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ANCHORAGE - Alaska Gov. Sean Parnell said the federal government dramatically underestimated the potential economic impact of designating critical habitat for polar bears.
An independent economic review, paid for by the state and a private corporation, estimates the designation will cost hundreds of millions of dollars in added expense for the oil industry and lost revenue for state and local governments.
Parnell, who became governor when Sarah Palin resigned last summer, has continued her lawsuit seeking to delist polar bears as a threatened species. He said the economic study would be used to object to the habitat designation.
"We will continue to fight improper listings and critical habitat designations with sound science and cost data," Parnell said in a prepared statement.
Polar bears were listed as threatened in 2008 by Dirk Kempthorne, an Interior Secretary under then-President George W. Bush, because of an alarming loss of summer sea ice in recent decades and climate models indicating the trend will continue.
The U.S. Fish and Wildlife Service has proposed 187,166 square miles as critical habitat for polar bears. More than 95 percent is sea ice in the Beaufort and Chukchi seas.
Parnell said the proposed designation includes areas that account for almost half of Alaska's oil production. Revenue from the petroleum industry provides upward of 90 percent of the state's general fund money.
The Fish and Wildlife Service estimated minimal economic impact - $669,000 over 29 years - from critical habitat designation in part because of polar bear protections already in place, such as a requirement to avoid polar bear dens by one mile.
The report predicted delays in the initiation or expansion of oil and gas exploration projects, reductions in oil production, and restrictions on construction projects.
"Experience shows that projects within critical habitat face additional costs, delays and litigation, making it more difficult for Alaska to develop our economy," Parnell said. "This economic analysis will help to set the record straight on what this proposal will actually cost Alaska."
Arctic Slope Regional Corp., an Alaska Native corporation, also paid for the report, prepared by Econ One Research, Inc.