Max Borders‘ latest Ideas Matter update includes an item tackling the wisdom or folly of setting a moratorium on oil drilling:
The BP Gulf spill was horrible to be sure. But with drilling moratoria, I’m reminded of a teacher of mine who’d punish the whole class due to the actions of one. Invariably, a kid would misbehave now and again. Why did we all have to suffer?
Anti-fossil fuel policies such as defacto moratoria are easy to implement in the wake of crises. But to expect to ban all risk is neither realistic nor right. At a time when the unemployment rate hovers near 9 percent in the US and gas prices are painful, such policies demonstrate that, for many, the ends justify the means.
Interestingly, Matt Ridley has just put out a study called the Shale Gas Shock, with the venerable Freeman Dyson writing the forward. The only thing standing between the world and decades of plentiful energy is, well, bad ideas encoded in bad policy. It is also interesting that moratoria on extracting fossil fuels on the N. American continent has driven much of the extraction offshore, to riskier areas. The law of unintended consequences is no joke.
Whatever the case, we’re starting to see Julian Simon-like substitution effects in fossil fuels. Where there is entrepreneurial will, there is a way.
