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Saturday, July 23, 2011

Change of Heart For A Self-Confessed Oil-o-Phobic (Or "Drill, baby Drill")

By most measures, I'm just a typical common or garden-variety environmentalist or at least a person who would rather see environmentally friendly policies than not. I'm a member of the Sierra Club, I recycle religiously, drive a Prius, support a gas tax and more public transportation and would rather sit in front of my TV on a Saturday morning than burn gasoline driving out to some beautiful scenic trail in the middle of nowhere. So, it was with some surprise that I reached the conclusion that it's time to turn right about in our position on exploration for and exploitation of oil resources in continental America.

Naturally, I don't endorse a no-limits "drill, baby, drill" approach where we simply hand the pristine wilderness over to the oil companies. Safeguards, the most rigorous environmental safeguards, would be an indivisible of this new drive to tap our resources. But tap them we must. If the Deepwater Horizon tragedy taught us one thing, it should be that our demand for oil will simply force drilling in ever more challenging regions. And if renowned companies like BP can fail so spectacularly, it would be naive to imagine that something similar or worse will not happen in the Gulf of Mexico or off the coast of Cuba. Cuba is especially dangerous, given their desperation for petrodollars and our continued short-sighted embargo, even to the point of threatening oil companies with sanctions if they work in Cuba; we have simply cleared the more experienced players from the field and left it to companies from India or China, companies with less expertise and technology as best and fewer safeguards or concerns for the environment. Companies in USA and Europe may not have any inherent interest in environmentally responsible practices, but they are forced to follow them nevertheless, while companies from elsewhere may not operate with the same constraints.

Perhaps the greatest issue for me however is not the risk that the beaches of Florida may be threatened by an accident in Cuba. Great as that tragedy would be, the sad fact is that other areas stand at greater risk or are even now suffering the effects of crude methods of oil extraction. Brazil has planned deep sea exploration every bit as dangerous as Deepwater Horizon; the Amazon jungle and especially the Niger delta have been under attack for the past decade, to the point that damage may be past repair.Do we care about environmental degradation only when it happens on our yard? More pertinent, perhaps, should we care? We know well that the ocean currents care not for our maritime boundaries around Hispaniola and hence we fret about Cuban wells, but the damage farther off the horizon may escape our notice while causing as much damage to the world as a whole.

We occupy a crucial, unique position in the world. By virtue of our enormous consumption, approximately a fifth of the total world's output, we enjoy leverage over the producers as much as they enjoy over us. The difference is that OPEC has consciously used that power to further their own interests, while we turn away from our power. The time has come to embrace our power and embrace reality. Environmentalists would like to believe that we can shed our dependence on oil and sustain ourselves on green energy, and perhaps someday we will get there. But that day is not today, nor even tomorrow. And as long as we pursue cheap gas as state policy, there is little incentive to make the switch. But we may change that if we wish. For starters, we must tap our domestic oil producing capacities to the fullest. I know this idea is almost criminal in environmentalist circles, but I prefer a wider worldview; we can force the companies to protect the environment here and work in a responsible manner (assuming a political will to enforce the laws) while we have next to no control over the depredations of the Niger. And while the arctic ecology may be delicate and easily damaged so is nearly any natural ecosystem and we can minimize the damage at home, keep the wells away from the wildlife reserves.

But this is the season of grand bargains, from debt ceilings to professional football, and increasing domestic production is but one leg of my proposal. In addition, we would introduce a higher gas tax, sufficiently large to generate significant revenues and nudge consumer behavior, with the revenue being used partly for mass transit systems and partly for more green energy. But, truth be told, if petroleum based solutions become more expensive, investment will automatically seek out greener solutions. And I am enough of a believer in markets that I think the government should not be betting on a specific technology but should simply signal a general shift away from oil and let the market find the best solution - it may be totally different from anything we've imagined so far.

But the real power of our top consumer status lies in the third leg of my strategy - we need to impose a green tax on all petroleum products imported into the US, based on how the company produces it's oil. If it's destroying the environment in Africa or southeast Asia, we would impose a higher tax on them than if the oil came from the North Sea. Exactly how we would rate the oil sands of Canada or the oil rigs in the Gulf of Mexico is debatable, but I suspect they would fall somewhere in between.  Companies may seek to get around the system by claiming the oil they give us is produced from "good" locations while the bad stuff is sold to other countries; we can combat that trick easily enough by basing the tax on total production of the company, with a company that has more responsible methods attracting a lower tax rate. The other trick would be for a company to sell it's "bad" stuff to a company that produces "good" oil and let the second company sell to us at their low tax rate. Again, a little vigilance would go a long way to negating this trick, with the "good" company getting tainted since a part of it's total production would now include the "bad" stuff it bought and it would still attract the same higher tax rate as the original bad producer.

