Opinion: The Economics of Climate Change

People have a lot of misconceptions when you tell them you’re from Alaska.

No. We don’t all live in igloos.

No. It’s not dark all the time.

And yes, I am a Democrat who is concerned about climate change and supports responsible oil and gas development in Alaska.  Now that you’re confused about Alaska again, let me explain.

I have long supported responsible oil and gas development in Alaska because it is good for both our national security and it safeguards our economy. Developing our Arctic resources means we can continue to ensure the Arctic is well managed by our neighbors while replacing the oil we are buying from countries that openly hate us. It also means creating jobs here at home and helping to control energy costs for American families. Production in the U.S. also means more royalties and revenue coming to our state and local governments rather than to countries whose policies we may or may not support.

It is estimated that lower gas prices will save Americans $125 billion this year. More specifically, households will save on average $750 annually. With middle-income families spending more of their total household budget on gasoline, that means real savings for working families.

Now I know the argument that many critics will make:  less oil production is the only way to get us to address climate change. But the reality is, we can’t switch to alternative energy overnight and for the foreseeable future, liquid fuels will power our cars, ships, and airplanes. As we transition toward more alternative energy sources, families are still going to rely on oil – to drive their cars, heat their homes, and run their businesses.

I believe that oil should come from here in Alaska, not foreign countries where we spend millions of dollars to protect the oil, extract the oil, put it on a tanker and bring it to the United States.

Another thing critics like to say is that natural gas should be the cleaner fuel we use to bridge the gap as we transition to alternative energy sources. I don’t disagree, but we can only get that natural gas to market if the companies making it happen know it will pencil out. No natural gas is going to get to market without consistent, reliable natural resource and tax policies that support drilling for gas.

Alaska is home to the largest natural gas fields in the country. The U.S. Department of Energy estimates there are roughly 35 trillion cubic feet of discovered, recoverable natural gas on the North Slope. There are estimated to be an additional 108 trillion cubic feet of natural gas offshore on the Outer Continental Shelf in the Beaufort and Chukchi Seas.

Bottom line: Alaska resources will be a critical component of this country’s all-of-the-above energy plan not only for today but also as we transition to alternative energy sources.

I agree that moving to renewable energy is good business for Americans, particularly those living in Alaska. It creates new jobs, leads to new technology development, and, by diversifying our energy supply, promotes our domestic energy security.  It is no accident that there are already an estimated 4 million people working in the “green economy” and that number continues to grow.

The good news is that a sound energy policy that addresses our environmental challenges also makes economic sense.

Alaska is seeing the impacts of climate change first-hand. The effects of extreme weather, from retreating ice, to rapidly eroding shorelines, thawing permafrost and ocean acidification are all impacting our state’s economy on multiple levels.

In rural Alaska in particular, crippling energy prices and being shackled to diesel fuel stagnates economic growth.  How can you start a business or save money when half your family’s income goes straight out on the diesel barge?  Local, clean, affordable renewable energy can change rural Alaska and already our state is becoming a world leader in these technologies on remote microgrids.

This is why Alaska is leading the way in transitioning to renewable energy. Our goal is to see 50 percent renewable electricity generation by 2025, and we are already at close to 25 percent.

When I was mayor of Anchorage we started a gas recapture project.  We now capture the methane gas that was leaking into the air from our landfill.  Anchorage sells this gas to the local military installation, cheaper than we can sell natural gas. When you make a valid economic argument to customers, you will earn their support. And what do we see now in Anchorage? Lower emissions.

In recent weeks, I have heard a lot of rhetoric and scare tactics when it comes to addressing climate change, from those who say we can’t have a robust economy and transition to renewables. I understand the fight to carve out political turf and fire up a base, but that doesn’t get us results and it certainly isn’t progress.

We need to be realistic. We need to talk about domestic options. And we need to do whatever we can to help working families who are still struggling to pay their energy bills and make ends meet while taking responsible steps to protect our environment.

There is so much we can do if we stop the divide-and-conquer mentality.  What we have done already in Alaska is proof of that.

It’s time to come together and pursue a path forward on an energy plan that makes economic sense, protects our national security, and addresses our critical environmental issues.

Begich served in the Senate from 2009 to 2015.

Read the full editorial here.