BrianGarst.com

Malo periculosam, libertatem quam quietam servitutem.

Energy and the Environment Archive

Monday

3

May 2010

1

COMMENTS

Is Oil Liability Cap A Dangerous Moral Hazard?

Written by , Posted in Energy and the Environment

Following up on my comments regarding what should be BP’s responsibility to compensate individuals, businesses and governments economically damaged by the oil spill, relevant federal law caps the liability of oil companies at $75 million.  Oil Spill Liability Trust Fund was established in 1986 and funded by the Oil Pollution Act of 1990, which imposed a tax on oil companies in exchange for a cap on direct liabilities.

The fund serves a good purpose by insuring that an industry where there is always risk of causing major damage will be able to pay for that damage, even if the company responsible is small and lacks the funds itself.  On the other hand, is it also possible that companies like BP might be encouraged to take greater risk, knowing that they are only on the hook directly for $75 million if something goes wrong?

Obviously there are plenty of other incentives to insure the quality of their rigs.  A broken rig can’t produce oil and bring in profits.  But might they also be encouraged to create a rig in a dangerous location or to a greater depth than they otherwise would?  It’s something to ponder.

Monday

3

May 2010

0

COMMENTS

Other Oil Politics

Written by , Posted in Economics & the Economy, Energy and the Environment

I haven’t surveyed the environmentalist response to the oil spill yet, but one argument I anticipate hearing is that the spill shows why we have to get off oil.  This argument holds no weight, because there is no energy plan that does not involve oil and offshore drilling.  We can go all in on “renewable technology,” build wind farms across the country and solar panels on every building, and we’d still need oil that we would either have to drill offshore ourselves or buy from someone who does.  So I’ll be on the lookout for these utopian arguments.

An important question raised by incidents like this involves who pays for the cleanup. BP says they will pay, as they should.  However, they owe more than just the cost of removing the oil.  They also owe economic compensation to the fisherman whose work they have made impossible, to the cities whose tourism will be devastated because their beaches are covered in oil, and anyone else directly harmed by this catastrophe.

Sunday

2

May 2010

0

COMMENTS

Oily Politics

Written by , Posted in Energy and the Environment

Whenever big disasters strike, opportunists jump at the chance to lampoon their political opponents. In response to the oil spill in the Gulf, we’re seeing just that as many on the right begin to construct the narrative that Obama’s response was slow or deficient. In so doing they are following the playbook successfully executed against Bush after hurricane Katrina.

There may well turn out to be faults in Obama’s response to the oil spill.  No doubt there will be investigations, inquiries and fact-finding panels aplenty after things have settled down. Right now, however, I’m concerned that critics of the administration are falling into a big government trap.

It may well be that they can do the kind of harm to Obama that Katrina helped liberals do to Bush. But this is only a short-term benefit. In the long run their critiques only feed the view that government should be responsible for all things, and that the President is essentially a King who must only snap his fingers and see his will done.

Far more productive for small government advocates would be to point out that, as we saw with Katrina, government simply cannot and should not be counted on to respond with quickness and efficiency in the event of catastrophe. Bureaucracies are simply not well designed for the purpose, and blaming Obama only spreads the myth that with the right kind of interventionist President, government can be made into something it is not.

The incompetence of FEMA was not primarily the fault of Bush and any incompetence in wake of the oil spill is likely not the fault of Obama. It’s the fault of all Presidents and Congresses that have contributed to the growth of such a behemoth government in the first place, and the fault of all of us here perpetuate the idea that the first place to look for assistance in time of crisis is the federal government.

Friday

23

April 2010

0

COMMENTS

Consuming For The Earth (Day)

Written by , Posted in Energy and the Environment, Free Markets

Kenneth Green had a great Earth Day post yesterday pointing out that consumption can be a benefit to the environment:

We all want to live in a clean, healthy environment. But only people whose basic needs are met, who have adequate housing, food, clean water, education, healthcare, and economic opportunity can take the time to care about protecting their environment, and can afford to do so.

