Archive for August, 2008

Eco-damage and the Need for Change; Drilling No Way Out

August 1, 2008

I just read in about the growing Dead Zone in the Gulf of Mexico. Apparently the combined effluents combine in the Mississippi and enter the Gulf late every spring. Most of the pollutants come from agricultural runoff, and consist of pesticides and herbicides. Apparently the higher price of corn has enticed farmers to grow more–this has increased the amount of effluents because corn needs a lot of fertilizer, etc. to grow.

I’d seen some doom’n’gloom comments there from people who’d rigthfully been disappointed with the continued degradation of our oceans. Here’s what I said in my comment there:
~begin comment~
“Part of this evil is the attitude that it won’t affect me, personally. Yes, this is more or less apolitical, an outgrowth of unregulated consumerism. The results of centuries of overconsumption and pollution will be starvation and death, slow misery. It’s believed throughout much of the US that individuals bear no responsibility for the fates of those whom their decisions affect. It’s simply easier to live in denial than to confront the collective impact that our individual decisions make.
I’d be very cautious in proclaiming a message of gloom and doom. People will simply turn off if 1) they think their actions will make no difference and 2) the standards of change and perfection are crafted too high. People need to know that even a few little changes can make a big difference–this is the flipside of the large negative collective impact that individual decisions can make.

If people are subjected to scorn for being anything less than vegetarians who ride their bikes and don’t use fossil fuels, the target audience will not IDENTIFY with the environmentalist or the alternative model they are offering. People need small, tangible steps, which they’re taking, though they are coming at a pace far too slow to stop all damage. This is in large part due to the anti-regulatory (Chicago School of Economics) viewpoint that predominates. Still, if you want worse, look back at 1880s America. Change and hope for a better world are possible, unless we just give up and abandon the possibility of change, which is tantamount to letting evil win.”
~end comment~
Taking no action to counter growing environmental problems will lead to predictable outcomes, like an ever-growing Dead Zone, or more methane, or more flattened mountains. I guess it’s just human nature to believe we can get away with doing what comes easily. Hopefully, people will discover that the benefits of making the right choices will help eacch of us enough to justify the additional effort or cost.

Individual choices, collective impact

Clearly there’s a major disconnect between what your average American does and the eventual impact on the environment of millions of individual decisions rolled together.

To be environmentally accountable, people need to assume responsibility for the impact of their choices. One marginally bad decision–to pour some medicines in the toilet, for example, might not in itself compromise an environmental threat. But when millions of people choose to pour pharmaceuticals into the water or, when pharmaceuitical companies are allowed to manufacture products which don’t decompose in the human body, the environmental effect is massive.

As it turns out, municipal water purification processes can’t eliminate certain anti-depresssants and other medicines from the water. Unless you plan to drink bottled water–which also causes an environmental cost as the bottles are rarely recycled–you’ll end up drinking some of these pharmaceutical ingredients in countless American municipalities.

And just where is government in all this? Over the past few decades, politicians have grown to see regulation as the enemy of business growth. Of course, it’s also no coincidence that the corporations that stand to gain the most from inadequate pollution controls. Through lobbying at all levels of government, corporations have greatly increased the scope and effectiveness of their efforts to get laws passed and regulations overturned, or at least unenforced.

Political economy

Republicans seem particularly predisposed to urge the regulatory standards be relaxed, and enforcement made more lax. Over the Bush years, it’s a open secret that the EPA and other federal bodies have been led by former (or did they never really leave their jobs?) executives in the industries that they purport to regulate. Officials responsible for Mining safety come from mining companies, FDA from the pharmaceutical industry, etc..

How can an adequate regulatory environnment emerge in a government run by businessmen? Environmental reports were edited to remove evidence of global warming; scientists who didn’t agree with the politicians in charge demoted and censored. For the past eight years, it seems as if truth has been victimized by corporate agendas intent on avoid the costs associated with regulatory standards.

Under the Chicago School of Economics which now forms the basis of our politicians’ thinking, government regulations and their enforcement are an inhibitor to economic activity. Our leaders believe that what is good for the economy is good for society. What makes some people rich is thought to help all people, which simply isn’t the case. Perhaps as sea levels rise and the inequities of the Chicago School are more fully grasped, Americans will realize the deconstruction of the regulatory environment is a curse for all but the richest, to whom a great deal of wealth has recently been accumulated.

