Pollution Tariffs

Here we are at the end of this informative and entertaining four-part series. If you are just dropping in today, we encourage you to go back and read the first three parts. You’ll find, the author Jim Amrhein has quite a wry sense of humor in which we wraps the key issues—making them an interesting read.

We wish to draw your attention to two specific points the author makes in this installment. First, the element of from where disastrous spills come, and second, the length of time it takes to get a new energy source up and running. If you disagree--or agree--with his view point, we encourage you to voice your opinion here.

To trim the length of this posting, we cut all of the author’s comments regarding the e-mails he has received in response to this series. (Remember, the original postings occured over a period of several weeks.) If you have been enjoying these postings, we suggest you go to the original site of the source and read the full version of this posting (there you will also finds the charts and maps referred to in these postings). Better yet, subscribe to the free newsletter: Whiskey and Gunpowder, so you do not miss out on any future wit and wisdom.

With his e-mails in mind, we wish to share one such comment with you before you read on. “Thanks also to the gas/coal energy industry executive who wrote to me from China to report on the horrific environmental conditions there — and to give first-hand validation of my assertion that China’s energy costs are so cheap in large part because of lax enviro-regulation…”

Now to the conclusion!"

Carbo-geddon, the Conclusion
“What we’ve got here is failure to communicate. Some men, you just can’t reach…”
— Strother Martin, as “The Captain,” in Cool Hand Luke, 1967

The entire premise of this series is the supposition that the current trend of global warming IS caused by smokestacks and tailpipes — but that America is still doing the wrong thing by planet Earth with its carbon policies. Yet every time I write one of these pieces, I’m astounded by the percentage of mail I get from people wanting to contest man-caused global warming theory (as though I need to be persuaded that it’s bunk). I feel like I’m in Cool Hand Luke. I’m simply failing to communicate that what’s true doesn’t matter — only what people can be made to believe.

And the tragic, ironic bottom line is that in this day and age, any assertion about global warming can ONLY gain an audience if it’s compatible with the flawed assumptions that govern the dialogue. I realized a long time ago that trying to educate or challenge the global warming hysterics with things like facts and logic was a futile errand. The issue has simply become too symbiotic to America’s media-fueled collective guilt at being the most powerful and prosperous nation in the world…

However, I do want to point out one grand hypocrisy inherent to the America-bashers on the global warming battlefront: Critics of U.S. fossil-fuel policies claim that they’re taking a more balanced global view by calling for reduced American consumption. They say that we’re egocentric and arrogant for using as much oil as we do. However, these ignorant gadflies are JUST as arrogant and egocentric themselves for trumpeting that America alone has the power to eliminate (or even to reduce) global warming by curbing its consumption. It’s nothing but typical top-down American empire-think to believe that other nations’ contributions to atmospheric CO2 are insignificant compared to ours, that they’ll follow our lead — or that somehow, magically, they won’t scoop up and burn every barrel of oil we don’t.

As I’ve spent the last month attempting to prove, this is flatly contrary to the facts. In the very nearly zero-sum world oil supply scenario, the cleanest atmosphere results when the more environmentally conscious nations burn the MOST oil, not the LEAST. I don’t understand why I have to reiterate this simple point…

Oh, and one more note to the few critics who wrote in about the first three parts of this series: If you honestly think that a barrel of oil or pound of coal consumed in one part of the world results in the same release of GHG as in another, you really must have your head examined.

Do you actually think that power plants, refineries, cars, trucks, etc. in places like China, Korea, the Russian Federation, the Middle East and Africa are designed, built and held to the same stringent (and ever-tightening) emissions specs that they are in places that are closer to the environmentally responsible end of the spectrum — like Japan, the U.S., Germany, and France? If this were true, nations’ greenhouse gas output would precisely mirror their fossil fuel consumption in barrels-of-oil equivalent. Yet as anyone who can read a cartogram or data from the Pew Center on Global Climate Change will attest, this is not even remotely the case.

But enough volleys back at my critics. After all, some men (and women) you just can’t reach. Right now, I want to examine some of the things I think are driving U.S. energy policy…

Global Warming, Inc.
As populist and conspiratorial as this may seem, I really do believe that America’s petroleum policy has been shaped in large part by the avarice and selfishness of a few. Lately, this assertion is made flesh in the form of the world’s greatest global warming profiteer: Al Gore, Inc.

