I’ve just returned home after two weeks of vacation, and would like to offer some thoughts on a general issue facing American universities. Although the incident I am about to relate is not directly connected to energy, be patient and I’ll tie it in at the end.

My brother Ted Everett is a professor of philosophy at the State University of New York at Geneseo, where he has taught for the last 17 years. He is a recognized scholar in his field and has spent his life considering questions of logic, knowledge and reality and studying the works of past philosophers on these issues. Ted sees his job as teaching students how to construct logical arguments, how the great (and not so great) philosophers have addressed the important issues of their day and how students can use this knowledge to understand the world. He has always been well-liked by his students who regard him as an excellent teacher able to address difficult material in a clear, entertaining and often funny way.

April 22-26 was “Sexual Assault Awareness Week” on the SUNY-Geneseo campus. Ted responded by organizing a Philosophy Department colloquium, the purpose of which was to discuss this important issue from a logical viewpoint. He often arranges such colloquia when there is a current issue of interest to students and faculty. These sessions are by their very nature controversial, since they involve questioning the assumptions and logic of strongly held views. He was nonetheless unprepared for the dishonest and vicious attacks he had to endure. His experience should raise red flags for all of us regarding free speech and honest inquiry on American college campuses.

Here’s the background. In 2010, SUNY-Geneseo conducted a survey which concluded that 25% of women at SUNY-Geneseo have experienced a sexual assault during their time on campus – a number similar to survey results at other colleges. Since this survey suggests that sexual assault is epidemic on the SUNY-Geneseo campus, several campus groups, with support from the university administration, have organized annual “Sexual Assault Awareness Weeks (SAAW)”. The term “awareness” here is a bit misleading, since the purpose of the week-long program was not to discuss the issue, but to present to the university community a very specific political agenda, which includes the following components. First, everyone should accept as a given what’s known as “Rape Culture Theory” which posits that white American men are taught to regard women as sexual objects and to believe that forced sex is not only acceptable but manly. Second, women have been so indoctrinated to be submissive that many do not even know that they have been sexually assaulted and therefore need a (very large) cadre of professionals on campus who can help women understand their victimization. Third, since the criminal justice system is part of the oppressive patriarchy, the police and courts do not treat sexual assault seriously. Fourth, the University must therefore step in and punish campus rapists with at least public shame and expulsion. Fifth, since women never lie about sexual assault, there is no real need for procedural safeguards for students accused of sexual assault. There should be no “plaintiffs” and “defendants” in university sexual assault proceedings, only “victims” and “perpetrators.” No need for presumption of innocence, rules of evidence, right of cross-examination, “beyond reasonable doubt” standards or impartial judges. The true purpose of “Sexual Assault Awareness Week” is to advance this agenda.

The radical nature of this political viewpoint becomes even more evident if you look at the survey itself, which you can find at https://www.geneseo.edu/webfm_send/2810. Among other problems, the survey defines “sexual assault” as everything from being raped by a stranger at gunpoint to allowing your boyfriend to badger you into letting him kiss you.

This viewpoint seems quite extreme and radical to most ordinary people. In fact, it runs counter to the most basic presumptions of American society. On college campuses, however, this agenda is often taken as a given. Nonetheless, one would assume that the university community at least ought to have an opportunity to discuss this issue and offer alternative arguments about how to define and address sexual assaults on campus. Alas, not always true, as Ted found out.

Enter my brother Ted and his Philosophy Department colloquium. Ted entitled his talk “Against ‘sexual’ ‘assault’ ‘awareness’”. The scare quotes were intended to demonstrate that the issue was not sexual assault itself but the way the campus organizing groups were defining these terms. The response of the SAAW organizers was to launch an all-out assault.

In essence, their objections to Ted’s talk were as follows. First, disagreeing with Rape Culture Theory or any other component of the political agenda of SAAW is tantamount to endorsing sexual assault. Second, any disagreement with any component of the SAAW agenda is deeply distressing to the victims of sexual assault and should therefore be regarded as unacceptable. Third, the organizers of SAAW own the podium for that week, and the presentation of views they don’t like is an unfair imposition on their program. Fourth, only those people with formal training in Rape Culture Theory are qualified to even discuss the issue.

Rather than offer these arguments in a calm, thoughtful way, SAAW supporters began a petition demanding that the University administration condemn Ted’s talk. Many students demanded that the colloquium be canceled. Blogs were full of nasty and threatening posts. If you can stand it, you can see some of the worst excesses here http://www.campusreform.org/blog/?ID=4722 and here http://trainsplanesbaseball.wordpress.com/2013/04/19/malignantly-dense-prof-lectures-against-sexual-assault-awareness/. The allegations in the latter post are entirely false. The local press reported that the campus was “outraged”, and all this before Ted even wrote the talk.

The university administration responded by stating unequivocally that they agreed with the SAAW organizers and were fully in support of their political agenda, but did at least acknowledge that Ted had a right to state his views. Nobody in the administration supported open discussion of this issue or dared question any aspect of the organizers’ radical agenda.

Ted proceeded with his talk to a crowd estimated at 800 people. His remarks were, as always, thoughtful, analytical and logical, and he received strong support from Prof. Heidi Savage, a feminist colleague and rape survivor who also believes that the issue of sexual assault should be subject to rational discussion and open to a variety of views. Hopefully, the furor will now die down, and Ted can get back to work. It was, however, a distressing episode for a long-service faculty member whose interest is in knowledge and not politics.

This kind of incident highlights a problem on college campuses today. Universities are supposed to be bastions of rationality and scholarship. Humanity’s body of knowledge expands precisely because different viewpoints are subjected to tests of logic and empiricism in university communities whose members are committed to the process, even though they disagree on the specific arguments. University departments have always been subject to internal political pressures. Faculty members are naturally inclined to hire new people who agree with them. By the same token, smart young academics often prefer to work with distinguished like-minded colleagues. The result is not always bad. The University of Chicago, for example, developed a distinctive view of economics based on the work of Milton Friedman, Friederich Hayek, Ronald Coase and others. The Chicago School, however, was still forced to argue its views against prominent economists from other equally prestigious universities with very different views. These conversations do get nasty and personal at times, but few university economists would support silencing their opponents.

The danger comes when everyone in a particular field at every major university in the country is in substantial agreement and they all then decide to translate their work into (at least in their view) positive and necessary political action. This situation can easily create a condition in which young scholars with different views can’t get hired anywhere, political solidarity becomes more important than intellectual integrity and people who disagree are assaulted by the collective with the intent to embarrass them, damage them professionally and ultimate force them to just shut up.

Most university fields of study have successfully avoided this situation. The hard sciences, engineering, medicine and most of the social sciences are still thriving in the US. The camel’s nose in the tent has been the multicultural movement, beginning with Black (now African-American) Studies, followed closely by Women’s or Gender Studies, Hispanic Studies and other similar departments. These fields are too often defined not by a field of study but by a particular political viewpoint. In many cases, the primary purpose of these departments was to meet self-imposed quotas for minority and female faculty. If the university could not attract sufficient qualified minority candidates into traditional fields of study, the “diversity” departments and their corresponding administrative staffs created additional slots. Almost by definition, most PhDs in these fields share powerful views not only about their fields of study, but about the political implications of their work.

To be sure, there is some very good work done in these departments, and there are excellent feminist and ethnic studies scholars who want their fields of study to establish and maintain high standards of academic integrity. Ted did receive some support from feminists in addition to Prof. Savage who support open inquiry even on “hot button” issues. These courageous scholars, however, are often fighting a losing battle against a dangerous alternative academic model in which political intensity substitutes for rigorous scholarship and in which dedication to common political objectives trumps any commitment to academic integrity. Often, other members of the university community are afraid to even raise these issues for fear of being labeled racist, sexist, homophobic or any of the other nasty epithets thrown around college campuses so easily these days.

I promised that I would bring this discussion back around to energy, so here goes. Environmental studies departments in the US are falling prey to these same political pressures. The environment is an excellent field of study where hard science can combine with economics and other disciplines to advance our understanding of how to deal with the very real and serious consequences of a globalized and growing industrial economy. In recent years, however, a dangerous level of agreement has developed, particularly on climate change. An uncomfortable number of environmental faculty members (including those trained in hard sciences) have made the transition from scholarship to political advocacy. They see this high level of agreement as evidence of the correctness of their views, but in reality we are seeing far more political solidarity than scholarship. As discussed in earlier posts, the constant refrain of more severe storms, more severe prolonged droughts and wildfires is seen not as a logical interpretation of the available data, but simply as an effective strategy for convincing people to accept severe carbon constraints. In too many cases, the academic rigor of climate science has simply fallen by the wayside under the pressure of political solidarity. In many other cases, dissenting scientists face the same nasty and dishonest treatment that so shocked my brother Ted.

University administrations too easily sign onto the full climate agenda as an expression of political correctness and show no interest in encouraging any discussion on campus of what is actually true. Whether or not the views of university administrators are sincerely held or not, it’s troubling that university administrators tell eighteen year old students in no uncertain terms that the climate change hypothesis has been proven correct and that further discussion of climate science and of the cost and trade-offs of carbon reduction is a damaging distraction from required political action. We need to resist strongly the conversion of our universities into political action committees.

Environmentalists like to say that the United States is “addicted to oil.” This metaphor is quite wrong. An addiction is a compulsion to use a product which makes us feel better but reduces our ability to function. We use oil because it gives us mobility – something of enormous value to the average person. The attempts of the environmental community to demonstrate an unacceptable downside to petroleum use have been a case of serial failure: peak oil, urban air quality, peak oil again and now climate change. Our use of ethanol as a gasoline supplement seems a much better candidate for the addiction analogy: it does nothing useful for us, has severe side effects, and we can’t stop using it.

First and foremost, ethanol is expensive. Here’s the math. The US currently uses about 135 billion gallons per year of gasoline. Ethanol contains only about two-thirds as much energy as gasoline, so it takes three gallons of ethanol to replace two gallons of gasoline. In 2011, the US harvested 12.4 billion bushels of corn from 84 million acres. Ethanol plants can produce about 2.8 gallons of ethanol per bushel of corn. If the entire US corn crop were converted to ethanol, the total output would be 35 billion gallons, equivalent to 23 billion gallons of gasoline or about 17% of US gasoline demand. US corn production is 36% of the world’s total, so diversion for ethanol use takes a major bite out of world food supply.

We should note that ethanol plants use the starch in the corn to produce a byproduct called “distiller’s grain” from the residual protein and fat. Distiller’s grain, however, is an inferior product used for animal feed and cannot be used for direct human consumption.

