Conservation vs. Oil: Why the Rift?

Posted by: 

The US Fish & Wildlife Service recently proposed setting at least one section of the Arctic National Wildlife Refuge (ANWR) aside as wilderness. If successful this would prevent any development, such as oil and gas production, in the region. This coincides the desires of many environmental groups.  It’s not just in ANWR that oil and gas development is opposed but on nearly any public landscape. Why is this so?

When lobbying for management on public lands groups don’t realize the full costs of their proposals. One of the biggest costs of not drilling in ANWR is the oil and gas not available as a result. Groups that oppose drilling don’t realize the potential benefits foregone. They don’t receive the revenues from the production. Hence, it is in their best interest to continue to fight for more and more – whether it’s wilderness, grizzly habitat, or some other restricted use – until the additional cost of lobbying efforts exceeds the perceived benefits. The value of the oil not produced, trees not harvested, or off-road recreation is not of concern.

There is a parallel for those advocating drilling, increased harvest, or increased recreation use on public lands. Here the value of untrammeled wilderness is not realized.

This differs from private management where the tradeoffs of both action and non-action are considered in the decision-making. The owner of a private plot of land realizes the costs and benefits of actions and actions foregone. The private owner is the direct recipient of increasing the value of the land use.

Political decision making and public land management are polarized because lobbying requests are superfluous; the cost to lobby for more doesn’t increase at the margin.

Originally posted at Environmental Trends.

Holly Fretwell is a Research Fellow at PERC and an adjunct instructor at Montana State University where she has taught  introductory economics, macroeconomics, natural resources and environmental economics. She works with the Foundation for Teaching Economics, giving workshops for  high school teachers to improve their skills in teaching and...
Read More > More Articles by Holly Fretwell >