01 June 2010

Regarding oil

This brilliant comment is from a thread on digg:
This is complete and utter bullshit.

If you ever voiced any concerns about the environment or wildlife in America, you're always labeled a hippy or a bleeding heart or a nature nazi.

Sorry, folks, but this is what happens when you interrupt a natural habitat. There is absolutely no way to drill underneath the ocean floor for oil and expect there not to be huge impacts on everything around it.

There simply isn't. For those of you who thought offshore drilling was a victimless situation, this is your wake up call.

The problem is that a lot of Americans want everything: They want the oil, they want to 'drill, baby, drill,' they want to maintain a life and culture where we're dependent on this stuff but they want it to go smoothly with no disasters or mistakes.

And it's simply impossible.

It's fucking horrible that sea life is dying and birds are dying and the marshlands of the Gulf won't be the same for a long, long time.

I volunteered for a non-profit organization for one and a half years who tried to spread (accurate) information about offshore drilling and the consequences and had doors slammed in my face just to get a signature for a petition and people wouldn't even take the flyers I was handing out. And my first words were always, 'I'm not asking for money, just a minute of your time.'

America has just created this absurd culture where nobody gives a shit about anything until it goes bad. And lots of things go bad because of risks and mistakes and things that cannot be avoided due to human error and/or mechanical failure.

So here I am, again, a fucking hippy, suggesting that America find alternative fuel sources. Not just for now, for the future as the current resources are depleted.

Someone suggested I was an idiot because I don't support massive nuclear energy in the U.S. but this dolphin is the direct result of human error and mechanical failure.

Can you imagine the photos if there was human error and mechanical failure (which is always lurking) at a fucking nuclear plant in Louisiana?

Sorry. Just not worth it.

Every American has the opportunity every day to individually help curb energy use. You can't always avoid driving a car but you can buy cars that use less gas. Five years ago, we were a nation of giant SUVs and nobody really saw anything wrong with that UNTIL gas prices shot up. And then it wasn't, 'we're depleting our resources like mad,' it was, 'I can't afford to drive to work!'

Think about your kids, their grandkids, our wildlife, our environment in a logical way: No matter what the consequences are, there's nothing wrong with being mindful about the future and what kind of earth/country we'll leave to the next generation. That's not being a hippy, it's being rational and realistic.

As it is with this situation, waiting for something bad to happen and then trying to fix it isn't an option.

Help slow down our dependency on oil and coal.

Not preaching, just saying.

It just blows my mind that so few people seem to care until there's a picture of a dead dolphin covered in oil.

By the time this is all over likely, this photo is going to seem fairly tame, I'm afraid.

28 comments:

  1. Thank you David for posting this brutally honest look at the American mindset towards industry v. environment.

    There is a lot of resistance to the TRUTH when it overlaps money and environmental impacts, and it usually comes packaged by bureaucrats and greedy corporations and then is parroted by the dumbos who slammed the door in this guy's face.

    Our culture, governance, and mindset are absurd. And yes, I'm a frigging hippie too.

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  2. Shouldn't this be labeled a guest post?
    : )

    This was a good article, and folks should get to blow off steam. I also don't know why people are so afraid of sounding like preachers.

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  3. @Josh -- thanks -- missed that...

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  4. David, dude, it was just a joke. I'm picking on you for your comment at Environmental Economics.
    : )

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  5. I know he must be serious (because he curses a lot... and everyone knows you can't curse if you aren't serious) and he must be incredibly intelligent, because he disliked something even before other people disliked it (and disliking something before other people dislike it is even better than liking something before other people do) and he has a solid platform (he used the phrase "for the future" and he mentioned not just children, but grandchildren, which proves he is a deep thinker) but even still I am going to dare to quibble.

    It isn't nearly so simple as "suggesting that America find alternative fuel sources." Self-deprecating hippy that you may be I detect the hint of someone that went to college; did you ever bother to take a physics class while you were there?

    Your other suggestions seem so on target: won't you also suggest where all this energy will come from?

    You don't like nuclear energy; you don't like fossil fuel energy. What do you like?

    Wind, solar, and tidal all have serious energy storage, load following, and land use issues.

    You can have a society powered by those, but not this society. This society watches TV even at night, hundreds of miles of the coasts, and when its not windy. It surfs the Internet at all hours of the day and night in air conditioned comfort.

    That other society is one that is pleased with paying incredible sums in order to obtain unreliable energy, is patient with frequent brown and blackouts many of which will last for days, no adaptability for load following, and gigantic requirements for land use, where beautiful fields and pastures are recarpeted in solar panels covered in thwumping aerogenerators by the hundreds of thousands.