Today’s wholesale ethanol price is $2.50 per gallon, equivalent to $3.75 per gallon of gasoline. Today’s wholesale price of reformulated gasoline excluding the ethanol (known in the industry as RBOB) is $2.95, so consumers pay an additional $0.80 per gallon for ethanol or about $18.5 billion in 2011.

There are also significant indirect costs to ethanol. Ethanol production began in earnest in the US around the year 2000. Since that time, corn prices have more than tripled from $1.96/bushel in 2000 to the current level of over $7/bushel. Some of the increase is due to the current severe drought, but let’s say half of the corn price increase, or $2.50/bushel, is attributable to mandated ethanol production. That means that consumers pay $18.5 billion dollars more for the 60% of the corn crop that went into food rather than fuel.

If we add these two costs together, American consumers are paying an additional $37 billion per year for ethanol or an extra $1.60 for every gallon of gasoline displaced by ethanol. So what do we get for all this money?

Ethanol started as an environmental policy. In the 1990 amendments to the Clean Air Act, the EPA defined areas in the United States – mainly large cities – as “non-attainment” areas where air quality standards had not been met. In these areas, the EPA required the phase-in of a special blend of gasoline called “reformulated gasoline” or RFG. Among the specifications for RFG was the inclusion of an oxygenated compound, in other words a hydrocarbon that contained one or more oxygen atoms, on the theory that additional oxygen would make the gasoline burn more cleanly. This contention has always been controversial, but it became law. The two primary oxygenates available were methyl tertiary butyl ether (C5H12O), also called MTBE and ethanol (C2H6O). By the middle of the 2000s, most states had banned MTBE because, although it carries no known health risks, it smells awful and can get into the water supply. Ethanol, the remaining oxygenate option, was too expensive to penetrate fuel markets on its own, so the federal government gave it generous subsidies to ensure its large-scale use. Although the explicit subsidies have been removed, federal law still requires the blending of increasing amounts of ethanol into the nation’s gasoline supply.

The ability of ethanol to improve engine performance has always been questionable. It’s interesting to note that most of the published reports defending ethanol claim it has important environmental benefits in “older” engines – an acknowledgement that modern automobile engines derive little if any benefit from the use of oxygenates.

Ethanol does have higher octane – between 110 and 115 compared to 87 for regular gasoline and 93 for premium. Ethanol supporters often point to the use of high ethanol blends in racing cars and tout this quality as though it’s a benefit for your engine. It’s not. Octane measures the propensity of the fuel to pre-ignite (also called “knocking” or “pinging”). High compression-ratio engines, such as those used in racing cars, require higher-octane fuels because the pistons create higher temperatures in the cylinder, thus increasing the tendency to pre-ignite. If your car engine is designed for regular gasoline, however, higher octane has no benefit.

How about greenhouse gases? Ethanol is often portrayed as inherently carbon-neutral since the carbon released to the atmosphere when the ethanol is burned is reabsorbed in the next corn crop. This oversimplistic view, however, ignores the considerable amount of energy used to grow the crops (fertilizer, tractors, etc.), harvest the corn, transport it to market, distill it into alcohol, transport the ethanol and then blend it into gasoline. Calculating the net carbon impact of ethanol is complicated. For example, how do we account for marginal cropland that would have remained unused had corn prices not risen so dramatically. If left idle, cropland, particularly near forested area, would gradually grow trees and other wild plants, absorbing a considerable amount of carbon over time. Should this “unabsorbed” carbon be included in the overall calculation? How about the distiller’s grain byproduct? Should some carbon emissions be attributed to the byproducts of distillation?

The 2007 Energy Independence and Security Act (EISA) requires that ethanol carry at least a 20% carbon benefit versus gasoline, but does not specify how that benefit is to be calculated or what happens if the requirement is not met. The Department of Energy’s Argonne National Laboratory, for example, recently concluded that corn-based ethanol reduced total carbon emissions by 19-48% relative to gasoline. In other words, corn-based ethanol either just meets the requirement or fails dismally, depending on how it’s produced. Opponents of ethanol, such as the Natural Resources Defense Council, claim that ethanol causes more carbon emissions than it saves.

Beyond these highly questionable benefits, ethanol also has some real drawbacks. As noted above, ethanol contains only two-thirds the energy content of gasoline. Therefore, blending ethanol into gasoline reduces the vehicle’s range and requires the driver to stop more frequently to buy fuel.

There is also a major controversy about the corrosive effects of ethanol. Alcohols in general cause more corrosion than pure gasoline. So-called “flex-fuel” cars use special materials and lubricants in the engine and fuel systems to reduce this corrosion, but many people believe that regular cars, and particularly marine engines, incur damage from ethanol blends.

Whatever the cost-benefit balance, the current federal ethanol policy is causing a lot of problems. The 2007 EISA required that ethanol blending in the gasoline pool increase from 4 billion gallons in 2006 to 33 billion gallons in 2020. The first problem is where to get all this ethanol. If we use corn as the feedstock, we need the entire US corn crop by the year 2022. Recognizing this problem, the law specifies that a maximum of 15 billion gallons out of the total 36 should come from corn. Another 16 billion gallons should come from the use of cellulosic feedstocks and the rest from other kinds of biofuels. Cellulosic ethanol is a much more complex process using wood, cornstalks and cobs, wheat straw and other waste materials. It’s much harder and more expensive to make ethanol this way, so the federal government simply directed that it would happen by phasing in the mandate, starting with very small amounts in the years 2010-2014 and then ramping up quickly thereafter. The problem is that there is no commercially viable method for making cellulosic ethanol, putting the oil companies in the interesting position of paying fines for failing to procure a product that doesn’t exist.

The second problem is the unexpected leveling off of gasoline demand in the US. The Energy Information Administration’s projections of US energy demand made in 2006 concluded that gasoline demand would increase continuously at 1-2% per year as the population grew and spread out across the country. The reality has been quite different. Increasing prices and constant improvements in vehicle efficiency caused gasoline demand to peak in 2007 and begin to decline at about 1% per year. The EIA now projects a continuation of this trend out into the future. This decline is, of course, what everyone always wanted, but it makes ethanol blending difficult. The mandated ethanol volumes were supposed to hit 10% of gasoline demand this year and 20% by 2022. In fact, the current blending requirement is 12½% this year, rising to nearly 30% by 2022.

So far, ethanol has been accommodated primarily by using a blend called E10, which is 90% gasoline and 10% ethanol. We are now at the point where the required ethanol volumes cannot be accommodated in this way. For a number of years, ethanol proponents have been pushing an E85 blend (15% gasoline and 85% ethanol), which can soak up a lot of ethanol, but can only be used in specially manufactured “flex-fuel” cars. E85 also requires separate fuel pumps and storage tanks at service stations, a costly requirement the oil industry has understandably opposed. E85 would carry a serious range debit. E10 reduces vehicle mileage by about 3% (a one-third debit on 10% of the fuel), but E85 reduces mileage by 27%, likely to be a real inconvenience to motorists.

In one of the worst energy policy decisions in recent memory (and that’s a mark of real distinction), the Environmental Protection Agency (EPA) has begun to allow the use of E15 (85% gasoline, 15% ethanol). The EPA claims it is just responding to “requests for waivers” of Clean Air Act requirements, but in fact authorizing E15 blends is the only way that the gasoline pool can accommodate the required amounts of ethanol. E15 is no problem for flex-fuel vehicles, but the automobile manufacturers are screaming about the potential damage E15 blends might do to regular vehicles. In fact, several of the car companies have indicated that using E15 would void the vehicle’s warranty. Here’s a really nice potential situation: the federal government may require you to use a fuel that will cost you more money, offer no clear environmental benefits, raise food prices and now perhaps damage your car. Why?

The answer is depressing. The ethanol industry may find its origins in energy policy, but it is now no more than a farm subsidy. You may not like ethanol, but corn farmers really love it. Imagine a government policy that triples your income and makes your land much more valuable without your needing to do anything. Even as we discover more and more drawbacks and fewer benefits from ethanol, its constituency has become so entrenched and powerful that we are stuck with this mess. If ethanol were a policy promoted by the Democratic Party but opposed by the Republicans, we might see some hope for a change if the Republicans could regain power. No such luck. Six states (Iowa, Illinois, Nebraska, Minnesota, Indiana and South Dakota) produce 70% of our corn crop. These states have 12 powerful senators – six Republicans and six Democrats. These senators will prevent any effort to cut back on this disastrous program which has shifted so much money from you to their constituents. This process is not helped by the early Iowa caucuses where any presidential candidate of either party must support ethanol to have any chance of surviving this critical step in the election process. Some writers have called this “worshipping at the ethanol altar”. Conservative principles rarely trump constituent interest.

There are numerous reasons to avoid heavily subsidized industries, like ethanol, wind and solar. The first is that they are inefficient and drain capital from more productive uses. The second is that they often create constituencies so powerful we can never get rid of these programs once their poor results are evident. Sorry, but we are now addicted to alcohol.

Congressman George W. Julian recalled discussing a confusing political question with President Abraham Lincoln: “[Lincoln] used to liken the case to that of the boy who, when asked how many legs his calf would have if he called its tail a leg, replied, ‘Five’, to which the prompt response was made that calling the tail a leg would not make it a leg.”

Let’s listen to Lincoln on this critical point and speak English. It’s a really nice language with an extensive and precise vocabulary. Unfortunately, our political discourse has degenerated into confusion and babble as people try to redefine terms to support their political agendas. In introducing the Senate budget proposal, Budget Chairman Patty Murray (D-WA) called tax increases “cutting wasteful spending in the tax code.” A tax increase is a precise term. Calling it a spending cut doesn’t change anything.

The International Monetary Fund (IMF) (established to manage a fixed exchange rate system that no longer exists and costing about $1 billion per year to operate) has just weighed in on the issue of energy subsidies with a clarion call for increased energy taxes. The IMF study evaluates two types of subsidies around the world. The first is called “pre-tax” subsidies, defined as government policies designed to keep energy prices below market levels. The IMF analysis here is reasonably balanced, but tells us nothing new. In 2011, governments subsidized energy to the tune of $500 billion per year – a conclusion similar to that reached by the International Energy Agency in its study last year. About half of this amount is attributed to countries in the Middle East and North Africa, particularly oil producing countries like Saudi Arabia who sell gasoline to their citizens at absurdly low prices of $0.50 per gallon or less. The study acknowledges that such subsidies are negligible in the US and other advanced countries.