By engaging in trade with other countries, we help them grow wealthier, helping them to afford environmental protection, while we help ourselves by gaining access to goods and services that it might be impossible, or ruinously expensive, for us to manufacture ourselves.

So go have some coffee, and help Africa grow wealthy enough to protect the environment. Maybe buy some nice wooden furniture from Africa or Asia. Buy a nice sari from India, or a fine tea set from China.

One of the inherent contradictions within the environmental movement is its recent penchant for extolling self-sufficiency and buying local. These insular practices not only reduce efficiency overall (by denying the virtues of specialization), they also do nothing to help bring the rest of the world out of poverty.  Anyone who has ever seen a picture of a poor African village, for instance, ought to realize why it is they are littered with debris and trash.

Tuesday

13

April 2010

0

COMMENTS

White House To Open New Front In Assault On The Economy

Written by , Posted in Economics & the Economy, Energy and the Environment, Free Markets

Not satisfied with the destruction that Obamacare has wrought, or will when it finally goes into effect, the White House is shifting focus and looking for another industry to destroy.

With the bruising health care debate over, President Obama’s top economic adviser left little doubt last week that energy and climate has taken its place atop the administration’s agenda.

During a 30-minute speech (pdf) at a Washington energy conference, Larry Summers, the head of the White House’s National Economic Council, used lofty rhetoric to warn of the long-term consequences if Congress fails to follow through this year on a sweeping overhaul of how the nation generates and uses energy.

“Read the history of great nations,” Summers said. “Read how they succeed and read how they fail. Their ability to mobilize to solve problems before they are absolutely imminent crises is what determines their longevity. That’s why this task of economic renewal is so important broadly. And that’s why I believe it is so important that we move for economic reasons to pass comprehensive energy legislation.”

The ability to mobilize to solve problems is indeed important. What Mr. Summers neglects is any consideration for how societies mobilize. What methods are best? He blows right by that question and just assumes that mobilization requires government direction.

The opposite is true. Free markets are much more capable of marshaling resources to deal with problems than governments. It requires a lot of information in order to centrally plan the use of capital and other resources. No one person or group of people are capable of taking into consideration all the data which is carried routinely and without significant notice through the free market price system. Yet history is full of failed attempts to do so.

Economic renewal of the kind which Larry Summers desires does not depend upon “comprehensive” legislation of any sort. It needs only for government to get out of the way.

Monday

25

January 2010

0

COMMENTS

Bragging About Inefficiency

Written by , Posted in Economics & the Economy, Energy and the Environment

This is a couple months old, but it’s remarkable enough to be worth the belated mention.  In a letter to the President promoting “green technology,” six liberal Senators brag about how inefficient their pet project of solar technology is.  No lie.

They say that solar power “creates more jobs per megawatt of energy produced than any other form of energy.”  And they consider that a good thing!

Apparently this needs reiterating. Creating jobs is not the goal of economic activity, it’s a byproduct, albeit an important one. Labor, properly understood, is a cost. If jobs were all that mattered we could pay people to dig holes and fill them up again, or outlaw all machines that enhance productivity at the expense of a particular job once done by human labor. Of course, the result would be less overall productivity and a lower standard of living for all.

Hat-tip: Planet Gore on NRO

Wednesday

20

January 2010

0

COMMENTS

Sunday

17

January 2010

1

COMMENTS

Not So Settled Science

Written by , Posted in Energy and the Environment

Remember this the next time they say that the IPCC reports on “settled” science:

Two years ago the Intergovernmental Panel on Climate Change (IPCC) issued a benchmark report that was claimed to incorporate the latest and most detailed research into the impact of global warming. A central claim was the world’s glaciers were melting so fast that those in the Himalayas could vanish by 2035.

In the past few days the scientists behind the warning have admitted that it was based on a news story in the New Scientist, a popular science journal, published eight years before the IPCC’s 2007 report.

