Shell Withdrawal Not a Victory

After Shell recently announced that they were ceasing all exploratory work in the Arctic, I received a flood of emails declaring “victory” from the various organizations who had been trying to pressure the Obama administration to not let Shell drill.  This was as deceptive as Bush’s infamous “Mission Accomplished” fiasco in the early days of the Iraq war.

While I am relieved that Shell has left the Arctic … for now … it is not a victory in any sense of the word because the efforts of those organizations to convince the government to not allow any drilling were unseccessful.  

Shell made its decision for two reasons.  First, after spending a reported $7 billion over several years trying to find oil in the Arctic, it had come up dry.  Second, given the current downturn in the oil market and the assessment by many that the market will not recover for some time, it was not economically prudent to continue drilling.

So this “victory” is a false one.  Shell just made a pragmatic economic decision.  It was not the result of a government resolve to not endorse further oil exploration, at least in environmentally sensitive areas, and certainly not a decision on the part of Shell that public opinion was so against the project that they best withdraw.

The power of big oil in governmental energy policy decision-making remains as before … great.  Nothing has changed other than the economics.  And one can be assured that within a few years the price of oil will be sky high again, leading the companies to dust off their plans for exploration of more expensive extraction locations.

So what to do now?  One thing is clear.  The American public will not support any effort to either cut production or decrease use of oil.  They are totally addicted to it.  They will not wean themselves from oil until they are forced to by ever-increasing prices caused by the diminished supply after peak oil.  

Although we were at or almost at that point, the fracking venture has turned the tables so that now there is a glut of oil and it will be some time till we are there again.  In the meantime, climate change will continue on its deadly path.

Obama has been able to move against coal through executive orders only because nobody really cares about coal anymore outside of those states that produce coal.  The power companies don’t need coal because they now have cheap natural gas thanks to fracking.  And the public will feel no pinch from the reduced use of coal.

One should not take heart from polls showing that more people now believe in climate change, even a majority of Republican voters.  It is one thing to believe in climate change, that what man is doing is causing this change.  It is another to believe that the possible future consequences are so dire that it warrants a major change in energy policy and in how we live.  It’s far more likely that these voters will support various efforts to adapt to future climate change, which efforts are already underway in many cities and countries.

So even assuming the public “revolution” that I have argued for in several recent posts occurred and the political power of major corporations and the wealthy was thus greatly reduced, on this  particular issue, where the public attitude and corporate interest are one, it is hard to see how any real progress would be made, absent a catastrophe of truly epic proportion.  And by then it would be too late.

I can see only one practical opportunity.  If fracking were banned, the oil glut would disappear and the price of oil would rise quickly and substantially, even with the global economy in its current state.  That sharp and quick increase in price, at least to the point where it was previously, would bring about renewed pressures both to develop alternative sources of energy and transport as well as to conserve.  Of course big oil would see it as an opportunity to explore more expensive extraction and return to the Arctic.

But how to achieve that aim?  For some reason, which I don’t understand, the evidence that fracking is an environmental disaster has not come together in a compelling way.  Some organization needs to gather all the facts about the actual environmental damage caused by fracking and put it together in a compelling way and convey that information to the public

Also, Congress must be pressured to reverse its position, pushed through by then Vice-President Cheney, that oil companies are exempt from the Clean Water Act requirement of disclosing what chemicals they are putting into the ground when they frack.  That that exemption still stands is a disgrace to our political system, and makes it harder to arouse the public.

With both those pieces of information in hand, the public would need to be mightily aroused and hopefully would then strongly support a ban on fracking.  That is the only hope of countering both the corporate and local business forces that gain from this dreadful practice.

This would not be an answer to the problem, but it would be a major step forward.

Why Should the Public Pay for Industry’s Costs of Production?

A for-profit business has to figure its costs of production in establishing a price and maintaining a sufficient profit margin to warrant being in business.  This includes all inputs into the production process.  However, for many if not most American businesses, this does not include the costs of rendering all byproduct outputs from the production process harmless to the environment.  

There are certainly measures that are required by regulation, but they are minimal relatively speaking.  When any efforts are made to require more stringent measures, the common outcry from industry is that the measures are too expensive.  And so government typically relents and the pollution or other damage continues, with the environment being damaged, sometimes irrevocably, sometimes to be cleaned up at the taxpayer’s expense.

Before any product is allowed to be processed or manufactured, why isn’t it required that a business provide an environmental impact statement indicating the measures it will take to insure that any potential impact is mitigated to the point that the process is harmless to the environment.  If a business cannot with a sufficient degree of certainty make such a statement, it should not be allowed to proceed.  (The former phrase is in italics because industry routinely makes such bold statements without there being any rigorous research or data backing up the statements.)

The obvious case in point is hydraulic fracking, but the same principle applies to coal mining, electric generating plants, chemical plants, and many other industries where one wouldn’t necessarily think that toxic discharges would be a problem.  No industry should be allowed to despoil the environment.  And the public should not have to pay for mitigation measures that should be considered costs of production.   

If such a system is not put in place and the government/taxpayer ends up paying, then isn’t that a form of socialism that big business and conservatives so abhor?  Why is it only socialism to these people when the government helps those who are in need, but not when government either directly or indirectly subsidizes the cost of doing business?

This is but one more example where corporate interests usually trump all others because of the power they have through the money they donate to politicians and the money they spend lobbying for their point of view.  Those who speak on the public’s behalf are drowned out by the shear magnitude of corporate power over the process.