Elizabeth Warren, Pablo Escobar, and Fracking

In 1993 as part of the war on drugs, the United States helped Colombia take down Pablo Escobar, head of the powerful Medellin cocaine cartel and public enemy #1. This was hailed as a great accomplishment. It did nothing to stop the drug trade. Escobar’s rivals in Cali kept the cocaine flowing and when they were taken down, the Mexican cartels stepped in. US illicit drug consumption remains unabated, supplemented by worrying increases in abuse of prescription pain medication and opioids.

Elizabeth Warren wants to address climate change and has, is so many words, declared fracking public enemy #1.

Climate change may be the most important problem of our times. But banning fracking is unlikely to be any more effective than taking down Escobar.

Banning fracking would put millions of US jobs in jeopardy and the cost to the US economy would probably be in the hundreds of billions. I’m fine with that if this is the price we must pay to save the planet. But what if its not?

What if banning fracking will not only NOT save the planet, but will actually exacerbate climate change? In the last decade, America has seen very impressive emissions drops. Fracked natural gas is a major reason. Renewable are making remarkable strides, but banning fracking now would slow down the great exodus from the dirtiest enemy: coal. Even were natural gas worse than coal (as some suggest), banning fracking in the US would still exacerbate climate change. Natural gas power plants would not go away overnight. Conventional natural gas and oil extraction would continue. The remainder of the nation’s natural gas needs would be met through imports. This means importing gas fracked in Canada through pipelines, or worse through truck. It means importing LNG on tankers, a process involving natural gas being cooled, transported by ship, then reheated. Some of the gas also evaporates during transport, making it a much less efficient and more polluting solution than fracking domestically.

The Real Solution

If you want to attack climate change, attack emissions directly. There’s a very easy way to do this: raise the price. This can be done either through green-house gas taxes or cap and trade. Emissions taxes would hit the most polluting energy sources hardest. Coal’s inexorable fall would accelerate. Oil would be pressured and even natural gas would get hit (good news for fracking opponents). And renewables would see their starkly destructive cost advantage become, well, even more stark and destructive (which is a good thing).

Does raising the price of polluting energy sources actually work? Consider the Arab oil embargo of 1973. OPEC cut oil supplies assuming the price would go up, which it did. The result: “OPEC…had underestimated the extent to which conservation and other sources of supply would eventually reduce demand. Electricity generation from nuclear power and natural gas, home heating from natural gas, and ethanol-blended gasoline all reduced the demand for oil”.

More recently, the oil price spike of 2007 caused a reduction in US gasoline consumption. And the converse is also true. As gasoline prices retreated post-2008, sales of polluting SUVs have soared.

Given the effect of price on consumption, we would expect pollution taxes to work. Programs have had varied success, generally based on how rigorously they are applied (big surprise!). As Sweden shows, they work when properly implemented.

Emissions taxes should target not just carbon, but anything that causes climate change. Such as methane and … SF6. What is SF6? Its a substance 23,500 times more warming than carbon dioxide that lasts in the atmosphere for at least 1000 years! Inconveniently it is used throughout the electrical industry, including in wind turbines, to prevent electrical accidents and fires. We can ban fracking all we want, but if things like SF6 slip through the cracks, we’ll fry the planet nonetheless.

Elizabeth Warren is probably smarter than most of the other presidential candidates out there. And its nice to see someone campaigning on ideas and detailed plans, rather than empty rhetoric. But her fracking position is politics at its worst: bad policy designed to appeal to the base by coddling their preconceptions. One hopes she can do better.

economist and software developer who dislikes cruft

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