Not mentioned in the supposed tradeoff of jobs for environmental standards are all the benefits of sustainable economics. In the desire to secure short-term profits, longer term sustainability is sacrificed. Greed is a hallmark of New Capitalism (which bears a lot of socialist instincs when it comes to protecting the housing market for instance.) It’s the nature of corporate profitability to want constant increases in the share prices which sadly, are far more likely to chart a unsustainable course towards a massive boom followed by massive bust.

Bottom line is that government must do a better job regulating. Companies are hard-wired to want to exploit ever-larger amounts of natural resources at lower and lower cost and greater profitability. All too often government allows private entities to lease land at sub-market rates, subsidizing the private sector, at least the part that relies on governmental subsidies and effective lobbying to get for free what other companies must fairly earn.

Already, the economic consequences of inadequate regulatory enforcement are showing up as environmental scars, mountains levelled by Big Coal in Appalachia. Perhaps no better example exists of how the failure to enforce the laws–Clean Air and Clean Water–has brought extensive, permanent environmental destruction. Simply by following the laws, Big Coal’s odious mountaintop removal processes would have been stymied, and countless mountains saved.

I don’t think it’s communistic to say that destroying those mountains is wrong. Sure they’re private property, but that doesn’t mean their owners should be able to do whatever they want with them. In its ugliest form, property rights are absolute. Property owners get total, unquestioned authority over their possessions, in the same way some humans were viewed during the slavery period.

I don’t think corporations are human–a common misperception channeled by adherents to the Friedman’s Chicago School. Surely what some corporations have done would warrant a jail sentence, a punishment which denies someone their freedom–just who’s been to jail in Enron’s case? For ass logn as corporations can appear to be accountable, they can duck responsibility. Often, they will claim that they are simply serving their stakeholders–employees, suppliers, vendors, and customers–to rationalize whatever environmental shortcuts they take.

As it turns out, environmental justice is in large part based on economic justice. As long as exploitation of public resources rewards the few at the expense of the many, there will be ecological consequences.

Changing core values

The world of the future must contend with the lingering aftereffects of the overuse of carbon-based energy by the America and countries eager to follow its model. The more fossil fuels we use, the more CO2 accumulates in the atmosphere. The more CO2, the more heating will occur although temperatures will not follow a straight line. Average temperatures might also be slow to move, but an average created by combining extreme hot and cold will hide the true extent of the climate’s radicalization.

Decisions that millions of people make do add up. Collective action is needed.

The current and future status of the planet’s ecology reflects the scientific amalgamation of individual actions and mechanical processes. Millions of combustion engines running simultaneously are belching out a staggering combined output of billions of pounds of greenhouse gases. A cause and its indeliable consequence are as interconnected as the effect of what we do as individuals on the environment.

There’s a childish, Rush Limbaugh-like pride in bad environmental stewardship which needs to go before Americans can confront the situation they’re in. Global warming deniers exist because it’s simply easier to ignore the consensus of the scientific community than to accept what one does makes a collective and combined impact.

Altering one’s actions as an individual forms the prerequisite for societal change. Yet greening has emerged as a method to promote more commercialism in our society. We are told to go on shopping, and that we can make a difference by buying green, and we can. It’s just that the consumerist portion of greening has come to dominate the need for change.

Now to shop for environmentally responsible products allows us to continue to live a consumption-oriented lifestyle, and takes less from the environment. Still, we must learn to consume less, to live simply so that other can simpyl live. Until we can rid ourselves of the idea that consuming is the route to happiness, we are bound to focus on satisfying our wants and cravings, especially once they are masterfully converted into needs by the marketing establishment, which surrounds us 24/7/365, from an increasingly younger age.

What we really need is a change in our values and principles that makes the advancement of human and social capital more valuable than the accumulation of monetary capital. As long as we’re hyper-capitalist–or pretend to be as we bail out mortgage investors and spend our way into inflation, the individual’s right to make money eclipses the social good.

We face particular environmental hazards because we’ve come to equate environmental regulation with higher prices. Until we choose an alternative value system, one that values social capital as much as monetary capital, our society will value individual choices as they are manifested in what reflects our base consumerist instincts.
Ever-present commercialization has shaped how we see ourselves according to what we buy. Rachel Corrie, killed by an Israeli bulldozer trying to save a Palestinian house, said that we are more than the sum of our choices of what to buy.


