RFF seminar: toward a national energy policy

Attended a seminar at RFF yesterday, where scholars presented the results of a study on policy options for climate and energy. Objectives: reducing US oil dependence and domestic energy related CO2 emissions. Options seemed to be somewhat confirming common sense. I was impressed, though, by the eloquence of Jason Grumet, president of Bipartisan Policy Center, who commented on the study. No slides, a coherent story, beautiful sentences. And some insights in catchy phrases, like for example on cap-and-trade: "For cap and trade you basically have to trust two institutions: Washington and Wall Street. Congressmen have to explain to their constituents in the Midwest: listen, we're going to create a new commodity. It's called carbon and it's going to be worth x billion dollars. Those guys at the coast will manage it." He also shared his take on the odds for a climate and energy bill. He said there are elements that enjoy bipartisan support, like electrification of transportation, a shift toward LNG, technology R&D, performance standards, but also a cap on the power sector. About the latter he said: people get it; it's been successfully done before with other pollutants (SO2, NOx). Nevertheless, those elements seem to boil down to the leftovers that define the least common denominator. Besides, they don't include the policies that came out as most effective in the study, i.e. a tax on oil and carbon. Would be better than nothing, though, but enough to trigger the critical mass to save Greenland's ice and the grilling of the Southwest? Hope that the renewed public support for climate and energy legislation in the wake of the oil spill translates into a little more ambition and the opportunity for Obama, with the RFF study in hand, to deliver on his campaign promise prior to Cancún.

Speech 3 at Toastmasters: Oil Spill

Did speech #3 at Capital Toastmasters 1 today. I posted it below, it's about the oil spill. The evaluator judged that it required more detail and concreteness to make the points. She's right. But besides me failing to find the examples (they may just not be there and if they are, they're not that clear or more nuanced and would do the case more harm than good - that being true, there would be no case), I generally find it hard to do. Repeatedly, when I do the research after having chosen a topic, I discover that things aren't as clear as I thought in the first place. I start of with an opinion, but end up with none. As Poul Anderson once said: "I have yet to see any problem, however complicated, which, when looked at it in the right way, did not become still more complicated [1]." Still, I think it's a valid case.

Spill of Blame

Today is the 64th day of the oil spill in the Mexican Gulf. On April 20th, an explosion on the Deepwater Horizon drilling rig killed 11 people and injured 17. It unleashed an uncontrollable flow of crude, life-destroying oil. Estimates of how much oil is gushing out have been raised repeatedly. The latest number suggests that today again 60.000 barrels are spilled into the waters of the Gulf. If that’s true, more than 3 million barrels have been spilled into the water by now. Despite thousands of ships involved in fighting the spill, the damage is heart wrecking: you have probably seen the pictures of birds covered oil, of Dolphins that have died trying to catch a breath of fresh air above the surface, but finding oil instead. Complete communities whose livelihoods are tied to the Gulf are hopeless. It’s devastating. It should stop and never happen again.

While in the Gulf the people are working hard to deal with the oil coming ashore, in the media and in politics the blame seems to be the national response to the disaster. “Who dun it?” I want to make the case that this is blaming and shaming, this climate of hatred and revenge, is counterproductive, and that the investigations into the root causes require different questions.

In the blame game, everyone is looking for a scapegoat. And with every charge, the accused feel the need to deny the charges and prove the charges wrong with actions the effectiveness of which is of minor concern. It’s an escalating dynamic of showing off and coming out on moral top. In this case moral seems to mean blood-thirsty. And every party is using the situation to proof their own world views. It’s absorbing resources that should be directed to the stopping of the leak and the clean-up.

Understandably, BP is receiving the most severe blows. It’s their well and they’ve acknowledged so. And obviously they have a bad safety record and made many mistakes. But they are a safe target, too. Those British, didn’t we kick them out 200 years ago? For Democrats BP is the embodiment of corporate interests exploiting the commons for profit. Republicans rather attack the Obama administration: how its oversight failed and its response was weak.

I think we need some fair play, here. Let’s suspend the PR battle. The first adversary in the game is not BP; it’s the oil gushing out of the ground. In this game, BP is the striker. I believe BP CEO Hayward when he says he more than anything else wants this thing to be over. Being to blame for the millions of victims, for loss of so much life and hope…I do not envy him. If they want to keep at least some chance to regain their license to operate, the only thing they can do is plug the hole and be nice. We should make sure they can do their work. Not vilification but collaboration. Suspend the accusations and resource consuming investigations. It’s now important that they tell the truth about what they’re doing, that they share the right information and maximize the learning. That they do not need to undertake useless actions just to ‘show’ they ‘do something.’

Deal with the accusations later, in the second game, when we investigate if BP really is the only adversary. I think, it turns out that it won’t be that simple. It’s hardly maintainable that this case is an incident.  The fundamental causes that led to the great human and environmental disaster may have to be found in a much larger domain than BP’s internal culture. It could have happened to other companies, too. There are 1000 similar wells around the world. And as a hearing of Big Oil CEOs in Congress revealed: no company has an adequate battle plan for a disaster like this.

So, besides the investigation into the actions that lead to the disaster, we may want to ask questions like the following:

➢ Why are the plans for dealing with an oil spill so inadequate?
➢ What incentives made that the engineers felt a need to compromise on safety? How is that in other companies?
➢ How is it possible that conflicting interests infested the institutions so deeply?
➢ Why do we doubt that BP cares for the Gulf’s people and wildlife? If so, why have we allowed them to operate there? Can we trust other companies better?
➢ What makes us allow oil exploration and production in ever more risky and pristine environments? There’s no doubt that technological progress is improving the safety of oil exploration and production. But the end of easy oil is driving us toward deeper and colder places, where risks are greater. Can safety keep up with the thirst for oil?
➢ For who are the oil companies exploring those difficult sources, anyway?

Answering those questions would likely lead to substantial controversy. But I hope it won’t be avoided and the temptation of returning to business-as-usual as soon as possible is resisted. An urgent, long-term public investigation into the fundamentals of the oil spill lies ahead, leading to a broad debate on the US energy future, and the role of corporations and government. But first, let’s stop the oil from flowing, clean-up the beaches and help the victims.

[1] Poul Anderson, quoted in Donella H. Meadows, "Thinking in Systems," Chelsea Green Publishing, Vermont, 2008, p.11.