    I don't see that society coming anytime soon, and that doesn't bother me.

    Drilling as safely as possible is a balance. Sometimes, as sad as it is, entirely innocent dolphins die because of it. Just like innocent people die in car wrecks. Just like innocent people die in airplane crashes. I don't demand some physically impossible alternative to airplanes because very rarely an airplane crashes. One just tries to learn from the crash and go on.

    When you don't have cheap energy, sometimes people (particularly the elderly) die of the cold or die of the heat. Food spoils more quickly, and people suffer from lack or even die from eating spoiled food. That is sad too. Maybe not as sad as when a dolphin dies, but still sad when it happens.

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  6. Feel better, Guest Blogger? Now let's get back to the real world.

    While I'm sure we're all sad about the dolphin, the fact is 11 actual people were killed in this event. So it's bad for more than one reason, but a dead dolphin doesn't exactly top the list.

    If you're going to make sweeping and judgmental statements about how the world works, you should be obliged to have a better idea. And it better be a serious idea. You can't just say, "Nuclear and oil aren't worth the risk," and then go back to playing hackey-sack. You certainly can't say that America should "find alternative fuel sources." Wow, Moonbeam, what a great idea! Why didn't anyone else think of this? Alternative sources of fuel -- like good feelings and bongwater. Why, I bet the energy from patchouli in the gutters on Haight and Ashbury after a good rain would be enough to power a medium city for a week.

    Guest Blogger is opposed to offshore drilling and nuclear power because he believes the risks are not worth the benefits. I submit that for the foreseeable future without fossil fuels or nuclear power we no longer have a working civilization. It's great to imagine yourself living in your cabin in Michigan full time, hunting and fishing and foraging berries and roots for survival. But there's no chance of supporting 6.7 billion people that way, even if they form a commune. And please, please, let's not get started about wind, solar, etc. Foregoing fossil fuels means one thing: far less energy. Agreed?

    How about a little evidence that you've actually thought about the costs/benefit in a serious way? For example, it's far from obvious to me that a major spill every twenty years is not a reasonable cost to pay for the use of oil. I'm sorry for flipper, and I'm very sorry for the workers who lost their lives and their families, but when you think about what the alternatives actually are, this may not be so bad.

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  7. I have four friends who work at Chevron in San Ramon: One geologist, two engineers, and one in HR. Their salary and benefit packages are insane. They're paid very well, have every other Friday off, get full medical and generous severance packages, and they have access to perks including daycare and full tuition reimbursement. The geologist works in Vietnam, and they double her already generous salary so she can afford to maintain her home in California. She has a full-time driver on call, and she flies back to the US first class every few months on Chevron‘s dime.

    I have a hard time wrapping my head around the mix of political, social and economic conditions that make this possible. I can’t explain how an industry with so many negative social and environmental consequences (I‘ll go ahead and call them externalities - although there is probably a better word for beached dead dolphins, 62,000 square miles of polluted, unfishable water in the Gulf, and destroyed wetlands that may provide reduced protection from hurricanes) can make so much money when everything about it screams not only unsustainability, but potentially catastrophic and irreparable environmental damage.

    BP may pay the cost of cleanup, but they will not pay the true cost of the disaster because our legal system does not favor monetizing environmental losses, dead dolphins, cancelled vacations or missed opportunities. I live on the West coast but I won’t be compensated for the loss of Southern coastal wetlands - which I value - or the fact that I probably won’t eat seafood for the next year - which I also value. I’m actually a little pissed off about that. I’m not willing to trade cheap gasoline for seafood or destruction of resources.

    The private gain/public risk phenomenon hit us twice in two years. The Supreme Court gave the green light to unlimited corporate campaign contributions last year, and corporations will contribute heavily to the one half of our political establishment who boil solutions to complex problems down to stupid slogans like “anti-big government“, “let the free market decide” or “drill baby drill”. 60-some odd percent of Americans don’t believe climate change is man-made. There’s no shortage of people who defend driving SUV’s because they “can afford to”, and the BP spill probably won’t change that.

    The realities are that Exxon-Mobile (I believe) made more money than any company in the history of the world in not one but two quarters last year. I think we desperately need a better balance between government regulation and free enterprise that operates with the recognition that at some levels business has a tendency to destroy itself. I say desperately because in some cases - twice this year, no less - it has the potential to take us along for the ride.