The other argument to address is the danger that companies facing a "green" tax will place an embargo on us. I would counter that it is precisely there that our power of consumption comes into play - companies simply cannot refuse to sell to us, we are too important to their balance sheets. Unlike the seventies and the oil embargo, we are talking about private companies driven by profit, not states that can live with financial losses in pursuit of a strategic objective. When you control a fifth of the market, no one can ignore your demands. The many leading oil companies that are based in the US or Europe already possess the technology to operate in a responsible manner but see no reason to to so in the less regulated corners of the world. At the risk of being a global cop again, we are going to make it less advantageous to destroy the environment, no matter where. Further I think, with companies vying for the newly available lucrative drilling contracts in the US, objections will be somewhat muted. The net result will be more revenue for mass transit and greener gasoline for everyone. As a bonus, dearer gasoline will also nudge all of us towards more responsible driving choices, be they smaller cars, gas-sippers instead of guzzlers, occasional bicycle rides in place of the SUV and maybe a rediscovery of the advantages of city life over the suburban experience.

Sunday, July 10, 2011

Not Quite a Sunscreen Song

As I drove into work the other day, I heard the "Sunscreen song", played to mark the end of most college semesters and as I listened to the best commencement speech never given, my thoughts drifted to the increasing number of articles I've seen questioning the value of a college education. I've ignored those articles for most part, since they are too late to influence my choices in that direction, but the very fact that such ideas are even being debated is disappointing in many ways. I've always considered my college years as the best times of my life, and it's sad that the next group of high schoolers will forgo that rite of passage in favor of plunging straight into the workforce.

It's possible of course, that the debate is less about skipping college and more about focusing on a more practical, and quicker, post-high school education that will prepare one for immediate entry into the job market without a lot of unimportant courses. Perhaps the traditional college degree isn't for everyone, just as it wasn't for everyone in the past. A person with absolutely no interest in education would obviously be wasting his money on a college degree. And it is certainly worth asking if education costs are worthwhile, when the average student will incur a cost of over $100,000 for a degree at any major school. But again, it's worth remembering that college does not have to include the big schools - a degree at a community college can be as good and, if the NBC sitcom is any barometer, far more fun than I ever had at school.

Those are valid questions that every student needs to face and answer for themselves. But today, I want to address the more insidious suggestion that college education in general is unnecessary. It is beyond doubt that college education, as high school education includes a lot of subjects that seem to have little bearing on our normal lives and that will be rarely if ever used in our careers after graduation. How many Wall Street wizards use their knowledge of history of European art as they craft toxic financial instruments? Will a knowledge of ancient or modern Chinese assist a mid-western farmer? Will intimacy with differential equations aid a trucker as he rolls across the length of America? Perhaps not, but with the vast range of courses available at any major college, well counseled students can pick a bouquet of useful and interesting classes that will broaden their understanding of the world around them and open new vistas to explore. We live in an increasingly connected world, and an understanding of the culture and motivations of people beyond our immediate circles is actually an increasingly critical and sought after skill in resumes.

But beyond the obvious and visible advantages of courses that apply to the world around us, college offers a chance for students to mature, to learn critical social skills, to broaden their critical thinking abilities and to generally acquire well rounded characters. Schools may do their best, but in the smaller student bodies, students face less diversity, not just racial or economic, but also cultural and intellectual; it's colleges that provide the microcosm of the real world that prepares students for the maelstrom they will soon face. Even without a variety of courses - my engineering course included none of the humanities or liberal arts that are mandatory in the US - I can still say that I came out of college a vastly more mature and developed person than the callow youth who entered four years previously. In the end, it was not engineering that was the most important of lessons learned, but the discipline and concentration I developed there, along with such intangible skills as working with people very different from me and learning to solve problems, involving both mathematical and people; the mathematical ones were the easy ones.

And finally, all practical advantages aside, college is the crucial time when we come of age, when boys become men (girls usually grow up earlier). It's a last time to enjoy life with few responsibilities and the knowledge that those responsibilities hover just beyond makes the joys of college all the sweeter. It's fun with a tinge of adulthood, carefree enjoyment with the edge of real life. Some people miss it for reasons beyond their control - Dafur or Congo being just two places that come to mind - but for kids here in the US, it would be a crime if they chose to turn their backs on this gift that's theirs for the taking, and a crime if they were advised to forgo college by people who have enjoyed it themselves. It's a last magical idyll and no one should miss out on the experience.