Bush is ready and willing to terminate the Congressional moratorium on coastal drilling which was supported by his father’s 1991 Executive Order banning offshore drilling. Responding to the higher price of gas, bolstered with Republican political support, Americans by a slim majority support more drilling. [See “The Three Biggest Myths the Bush Administration Wants You to Believe About Offshore Drilling” by Faiz Shakir, The Progress Report, on alternet.]

The ultimate beneficiaries of expanded drilling will be the companies who drill and sell the oil, what NYU economist Nouriel Roubini calls “privatization of the profits.”
The risks of coastal drilling are immense. Last week, over 160,000 gallons of oil had spilled into the Mississippi, stopping barge traffic and requiring drinking water (on which so many communities along the river regularly depend, where it’s not too polluted) to be trucked in. Likewise we taxpayers will have to pay for the cleanups, Roubini’s “socialization of losses,” either through indirect impacts on the economy, or lost tourist revenues. The shocking dismemberment of the abusively delayed Valdez verdict shows that the Courts will side with Big Oil rather than their victms.

I guess if the spill isn’t where you go, or near property you own, or affecting your job, you think you’ll be just fine, at least until the new resources dry up. Well, perhaps, or the price of oil could continue to go up despite the drilling and all the environmental risks it brings, due to a rise in global demand. Our major oil companies operate on global market prices: to reduce prices–globally–supply must outpace demand–globally, not at all likely.

Just how immune are we from the consequences of ecological disaster which always acccompany the transport and production of oil? I’d venture that none of us are more than a few degrees of separation apart from the environmental consequences of our dependency on oil. While we may not be directly impacted, we will know those who are. And the spectre of climate radicalization means hotter temperatures will likely brew stronger storms, drier droughts, and worse flooding.

Does one person’s use of oil contribute to the intensification of a hurricane, to the formation of a tornado just a little bit stronger than would have otherwise formed? In a complex system of interactions, we do not know how one input will impact the overall system.

We are led to believe that the crisis is the product of undersupply, despite the fact that oil and natural gas companies aren’t drilling on some 68 millions acres of federal land which, last time I checked, belonged to the American people. So what have we got in exchange? Higher oil prices. Today Exxon announced earnings of some $11 billion for the quarter, which still wasn’t enough to placate Wall Street. Greed has no limits. The more these companies make, the more they must make.

So, with 68 million acres already under lease, the Republicans want to give oil companies access to coastal drilling areas and ANWR, as if that solves the problem. Nonpartisan oil experts have estimated that this drilling could take decades to make any impact on US domestic oil prices. As I’ve said, the oil companies are structured in such a way as to sell their oil on the international market, which is impacted by higher demand from other nations. No longer can we isolate the price of oil to our demand for it, nor can we isolate the prices we pay with our domestic supply, as it makes up only a tiny proportion of the total.

Peak oil has arrived. Now the term itself is somewhat deceptive, as we’ve come nowhere near to depleting half the world’s oil. We have however, come to the point where oil production is declining because easily extracted oil is running out. We’ve explored from the mountains to the sea, and found virtually all the supplies that we can find. Yes, oil is down there but no, it won’t come up without huge investments, investments which at this point are born by private sector speculators and oil companies.

As profit-based industries accountable to their shareholders, oil companies need not only to produce oil, but do so in a manner which allow maximum profitability. They are under constant pressure to decrease their cost of production, find larger fields, and shrink time frames. No amount of government lease-granting is going to speed private sector investment, unless the lease spots are increasingly attractive to oil developers. This could explain the push by oil companies and their political allies to open up more federal land to drilling–not necessarily to access oil but to make oil access easier and cheaper

The gains of leasing away more land could be phantasmal. The rate of return that oil companies expect is set by the financial markets, who are clearly less excited about developing in places where the oil is harder to get out. It’s only after the investors and oil company shareholders get their cut that Americans will theoretically be able to gain from lower gas prices, which will be granted only at the mercy of the oil companies who’ve used our land for their gain.

The logistical and mechanical challenges inherent in trying to get oil out of faraway or hard-to-access places are solvable, but just cost more money, or produce less. By giving oil companies the ability to drill in more places, regardless of environmental risk or collateral damage, politicians are essentially improving the profitability of drilling, which might increase the scope of drilling. Sooner or later though, these sweet spots will flow less oil, and lose their profitability, then we’ll be back where we are now.