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  8. @The Outsider:

    I think your cost/benefit analysis is flawed because you aren't factoring in the full cost of fossil fuel consumption. You didn’t bring this up specifically, but I think the climate-change-is-not-manmade argument is a convenient way to hold on to a way of life that will, at some point, come to an end. If it’s real, and if it’s caused by fossil fuel consumption, then that’s a cost that would be impossible to justify outside our American lifestyle bubble, and perhaps even within it.

    Saying “I submit that for the foreseeable future without fossil fuels or nuclear power we no longer have a working civilization” may be correct - we can’t just turn off the coal, oil and natural gas and hope to maintain our society as-is. But, wouldn‘t you agree that not developing alternative energy now in light of the costs of fossil fuels (excluding global climate change) is irresponsible? I mean this respectfully: We’re not just talking about a few dead dolphins, dead oil workers, or ugly beaches - we’re talking about the potential end of the Gulf Coast fishing industry as we know it, and the destruction of wetlands that protect the region from hurricanes (which, ironically, are growing in size, duration and intensity due to climate change). And, this is all happening as our economy is beginning to recover from the failure of regulatory oversight in the financial industry, which could slow the recovery. The system is overloaded…it can absorb a few dead dolphins and some dirty beaches, but that‘s about it.

    I also think you downplay the potential for alternative energy sources. Yes, solar requires sun - which we don’t always have - and wind power requires wind, which doesn’t always blow. How did we suddenly become too dumb to resolve these issues? I can think of three or four good solutions, and I have no engineering experience. Beginning to address these issues will begin the process of lowering fossil fuel use, and we can work on solutions to logistical problems along the way. Not beginning the process of developing wind farms and solar grids is irresponsible in light of the facts. I suspect one of the main reasons we haven’t really begun developing alternative energies is because the oil & gas industry has enough political and economic power to stall it, and I can’t even imagine a legitimate argument to support that…let alone buying into it.

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  9. Andrew547, how do you know I'm not factoring in the "true" cost? Because I didn't put my assumptions down. My point exactly.

    But listen, it might be true that IF fossil fuels cause global warming and IF global warming causes catastrophic harm, then burning fossil fuels wasn't worth it. Unfortunately, that's now how you do benefit/cost calculations. That's just arm-waving, which seems to comprise about nine tenths of the discussion about global warming. It's a convenient red carpet for people who like to strike a pose of moral superiority.

    Your second paragraph, about what happens if we don't quit using oil, is like that. Why don't you go look up Prince William Sound as an example of the last fragile eco-system that was utterly destroyed forever by an oil spill. If fact, why don't you go on one of the commercial cruises up there to see the glaciers and wildlife. That's not to say oil spills don't matter or that there was no harm done. They do, and there was. But these end-of-the-world scenarios you're tossing around are a little incredible.

    All I'm saying is that it seems likely to me that if you take a rational look at the risk-cost from occasional oil spills, it may not be that high. What do you think about that? Could you imagine actually looking at the costs and concluding they're not too high?

    The problems with solar and wind are more fundamental than you suggest:

    1. They're intermittent, as you point out.

    2. They're EXPENSIVE. Now you might say, "Hey, we're rich, we can afford a few extra dollars a megawatt hour," but that misses the real point. India and China are going to burn coal. There's not a damn thing you or I can do to stop them. The coal will be dug up and burned. The question is only whether the West will make itself poor and irrelevant while this is happening.

    3. They're "thin." The energy density is very low, which means they take up lots of space, which means a) they abuse a truly scarce resource, the surface of the earth, and b) they're dangerous.

    4. They're environmentally unfriendly. Because of their "thin-ness," wind and solar take up space that birds and bunnies and little baby deer need to frolick and play.

    What are your three or four good solutions to these problems?

    How can you say "we" haven't begun developing wind farms? My own state is throwing money away at an alarming rate to meet a legislative requirement than 15 percent of all energy come from "renewables." Fifteen percent is probably more than the transmission grid can actually manage, but you'd need some engineering experience to know that. We're walking up to the edge of a cliff.

    I wish you'd develop your theme that businesses tend to destroy themselves if left unregulated. Can you support your thought?

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  10. Outsider, I appreciate your comments. Due to length I had to break my reply into two posts.

    ::it might be true that IF fossil fuels cause global warming and IF global warming causes catastrophic harm, then burning fossil fuels wasn't worth it.

    I Agree

    ::That's just arm-waving, which seems to comprise about nine tenths of the discussion about global warming.

    That’s partly why I left climate change out of my list of costs. I was arguing that the cost of a loss of southern coast wetlands and the resulting loss of protection from hurricanes and the potential loss of that region’s fishing industry (I won’t eat seafood for at least a year) could cost tens of billions of dollars and may have an impact on the national economic recovery. This spill is a potentially catastrophic event. At SOME point the cost of an oil spill outweighs the benefit of drilling, and I am arguing that we could reach that point. We’ll find out as things unfold. I’m hearing that the leak may not end until July at best…and some pundits are saying years.