It’s no big surprise that developing countries lack basic free market institutions and that the largely undemocratic governments in these countries subsidize many basic commodities to try to keep the peace among unhappy and frustrated populations. If the IMF wants to convene a meeting and encourage the Saudis, Iranians, Venezuelans, Nigerians and Russians to allow free market pricing for energy products, they have my blessing. That issue, however, has nothing to do with the United States.

The IMF study then falls off the cliff with its analysis of “post-tax” subsidies, which it claims totaled $1.9 trillion in 2011. I have discussed the fallacies associated with the energy subsidy argument in previous posts (see “The Oil Subsidy Myth” from February 17, 2012). The IMF study falls into all these traps and more. Let’s take a deep breath and go through the IMF’s analysis.

First and foremost, the study conflates three different economic concepts. A subsidy is defined by Webster’s dictionary as “a grant by a government to a private person or company to assist an enterprise deemed advantageous to the public”. This is a perfectly good definition and we should stay with it. Personally, I would take no exception to the inclusion of tax credits in this category, since a tax credit is the grant of government money by excusing a payment normally due from a private person to the government. If we use the word “subsidy”, we should use it in its precise sense.

The IMF, however, expands the definition of subsidies to include a failure to tax. This strange construct is very common in Washington where government is the core institution of society, but it makes little sense to anyone else. The IMF analysis assumes that there is a “correct” level of energy taxation that can be defined as either the prevailing level of VAT (value added tax or national sales tax) or, for countries like the US which have no VAT as “the average VAT rate of countries in the region with a similar level of income”. This definition assumes that there is a proper model of governance and that it’s not the US model. European governments take a significantly larger share of GDP than does the US (at least for now). The difference derives from a 200-year old argument about the proper roles of government and the private sector, the size and scope of the welfare state, the nature of economic planning, the role of civil society and many other critical and highly debatable issues. The IMF study essentially assumes (as do President Obama and the Democrats) that the American government is too small and insufficiently powerful. Americans on the whole have never believed this, and it’s not at all clear that they believe it now.

The IMF study then turns to the question of externalities. In economics, an externality is the cost of a transaction which is (a) imposed on people not party to the transaction and (b) not reflected in the price. Pollution is the classic example of an externality. The concept is valid and worth addressing, but it’s not the same thing as a subsidy. Grouping subsidies and externalities together confuses rather than clarifies.

We deal with some externalities, like dumping toxic waste in the river, by prohibiting the activity. For other externalities, however, like sulfur emissions from power plants, we use a tax or “cap-and-trade” system to ensure that we mitigate the externality without killing off the underlying economic activity. In order to use the latter approach, however, we need to have some idea of the value of the externality. Otherwise, we can’t set sensible limits or taxes. Unsurprisingly, the IMF focuses on climate change as the critical externality of fossil fuel use and offers $25/metric tonne as the “correct” tax level. According to the IMF, anything less than $25 should be considered a subsidy. That’s complete nonsense. As discussed in numerous posts, we understand very little about the influence of carbon dioxide emissions on the climate. We have no idea whether increasing levels of carbon will cause an accelerated temperature rise, how high temperatures might rise, when such rises would occur or what their impact on society would be. How in the world can we establish a price? The IMF uses a typical bureaucratic answer. They simply use the result of the United States Interagency Working Group on Social Cost of Carbon from 2010. Committees can do useful work, particularly in characterizing the state of knowledge on a particular problem. Committees cannot, however, answer every possible question. For example, how many intelligent species are there in the universe? The answer is that we don’t know. If you get the best scientific minds together for six months and ask them to come up with an answer, they might give you a guess, but it would be meaningless. As another example, which team will win the World Series in the year 2100? We know the teams and the players for the 2013 season, and can’t make a meaningful prediction six months out. A Committee on Future World Series Winners might offer an opinion, but it would have no predictive value. Zero.

The US currently emits about five billion tonnes of carbon dioxide annually. A $25/tonne tax would initially cost American consumers $125 billion a year. The IMF wants us to impose such a tax on the basis of a government committee’s analysis of a problem they don’t understand. Seriously? Given the dominance of Chinese carbon emissions, a $25/tonne tax in the US is unlikely to have any impact on global carbon (See my post “The Great Climate Change debate from March 7) but would most certainly have severe impacts on the US economy.

The IMF report also offers higher energy taxes as a way of reducing the externalities of traffic congestion and vehicle accidents. First, these issues don’t really qualify as externalities. It’s a bit of a stretch to argue that other drivers are imposing a cost on me by driving on my road. We treat most roads as public goods, and the real problem is that their use is priced at zero. Economics 101 tells us that free goods tend to be over-consumed. For many years, we lacked any practical road pricing mechanism. I can remember driving on the Garden State Parkway in New Jersey and repeatedly waiting 10-15 minutes to pay a 35¢ toll, much of which just covered the cost of collecting the money. Fortunately, we now have transponder technology, such as the E-ZPass, which allows us to pay tolls without even slowing down. Furthermore, tolls could be set by time of day. Applying pricing to roads is a much better way to manage congestion than increasing gasoline prices. Accidents are fully priced into car costs through insurance premiums and do not require any policy intervention.

The study assigns about $500 billion of energy subsidies – a quarter of the global total – to the US, making us one of the biggest global miscreants. The study doesn’t document, however, how this number is calculated. If the IMF is saying that the US is guilty of not imposing either a national sales tax or a carbon tax, it has strayed way outside of any meaningful definition of “subsidy”.

Having started with a useless definition of the term “energy subsidy”, the IMF report then proceeds to combine all the countries of the world into a single group and to propose a series of recommendations for everyone to follow. The circumstances of countries differ so sharply that global recommendations are (like just about everything else in this study) meaningless. Does the IMF seriously think that Iran and the US need to apply the same economic policies? Should we study global drug violence and develop a set of recommendations equally applicable to Mexico and Luxembourg?

The IMF study implies that all countries, including the US, should implement their universal recommendations. An underlying assumption of the study is that biggest problem governments have is providing for the poor and that insufficient energy tax revenue robs governments of the funds needed to meet that objective. That may be true in Bangladesh or Haiti, but it’s certainly not true in the US. “Poor” American families generally live in quality housing, have one or two cars, a full set of home appliances, 2-3 color televisions, cable TV, home computers and internet service. Most US entitlement programs (which are indeed underfunded) benefit middle class or even upper middle class families.

To make matters even worse, the IMF recommends that governments “de-politicize” energy pricing by making its recommended price increases automatic under the supervision of “an independent body”, presumably one not accountable to the public. It is annoying to bureaucrats when the public objects to massive tax increases based on staff analysis and interagency task force recommendations, but politics is the process by which societies make difficult decisions. Since early colonial times, taxation in the United States has been THE critical political issue. Remember “No taxation without representation”? The IMF’s preferred slogan is “Representation impedes taxation”.

Not to worry, however. The IMF study also recommends “consultation with stakeholders”. Such consultation allows the bureaucrats to ease the concerns of the public without actually allowing the public to make decisions. In other words, democratic institutions are to be replaced by clearer explanations from the government. If the public really understood what the bureaucrats were trying to achieve, people would understand and be supportive. You cannot, however, allow the citizenry (known in government circles as “special interests”) to get in the way of what’s right.

It would be easy to dismiss this study as just another terrible piece of analysis. Unfortunately, it feeds into the common misconception that fossil fuels dominate our energy economy because of heavy subsidies, rather than because of their low cost and high performance. The storyline from the Washington Post, for example, reads “IMF: Governments need to end energy subsidies”. The New York Times says, “I.M.F. Calls for Curbing Fuel Subsidies”. Most people will see these headlines without reading the study and come to exactly the wrong conclusions.

The IMF is an institution that is supposed to help the global economy deal with financial disruptions and crises, making use of its nearly $800 billion in capital. The energy subsidy report, however, reveals a strong preference by the IMF staff and management for autocratic political institutions and central planning. Why in the world would we entrust these people with anything?

Since the beginning of the modern petroleum industry in 1859, Americans have worried about the imminent decline of petroleum production and the inevitable severe economic consequences that would follow. In 1882, the US Institute of Mining Engineers estimated that the US had 95 million barrels of remaining oil reserves – only about four years of supply at prevailing production rates. In 1932, the Federal Oil Conservation Board estimated remaining US oil reserves at 10 billion barrels – a big increase from the Institute’s earlier estimate, but still only 13 years’ worth of production. In 1944, the US Petroleum Administrator for War estimated that the US had 20 billion barrels of oil remaining – only 12 years of production at the prevailing rate. To date, the US has produced well over 200 billion barrels of oil and the remaining reserves are still 31 billion barrels.

We see the same pattern for the world as a whole. Since 1980, the world has produced about 817 billion barrels of oil, but has found 1,787 billion barrels, thereby increasing reserves by about 970 billion barrels. Natural gas shows the same trend. Since 1980, the world has produced natural gas equivalent to 434 billion barrels of oil, but has discovered new reserves of 1,210 billion barrels of oil equivalent, resulting in an increase in natural gas reserves of 776 billion barrels of oil equivalent.

This hundred years’ experience still doesn’t dissuade people from predicting the imminent, apocalyptic decline in world petroleum production – a view known as “Peak Oil”. The term was coined in the late 1940s after M. King Hubbert, a geologist with Shell Oil, predicted based on statistical analysis that US oil production would peak and begin to decline in the early 1970s. Hubbert’s argument was that oil production peaks and begins to decline after half the oil in the ground has been produced. His forecast turned out to be correct. US field production of crude oil peaked in October of 1970. Based on Hubbert’s concept, many people, including Ken Deffeyes of Princeton and oil analyst Matt Simmons, predicted that the same thing would happen to the world as a whole. The infamous 1972 report “The Limits to Growth” published by the Club of Rome, expanded this concept to all important minerals, predicting severe economic contraction as exponential growth hit the wall of limited resource availability.

In reality, Hubbert’s success was just coincidence. US oil production peaked not because the resource base was exhausted, but because the Middle East began to produce massive amounts of oil at $2 per barrel, driving the more expensive parts of the US resource base out of the market. Furthermore, the US oil industry was subject to federal price controls, further discouraging exploration and technology development.