Even now, Bush and the Republican Party want to ignore the role of speculators in driving up oil prices. Instead we are told to accept coastal drilling, despite the fact that oil and gas companies sit on 68 million acres of federal land that they are not drilling. Plus, as I’ve pointed out, the oil might not even make it to our shores and instead be sold abroad, as after all, just because the oil is pumped or refined here, doesn’t mean it won’t be sold overseas. Hey, it’s a free market, so even if it’s drilled on American land, we don’t own the oil.

No plan for conservation

Whatever the oil supply, it’s clear we don’t have enough easily extractable reserves. Bush did explain the value of conservation in his July 15th press conference, but he made no effort to explain his leadership responsibilities in the matter, choosing instead to have Americans conserve through the choices they make. While the free market might do many of the same things as an active conservation program, the two are not the same. First, leadership is vital in leading Americans to a way of life that is less dependent on cheap energy. Secondly, the idea that higher prices in the free market will create conservation ignores the fact that many industries will continue to use energy inefficiently and simply pass on the higher prices, or continue to rely on dirty coal, which remains cheap.

<i>Laissez faire</i> government is no substitute for true leadership in the cause of energy conservation. For one thing, the President is the leader of the number one user of petroleum in the world: the U.S. government. As chief executive of that organization, under the new Unitary Executive paradigm, it’s Bush’s right to do as he sees fit. Being an oilman, Bush is tied even while in office to that industry, if we judge by the level of poltical pressure applied concerning opinions on global warming.
Why not let the use of petroleum spike, and let Bush cronies both here at home as well as his Saudi friends benefit? Lord Acton said absolute power corrupts absolutely. If Bush and friends have their hand on the pump, why would they do anything to reduce demand? [Similarly, if the US government and their Israeli allies knew 9/11 was coming and could see the opportunities (Rice, Cheney, used that word) it presented, why act to stop it?]

How can an entity like our government change its use of energy without artfully implemented policies formulated at the top? Getting government to change is a feat in itself. Expecting federal employees to step forward to lead, innovate, and change the federal entity is ridiculous. The federal government acts outside the rules of the free market that Bush and his investor class supporters occasionally follow (bailing themselves out as in the subprime scandal.) Why would the government be impacted by the cost of gas? Simply up the budgetted amount, whine to Congress for relief, and stick future American taxpayers with more debt. We need it now, the U.S. military, which is the largest user of petroleum in the word, might say. “For our security” they might say, ironically, ignoring the reality that the large military presence in the Gulf is surely heightening tensions and raising the price of gas.

Absent leadership on conservation, wasteful energy use will continue. Is it that hard to sign an Executive order forcing better fuel economy standards for federally operated vehicles? Couldn’t Bush order that federal office buildings set the thermostat a few degrees lower or higher, like Carter did? Just how hard would these things be to accomplish?

I’ve explained how Bush unwilling to demand conservation from the government he purports to lead which would save taxpayers in taxes and reduce overall demand and cost. He’s content to let the free market–read higher prices and profits for Big Oil–curb consumption. Just how seriously is Bush trying to reduce the cost of oil? At a cetain point, with gas prices skyrocketing, oil company profits soaring, and nothing being done to cut the government’s usage, the absence of leadership is highly suspicious.

Bush has always been friendly to the oil industry, having come from oil money, and overseen a regime that has helped drive the price of crude oil up almost ten-fold. How Americans can still believe that Bush is not actively pursuing a pro-Big Oil agenda is remarkable. Apparently, the dumbing down of the mainstream media has rendered meaningful debate based on anything more than 30-second sound bites obsolete. Maybe there really is something in the water.

Bush tried to defend the speculators from their contribution to rising oil prices. I’d quote a Michael Greenberger, former head of the Commodities Trading Commission, that had attributed 30% of the price of oil to speculation. (Hmmm, maybe why that clip on C-Span still isn’t available.)

No, the rise in the price of the oil is not from inadequate capacity. It’s from the absence of leadership on conservation, coupled with geopolitical instability that <b>we</b> created by invading two countries in the heart of the world’s most productive oil resources. Yes, demand is up in Chindia (China & India). But to attribute the price solely to demand ignores the willful conspiracy to rise its prices, which is fed back into the Cheney-Bush-Big Oil proft nexus, hardly a free market. If anything, it’s the absence of regulation that allows speculators with access to artificially low prices for money to borrow and drive up its price.

Worth Reading:
Bush on the Environment” by Jeremy Jacquot