It has also emerged that the New Scientist report was itself based on a short telephone interview with Syed Hasnain, a little-known Indian scientist then based at Jawaharlal Nehru University in Delhi.

Hasnain has since admitted that the claim was “speculation” and was not supported by any formal research. If confirmed it would be one of the most serious failures yet seen in climate research. The IPCC was set up precisely to ensure that world leaders had the best possible scientific advice on climate change.

In court that’s called hearsay.  Why is the UN claiming that it’s “science?”

Sunday

20

December 2009

0

COMMENTS

Environmentalists Target Toilet Paper

Written by , Posted in Energy and the Environment, Free Markets

The latest assault on the western lifestyle by the loony green fringe finds our soft toilet paper in the cross-hairs:

The issue over tissue in the bathroom — the really super-soft stuff — is more like the fight about the big SUVs loved by many Americans.

Anti-green, according to environmentalists. Politically incorrect. Why should Americans use luxurious toilet paper made from old-growth trees when much of the world gets by with a far more basic and often recycled product?

Americans use luxurious toilet paper because America has long promoted a system of liberty and free enterprise that has made us much more prosperous than the rest of the world.  Rest assured, if they could afford better, they’d be using better.

These nutbags won’t be satisfied until we’re living in the stone age again.

Hat-tip: John Stossel’s Take

Wednesday

16

December 2009

0

COMMENTS

Copenhagen Boondoggle Proves It Ain’t About Science

Written by , Posted in Energy and the Environment

The Copenhagen talks aren’t about climate science.  They aren’t about carefully crafting policy to deal with scientifically calculated problems.  For one thing, we know that the science has been cynically manipulated to the point that the very scientific process itself has been forever undermined.

No, Copenhagen is not about science.  It’s about two things: power and ideology.

The violent protests taking place outside the conference probably look familiar to you. They should.  We’ve seen all this before.  It’s the same bunch who have been protesting since the 60’s – radical leftwing agitators who hate capitalism.  They’ve found a new home in the confines of ecoreligion, where they can again comfortably lob emotional attacks on the capitalist order.  These are ideologically minded radicals; brainwashed, capitalist-hating and know-nothing college youths; and other social malcontents.  They don’t have the first clue as to what the science does or does not say, nor do they care.  All they know is that the West is evil and capitalism has got to go.

Been there, done that. We’ve heard it all before.

They are quite clear in what they want.  Marching under the banner of “Climate Justice Action,” some of these leftwingers want redistribution as “reparations” for “ecological debt.”  They are demanding up to $45 trillion.  This is attempted confiscation and political revolution, not science.

gore-ap

Dance, puppets!

Inside the conference, it’s all about power.  These people don’t give a damn about the environment, climate change, or whatever buzz words they’re throwing out to the world at large.  Oh, sure, they’ve invited plenty of people who have been duped into believing such things, but those actually making the decisions aren’t there to save the planet or any such feel-good nonsense.  They’re there because the world order is suddenly up for negotiation.  Power is being redistributed, and everyone wants to maximize their acquisitions.

Don’t believe me? Just look at the two sides. Where are the fault lines? The so-called developing nations want power redistributed to them, while the current powers seek desperately to defend the status quo.  The entire affair is best understood through the prism of realist foreign policy.  It’s power politics, plain and simple.

This might actually be good, as it reduces the chances of all sides settling on some economy destroying agreement that leaves none better off.  If they’re all indeed fighting to preserve or enhance their own power structures, we might just skate by without any freedom-reducing agreements to “save the planet” from imagined catastrophe.

Update: Confirmation that it’s not about science (via The Foundry):

Janos Pasztor—the Director of U.N. secretary-general Ban Ki-moon’s Climate Change Support Team—was characterizing the nature of the talks between the rich and poor nations of the world when he said the following: “This is not a climate-change negotiation … It’s about something much more fundamental. It’s about economic strength.” The nations at the negotiation, he added, “just have to slug it out.”

Update II: Hugo Chavez gets wild applause for saying that capitalism is the “silent and terrible ghost in the room.”