The problem with the “Peak Oil” concept is its confusion of the terms “reserves” and “resources”. The term “reserves” is an estimate of how much oil and gas have already been discovered that can be produced with today’s technology at today’s prices. “Proved reserves” are the amount of oil that can be produced with 90% confidence. “Resources” refers to our best estimate of oil and gas in the ground, regardless of whether we know how to access it or can do so at a profit. As we keep exploring, we keep moving hydrocarbons from the “resource” category to the “reserves” category. Second, as our exploration and evaluation tools improve, we add more and more hydrocarbons to the resource base. Finally and most importantly, improved technology allows us to produce a larger and larger share of the resource base. We can see dramatic examples of technology improvement in in the oil industry’s move to deep water reserves, particularly in the US Gulf of Mexico and West Africa in the 1990s and 2000s, the development of Canadian tar sands and the boom in hydraulic fracturing (“fracking”) of low-permeability shale oil and gas reserves in the US over the last ten years. Think of the term “reserves” as the amount of food you have in your pantry. That number will tell you how urgent it is to go to the grocery store and buy additional food. It doesn’t tell you how soon you will starve to death.

But aren’t oil and gas resources ultimately limited? Yes, but not in any meaningful way. Take copper as an analogy. Humans have been producing and using copper for over 3,000 years. We keep increasing production, yet we never exhaust the resource. When copper production gets tight, prices rise giving a signal to find more copper ore and improve the technology for exploration and production. In effect, resource extraction economics are a race between depletion, which drives prices up and technology, which drives prices down. Technology can win this race over very long periods of time. Today’s copper price is lower in real terms than it was 100 years ago.

The shale oil and gas boom in the US is dealing a serious blow to the Peak Oil hypothesis. US natural gas reserves and production in the US have increased dramatically, despite constant predictions to the contrary. Perhaps even more significantly, shale oil production in places like North Dakota has reversed the decline in US crude production. The Hubbert’s Peak experienced in 1970 may actually be exceeded in the coming years.

For a real insight into total world hydrocarbon possibilities, however, have a look at the work underway off the coast of Japan by the Japan Petroleum Exploration Company, Ltd (Japex). Methane is the simplest hydrocarbon molecule (CH4) and is the main constituent of natural gas. The ocean floor is covered with methane trapped in ice crystals – a material known as “methane hydrate” often referred to as “burning ice”. This is new technology, but Japan has a real incentive to see what can be done with this stuff. Japan has no real energy resources and has effectively lost the use of its nuclear power plants after the Fukushima disaster.

How much of this material is there? I strongly recommend reading the Department of Energy report “Energy Resource Potential of Methane Hydrate” which you can find at http://www.netl.doe.gov/technologies/oil-gas/publications/Hydrates/2011Reports/MH_Primer2011.pdf. Page 6 of this report displays what’s known as a “resource” pyramid showing estimated volumes of methane hydrates classified according to the difficulty of extraction. The easiest methane hydrate resources are found in Arctic sands where conventional oil and gas technology may be applicable. The report estimates these resources at hundreds of trillions of cubic feet (Tcf). A trillion cubic feet of natural gas contains the energy equivalent of about 175 million barrels of oil. Hundreds of Tcf are thus equivalent to tens of billions of barrels of oil.

The next layer of the pyramid is marine sands which are in deeper water and therefore more difficult to extract. The report estimates that there are 1,000s to 10,000s of Tcf of this material – equivalent to 100s of billions to trillions of barrels of oil equivalent. Accessing this part of the resource base could potentially double or triple the world’s known hydrocarbon resource base. Even lower down in the pyramid, however, we find the type of material the Japanese are looking at – much harder to extract but available in truly massive quantities. The report indicates 100,000s of Tcf, which could increase the world’s hydrocarbon resource base by a factor of 10 or more.

I often hear my students say something along the following lines, “Oil and gas will run out sooner or later, so why don’t we just go ahead and engineer a transition to renewable energy now before we run into resource constraints.” I think this argument is wrong on two counts. First, as discussed in previous blogs, the government is not capable of engineering such a transition. Second, it seems to me reasonable to expect that the global hydrocarbon reserve base will continue to grow and to support increasing levels of production for as far into the future as we can see. Oil and natural gas prices are likely to undergo cycles of increase and decrease, thus giving the industry the signals it needs to speed up or slow down its efforts. Hydrocarbons will be replaced through a natural market process when something better comes along.

We have a number of major issues in our energy economy. The first is how to provide increasing amounts of energy to a growing global population. The second is how to mitigate the environmental consequences of increasing energy consumption. The third is how to ensure that the complex and expensive transnational infrastructure required to support growing energy consumption levels is in place. A shortage of hydrocarbon molecules is not on the list.

Tufts University students have joined a national campaign to pressure universities and other financial institutions to divest holdings of fossil fuel companies. Tufts’ organization is called “Tufts Divest For Our Future”, and you can find their website at http://tuftsdivest.com/. I have spoken to several students active in this campaign, and they are convinced that they are fighting the great moral crusade of our time, comparable in their minds to the fight against apartheid in South Africa. I don’t doubt their sincerity or their passion, but their campaign is based on several incorrect premises.

As I discussed in my post last week, climate change is a “fixed point” on college campuses. With very few (very quiet) exceptions, students never question the view that fossil fuels will destroy the planet in the very near future. In reality, as I have outlined in many posts, catastrophic climate change is a highly debatable proposition based on questionable assumptions, anecdotal evidence and weak science. It may prove to be true, but the case has yet to be made. We don’t have this discussion on college campuses very often, and most students have never been exposed to a contrary viewpoint since they started school at age 5.

The second incorrect premise is that we have available to us right now economically viable alternatives to oil, which are kept out of the marketplace by various political barriers. If we could remove these barriers, we would quickly transition to a new world in which low-cost mobility is available to all without carbon emissions. This statement is simply untrue.

During the 1960s, when the world was inhaling $2 per barrel Middle East oil, petroleum was the cheapest source of energy and penetrated every sector of our economy: transportation, electric power generation, home heating and industry. Following the sharp oil price increases of the 1970s, however, oil was quickly pushed out of many of these applications. In power generation, for example, oil’s share fell from a high of 17% in 1976 to its current level of less than 1%. In residential heating, oil’s share fell from a high of 18% in 1976 to around 5% today. The energy market does work, and oil loses when it can’t compete.

The structural change from a broad market base to a concentration in transportation cost the oil companies a great deal of money. Electric power plants use heavy fuel oil, which is a natural component of most crude oils. Without this market, the oil companies were forced to invest tens of billions of dollars in refinery upgrades to convert the heavy crude oil components into motor fuels. This expensive structural shift coincided with the loss of the oil companies’ most profitable overseas producing ventures to government nationalization.

The replacement of oil in transportation, however, has proven to be more difficult. Oil has advantages that no other fuel possesses, in particular its high density and liquid state. (For an excellent discussion of this issue, see Robert Bryce’s recent article in the National Review entitled “The Tyranny of Oil” at http://www.nationalreview.com/articles/342572/tyranny-oil-robert-bryce). We keep trying alternatives, such as biofuels, which have proven to be an economic and environmental mess benefiting only corn farmers and big food processing corporations like Archer Daniels Midland while ordinary consumers pay higher prices for both fuel and food. Electric cars are dramatically more expensive than conventional cars and have severe performance drawbacks, such as limited range and long recharging times. (See my February 13 post “The State of Play on Electric Cars” for more detail.)

The third incorrect premise is that the oil companies (or the fossil fuels companies in general) are in some sense criminally complicit in denying carbon-free alternatives to the public. I generally hear two versions of this argument. The strong version is that the oil companies are so politically powerful that they are able to block the introduction of these new and better technologies through various means, such as demanding and receiving heavy government subsidies for oil. This argument is simply wrong. (See my February 17, 2012 post “The Oil Subsidy Myth” for a complete discussion of this fallacy.) As an aside, an interesting question is why the oil companies, if they are so powerful, were unable to stop the nationalization of their properties and the loss of major markets, as noted above, during the 1970s.

The milder version of this argument, one often presented by Massachusetts Congressman and likely Senator Ed Markey, is that the oil companies are “rich” and have an obligation to use their considerable financial and technical resources to develop zero-carbon alternatives for the public. This argument is confused. Oil companies are commercial entities. They accept money from their shareholders in order to earn a return. Naturally, we expect all corporations to obey all laws and meet high ethical standards. ExxonMobil’s shareholders, for example, are primarily pension funds and mutual funds owned by average people in their retirement accounts. ExxonMobil is “rich” in the sense that its profits are very large, but not in terms of its return to its shareholders, which is in line with other large companies. It would be highly unethical (and probably illegal) for ExxonMobil’s management to take money entrusted to them and use it for social purposes, no matter how high-minded that might sound. Banks have fiduciary responsibilities to their depositors which supersede any other obligations, such as feeding the hungry or seeking a cure for cancer. The profits of a company like ExxonMobil belong to shareholders, not management.

Furthermore, companies like ExxonMobil have enormous technical capabilities, but these abilities are concentrated in very narrow areas related to finding, producing, transporting and manufacturing hydrocarbons. These skills are not easily transferable to other areas. Why would we expect ExxonMobil to be able to compete with a company like General Electric in the production of wind turbines or solar panels? Why would we expect that turning geologists loose on the problem of battery technology would produce real results? This idea is similar to asking the New England Patriots football team to suddenly start competing in ice hockey. That would be amusing to watch, but wouldn’t present much of a threat to the Boston Bruins.

In fact, Exxon tried to diversify its business lines in the late 1970s with investments in solar panels, uranium mining, nuclear fuel manufacture, computers and electrical equipment. The company even went so far as to buy Reliance Electric for $1.2 billion in 1979 in order to commercialize some energy-saving electrical device ideas Exxon had developed. The ideas turned out to have no commercial value, and Exxon sold off Reliance and most of its other non-fossil fuel businesses in the mid 1980s. The New York Times called Exxon’s diversification effort “an embarrassing, mistaken venture.”

As a final note, there’s an interesting irony in the student divestment movement. The organizers insist that replacement transportation technologies are available today, but they themselves don’t use these technologies despite heavy subsidies. I don’t know a single Tufts student who drives an all-electric car charged exclusively with renewable electricity. I suspect that they simply couldn’t afford such an option – a fact they ought to consider when formulating their views on this subject.

In effect, the students who support this effort are all consumers of the product they want to ban. If these students were demanding the prohibition of tobacco, we wouldn’t expect to see them all lighting up cigarettes while they marched. In a way, the Tufts divestment campaign is analogous to a group of smokers who refuse to give up nicotine, but demand that the tobacco companies offer them a safe, non-carcinogenic alternative at no additional cost. The students may see themselves as moral crusaders, but it’s a rather muddled morality.