    ::Your second paragraph, about what happens if we don't quit using oil, is like that. Why don't you go look up Prince William Sound as an example of the last fragile eco-system that was utterly destroyed forever by an oil spill. If fact, why don't you go on one of the commercial cruises up there to see the glaciers and wildlife. That's not to say oil spills don't matter or that there was no harm done. They do, and there was. But these end-of-the-world scenarios you're tossing around are a little incredible.

    The damage in the South is not thoretical. Wetlands and fishing grounds that we rely on for food and hurricane protection may be destroyed - at huge financial cost, particularly during hurricane season. That could be a huge economic hit. I’ll leave the end-of-the-world scenarios for climate change, which is another reason why I left it out.

    ::All I'm saying is that it seems likely to me that if you take a rational look at the risk-cost from occasional oil spills, it may not be that high. What do you think about that? Could you imagine actually looking at the costs and concluding they're not too high?

    I can imagine that…if the cost’s aren’t too high. What I’m saying is that the costs of this oil spill could reach the point where it would be rational to say “the cost is too high”. We aren’t there yet, but we could get there…and soon. Let’s see what happens to the fishing and tourism industries, and during hurricane season.

    ::The problems with solar and wind are more fundamental than you suggest:

    1. They're intermittent, as you point out.

    Yes. I think a large grid and battery storage capacity are good places to start. Let’s make a plan and start building. I just want to see progress - a move in that direction. I want to see a national plan to subsidize clean technology development. We won’t get off oil, gas or coal anytime soon, but we should make a better effort right now.

    ::2. They're EXPENSIVE. Now you might say, "Hey, we're rich, we can afford a few extra dollars a megawatt hour," but that misses the real point. India and China are going to burn coal. There's not a damn thing you or I can do to stop them. The coal will be dug up and burned. The question is only whether the West will make itself poor and irrelevant while this is happening.

    You made two points, so China first: I think that’s a defeatist attitude. I recycle my cans and bottles despite the fact that my contribution does not make a dent. I do my part because it’s the responsible thing to do. Everyone should do the same. China argues their coal use is reasonable because 1) we already had our industrial revolution and it is unfair to deny them theirs, and 2) we aren’t making significant efforts to reduce our fossil fuel consumption. Reducing our fossil fuel consumption takes half that argument away.

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  11. Second point: yes, alternative energy is expensive - now. New technology is expensive, but with technological advancements and full production comes cost reduction, and the cost of wind NOW can be lower per kw/h than gas, coal and nuclear (http://peswiki.com/index.php/Directory:Cents_Per_Kilowatt-Hour).

    ::3. They're "thin." The energy density is very low, which means they take up lots of space, which means a) they abuse a truly scarce resource, the surface of the earth, and b) they're dangerous.

    I can think of a lot of empty space in the desert that is not being put to better use. Same with offshore wind farms. In California we have wind farms in the hills and the central valley. Landowners make money for leasing the land and we get cheap energy. It’s a great start. I will trade a coal power plant for a thousand acres of solar panels in the desert - or whatever the equivalent would be.

    ::4. They're environmentally unfriendly. Because of their "thin-ness," wind and solar take up space that birds and bunnies and little baby deer need to frolick and play.

    I love birds and bunnies, but I’m not worried about them. That’s a cost I’m willing to pay. Birds and bunnies die when they fly into windows or are sucked into airplane engines, but I still think windows and airplanes are good things. I forget the numbers, but I think that's like saying toasters are bad because they kill two people each year. The numbers just aren't there.

    ::What are your three or four good solutions to these problems?

    - batteries
    - large interconnected grids that resolve the no wind/no sun problem. No wind in CA? Pull the energy from AZ.
    - put our eggs in multiple baskets: tide, wind, geothermal, solar.
    - we generate as much clean power as we can and phase out fossil fuel power plants as we improve clean energy technologies. We need to start, and we can resolve issues as we go.

    ::How can you say "we" haven't begun developing wind farms? My own state is throwing money away at an alarming rate to meet a legislative requirement than 15 percent of all energy come from "renewables." ...We're walking up to the edge of a cliff.

    My State mandates 20%. I know the grid needs to be updated, especially with wind and solar. Sounds like a damn good economic stimulus project. No one said it was going to be cheap. What we haven't begun is the fundamental mindset change that would result from a national plan to develop alternative energy sources. I'm not talking about solar subsidies...I'm talking about a national mandate that gets us moving, like, now.