Despite his reception of the Nobel Peace Prize and incessant fawning praise from the mainstream media, the fact remains that before adopting climate change as his cause celebre`, Al Gore was nothing more than your run-of-the-mill American career politician whose run was over. And with only a degree in Government to fall back on after the 2000 election, he desperately needed a new gig…

This isn’t to say that Gore hasn’t been consistently at the vanguard of the climate-change issue since it first came on the scene, or rather, since he first forced it there. Indeed, this may be the only constant thread of rhetoric, and perhaps belief (you’ll see what I mean in a minute), in his political life. Gore held Congressional hearings on CO2 and climate change in the late 1970s and again in the ‘80s, wrote numerous articles and editorials on the subject, published 1992’s Earth in the Balance — and of course, starred in 2006’s hugely successful “documentary” on climate change, An Inconvenient Truth, for which he also wrote a companion book in that same year.

However, I maintain that it’s easy to “believe” in something that’s profitable — either in terms of political image or in monetary terms. For me, the proof is in whether someone walks like he talks. You decide if The Reverend of Gaia (Gore actually attended divinity school in the early ‘70s) is “living the word” or just profiting from it:

* According to BusinessWeek and other sources, Al Gore’s 20-room, 8-bath Nashville mansion drained more electricity from the grid per month than 20 average American households combined in 2006 — the same year his book and “documentary” called on Americans to conserve electricity. This represents an increase in consumption of 13.5% over the previous year.
* Not ashamed enough at merely over-consuming electricity, habitants of Gore’s home and guesthouse sucked an average of nearly $1,100 a month worth of natural gas in 2006.
* Instead of walking to save greenhouse gases, Gore and his entourage drove five cars the roughly 500 yards from his hotel to the screening of An Inconvenient Truth at the Cannes Film Festival.

Aside from this kind of hypocrisy, Gore has leveraged his pet cause to morph himself from a public servant who, according to Newsweek, barely made the millionaire list on paper in 2000 into a “green” consulting juggernaut now worth an estimated $100 million or more. Consider also:

* Gore claims to offset his mammoth personal carbon footprint by buying carbon credits from a company, Generation Investment Management (an institutional asset management firm specializing in opportunities positioned to cash in on global-warming-driven policy changes), of which Gore himself is the Chairman and Founding Partner. To say he stands to gain financially, as this firm’s global clean-energy investments pay off, would be an obscene understatement. He’s not buying pollution absolution, he’s simply funneling that money into investments that are poised to ripen on the strength of his own hot air.
* Last November, Gore was named as a new partner in a famously successful venture-capital firm, Kleiner, Perkins, Caulfield and Byers, symbolically leading their “Greentech” division — a strategic alliance with Gore’s firm, Generation Investment Management. Though Gore has stated that his entire upfront salary will go to the non-profit Alliance for Climate Protection (which he Chairs, coincidentally), he stands to rake in tens, maybe hundreds of millions down the road as KPCB claims its 30% profit stake as “green” start-up firms that Gore helps them cherry-pick for funding go public or are sold.

If you look at all this from a certain point of view (an objective one), what we’ve basically got here is a politician with a flair for opportunism shrewdly pre-positioning himself to profit from climate change hysteria that he may or may not believe in — then collaborating with Hollywood big-shots in making a high-profile movie that, along with a willing media, pumps such hysteria to a fever pitch. Obscene profit, accolades, Nobel prizes and freedom-robbing legislation ensues…

What I want to know is when politician-made movies ceased to be called propaganda.

I must say that from a purely Machiavellian standpoint (damage to America’s economy and freedom notwithstanding), Gore’s flim-flam is really a marvel of vision, ambition, and execution. What a different nation this might be today had he exhibited some of these qualities while in office on behalf of America’s best interests.

Doom with a View
Another thing that has a huge affect on American petro-policy is the regulation of domestic oil drilling. And interestingly enough, I detect the fingerprints of a selfish, greedy few driving this policy — instead of the energy needs and environmental concerns of a nation…

First, some background. Currently, only about 15% of the United States’ Outer Continental Shelf — roughly, the seabed from around 3-9 miles from shore out to 200 or more — is open for underwater oil drilling, a practice which is far less likely to result in disastrous spills than the importation of oil by tanker. From what I could gather (it proved remarkably hard to find easy-to-interpret data on this), somewhere north of 80% of the world’s worst petro-disasters in terms of volume of oil released into the environment have been from tanker spills. Conversely, 97% of oil spills and accidental discharges from offshore rigs do not exceed one barrel, industry sources claim…

But I digress. I was starting to wonder aloud why such a small percentage of America’s coastlines are dotted with offshore oil rigs — until I looked at the locations of offshore drilling rigs in OCS waters of the U.S. Again, I didn’t have time to make an intensive study of this (it could be book-length if I had, I’m sure), but I’m pretty confident in postulating that there’s a strong correlation between the location of offshore drilling rigs and costal real estate values, or the comparative wealth and influence of states.