I think most members of the Tufts community would agree that there are some endowment investments Tufts shouldn’t make. I, for example, wouldn’t support Tufts’ investing in the global opium trade, even if it were legal. The oil industry, however, is producing a product which is not only legal, but is currently both irreplaceable and essential to our economy and our way of life. I doubt that Tufts will succumb to this pressure and divest its holdings, but it would be nice to see the administration make a more robust defense of their investments.

[I have offered “Tufts Divest For Our Future” an opportunity to respond, and I will post their comments as soon as I receive them.]

Every year, students at the Fletcher School at Tufts organize a debate on climate change between my friend and colleague Professor Bill Moomaw and me. Bill is a distinguished faculty member at Fletcher, the Director of the Center for International Environment and Resource Policy, an IPCC lead author and an active member of the Climate Community. This debate is always a lot of fun, since it gives the students an opportunity to hear two very different points of view.

The debate always starts off in the same way. I make the following points: (1) global temperatures do appear to have increased over the years, (2) increased carbon concentrations in the atmosphere are likely a contributing factor, (3) physics, however, indicates that the expected carbon dioxide concentration in the atmosphere will cause only modest warming, on the order of 1° C by the end of this century, (4) catastrophic scenarios require debatable assumptions about feedback loops and (5) the cost of carbon reduction is very high. Bill always counters with: (1) the argument that today’s weather patterns are powerful evidence that catastrophic climate change is already occurring, (2) almost all peer reviewed articles by qualified scientists support his position and (3) we can easily achieve substantial cuts in carbon emissions at low cost.

This year, I tried a slightly different tack. My slides are attached, if you’d like to follow along. I quoted President Obama’s inaugural address “Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms.” I then posed the simple question of whether these assertions are supported by the data. The answer is no.

Wildfires in the US have ticked up in recent years from 4-5 million acres burned per year to 8-10 million acres. Sounds like an alarming trend, until you look at the historical data. In the early 1930s, wildfires burned 40-50 million acres per year, 5-10 times the recent average. Burned acreage declined quickly over the years, reaching the current relatively low level by the late 1950s. It’s obvious that factors other than temperature are at work here. Otherwise, we would have seen a steady increase in fires as global temperatures rose. I’m no expert, but I would guess that forest management has at least as much to do with wildfires as temperature and humidity. Regardless, as a simple factual statement, wildfires are not worse today than they were decades ago.

Regarding droughts, for over 100 years the federal government has tracked the Palmer Drought Severity Index. Although the US is currently experiencing a terrible drought, the data show no trend. We have had worse droughts in the 1950s and 1930s (the infamous “Dust Bowl”). If the current drought is caused by climate change, then I challenged Bill to explain what caused the earlier droughts and how he can tell which drought is caused by which factors.

Finally, regarding storms, it’s widely argued by politicians and the media that Hurricane Sandy is clear proof of catastrophic climate change. Once again, however, the data simply don’t support this claim. Whether we measure the number of storms, the number of severe storms or the accumulated cyclonic energy, there is no upward trend. The President’s statements are simply not true.

Bill responded by accusing me of “cherry-picking” the data and then proceeded to show offer a string of anecdotes, such as the droughts in the US, floods in Pakistan, unusual snow accumulation in New England and, of course, Hurricane Sandy. Bill argued that it was particularly telling that Sandy was an exceptionally large storm occurring very late in the season. He did not, however, show any data sets or attempt to document any trends in these phenomena. This argument seems quite weak for a very distinguished scientist.

The debate went back and forth on these points. As is always the case, the audience starts out mostly in his favor and remains unconvinced by my arguments. I know that there are some students in the audience who agree with me, but they tend to stay pretty quiet. My only hope is that my arguments will at least convince some students to shed the heavy intellectual baggage they carry from as far back as elementary school and begin to think for themselves on this subject.

Prof. Moomaw did make one extraordinary point, however, that was surprising and troubling. He made an argument for a carbon tax, one of the topics the student organizers had asked us to address. He suggested a tax structure with some of the funds rebated back to consumers to avoid an undue increase in the overall tax burden. He also suggested that the funds retained by the government be earmarked for certain carbon mitigation purposes. So far, so good. He then insisted that the legislation include severe financial penalties for those who had “distorted climate science” and “misled the public on climate change.”

This is quite an extraordinary statement in a country built on freedom of speech. I suspect that Bill was being provocative, but why would anyone feel comfortable making in public a statement straight out of a totalitarian dictatorship? I believe that the answer lies in the world view of the Climate Community which has permeated college campuses. Here’s what college students (and in many cases elementary students) are taught to believe.

First, the imminent danger of catastrophic climate change is an established fact, believed by every intelligent and educated person. It’s not only true, it’s obvious. Most sincere “climate skeptics” are ignorant and anti-science, essentially akin to the Flat Earth Society. Since people like the Koch Brothers and the management of ExxonMobil are intelligent and educated people, they cannot possibly believe the anti-scientific drivel they spread. They know what’s true but have a narrow selfish interest in keeping high-carbon technologies alive and highly profitable in the marketplace.

Second, the average American is not really very smart and can be easily misled by rich companies spending lots of money to cast doubt on climate science. Every argument against the climate hypothesis can ultimately be traced back to corporate money, even if we can’t see the connection. There is no legitimate debate, only a war between good and evil.

Third, there is no real democracy in the US, since all politicians have been bought by the fossil fuel industry. By the way, when Bill made this point in the debate, he got a strong round of applause from the audience. The economic analog of this argument is that there is no “free market” since freedom just allows the strong to eat the weak. The only antidote to the current corporate stranglehold on our society is central planning.

Fourth, by implication free speech and open debate will always be captured by the rich and selfish rather than the struggling and under-resourced Climate Community. The only solution is to take control of the future of our society through a strong central government composed of climate experts who will force the public to do what’s right and not what the public misguidedly wants to do. Shoving the oil companies out of the way by whatever means necessary is an essential step in saving humanity. Hence, Bill’s proposal for punitive fines against those who disagree with him.

These premises are powerfully ingrained on college campuses today and are unchallenged by the faculty and administration, especially at elite colleges like Tufts. Fighting climate change and the fossil fuel industry are regarded as acts of community service similar to tutoring inner-city kids or serving food at homeless shelters.

Tufts, like many universities, has an Office of Sustainability – a source of great pride to President Tony Monaco and the university administration. The Office of Sustainability’s web page states that “Sustainability for universities is about their very survival as institutions.” Seriously? Later, the web page states “Tufts leadership continues with bold commitments to regional (New England Governors/Eastern Canadian Premiers Climate Change Action Plan) and international (Kyoto Protocol) goals to reduce emissions of climate-altering gases.” Note that the Office does not encourage students to understand climate change in either scientific or economic terms. The fact that carbon dioxide alters the climate is the “fixed point” and all arguments flow from there. Nowhere does the Office of Sustainability attempt to analyze whether the steps the University is taking, such as shared hybrid vehicles programs and expensive rooftop solar panels, are offering meaningful carbon reductions in return for their high cost. Nor are students encouraged to analyze these issues. The current undergraduate tuition (with fees) at Tufts is $44,666, up over 400% in the last 25 years. How much does it cost to green up the campus and what impact does that have on global carbon concentrations? You’ll never know because nobody at Tufts ever asks this question. Green goals never have a cost component.

As a society, we often get ourselves in trouble with these “fixed points”. Slavery, segregation, creationism, anti-gay bias and denying women the vote all seem strange to most people in today’s world. These views were (and in some cases are) able to exist in a free society because children were taught to believe them, they heard nothing else, no dissent was permitted and other viewpoints were demonized. The flimsiest of evidence was accepted as proof of validity and even strong counterarguments were dismissed out of hand. Fans of Downton Abbey watch in every episode the “fixed points” of early 20th century Britain colliding with reality.

The Climate Community may be right in their assessment of the future of the climate. So far, however, they are relying to an distressing extent on squashing dissent rather than on proving their case. As an optimist, I can only hope that free discourse will prevail in the society as a whole even if it doesn’t on college campuses, our supposed bastions of open thought and discourse. As one of my former students recently told me, “Pretty soon, climate science will have to be replaced by real science.”
Climate change debate 2-28-13 Round 1 (exjpg)

Climate change debate 2-28-13 Round 2 exjpg

New York Governor Andrew Cuomo, apparently buoyed by last November’s Democratic election victory, is testing how far he can go in implementing the Left’s economic and social agenda. One part of the push is Cuomo’s effort to expand late-term abortion rights, an issue dear to the Left that makes the public at large distinctly queasy. The Governor has also placed a de facto ban on natural gas development in his state. At first glance, blocking an opportunity to develop a clean, low-carbon energy source with all the accompanying jobs and tax revenue would seem like a strange decision.

Traditionally, the northeastern states have imported their energy from other states or other countries. According to the Energy Information Administration, in 2010 (the last year for which full data are available), New York State consumed 3.7 quadrillion Btus (Quads) of energy and produced only 0.9 Quads, almost entirely in the form of nuclear and hydroelectricity. The rest has to be brought into the state from somewhere else. New York has a share of the Marcellus Shale, a huge natural gas deposit extending from West Virginia and Eastern Ohio across Pennsylvania and the southern tier of New York Counties from Chautauqua and Erie Counties in the West to Ulster, Greene and Albany Counties in the East. Although Pennsylvania has allowed extensive drilling, proving up over 10 trillion cubic feet of natural gas, New York has done nothing. What’s the hang-up?

According to Governor Cuomo, we still don’t know if shale gas produced through hydraulic fracturing (“fracking”) is safe. Is that a reasonable position? Fracking has been very controversial of late, but the fracking opponents have been rather hysterical. There are some activities in life that are inherently dangerous and offer no discernible benefits. Drunk driving or firing guns into the air in crowded areas fall into this category, and we often restrict or even outlaw these things. Other activities, like air travel, involve substantial risks but also bring huge benefits. We have been spectacularly successful in mitigating the risks of 100 ton machines hurtling through the air at over 500 miles per hour, but the risk will never be zero. Every once in a while we are going to have a spectacular plane crash with lots of fatalities. Our risk mitigation approach is to find out what went wrong in that specific case, and then take appropriate action to make sure it doesn’t happen again. Still, the risk will never be zero.

Is fracking so dangerous that we can never bring the risks down to acceptable levels? Are the benefits of shale gas so small that it’s not even worth trying? Hydraulic fracturing is not new, and we have a substantial amount of experience with shale gas drilling in Texas, Pennsylvania, the Dakotas and other states. The US currently fracks about 35,000 wells per year. There have been occasional issues of ground water contamination, but always in the context of wells that were not drilled and managed properly. On balance, this is a very safe and well understood industry.