    ::I wish you'd develop your theme that businesses tend to destroy themselves if left unregulated. Can you support your thought?

    Maybe it's more accurate to say the free market destroys itself if left to its own devices. I’m on summer break and don’t feel like writing a paper, but I think it would be a good one. Maybe I will next semester if I get the chance. Imagine a world with no government regulation: no antitrust laws, no financial regulation, no regulation of the oil & gas industry. It’s survival of the fittest…and the fittest would survive - until they destroy the very system that supports them. The financial industry came close last year. In fact, without government (public) intervention they may very well have destroyed all the economies of the industrialized world. There was no requirement for oil companies to prove they could deal with deep-water spills, so they did not develop the technology...and here we are: BP‘s spill is effecting its customer‘s ability to buy its products. I think it’s fair to say that if destroyed wetlands lead to reduced hurricane protection, which leads to thousands of square miles of uninhabitable southern coastline, then BP is destroying part of the foundation it relies on for its own survival. Imagine if companies were not restricted in their ability to externalize costs. I see chaos, and a very unhappy life for the masses.

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  12. Okay, okay, I give! I can't keep up any more. Let me just address a few points that jumped out at me.

    Maybe I'm defeatist about China, I don't know. But I'm right. They're going to burn coal, and that's that. You don't seriously doubt that, do you? They'd be very happy if we cut our usage, since that would reduce demand and lower the price to them.

    Why do you say recycling cans and bottles is the responsible thing to do? Another way to look at it is that recycling cans, bottles, paper, and most of the other stuff you'd otherwise throw away is wasteful and inefficient. When recycling is efficient you don't have to rely on force -- literal force or social pressure, both are used to induce recycling. I recycle my socks, for example.

    I hope this won't insult you, I don't mean it to. Your view of the issues around power generation is naive. The solutions you mention are economically unfeasible and technologically impossible. Batteries? I can't even get my cell phone to stay charged!

    My advice is to start with this assumption: the coal and oil will be burned. Any plan that is not based on this assumption is probably wrong from the start.

    I can definitely imagine a world with no (or very, very little) government regulation. Maybe you'll read Hayek and Friedman next semester -- and Ayn Rand. Until then, I hope you'll at least consider that the worst-case scenario you picture is not the only possibility.

    Are you familiar with public choice theory? I highly recommend you give yourself a dose of it -- it'll be a good antidote to your current faith in government regulation.

    Good conversation. Thanks. I'll read your response for sure.

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  13. ::Maybe I'm defeatist about China, I don't know. But I'm right. They're going to burn coal, and that's that. You don't seriously doubt that, do you? They'd be very happy if we cut our usage, since that would reduce demand and lower the price to them.

    I do doubt that. They want to burn coal, but I don’t conclude that they’re immune from international pressure to develop alternatives. I want the US to develop alternatives for our own environmental, economic, political, and cultural health, and then I want to pressure, persuade, cajole or bribe China to do the same.

    ::Why do you say recycling cans and bottles is the responsible thing to do? Another way to look at it is that recycling cans, bottles, paper, and most of the other stuff you'd otherwise throw away is wasteful and inefficient

    I don’t feel pressure. I recycle because it saves energy and resources. I also do what I can to avoid creating waste in the first place. Why do you say recycling is wasteful or inefficient? The 8 seconds a day I spend recycling is time well-spent, and I would stop if there were no net energy savings.

    ::I hope this won't insult you, I don't mean it to. Your view of the issues around power generation is naive. The solutions you mention are economically unfeasible and technologically impossible. Batteries? I can't even get my cell phone to stay charged!

    None taken. I threw those ideas out because they’re reasonable, even if the technology isn‘t there yet. I'm not trying to replace oil tomorrow. I want us to move faster on renewable energy because not moving guarantees that we’ll find no solutions to problems that we won‘t have unless we start. Additionally, I’d rather face technological challenges than geopolitical and social justice crises. I’m making climate change assumptions here, but I hope you see it’s only part of my concern.

    ::My advice is to start with this assumption: the coal and oil will be burned. Any plan that is not based on this assumption is probably wrong from the start.

    I do. I know it will take time to build alternative energy assets, and we will continue to consume fossil fuels. I’m disappointed that we didn’t put more resources into alternatives 20 years ago. I don’t want to feel the same disappointment 20 years from now.

    ::I can definitely imagine a world with no (or very, very little) government regulation. Maybe you'll read Hayek and Friedman next semester -- and Ayn Rand. Until then, I hope you'll at least consider that the worst-case scenario you picture is not the only possibility.