Perhaps the starkest example of this is Florida. Home of some of the wealthiest coastal zones in the U.S. (seven of the top 11 places with the country’s highest per-capita income are in the Sunshine State), Florida has been under a strict moratorium on offshore drilling since 1983 — despite no doubt being home to huge reserves of eastern Gulf oil…

Yet the coastal waters of neighboring (and comparatively poorer) Alabama, Mississippi, Louisiana and Texas are dotted with thousands of rigs, without which the U.S would be far more dependent on foreign oil.

Now, what do you suppose the reason is for why there are no oil rigs off Florida? Do you think it’s because there’s no oil there? Or could it be because a comparatively few rich people who live in Florida and can afford to buy gas and heating oil at whatever the price have decided that they don’t want their pristine horizons spoiled by a few speck-sized rigs?

It’s the same way in California — there are some offshore rigs there, but you won’t see them along the Monterey coast…

Currently, only a handful of U.S. states allow drilling in the waters adjacent their shores. And it’s my perception that the greatest concentrations of rigs seem to roughly cluster off coastlines where there are relatively few marquis beaches, and where relatively few rich people live.

I could go on and on about this stuff, but the simple point I’m making is this: Whether it’s increasing offshore drilling, judiciously tapping into the Arctic National Wildlife Refuge, or partnering up with Mexico or Canada (a lot of their future oil sands yields are destined by agreement for China), the United States has far more oil in its backyard than we’re extracting.

And these sources are one component of the energy policy I think we should be living by…

The End of Carbo-geddon
Here’s the real bottom line with this whole four-part series…

As a nation, we need to decide what we want: Cheap stuff or a cleaner atmosphere. We cannot have both.

If we really want to buy into unproven global warming theory and commit ourselves to what we think will be the betterment of planet Earth, we must reduce the demand for (or availability of) oil by nations that pollute with impunity. The only way to do this, barring warfare, is to compete with them — both on the world oil stage and in the manufacturing arena.

As it stands right now, curbing American importation and consumption of oil is a BAD thing for the global environment, all other things remaining equal. Every barrel of oil we leave on the market is a barrel of oil that hyper-polluting China will scoop up at any price (they have little oil of their own to extract) — and they both need it and can afford it, since we’re buying all of our stuff from them.

I believe that in the short term, America should ramp up its importation of oil and pour our national might into once again becoming a worldwide leader in manufacturing and production. This limits China’s access to oil (since we’d be buying comparatively more of it), their ability to buy that oil (since we’d be buying less of the stuff they make with it), and their need for it (since their manufacturing sector would lag without booming U.S. demand). Upsides are a stimulated American economy and comparatively less global GHG. The downsides are that we’d become even more dependant on foreign oil in the short term — and we’d have to pay higher prices for domestically made things…

I also believe that America should simultaneously, aggressively begin drilling and extracting what oil we have. It will be years, maybe decades, before such an effort could reach full swing. However, when it happens, we’ll be in far better shape in terms of our ability to sustain ourselves without foreign oil once we reclaim the former production glory that made us great (this will take years, too).

Finally — and as a lover of free market capitalism, it pains me to say this — I believe that we must find a way to generate some solidarity and resolve among the American people to buy only those products made in environmentally responsible nations, foremost among them the U.S.

Ideally, this should come from our leaders. Our politicians, were they truly ecologically conscientious (instead of hustling us for their own fortunes), would expose and propose solutions to the “dirty little secret” that America’s appetite for cheap, foreign-made goods may be speeding the warming of planet Earth — and that it’s our duty to our fellow man to produce and choose more goods made domestically and/or in an environmentally responsible way. Even if they cost more.

However, hoping for objectivity and a greater-good mentality from politicians who, by and large, are motivated by their own enrichment and bound (somewhat) by the selfish wants of their individual districts is perhaps even more futile than hoping for some reason and sanity in the global warming debate. Therefore, I don’t think it would be out of line to slap the hard-goods made in major polluter nations with a hefty tariff. It’s not like there’s no precedent: We’ve enacted economic sanctions before over human rights violations — and what’s rampant greenhouse gas pollution, if not a violation of our basic human right to a clean, cool Earth…

The real question is: Do hyper-consumptive, stretched-thin, credit-addicted Americans have the fortitude to pay more for their principles — even if they’ve been falsely sold on them by the greedy and corrupt?

Jim Amrhein

Freedoms Editor, Whiskey & Gunpowder