New York’s state government doesn’t seem to have any objection to natural gas per se, since 36% of the state’s electricity is produced from natural gas – almost all of it imported from outside the state. Nobody in New York has seen fit to question the environmental impacts of natural gas produced elsewhere.

The basis for the fracking ban lies entirely in politics and in the unusual demographics of New York state. Andrew Cuomo, like his father before him, is a purely political animal. He knows how to assess the various constituencies in New York and assemble the votes to keep himself and his allies in power. New York has a population of about 20 million but it’s heavily concentrated. The five counties of New York City are home to 8.2 million people and the two adjacent counties of Westchester and Nassau to another 2.3 million. Thus, New York City and its immediate environs account for 10.5 million people or over half the state.

The Marcellus shale gas resources lie predominantly under 26 upstate counties with the thickest and potentially most productive part of the shale concentrated in 16 counties from Steuben County in the West to Greene County in the East. These counties have a total population of 1.7 million or only about 9% of the state. To these counties, natural gas development represents an extraordinary opportunity. This region has not fared well in the recent economic downturn, with average unemployment of 8.5% – well above the national average. If Pennsylvania’s experience is any guide, natural gas development will bring a flood of money, jobs and tax revenue into this area. Naturally, there will be disruptions: noise, traffic, too many people. On balance, however, these communities should be allowed to decide the proper trade-offs through local zoning and other regulations. History shows that people always choose economic growth, with all its problems, to stagnation. Governor, Cuomo, however, insists that these decisions be made in Albany, which means made in New York City.

Manufacturing companies are often very sensitive to energy costs and see the development of a clean, low-cost local energy source as a big plus. New York City employs about 3.7 million people, but they are concentrated overwhelmingly in the services sector. Manufacturing in New York City employs only 2% of the work force – and that number has fallen in half in the last 10 years. Unemployment in New York City is slightly above the national average at 8.2%, but the problem is concentrated in Brooklyn (9.5%) and the Bronx (11.9%). The people of Manhattan, Queens and the suburbs are doing much better, with unemployment rates below the national average. The residents of New York City do not see their economic condition as linked to energy supplies nor do they see natural gas production as adding anything of particular value to the economy of New York City. Their main energy concern is that the power stays on during storms. They do, on the other hand, have large numbers of people on the political left who are sympathetic to environmental causes, including the anti-fracking crowd. In essence, people in New York City see natural gas development as an abstraction, rather like global warming. It’s not fashionable in New York City to oppose any environmental cause or to talk about economic trade-offs. Economic life-and-death issues for the upstate counties are just coffee shop conversations in Manhattan.

In the 2012 election, New York State supported President Obama almost two-to-one (4.5 million votes to 2.5 million votes). The huge Democratic vote from New York City and the adjacent suburbs accounted for 80% of the difference. The rest of the state was much more balanced, with many of the small counties overlying the Marcellus shale voting solidly Republican. So here’s the answer to the question. Governor Cuomo can reign supreme in Albany if and only if he makes the people of New York City happy. Not only does the rest of the state not really matter, but the Democratic establishment is happy to let a few small Republican counties suffer economically. This situation may be realistic in a political sense, but it’s rather hypocritical from the “party that cares.”

The situation is different in Pennsylvania. Philadelphia has about 1.5 million people – only about 12% of the population of the state. Pittsburgh, the second largest city, has only 0.3 million people. In other words, statewide politicians in Pennsylvania have to appeal to the entire state to stay in power. Hence the shale gas boom. The people of upstate New York are not being protected by King Andrew the Wise with his constant demands for further study. They are in fact getting royally screwed.

I was hoping that President Obama would reveal his climate change intentions during his State of the Union address, but all we really got was his standard political threat: “I urge this Congress to pursue a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on together a few years ago. But if Congress won’t act soon to protect future generations, I will. I will direct my cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”

The President and Congressional Democrats will probably (for now) to demand more of the failed policies we have been pursuing for decades (R&D, mandates, renewable portfolio standards, manufacturing subsidies to well-connected renewable energy investors, subsidies, etc.) but the other shoe is bound to drop sooner or later. Personally, I’m expecting a push for a carbon tax, perhaps not now but certainly after the 2014 elections if the position of the Democrats improves.

Carbon taxes have a respectable intellectual pedigree. The British economist Arthur Cecil Pigou (1877-1959) suggested many years ago that government should impose taxes to counteract external costs in the economy. An external cost or “externality” is a cost imposed on people not party to the transaction and therefore not reflected in its price. In the early days of steam trains, for example, sparks from locomotives would set fire to farmers’ crops. Outlawing trains would have been stupid, but adding a tax to freight rates and passenger tickets would increase rail costs to discourage the agricultural damages and provide government with a source of revenue to compensate farmers. With this market distortion corrected through the price, consumers and investors could then set about determining the proper size of the railroad industry without further government interference.

As an approach to reducing carbon emissions, however, a “Pigovian” tax has a fatal flaw: we have no idea how to set a value on carbon, assuming it has any value at all. Many members of the Climate Community insist that human-induced climate change is sure to be so catastrophic that they are under no obligation to place a value on greenhouse gases. After all, you will pay whatever you have to save your life. As discussed in many previous posts, however, the science isn’t that clear.

In evaluating carbon taxes, we also need to bear in mind that the United States is no longer the prime mover of global carbon emissions. In 1990, the world emitted roughly 22 billion metric tonnes (mt) of CO2 from energy sources. The US accounted for 5 billion mt or just under one quarter. In 2013, the Energy Information Administration (EIA) estimates global carbon dioxide emissions of about 33 billion mt, with the USD accounting for just under 18%. By 2035, the EIA expects 43 billion mt of emissions with the US contributing less than 15%. In other words, if the US cuts its emissions by one-third by 2035, global emissions will decline by just 5%.

China, on the other hand, accounted for about 10% of global emissions in 1990, over 25% today (more than the US) and is expected to account for over 30% in 2035. In short, if the Chinese aren’t cutting emissions, then nothing that we do matters much.

We should also note that the EIA 2015 forecast assumes (1) a 51 miles per gallon new car fleet, (2) strong growth in solar energy and electric cars and (3) a continued contribution from wind energy and biofuels. Those programs will have cost a cumulative $1 trillion dollars, and their contribution will consist entirely of slowing the growth in US emissions, not bringing about a reduction in emissions.

Would a carbon tax help? Maybe, but how large should it be? The US currently emits about 5.7 billion mt of carbon dioxide from roughly 120 million households. The average American household therefore emits about 50 mt of carbon dioxide per year. A carbon tax of $10 per mt would initially cost each family $500 per year. OK, but how high would the tax have to be to effect serious carbon reductions? Let’s start with the easy stuff. If all existing federal and state subsidies were eliminated, onshore wind energy would require a carbon tax of about $170 per mt, costing the average family $8,500 per year. Offshore wind farms (such as the infamous Cape Wind Project off Cape Cod) would require a tax of $565/mt, costing each family $28,250. Solar energy? The tax would have to be about $800/mt or $40,000 per family. Light rail systems, those “efficient” people movers so beloved of city planners? You’d need a tax of about $10,000 per mt or $500,000 per family.

Herein lies the problem. Government planners can set a carbon tax either (a) high enough to encourage serious carbon reductions or (b) low enough to avoid severe hardship on average middle class Americans, but not both. All the early efforts at carbon taxes have opted for (b). The European Carbon Exchange is currently trading carbon emission rights at about 8 Euros per mt or $10. The Regional Greenhouse Gas Initiative of northeastern states in the US has a current price of $2. The “cap-and-trade” systems proposed but never adopted in the US Congress put limits on the carbon price of $25-50 per mt, a level equivalent to 20-40¢ per gallon of gasoline, hardly enough to encourage any change in either vehicle technology or consumer habits.

So why bother with carbon taxes at such low levels? The answer is that our elected officials are interested in revenue, not carbon reductions. Take cigarettes for example. American politicians rail at the disastrous effects of smoking on public health. They regard the tobacco companies as the worst kind of corporate criminals and berate them at every opportunity. If they really wanted to stop people from smoking, they could easily outlaw cigarettes and put the tobacco companies out of business. After all, Mayor Bloomberg has outlawed transfats and large soft drinks in New York City. Instead, officials at both the state and federal levels have been careful to set cigarette taxes at levels that maximize revenue, which in fact requires that people NOT stop smoking. If everyone in the US quit smoking tomorrow, most state budgets would collapse.

That’s exactly how Washington will see a carbon tax. Watch for the carbon tax to start at something like $20-25 per mt. That would provide the federal government with roughly $115-140 billion in annual revenue. So what if these taxes bring no carbon reduction? In fact, their very failure would provide a convenient pretext for continually raising the tax. President Obama and the Democrats have been promising for the last five years that they would not raise taxes on the middle class. The President could claim that carbon taxes are an environmental policy, not a tax policy and therefore not in violation of his promise.

It’s my guess that people won’t buy this when they see dollars flowing out of their pocketbooks in higher energy costs. That’s not to say, however, that President Obama won’t give it a try. Governments love to extract revenue from things they condemn, particularly cigarettes, alcohol and gambling. The Europeans long ago added gasoline to their list. Their population acquiesced. Let’s see what Americans do.

President Obama and all politically-correct politicians support an energy strategy encompassing all forms of energy. I addressed wind and solar in recent posts. How are we doing on electric cars, another favorite of President Obama (and President Bush as well)? I offer a four-word answer: huge disappointment, no surprise.

In January of 2011, President Obama said, “We can replace our dependence on oil with biofuels and become the first country to have a million electric vehicles on the road by 2015.” This statement is typical of the glib promises presidents have been making on energy since Richard Nixon’s Project Independence in 1974. Each promises the world, but offers no policies commensurate with the goal.

In a report on the President’s million electric car program (which you can find at http://www1.eere.energy.gov/vehiclesandfuels/pdfs/1_million_electric_vehicles_rpt.pdf), the department of Energy offered a schedule for achieving this goal. The heavy lifting (97% of the million car total) was to be done by the Chevy Volt (505,000), Nissan Leaf (300,000), Fisker Nina (195,000), Ford Focus EV (70,000), Think City EV (57,000) and Tesla Model S (55,000). The DOE expected a modest start in 2011 with 45,600 vehicles sold. Actual sales were 17,345, so the President’s program underperformed by 60% within months of its announcement. The Norwegian company Think City, one of the President’s electric car team, went bankrupt before initiating sales to the public in the US.