    I was a student in David’s EEP class and we read a little Hayek…and I‘m familiar with Friedman. I am starting from the perspective that regulation is necessary because business can’t survive in its absence. I know that extreme doesn’t exist, but knowing how business behaves without regulation and when it's over-regulated me know when we deviate from the sweet spot in the middle.

    ::Are you familiar with public choice theory?

    Ah yes…fond memories. We spent a good amount of time on collective action in David’s class. I care about my future and the future of humanity, and I am willing to invest in new technology to make that future better. I have 20 years of work experience and I know how hard progress is when it’s blocked by entrenched or institutionalized interests. I know about waste and abuse in the public sector - rent seeking, principal/agent issues, etc. Public choice theory is like philosophy: it makes sense in context. It can seem silly when taken out of context. Are you familiar with social construction theory? I recommend Ian Hacking‘s “The Social Construction of What?” and Sandra Harding’s “Strong Objectivity: A Response to the New Objectivity Question” (in that order). Is the behavior that inspired public choice theory inevitable? Is that the way it always has been, and the way it always must be? Can you think of exceptions to the rules?

    ::Good conversation. Thanks. I'll read your response for sure.

    Agreed

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  14. @andrew -- "I do doubt that. They want to burn coal, but I don’t conclude that they’re immune from international pressure to develop alternatives. I want the US to develop alternatives for our own environmental, economic, political, and cultural health, and then I want to pressure, persuade, cajole or bribe China to do the same."

    I have NOT read this whole debate (yay readers!), but I am not too optimistic on China. Maybe things will change in the future, but China looks like a total free rider these days, and for the next few years... perhaps a little more democracy would help!

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  15. Judge not, David, lest ye be judged. Free-rider? China's got a billion people most of whom are basically living in third-world conditions. India's in worse shape. Burning all that coal is the only option they've got. Would you seriously suggest they should do anything else?

    Listen, in the West we get all moist about the Maldives and the polar bears and whatever. But that's just because we can afford to. If your marginal dollar buys not a vanilla latte but your 1,800th calorie, I assume your perspective is a little different. In fact, if you offered the average Indian a Western income in exchange for marooning a bunch of polar bears on the Maldives and then purposely sinking the island with a torpedo, he'd probably do it. I know I would. As such, democracy would make no difference -- except perhaps to improve the efficiency with which carbon is converted to Yuan.

    Let's all get off our high horse, that's all I'm saying. Reality goggles for everyone.

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  16. Outsider, did BP offer you a job?
    : )

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  17. David, I think we have common ground regarding the Chinese status quo, the need for "more democracy", and the likelihood of some degree of change over time. I'm arguing that implementing a national clean energy initiative - a serious one - will put us in a position to take advantage of that change, and may help to facilitate it.

    China wants to grow, and they won't reduce carbon now because they don't have to. My hypothesis is that China would take action to lower carbon emissions if technological advancements made it cheaper, if there was a concentrated international effort to push them in that direction, and if Chinese citizens demanded a cleaner environment (China has environmental NGO's, believe it or not). All of these things are possible, and represent a change in the status quo.

    I'm working on the assumption that oil prices will continue to rise over time as demand increases and supply decreases. If I'm right, the 2008 food riots in Bangladesh, Egypt and Haiti were just a warm-up. In the future, I think two things are likely: first, any money we spend on alternative energy development now will be considered money very well spent. Second, China may be more likely to change its energy consumption ways.

    Outsider, I'm not demanding that everyone see things my way, and I'm not claiming moral superiority. In fact, I'm willing to pay for change. Perhaps that has applications to the China issue. I'm just searching for solutions. Foxconn China just doubled salaries after worker suicides and pressure from AAPL and MSFT. If there's any good in $100 per barrel oil, food riots and mass population displacement, maybe it's China committing to change. I think we start that process by committing ourselves to change.

    I was amazed by the oil price spike in 2008 and how it changed our collective perspectives - along with the opportunity cost of alternative energy. I don't want to wait until disaster strikes, like we always seem to do. So why not invest now and position ourselves for the future. The world is changing, and we can't rely on WWII-inspired competitive advantages much longer.

    Is developing kick-ass clean power technology, and then licensing it to China and the rest of the world within the realm of possibility? Or, will we fall further behind and just buy our equipment from Spain? The change will come at some point, whether we're ready or not.

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  18. Josh, is BP hiring?

    Whew! That's a lot of wishful thinking for one comment, Andrew547.

