would keep existing special tax breaks and give Big Oil additional tax cuts, while also slicing vital middle-class programs, including education, science, and infrastructure. Meanwhile, President Obama’s proposal to eliminate $40 billion of special tax breaks for Big Oil as part of comprehensive business tax reform would make the tax code more fair.

Daniel J. Weiss is a Senior Fellow and the Director of Climate Strategy at the Center for American Progress.