Sales in 2012 were expected to grow rapidly to 178,600 vehicles, but actual sales were 51,177, short by over 70%. Chevy Volts were supposed to hit 120,000 in 2012, but only 23,641 units were sold – an 80% shortfall. Nissan’s leaf did much better, hitting almost 40% of its 25,000 unit target. Fisker, another of the stalwarts of the program, went belly-up in 2012, as did A123 Systems, an electric car battery manufacturer financed and subsidized by the federal government and subsequently sold to a Chinese company for a fraction of its cost to taxpayers.

The forecast for 2013 is 264,000 units. January sales of all models were 3,375 – about 15% of the pace necessary to meet the forecast and about half the level of recent months. Perhaps poor January weather suppressed electric cars sales, but this was not true for conventional vehicles, which enjoyed strong January sales.

Overall, halfway through the President’s program, electric vehicle sales have totaled about 80,000 – 8% of the ultimately promised level. (As an aside, 8% seems to be one of President Obama’s favorite numbers, since it’s also the share of the deficit that is supposed to be eliminated by raising tax rates on the rich ($80 billion per year out of a $1 trillion annual deficit).

Why this dismal failure right out of the starting blocks? The answer is quite simple: electric cars have an unacceptably high cost and an unacceptably poor performance for the average consumer. Take the Nissan Leaf, for example. In terms of size and comfort, the Leaf is similar to the Nissan Versa. A basic Versa Model 1.8S with navigation system (to be comparable with the Leaf) has a Manufacturer’s Suggested Retail Price of $18,245. Edmunds says the fair market price is around $17,280. Nissan just announced a major price reduction for the Leaf from a base price of $35,200 to $28,800. I doubt that Nissan makes any money at this price, but they’re a private company, so they can do what they like. Edmunds says that with the destination charge, the fair market price of a 2013 Leaf is $30,790. A consumer must therefore pay an additional $13,510 or 80% more to get the all-electric equivalent of a Versa. A Chevy Volt lists for $40,000, and Edmunds says you could get one for $38,722. These are very high prices for relatively small, basic cars. You could, for example, buy a Lexus ES350 for less than a Chevy Volt. (The federal government offers a tax credit of $7,500 on electric vehicles. That doesn’t reduce their cost, but only shifts it from the buyer to other taxpayers).

So what are you getting for your money? Let’s start with the good news. Electricity is cheap relative to gasoline. According to the EPA, a Nissan Leaf will, on average, use about 340 Watt-hours of electricity to travel one mile. Assuming that about 10% of the electricity is lost in charging and storage in the battery and at the current residential average price of 12¢ per kilowatt-hour, fuel for the Leaf costs about 4½¢ per mile. Fuel for a gasoline Toyota Prius getting 50 miles per gallon would cost about 7½¢ per mile. If you travel 15,000 miles per year, you’d save about $450 a year on fuel. Unfortunately, the higher initial price of the car, even with the $7,500 federal rebate, would cost you an additional $1,500 per year in car payments, more than wiping out your fuel savings.

There may also be some intangible benefits to owning an electric car. You can certainly show off your green credentials to all your friends and neighbors, if that’s what you like. There are also a few consumers who love to have the latest gadget, people who will wait in line all night to get the first iphone-5, for example. Presumably, however, President Obama wants electric cars to appeal to the average person, not just a handful of eager rich kids. The overwhelming majority of consumers want performance for their money, and here’s where the electric cars are failing.

Range, for example, is a critical parameter for most consumers. In a gasoline vehicle, low range is a mild annoyance. I have a 1999 Lexus RX300 SUV, which is a nice car, but a major league gas guzzler. Even with a fuel tank holding 17.2 gallons, its average fuel economy of about 15 miles per gallon gives it a range of only about 260 miles. Since I never let the gas tank get too low (a phenomenon known as “range anxiety”), I tend to fill the car up every 200 miles or so. That means stopping a couple of times a week during the summer. I also have a 2011 Ford Fusion Hybrid, which has a fuel capacity of 17 gallons, but gets about 35 miles per gallon, giving it a range of nearly 600 miles. Even filling up at 500 miles means very few trips to the gas station. This issue isn’t really serious, however, since even the old Lexus can be refueled in less than 5 minutes.

The Nissan Leaf, on the other hand, has a range that is both low and unpredictable. Under “ideal conditions”, Nissan analysis indicates that the Leaf can go as far as 138 miles on a single charge. “Ideal conditions”, however, means that car travels at 38 miles per hour on a flat surface without stopping or slowing down. The faster you drive it, however, the fewer miles it goes. Turning on the air conditioner seriously reduces the range. At 55 miles per hour with the air conditioner fighting 95° heat, the range is only 70 miles. The Environmental Protection Agency tests show an average range of 73 miles on a charge based on tests of five different driving conditions.

I recently spent a couple of days on Santa Catalina Island off the coast of Southern California (nice trip by the way). With small streets and little flat land, most islanders drive golf carts, which are almost entirely powered by gasoline engines. I asked several people why they did not use electric golf carts, and was told that traveling up and down hills drains the batteries almost immediately.

Furthermore, running out of electricity doesn’t mean a 5-minute refill at a gas station. The Leaf has a battery capacity of 24,000 Watt-hours (Wh), of which 20,000 Wh can actually be used. If your house has a normal 120 Volt system with 200 amps of power (pretty standard for new single family homes today), how long would it take to charge your Leaf? Assuming that you draw 20 amps (10% of your home’s power) and that the battery loses 10% of the power in the charging process, it would take a little over 9 hours (20,000 Wh divided by (20 amps X 120 volts X 90%). If you used a 240 volt plug, like a clothes dryer, it would cut the time in half, but you would still need 4½ hours of charging time. You can further accelerate the charging by drawing more amps, but you will at some point encounter serious safety concerns as well as overtaxing your power supply and possibly tripping your circuit breakers. In any case, you better count on several hours if you are recharging your electric car at home. Recharge time will increase if you are charging outdoors in cold weather or if your garage is very cold.

The problem of recharge time can be reduced if you use a special charger drawing high amps at high voltage (say, 480 V) at a commercial installation or office building. Several of the electric car companies, including Nissan, are selling jointly a quick-charge device of this type which they claim can recharge a Leaf to 80% of its battery capacity in 30 minutes, but the device costs over $15,000 and exceeds the power supply capacity of most residences.

The major point here is that running out of power in an electric car is not the same as running out of gas in your conventional car. The latter is a slight inconvenience, while the former is a major hassle.

Those consumer concerns are all well and good, but what about the environment? Aren’t electric cars a way to reduce our carbon footprint and thus mitigate the risk of global warming? Actually, no. The EPA has (at least in my humble opinion) done a disservice to the public in the way they calculate fuel economy for electric cars. The EPA estimates the amount of electricity required to travel each mile and then values that electricity at 3,412 British Thermal Units (Btus) per kWh. The EPA estimate for the Nissan Leaf of 340 Wh per mile translates into 1,160 Btu per mile. Gasoline contains about 115,000 Btus per gallon, so the EPA estimates the Leaf’s mileage as equivalent to 99 mpg (115,000 divided by 1,160). To be fair, this approach is logically consistent with the way the EPA estimates gasoline mileage, but there’s a serious problem here.

Estimating miles per gallon this way ignores the energy that is used to produce, refine and transport the gasoline. Burning one gallon of gasoline actually requires about 1.2 gallons of crude oil. We call this “well-to-wheels” analysis. Cars emit about 9 kilograms of CO2 for every gallon of gasoline they burn. The “well-to-wheels” emissions, however, are closer to 11 kg per gallon burned in the car. That distortion is not too serious for gasoline, but it’s much worse for electricity. If we start with our 340 Wh per mile for a Nissan Leaf, then factor in the 10% charging loss, the car needs to draw 378 Wh from the power grid. With another 10% loss in transmission and distribution, the grid must generate 420 Wh from its power plants. A natural gas fired combined cycle power plant, the most efficient technology currently in service, has a “heat rate” of 6,800 Btus per kWh. In other words, the power plant burns 6,800 Btus of natural gas to generate 1 kWh. To generate 420 Wh, we must therefore burn 2,860 Btus of natural gas. To deliver 2,860 Btus of natural gas to the power plant, we must consume another 500 Btus of natural gas in production and transportation. On balance, driving the Nissan Leaf one mile requires the combustion of 3,360 Btus of natural gas, not the 1,160 in the EPA estimates. The “well-to-wheels” fuel economy of the Leaf is thus 34 mpg, not 99. If the electricity source is coal, which is a much less efficient power generation technology, the fuel economy would be even lower at 23 mpg. The 99 mpg figure makes many observers, like Thomas Friedman and Nicholas Kristoff, go positively weak in the knees with joy, but it shouldn’t. The number really doesn’t mean anything. My Ford Fusion Hybrid has a “well-to-wheels” energy efficiency of about 31½ mpg – very close to the Leaf’s.

How about carbon efficiency? My Ford Fusion emits (well-to-wheels) about 350 grams of CO2 per mile driven. The Nissan Leaf (again assuming electricity generated by natural gas), emits about 180 grams – a reduction of nearly 50%. Unfortunately, most of the difference is due not to the inherent efficiency of electric cars, but to the use of natural gas rather than gasoline as a primary fuel. If we used a simpler approach and just burned natural gas directly in the car’s engine, we’d get almost the same carbon reduction at much lower cost. Moreover, if coal is the primary power generation fuel, electric cars emit considerably more carbon dioxide than conventional cars do.

Maybe electric car technology will make a quantum leap in the next two years, vindicating the President, but I very much doubt it. The key problem for electric cars is the battery. Battery technology has gotten better in the sense that a kilogram of lithium-ion batteries can store much more energy than a kilogram of the old lead-acid type. The new generation batteries, however, are much more expensive than their predecessors, and that is the real issue. The battery for the Nissan Leaf, which still offers a totally inadequate range, costs as much as the rest of the car.

The car companies will learn something from their electric car experience, and the scale-up will reduce costs a bit. The technology, however, is fundamentally flawed in its current formulation, and forcing it into the marketplace is not going to help. All the President is doing is helping some rent-seeking companies, like Fisker and Tesla, try to make money at the taxpayer’s expense. So far, the federal government has pumped about $2½ billion into electric car and battery manufacturing plus another $600 million in subsidies for consumers to purchase these cars. A subsidy of $3.1 billion is not a lot in Washington today, but it is (so far) nearly $40,000 per vehicle for cars which have no discernible benefit for society.

