Governments of the people must take responsibility for our future

From an Essay by Paul Krugman, Opinion Columnist, January 27, 2020

I’ve never been a fan of the World Economic Forum at Davos, that annual gathering of the rich and fatuous. One virtue of the pageant of preening and self-importance, however, is that it brings out the worst in some people, leading them to say things that reveal their vileness for all to see.

And so it was for Steven Mnuchin, Donald Trump’s Treasury secretary. First, Mnuchin doubled down on his claim that the 2017 tax cut will pay for itself — just days after his own department confirmed that the budget deficit in 2019 was more than $1 trillion, 75 percent higher than it was in 2016.

Then he sneered at Greta Thunberg, the young climate activist, suggesting that she go study economics before calling for an end to investment in fossil fuels.

Well, unearned arrogance is a Trump administration hallmark — witness Mike Pompeo, the secretary of state, claiming that a respected national security reporter couldn’t find Ukraine on a map. So it may not surprise you to learn that Mnuchin was talking nonsense and that Thunberg almost certainly has it right.

One can only surmise that Mnuchin slept through his undergraduate economics classes. Otherwise he would know that every, and I mean every, major Econ 101 textbook argues for government regulation or taxation of activities that pollute the environment, because otherwise neither producers nor consumers have an incentive to take the damage inflicted by this pollution into account.

And burning fossil fuels is a huge source of environmental damage, not just from climate change but also from local air pollution, which is a major health hazard we don’t do nearly enough to limit.

The International Monetary Fund makes regular estimates of worldwide subsidies to fossil fuels — subsidies that partly take the form of tax breaks and outright cash grants, but mainly involve not holding the industry accountable for the indirect costs it imposes. In 2017 it put these subsidies at $5.2 trillion; yes, that’s trillion with a “T.” For the U.S., the subsidies amounted to $649 billion, which is about $3 million for every worker employed in the extraction of coal, oil and gas.

Without these subsidies, it’s hard to imagine that anyone would still be investing in fossil fuels.

But maybe Mnuchin thinks that the I.M.F. should also take some courses in economics — along with the thousands of economists, including every living former Federal Reserve chair, dozens of Nobel laureates, and chief economists from both Democratic and Republican administrations, who signed an open letter calling for taxes on emissions of greenhouse gases.

In short, Greta Thunberg may be only 17, but her views are much closer to the consensus of the economics profession than those of the guy clinging to the zombie idea that tax cuts pay for themselves. But could the economics consensus be wrong? Yes, but probably because it isn’t hard enough on fossil fuels.

On one side, a number of experts argue that standard models underestimate the risks of climate change, both because they don’t account for its disruptive effects and because they don’t put enough weight on the possibility of total catastrophe.

On the other side, estimates of the cost of reducing emissions tend to understate the role of innovation. Even modest incentives for expanded use of renewable energy led to a spectacular fall in prices over the past decade.

I still often find people — both right-wingers and climate activists — asserting that sharply reducing emissions would require a big decline in G.D.P. Everything we know, however, says that this is wrong, that we can decarbonize while continuing to achieve robust growth. Given all this, however, why are people like Mnuchin and his boss Trump so adamantly pro-fossil fuel and anti-environmentalist?

Part of the answer, I believe, is that conservatives don’t want to admit that government action is ever justified. Once you concede that the government can do good by protecting the environment, people might start thinking that it can guarantee affordable health care, too. The bigger issue, however, is sheer greed.

Given the scale of subsidies we give to fossil fuels, the industry as a whole should be regarded as a gigantic grift. It makes money by ripping off everyone else, to some extent through direct taxpayer subsidies, to a greater extent by shunting the true costs of its operations off onto innocent bystanders.

And let’s be clear: Many of those “costs” take the form of sickness and death, because that’s what local air pollution causes. Other costs take the form of “natural” disasters like the burning of Australia, which increasingly bear the signature of climate change.

In a sane world we’d be trying to shut this grift down. But the grifters — which overwhelmingly means corporations and investors, since little of that $3-million-per-worker subsidy trickles down to the workers themselves — have bought themselves a lot of political influence. And so people like Mnuchin claim not to see anything wrong with industries whose profits depend almost entirely on hurting people. Maybe he should take a course in economics — and another one in ethics.

>>> Paul Krugman has been a columnist since 2000 and is also a Distinguished Professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography.

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See also: Davos asks CEOs to set net-zero target by 2050 | World Economic Forum, January 17, 2020

No One Is Counting the Trucks in N. WV and SW. PA

Two Injured In Wetzel County Crash on July 28th

From Lauren Matthews, Wetzel Chronicle, July 30, 2014

Chief Deputy Mike Koontz of the Wetzel County Sheriff’s Department confirmed that a citation was issued in an accident that occurred Monday involving a tractor-trailer.

