Topic: Energy and Environment

Will the Natural Monopoly in Energy Distribution Come to an End? Here’s Hoping

Dr. Ben Ho’s piece in Tuesday’s New York Times entitled “The Conservative Case for Solar Subsidies” is certain to raise a few eyebrows amongst the conservative crowd. But Ho asks a valid question that I’m not sure conservatives have seen fit to fully address in the last few years: What, precisely, should free market denizens hold true about energy policy?

The facile response–that there should simply be no government role–doesn’t quite work here. To be fair, few conservatives suggest such a thing. Ho points out that when there are negative externalities to the production of a good or service the economically efficient policy response requires a tax, and our carbon-based fuels emit a variety of pollutants when burned. This holds true regardless of one’s opinion about the verities of carbon emissions and climate change: Smog–which results mainly from automobile emissions–remains a key contributor to myriad health problems in the United States, and particulate matter resulting from coal burning bedevils asthmatics.

But the libertarian solution is not quite as simple as imposing a tax that covers the socialized pollution costs of burning fossil fuels. We have a nationwide energy grid, one that the federal government played an integral role in conceiving and constructing. Without eminent domain, such a thing would have been all but impossible. The federal government’s regulatory apparatus also has an integral role in regulating power providers, and since the provision of power is a natural monopoly, it’s hard to conceive of an alternative, at least for the moment.

A Western Film Noir

The more I read about the case of Dwight and Steven Hammond, the more convinced I am that their prison sentences are a gross miscarriage of justice. After conducting prescribed fires on their own land that crossed onto a few acres of federal grasslands, they were convicted of arson on federal lands, which under a 1996 anti-terrorism law carries a five-year mandatory minimum sentence.

The law says, “Whoever maliciously damages or destroys … by means of fire or an explosive, any … real property in whole or in part owned or possessed by, or leased to, the United States … shall be imprisoned for not less than 5 years.” The key word is “maliciously”: there is nothing malicious about starting a prescribed fire, something that is regularly practiced by thousands of landowners as well as the government itself.

In its opinion on the case, the Ninth Circuit concluded that a 2001 fire (which the Hammonds started on their own land but which escaped to federal land) was malicious because Dwight Hammond’s grandson and Steven’s nephew, who was a 13 years old in 2001, “testified that Steven had instructed him to drop lit matches on the ground so as to ‘light up the whole country on fire.’” This betrays a divide between urban and rural cultures. To urbanites such as the judges on the Ninth Circuit, “the whole country” means the entire United States.

This obviously makes no sense; no one would think that a teenager with a few matches could light the whole nation on fire. This is probably why some press accounts reported that Steven told the teenager to “light the whole county on fire,” but even that makes little sense: Harney County, in which the Hammonds live, is the largest county in Oregon and bigger than the entire state of New Jersey.

Ruralites use the word “country” to mean something other than “United States.” Instead, it means what urbanites would call “land” or “countryside” (another word used in some press accounts). Steven Hammond’s instruction to the teenager probably was intended to mean, “burn this entire field.”

No Good Guys in the West

There are no good guys to cheer for in the militia takeover of an Oregon federal office building on January 2. The ostensible issue is the re-sentencing of two Oregon ranchers–Dwight Hammond and son Steven Hammond–for arson, while the underlying issue is federal land ownership of much of the West.

The arson fires lit by the Hammonds in 2001 and 2006 may have actually represented sensible land management, but the Hammonds lost the high ground by their failure to coordinate with the government agency managing the land they burned. Prescribed fire is a tool used to improve wildlife habitat, increase land productivity, and control wildfire. The 2001 fire aimed at improving productivity, but the government says the ranchers didn’t bother informing the Bureau of Land Management (BLM) they planned to burn until two hours after they lit the fire. While they lit the fire on their own land, it escaped and burned 139 acres of federal land, but that burning probably did not do serious damage to the grassland and they put the fire out themselves.

The 2006 fire was more questionable. A wildfire was burning on BLM land near the Hammond’s ranch, so to defend their land they lit a backfire on their own land. That would be standard procedure except, again, they didn’t tell anyone and when their fire crossed over onto federal land it endangered firefighters who the Hammonds apparently knew were located between the wildfire and their backfire. Due to severe fire hazards, the county had a no-burn rule which the Hammonds apparently violated, but this was hardly a terrorist act.

For these actions, they were sentenced to a year in jail, which possibly was appropriate considering they endangered people’s lives. But the federal government, citing an anti-terrorism law that sets a mandatory minimum sentence of five years for arson on federal land, demanded that they be re-sentenced. Having already served the first year, they were scheduled to be re-incarcerated for four more years after the New Year. It is always disturbing when the federal government uses laws aimed at foreign terrorists to oppress citizens who have political differences of opinion with government policy. The Hammonds, who have paid $400,000 in fine related to the fires they lit, probably should not have been re-sentenced to four more years in prison, but that’s a problem with mandatory sentencing laws and overly aggressive prosecutors, not federal land management.

Vilsack to Congress: Give Me More Money or I’ll Let the West Burn

Congress rejected the Forest Service plan to give the agency access to up to $2.9 billion a year to suppress wildfires. In response, Secretary of Agriculture threatened to let fires burn up the West unless Congress gives his department more money. In a letter to key members of Congress, Vilsack warned, “I will not authorize transfers from restoration and resilience funding” to suppress fires. If the Forest Service runs out of appropriated funds to fight fires, it will stop fighting them until Congress appropriates additional funds.