None of this analysis is new; it was all well-known to everyone before the President announced his million electric car program, and the disappointing results of the effort were quite predictable. The real purpose of such programs, however, is to create an illusion of progress in the hope (and unfortunately, in the very real expectation) that nobody will really care when the program fails. After all, in Washington, the only success metric is how much money is spent, not what results are achieved. Sooner or later, we will have to stop doing this.

Professor Lawrence Krauss, a physicist at Arizona State University, wrote an op-ed for the New York Times (our favorite newspaper) on January 15 entitled “Deafness at Doomsday”. This is a very useful read, although probably not in the way that Professor Krauss intended. The only word I can use to describe this piece is “whiny”. Professor Krauss is bemoaning the fact that the country is not listening to scientists on important issues, the way we once supposedly did.

He cites Einstein’s August, 1939 letter to President Roosevelt concerning the possibility of an atomic bomb as an example of how scientists were once respected and their advice heeded. Prof. Krauss is missing the point entirely. Einstein’s letter (which you can read at http://www.dannen.com/ae-fdr.html) made two factual points. First, science now tells us that an atomic bomb is a real possibility and, second, the Nazis seem to be doing work in this area. His only recommendations were that Roosevelt pay attention to this issue, consider funding additional research and think about how to obtain uranium which was not believed to be in abundant supply in the US. Einstein’s letter was effective precisely because of its rigor and modesty. He brought some compelling facts to Roosevelt’s attention and made some common sense suggestions about what to do. Einstein did not recommend that Roosevelt approach Hitler and agree to ban further nuclear weapons research in the interests of humanity. He did not suggest that the US should publicly declare our intention never to have such weapons and our willingness to work with other countries toward that end. He did not recommend that the US let the League of Nations take the lead on controlling such weapons. Such recommendations would have seemed preposterous at the time. The League of Nations was in shambles. Europe was being carved up by ruthless and murderous dictators in Germany and the Soviet Union. Britain’s attempts to avoid war by appeasing Hitler had clearly failed, and very few Americans at the time saw Hitler as an acceptable partner in anything.

Fast forward to today when nine countries have nuclear weapons, including Putin’s Russia, the oppressive and increasingly aggressive Chinese communists, the lunatics in North Korea, and an unstable and increasingly Jihadist Pakistan. Ahmadinejad’s Iran, whose stated goal is to wipe Israel off the map, appears to be next. The US, Professor Krauss argues, is complicit in nuclear weapons proliferation because “our actions suggest that we have no real intention to disarm.” Seriously?

Einstein’s letter to Roosevelt demonstrated that he had adopted the US as his new home and that he believed that the US should and must defend itself and the rest of the world against the evils everyone could see. Prof. Krauss, on the other hand, sees the US as having no more moral standing than Kim Jong-Un. He implies that all these dangerous states have nuclear weapons only as a defense against aggressive enemies (such as the United States) and would happily give them up if we would do the same. His scientific advice fails on two grounds. First, it is based on opinions about politics and has nothing to do with science. Second, it’s advice no sensible person would accept. His viewpoint undoubtedly gets rave reviews on college campuses, a bastion of extreme left ideology. The average American, however, is much too smart and sensible to buy into this nonsense. If Professor Krauss had written the 1939 letter instead of Albert Einstein, Americans (or what was left of us) would be speaking German today.

Then, of course, Prof. Krauss gets to global warming. As we’ve discussed in many previous posts, the science behind predictions of catastrophic global warming is weak. What our Climate Community scientists are proposing is that Americans abandon the free market institutions which have made us a wealthy and successful nation and turn the economy over to “experts” who will dismantle our economy, impose severe limitations on our personal liberty and dramatically reduce our standard of living in order to achieve a trivial reduction in carbon emissions which will be dwarfed by the massive growth in emissions from China, India and other developing countries. Professor Krauss seems genuinely baffled as to why the American people would not take that advice seriously.

Here are a few suggestions for Professor Krauss.

First, remember that the US is a democracy and not a Platonic Philosopher Kingdom in which the smartest people rule. Monarchy always looks good to the people who assume that they will be the monarch. Unfortunately, the levers of power have a tendency to end up in the hands of the most ruthless people, not the smartest. Monarchy is not so attractive when someone else is telling you what to do. Hence the appeal of democracy to most people.

Second, remember the distinction between science and the opinions of scientists. The American scientific community should speak out actively and forthrightly on scientific issues. Most of the issues around, for example, nuclear proliferation and climate change, however, have very little to do with science and much more to do with economics, politics and general world views about how nations really do interact, as opposed to how Professor Krauss would like them to interact. Scientists have no superior claim to knowledge in this area. It’s rather silly to claim that “I know how to deal with Vladimir Putin because I wrote a paper on String Theory and must therefore be smarter than you.”

Third, leave campus every once in a while and talk to real people. Most Americans don’t accept the leftist politics of academia that cast the United States as the villain in the world and see American society as a racist, sexist, homophobic cesspool of gun-toting bible-belting rednecks. At the very least, Professor Krauss should understand that most Americans will not easily accept that view of themselves or the country in which they live and then give him the power to “fix” them.

Professor Krauss asks an interesting question: Why don’t we listen to our scientists on the critical issues of the day? His embarrassing essay answers that question brilliantly.

It’s been a while since I’ve offered a post on Tom Friedman, but I would like to direct your attention to his January 12 New York Times column entitled “Collaborate versus Collaborate” – one of his very worst pieces. Mr. Friedman offers a solution to Washington gridlock – the two parties should collaborate as they do in Silicon Valley. Mr. Friedman argues that collaboration produces great outcomes, or, as Jeff Weiner, the C.E.O. of LinkedIn, puts it: one plus one can often turn out to be four. This topic is a bit off energy, but it’s very fundamental to what’s going on in the country today.

Mr. Friedman’s problem here is that he does not understand the difference between zero sum games and positive sum games. In a zero sum game, one person’s gains can come only at someone else’s expense. In positive sum games, the total benefit available for distribution can grow with everyone sharing some part of the gain. The real beauty of the free market is that it’s a positive sum game – hence the extensive opportunities for collaboration in Silicon Valley. Mr. Friedman needs to re-read (or perhaps read) Adam Smith. Silicon Valley entrepreneurs are not collaborating to help their customers or to improve the society; they’re collaborating to make money. The benefits to their customers and to the society as a whole are substantial but incidental and are not increased by replacing capable, self-interested business people with altruists. It’s this point that the American political Left doesn’t seem to grasp.

Politics is different. Elections are by definition zero-sum games. One candidate wins, the other loses. They can’t collaborate to improve the outcome. Mitt Romney and Barack Obama were not seeking common solutions. Only one of them could be President; the other got nothing.

For many years, the Congress gave the appearance of a positive sum game. Between 1954 and 1994, the Democrats controlled the House of Representatives. They also controlled the Senate for 34 of those 40 years. That made politics easy and civil. The Democrats expected to win and thus enjoy all the power and perks of office. They named the committee chairs and controlled the pork. The Republicans expected to lose and collaborated with the Democrats on many issues in return for whatever share of the pork they could get. Both parties agreed, however, that the federal Treasury should be a constantly expanding piggy bank they could use to dispense funds to the constituents they needed to keep getting elected.

Since control of Congress was never really contested during this period, there were opportunities for collaboration, particularly on defense. Senior congressmen of both parties never had to choose between a strong defense and getting reelected, since they could have both. Democrats knew they would have the positions of Congressional power, and Republicans accepted that fact.

The whole world changed in 1994 when the Republicans took control of both the House and the Senate. All the powers and perks which were assumed to go to senior Democrats were suddenly up for grabs in each election. It’s interesting to note that, when the Republicans took the Senate, a couple of powerful lifetime Democrats, Richard Shelby of Alabama and Ben Nighthorse Campbell of Colorado, immediately switched parties to remain on the winning side. When the Democrats regained the Senate, Jim Jeffords of Vermont and Arlen Specter of Pennsylvania decided that they were really Democrats. According to Washington values, collaboration on problem solving is fine, but always takes a back seat to getting reelected. As my father (a very wise man) said recently, “Politicians do care about the country, just not very much.” For the last twenty years, we have been in a constant knock-down-drag-out fight for political control in Washington. Nothing of substance takes precedence over the need to gain and hold power.

Mr. Friedman maintains the naïve view that elected officials in Washington are there to serve the country and solve its problems. They are there first and foremost to keep getting reelected and second to enhance their status and power as much as they can. If you don’t understand that simple fact, nothing in Washington will ever make sense.

The country could easily tolerate this ongoing battle provided as long as there were no great national issues to be solved. Today, however, we face one of the most critical issues in the country’s history: the unsustainable growth of government. In 1950, government at all levels consumed about 25% of our GDP. As our elected officials sought more and more funds to distribute to favored constituents, that share gradually increased to about 38% by 1992. Government declined to about 36% under Bill Clinton’s presidency, largely because of cuts in defense, but then began to grow again under President Bush, reaching almost 40% under President Obama. Much of the historical increase was at the state and local level, but, unfortunately, large federal funds transfer to state and local governments in the last few years have enabled the profligate states and municipalities to maintain their growing budgets at the expense of those areas of the country that are well managed.

This situation has become unsustainable. The public is aware of our annual deficits of more than a trillion dollar plus deficits, but the real problem is the unfunded liabilities of Social Security, Medicare, Medicaid and the pensions of overpaid state and municipal workers. These liabilities total tens of trillions of dollars and cannot possibly be paid for by any of the “soak the rich” schemes currently under discussion. Arithmetic dictates that one of three things will happen: (a) the country will reverse course and reduce government’s hold on the GDP, (b) the government will impose heavy taxes on the middle class (where the real money is) or (c) governments at all levels will exhaust their credit limit and default on their obligations and debts with disastrous consequences.

Both parties agree that (c) would be a bad outcome, but they are completely at odds as to what to do. The Democrats are insisting that government spending must continue to grow. Although they have yet to say so, option (b) is their only hope of success. Republicans, on the other hand, are demanding that we do (a). These positions are simply incompatible. How in the world can the two sides collaborate on solutions?

Mr. Friedman naturally blames the Republicans for the impasse. Mr. Friedman’s real point seems to be that the Democrats are right, and the Republicans should abandon their position and get on board with the unsustainable growth of government, which Mr. Friedman generally refers to as “investment”.

The outcome that Mr. Friedman seeks is as plausible as expecting the Ravens and the 49ers to “collaborate” at the Superbowl, agreeing in advance to end the game in a tie and give the championship bonuses to charity. This expectation is not only unlikely, it’s impossible. One way or another, one of these positions must prevail over the other.