Bloomberg News

Obama Interior Pick Championed Outdoor Jobs Over Oil

March 07, 2013

Obama Interior Pick Championed Outdoor Industry Versus Drilling

President Barack Obama, left, hugs Sally Jewell, chief executive officer of Recreational Equipment Inc., during Jewell's announcement as a nominee to become secretary of the U.S. Interior Department at the White House on Feb. 6, 2013. Photographer: Andrew Harrer/Bloomberg

As she stood before governors from western U.S. states last June, Sally Jewell made a pitch that was self-evident and revolutionary: Public lands are an economic boon.

“Protecting America’s parks, waters and trails is about protecting the economy, the communities and the people whose lives depend on the ability to play outside,” Jewell, president of Recreational Equipment Inc., told the 22-member governors’ group at a resort in Washington’s Cascade mountains.

Selling fleece jackets, fishing poles, skis and kayaks -- REI’s business -- is a $646 billion industry, making it a bigger part of the U.S. economy than manufacturing pharmaceuticals or refining gasoline, according to an industry report Jewell highlighted that day.

Now Jewell, a 57-year-old company executive, is President Barack Obama’s pick for Interior secretary, and her advocacy has won her support from wildlife and environmental groups -- and cautious questions from backers of expanded oil drilling on federal lands. If confirmed by the U.S. Senate after a committee hearing today, she would run the sprawling, 70,000-employee department that manages national parks, 500 million acres of mineral-rich lands, Arctic drilling and duck stamps for wetland conservation.

At REI, Jewell, an accomplished mountain climber, expert skier and longtime bicycle commuter, helped lead groups such as the Conservation Alliance that pushed government to curb fossil- fuel mining in or near public lands.

Activism, Reliance

Oil-and-gas drilling groups such as the Western Energy Alliance say senators should press Jewell today about whether she will balance conservation with the needs of energy companies to access areas controlled by the Interior Department

“It’s hard to square her environmental activism with what needs to be done to increase production on public lands,” Kathleen Sgamma, a vice president at the Denver-based group, which represents 400 companies, said in an interview. “The recreation industry has hitched its wagon to the conservation- only lobby,” she said. “But they are totally reliant on oil and gas.”

So far the only sign of opposition to Jewell has come in a threat from Alaska Republican Senator Lisa Murkowski to hold up a vote on confirmation until Interior approves a road in a rural Alaska town. She said today Republicans were looking to Jewell for support on several broader issues.

Tourism Communities

“We need you to reassure us that public lands provide not just a playground for recreational enthusiasts,” Murkowski said today. “You need to convince us that you will maintain balance in the various” uses of land, she said.

Jewell’s colleagues in the “human-powered outdoor industry” said her approach makes commercial sense, boosting everything from American manufacturing to the nation’s tourist- dependent communities.

“She has spent a lot of time focused on the economic benefits of being outdoors, and access to the outdoors,” Will Manzer, the former head of Eastern Mountain Sports, an REI competitor, said in an interview. “There is a huge, huge compatibility between economic growth and outdoor recreation and conservation.”

Oil Engineer

Jewell, a former petroleum engineer at Mobil Oil Corp., will balance the conflicting demands of development and conservation, according to Republican Dirk Kempthorne, a former Idaho governor and Interior secretary under President George W. Bush, who pushed for more resource development on public lands.

“You don’t become CEO of REI without having tremendous management and leadership skills,” according to Kempthorne, who said in an interview that Jewell advised him during 2 1/2 years at the agency. “She has a background in oil and gas, and she knows that you need these resources.”

Jewell disclosed holding stock in companies such as ConocoPhillips and Exxon Mobil Corp. (XOM:US), which have drilling leases managed by Interior. Jewell reported more than $2 million in stocks, bonds and mutual funds with the Office of Government Ethics.

The shares include about three dozen oil, gas and related companies, including Exxon and ConocoPhillips (COP:US), which Jewell said in a letter to the ethics office that she would sell if confirmed. REI reported Jewell’s 2011 compensation was $2 million.

Revenues Climb

Since the U.S. recession began in 2007, the Kent, Washington-based cooperative has grown every year amid the U.S. economic slowdown, John Hamlin, chairman of REI’s board, said in an interview. Revenue in 2011 was $1.8 billion, up 8.4 percent from a year earlier, according to a report to members.

The company also gives $100,000 a year to the Conservation Alliance. The advocacy group in recent years pressed the Interior Department to ban new uranium mining near the Grand Canyon and to set aside habitats within Alaska’s National Petroleum Reserve for conservation and recreation. While the group praised Interior’s decisions in both cases, industry groups and Republicans decried them.

“Interior has once again caved to environmental special- interest groups,” Representative Don Young, an Alaska Republican, said in a statement after Interior Secretary Ken Salazar announced the final Alaska plan that limited access.

Parks Advocacy

Jewell is also a leader of the National Parks Conservation Association, which advocates for funding and resources for parks. In 2010, the group helped defeat plans to construct eight coal plants near parks. It also filed a lawsuit to require a federal environmental review before hydraulic fracturing is allowed in the Delaware Water Gap recreation area.

The group also pressed the department to strengthen pending rules for hydraulic fracturing on public lands, and Wyoming Senator John Barrasso today asked whether Jewell would recuse herself from deciding issues where the group had lobbied.

Jewell highlighted the need for energy development on federal lands in her testimony to the Senate panel.

“Innovative technologies and new frontiers both onshore and offshore are increasing our nation’s domestic oil and gas production, and we owe it to the American people to make sure that development takes place in a safe and responsible way,” Jewell said.

“There is no question that we need balance with regards to our public lands,” she said. “Many people, when they enjoy the outdoors, jump in a car to get there.”

Land Access

To be sure, not all the pressure is for more drilling. Jewell’s nomination was announced a day after President Bill Clinton’s Interior Secretary Bruce Babbitt criticized the Obama administration for not setting aside enough public lands for conservation.

“So far, under President Obama, industry has been winning the race as it obtains more and more land for oil and gas,” Babbitt said in a speech in Washington. “Over the past four years, the industry has leased more than 6 million acres, compared with only 2.6 million acres permanently protected.”

Jewell, if confirmed, will need to balance those conflicting demands. Her colleagues say she has the ability to handle the political requirements of working with lawmakers, as well as the love of the outdoors, which is what the department is about.

“She takes input, but she takes action,” Hamlin said. “It’s very important to her that we have places for outdoor recreation, but she also understands that in any public-land debate there are interests who want different things.”

“She will make decisions based on the facts.”

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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  • COP
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