This is a stunning example of brinksmanship on the part of an agency once known for its easygoing nature. Since about 1990, Congress has given the Forest Service the average of its previous ten years of fire suppression funds. If the agency has to spend more than that amount during a severe fire year, Congress authorized it to borrow funds from its other programs, with the promise that Congress would reimburse those funds later. In other words, during severe fire years, some projects might be delayed for a year–hardly a crisis.

Yet Vilsack and the Forest Service are intent on turning it into a crisis. In a report prominently posted on the Forest Service’s web site, the agency whines about “the rising costs of wildfire operations”–that cost not being the dollar cost but the “effects on the Forest Service’s non-fire work.”

Massive Natural pH Fluctuations Do Not Inhibit Marine Life in a Coastal Environment

According to four American researchers–(Baumann et al. (2015))–projections of ocean acidification, in which the average pH of the open ocean is predicted to decline by 0.3 pH unit over the next century, have “heightened the need to better understand the sensitivity of marine organisms to low pH conditions.” As a result, numerous ocean acidification experiments have been conducted on various marine organisms, producing a wide range of results. This “complexity of organism responses to elevated CO2,” continue Baumann et al., “appears to stem, in part, from insufficient knowledge and thus appreciation of the scales of natural pH variability experienced by marine organisms in their habitats.” Coastal environments, for example, generally experience greater fluctuations in pH than the open ocean. And since the majority of ecologically and economically important marine species spend a vast portion of their life cycles in coastal environments, the authors say there is a great need to “characterize [such] marine habitats in terms of their short- and long-term pH variability.”

In an effort to fill this knowledge gap, this team of researchers embarked on a journey to “characterize the patterns and magnitudes of diel [daily], seasonal, and interannual fluctuations in pH and dissolved oxygen (DO) in an undisturbed tidal salt marsh adjacent to Long Island Sound, using a multiyear, high-frequency data set.” Flax Pond (40.96°N, 73.14°W), a one square kilometer tidal salt marsh located on the north shore of Long Island Sound, served as the specific study site where data were collected between April 2008 and November 2012. And what did those data reveal?

As shown in Figure 1, large fluctuations in pH occurred at Flax Pond on both daily and seasonal time scales. The daily pH range varied from a low of 0.22 unit during the winter to a high of 0.74 unit in the summer. Seasonally, the highest pH values occurred in February (average of 8.19) and the lowest values (average of 7.59) occurred in August. Thus, average pH conditions in Flax Pond “decline from early spring until late summer by approximately 0.6 units” and “average diel [daily] pH fluctuations exceed 0.7 units and commonly approach one unit of magnitude in July and August.” Yet even more extreme fluctuations in pH were found to occur within a single tidal cycle. The right panel of Figure 1 presents a three-day record of detailed measurements that reveal a pCO2 fluctuation “between ~350 µatm and nearly 4,000 µatm within one tidal cycle.” Thus, within a few short hours, the marine life within Flax Pond was subjected to a pH fluctuation that reached values as low as 6.9, which is nearly 1 full pH unit below the predicted decline by the end of this century.

The Solution to Congestion

It is distressing, at least to economists, how many problems could be solved by adopting basic free-market principles, yet those solutions are ignored or stridently opposed by the very people who would benefit from them. California’s drought is one of those: California actually has plenty of water, it is just poorly priced.

An even more pervasive problem is traffic congestion, which (according to the Texas Transportation Institute) wasted more than 3 billion gallons of fuel and nearly 7 billion hours of people’s time for a total cost of $160 billion in 2014. Brookings economist Anthony Downs wrote a whole book about congestion that concluded there was no solution to the problem–except, he noted almost parenthetically, congestion pricing which Downs decided was politically impossible. Of course, that’s a self-fulfilling prophecy because if no one argues for something because it’s impossible, it will truly be impossible.

Dumping Money on Fire

A bill before Congress would practically give the Forest Service a blank check for firefighting. HR 167, the Wildfire Disaster Funding Act, proposes to allow the Forest Service to tap into federal disaster relief funds whenever its annual firefighting appropriation runs out of money. It’s not quite a blank check as the bill would limit the Forest Service to $2.9 billion in firefighting expenses per year, but that’s not much of a limit (yet), as the most it has ever spent was in 2006 when it spent $1.501 billion.

The Forest Service puts out fires by dumping money on them.

Having a blank check is nothing new for the Forest Service. In 1908, Congress literally gave the agency a blank check for fire suppression, promising to refund all fire suppression costs at the end of each year. As far as I know, this is the only time in history that a democratically elected legislature gave a bureaucracy a blank check to do anything: even in wartime, the Defense Department had to live within a budget.

Due to rising firefighting costs, Congress repealed the Forest Service’s blank check in about 1978, giving the agency a fixed amount each year and telling it to save money in the wet years to spend in the dry years. The agency actually reduced its costs for about a decade, but then two severe fire years in 1987 and 1988 led the Forest Service to borrow heavily from its reforestation fund. Congress eventually reimbursed this fund, and costs have been growing ever since.

In the 1970s, when firefighting costs were so out of control that Congress repealed the blank check, the agency spent about 10 to 20 percent of its national forest management funds on fire. Today, even though the agency’s budget has kept up with inflation, more than half goes for fire.

Yet there is some restraint on what the agency spends. In severe fire years, it has to borrow money from its other programs, putting a crimp in those activities. Congress eventually reimburses that money, but in the meantime fire managers are aware that their spending is having an impact on other agency projects.