Koontz stated the wreck occurred at approximately 3:05 p.m. when the tractor trailer transporting drilling materials was headed west on state Route 7 near the Wetzel County 4-H grounds. Koontz said that the tractor trailer crossed over the center line at a sharp turn and collided head-on with a Ford F-150 pickup truck, which had two occupants.

Koontz stated the two occupants of the pick-up truck were transported to Wetzel County Hospital for treatment to injuries and were later released. The driver of the tractor trailer was not injured, but was issued a citation.

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An article in a recent issue of Science, the journal of the American Association for the Advancement of Science, links the recent Oklahoma earthquakes to unconventional drilling waste water disposal. The largest was magnitude 5.7.

The USGS defines this effect as on the line between “felt by all, many frightened, some heavy furniture moved; a few instances of fallen plaster, damage slight” and “damage negligible in buildings of good design and construction; slight to moderate in well-built ordinary structures; considerable damage in poorly built or badly designed structures; some chimneys broken.”

Most have been in the range of magnitude 2 or 3, “not felt except by a very few under especially favorable conditions.” These are readily detected by instruments, however.

These earthquakes are caused by displacement of strata by the huge pressures used to force the water into the earth. The evidence is timing with peak pumping, location of the quakes bear the disposal wells, and sudden increase in earthquakes when waste disposal began a few years ago . One was 22 miles away from the injection well.

Interesting fact from the article: It takes 200 times as much water to produce a barrel of oil by unconventional wells as by conventional ones. It would be good to know how unconventional gas wells compare with older wells here in the Marcellus!

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An article in the Wisconsin Gazette starts: “Federal and state subsidies for fossil fuels in the United States tops $37 billion a year, according to a new report from Oil Change International.”

Of course, this counts subsidies directly from governments, and does not count forced subsidies from people compelled to donate their land and water to the industry, their health, comfort, convenience and esthetic values, the public expense of repairing roads, additional cost to maintaining court house record rooms and additional law enforcement due to drilling, nor the probability wells that won’t get plugged and will be left open forever, or paid for at public expense, long after they are exhausted. All those “externalized” costs, left for someone else to pay.

Anther line in that article reads: “Much of the increase in the value of fossil fuel production subsidies can be attributed to the increase in oil and gas production in recent years, according to OCI. Federal fossil fuel production and exploration subsidies, for example, have grown in value by 45 percent since President Barack Obama took office in 2009.” Also “The organization credited the Obama administration with attempts to reduce subsidies and criticized Congress for stymying those efforts.” Further: “The report notes that in 2011-12, the fossil fuels industry spent $329 million in campaign finance contributions and received $33 billion in federal subsidies for that same period, marking a 10,000 percent return on investment for the industry.”

One of the most grievous subsides is mentioned in another article: “A tax deduction for oil spill remediation costs allows companies to deduct costs of oil spill clean-up from tax payments as a “standard business expense”. The most notable example occurred in 2010 when BP claimed a $9.9 billion tax deduction due to clean-up costs for the Deepwater Horizon blowout and resulting oil spill in the Gulf of Mexico.”

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From the Wall Street Journal of July 17, 2014:

“Antero currently has access to a total of 600 MMcf/d of cryogenic processing capacity at the MarkWest Sherwood processing facility located in Doddridge County, West Virginia. The Company has committed to four additional 200 MMcf/d cryogenic processing plants, Sherwood 4, 5, 6 and 7. Sherwood 4 is expected to go on line in the third quarter of 2014, Sherwood 5 is expected to go on line in the fourth quarter of 2014, Sherwood 6 is expected to go on line in the second quarter of 2015 and Sherwood 7 is expected to go on line in the third quarter of 2015. These commitments provide Antero access to a total of 1.4 Bcf/d of Marcellus cryogenic processing capacity. Ethane is currently being rejected at the Sherwood processing facility and sold in the gas stream.”

The ethane is used to manufacture ethylene, which is used for making plastics (polyethylene) and a host of other products. It is the most valuable single input to the chemical industry. MarkWest lets it go through to be taken out by its customers. The hydrocarbon liquids which are removed are in a separate pipeline going away from the Sherwood plant.

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Phyllis Zorn, Staff Writer Enid News and Eagle (Oklahoma) writes in this article that up to 20,000 gallons of hydrochloric acid was spilled near Hennessy, Oklahoma, at the site of an oil well being drilled in an alfalfa field. From the article, “It’s not as bad as it sounds,” Vernon said. “When we found out it had leaked, we immediately spread soda ash on it. It’s a chemical that counteracts the acid.” My reaction is, “That’s a whole lot of fizz.”

The Aquifer is only 27 feet down. There is a question as to whether the soil would absorb it, or whether it would go down that far, contaminating the drinking water.

If you are not familiar with the usual corporate run around “I didn’t do it, but I won’t tell you who did,” and the routine denials, this article might be worth the read, but otherwise save your time.