    I doubt very much we'll see continually higher (real) oil prices. Back in 2008, I seized the opportunity created by momentarily higher gas prices to get a screaming deal on a pickup with a great, big V-8. I knew prices would come back down, and sure enough, they did. In fact, I just did the same thing again this month with a shiny, new SUV for the missus.

    Money and mouth in the same vicinity. Are you long oil? Or are you short because you're counting on new technology? Which way does somebody like you bet?

    We don't have a "collective perspective." Your perspective isn't mine, and obviously mine isn't yours. Don't pretend that the way you see the world has anything to do with how anybody else sees it -- especially somebody else in India. There is no "we," as Russ Roberts would say.

    Yes, developing great technology and licensing it to China is outside the realm of possibility. Three-cent coal. That's the magic number you have to keep in mind. Unless you can produce gigawatts at less than three cents, you're out of the money. Remember: start with the assumption that the coal will be burned. It's a done deal. Besides, if someone did invent a way to, I don't know, burn water at two cents, we'd be much more likely to find the Chinese reverse-engineering it than buying a license. Remember, the Chi-Coms are basically a bunch of gangsters running a country. They're thugs. How they've survived this long I don't really know, but there you are.

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  19. Outsider, after I read my comment, it looked worse than I meant it. Too cryptic. I meant, considering the job you described, it sounded like a BP job... jokingly.

    I'm sure they are hiring for PR/lobbying positions. No joke there.

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  20. That's a good one, Josh, I got a good laugh out of that. Actually, I'm thinking of starting an environmental destruction consulting practice. That way I could work for all the oil companies, Coca Cola, Quadrant Homes, RJ Reynolds, the GOP, the Council on Foreign Relations, CitiBank, Simpson Paper, and Duke Energy all at once. A goldmine.

    Interested in some solid hourly work? Good benefits. Some travel.

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  21. Outsider, A friend of mine bought an insanely cheap, slightly used Range Rover in 2008. I was disappointed, but I acknowledge that it was a good short-term deal.

    Opportunism aside, I don’t think I’m wrong about future energy costs. Here’s some info from the IEA’s 2010 energy outlook:

    “Worldwide, projected industrial energy consumption grows from 184 quadrillion Btu in 2007 to 262 quadrillion Btu in 2035. The industrial sector accounted for most of the reduction in energy use during the recession, primarily as a result of substantial cutbacks in manufacturing that had more pronounced impacts on total fuel consumption than did the marginal reductions in energy use in other sectors. In the Reference case, national economic growth rates and energy consumption patterns return to historical trends.”(http://www.eia.doe.gov/oiaf/ieo/highlights.html)

    So congratulations on your SUV purchase, I guess. Will you feel as good when you sell? Most people knew the price spike was temporary, but why are you confident that prices won't creep back up? They are (again) here in CA. What happens when the economy starts cranking and the "national economic growth rates and energy consumption patters return to historical trends."? What’s different now that will prevent oil prices from rising to or beyond 2008 levels? Maybe the dollar is stronger and maybe Congress will pass anti-speculation legislation, but at best those just slow the ascent.

    You understand that in the long-run I am long oil. Future technology may slow the price rise but it is not a solution - unless technology finds a way to harvest oil from good intentions - but even then you have to deal with climate change, so I’m not a fan of the technology "solution". Come to think of it I’m not a huge fan of good intentions - although there’s something to be said for character. Free riders, however, are another story. The “screw you, I got mine” attitude is wearing a little thin with me at the moment, which leads me nicely into the concept of perspectives.

    Our collective perspectives did change in 2008. You and I both contributed to it and we both experienced it. You claimed to have bought a SUV in 2008 because you believed gas prices would fall again. How many people don’t drive, eat, work, watch the news, read the newspaper, go online, and have no friends? Oil prices in 2008 affected everyone to one degree or another. And, the opportunity cost of alternatives did change. I can tell you really want to catch me projecting my views onto others or using some hegemonic rhetorical device, but that’s not the case. In fact, I‘m a bit of a cold-hearted bastard, and that requires a keen awareness of opposing viewpoints.

    China is a net importer of coal. Yes, the Chi-Coms are gangsters, and they’ve probably survived this long because they give the people what they want. Maintaining a closed society in the face of economic freedom seems tenuous at best.

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  22. Andrew547, your economics is pretty iffy. It is not only demand that determines price. In fact demand has been rising for, I don't know, a hundred years?, and oil prices have fallen more or less that whole time. Yes, maybe this time is different, but the market, which captures the tacit knowledge of a huge bunch of people who have strong incentives to be right, does not seem to suggest that it is.

    Andrew, come on now. Your next to last paragraph is a little silly. Really? Do I want to catch you projecting your views or using hegemonic rhetoric? I'm not entirely certain what "hegemonic" means, although I am pretty sure "rhetoric" is illegal in my state except for licensed adults.

    I don't doubt for a second that you're a cold-hearted bastard, though. In my experience, many environmentalists are. As C.S. Lewis put it,

    "Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience."

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  23. Hey, that came across a lot more harsh than I intended. Tone is tough.

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  24. A great comment from the always-counter-intuitive Steven Landsburg.

    http://www.thebigquestions.com/2010/06/04/whats-worse-than-an-oil-spill/

    Perspective, people.

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  25. @Outsider and Andrew -- China is free riding NOT because they are trying to escape poverty but because they are doing everything they can to avoid integrating climate costs into their growth. I am all for LDCs getting a fair deal (http://aguanomics.com/2008/05/speaking-of-carbon.html), but not when they sabotage CC negotiations (as China did with Copenhagen).

    Read this too: http://aguanomics.com/2008/06/where-to-do-what.html

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  26. David, yeah, I knew that's what you meant. My point is that the climate costs are never assessed realistically.

    When I look at how little difference the reductions in CO2 from these silly inter-governmental agreements would actually make -- even if I accept the preposterous assumptions -- I feel like sending China a fruit basket.

    Copenhagen, Kyoto - these are about posturing, not environment. Do you disagree?

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  27. Outsider, I was going to let my words speak for themselves, but had second thoughts because I wrote a lot of words. So, here are the relevant ones:

    ::Andrew547, your economics is pretty iffy. It is not only demand that determines price. In fact demand has been rising for, I don't know, a hundred years?::

    Good one....except here's what I said:

    “I'm working on the assumption that oil prices will continue to rise over time as demand increases and supply decreases.”

    ::...and oil prices have fallen more or less that whole time.::

    If by falling you mean rising, then I agree.

    http://www.wtrg.com/oil_graphs/oilprice1869.gif.

    1869-1929: falling prices? Perhaps. 1929-present: looks like it's rising to me. Here's an inflation adjusted chart:

    http://inflationdata.com/inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm

    ::Andrew, come on now. Your next to last paragraph is a little silly. Really? Do I want to catch you projecting your views or using hegemonic rhetoric?::

    You tell me. I especially like number two, where you criticize the way you think I push my views on others by pushing your views (of “reality”) on others. Far out!

    1) It's a convenient red carpet for people who like to strike a pose of moral superiority. Your second paragraph, about what happens if we don't quit using oil, is like that.

    (BTW I never suggested we quit using oil)

    2) Let's all get off our high horse, that's all I'm saying. Reality goggles for everyone.

    (Me=high horse, you=reality. Sweet! Here is a direct link to hegemonic: http://en.wikipedia.org/wiki/Hegemony)

    3) We don't have a "collective perspective." Your perspective isn't mine, and obviously mine isn't yours. Don't pretend that the way you see the world has anything to do with how anybody else sees it.

    I wasn't. I hope you look up both hegemonic and rhetorical. I assume you already understand "device". I never claimed to be objective. You, however, implied that if I saw "reality" I would see that you're right...or if I would just see that not all views are the same, then I would stop pushing for what I want. You tell me who is pushing their view on whom? Who among us is "claiming moral superiority" from their "high horse"?

    Like: "All I'm saying is that it seems likely to me that if you take a rational look at the risk-cost from occasional oil spills"

    (I get it: I'm not seeing it rationally)

    And: "But I'm right. They're going to burn coal, and that's that. You don't seriously doubt that, do you?"

    (My future prediction=wrong, your future prediction=right. I see how it is. Well, you'll probably be right if we maintain the status quo. I don't know why you're invested in that outcome.)

    ::I don't doubt for a second that you're a cold-hearted bastard, though. In my experience, many environmentalists are.::

    Environmentalist? Interesting. I'll just let that one be.

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  28. Good catch. Gasoline prices have been falling, that's what I was looking at. Crude oil prices appear to have been more or less constant except for artificial shocks like the embargo and the war in Iraq. I'll stand by my basic point, that counting on oil prices to drive the construction of wind farms is far-fetched.

    Okay, listen, you're taking some of this personally, which isn't my intent. Tone is hard to convey, and I probably came across badly. I'm naturally using you as synecdoche (a word I found when I looked up "rhetoric") for the views you're describing, but I'm sure you're a nice guy, and you're obviously not a dummy.

    Let's just call it a day and I'll see you at the next one. Cool?

    Thanks.

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