1. Three cheers for Koch Industries: they are not knuckling under
The AP is reporting that, like the Locke Foundation, the Heartland Institute, and a number of other think tanks, private companies, and individual scientists, Koch Industries, headed by philanthropists and donors to free market causes David and Charles Koch, has received a letter demanding information regarding money spent or received concerning global warming research. The letter is from three Democrat Senators well known for their anti-free market stance on most policy issues, Edward Markey, Barbara Boxer, and Sheldon Whitehouse. The upshot is that Koch Industries is just saying no to the Senators’ request. In refusing to comply, a spokesman for Koch Industries claims that the Senators are infringing on their First Amendment rights of free speech, which they clearly are. Ultimately this attack on the free market movement by these senators and others who are using the global warming issue to advance an anti-freedom agenda is not about a fear that the science and analysis that is being pursued or being funded is bad science and therefore wrong, but that it is good science and analysis and therefore right.
2. Swiss shoot down carbon dioxide tax
Swissinfo.ch is reporting that a Green Party proposal to "replace the main consumer tax with a new levy on non-renewable energy has suffered a blistering defeat in [a recent] nationwide ballot. It scored one of the worst results in modern Swiss history." The proposal for this eco-tax received a mere 8 percent of the vote, in spite of the fact that it was not a new add-on tax but a replacement for an existing value added tax.
My hope is that, as proposals to pursue similar schemes come from both the statist Left and the statist Right in this country, Americans will show the same common sense as have the Swiss. Unfortunately, it is unlikely that in the US this would ever reach a national referendum. It would more likely come as part of some grand tax reform bargain where the two political parties end up boasting about how they are doing the right thing for the economy and the environment all at once.
3. Are those predicting doom and gloom for US Oil wrong?
This article at oilprice.com offers a very interesting analysis of the US oil industry as it now stands in the context of the dramatic oil price declines over the last year. Not a day goes by that a pundit or business analyst on CNBC or the Fox Business Channel does not point to how the decline in oil prices could be leading to the demise of the US oil industry or at least to a dramatic halt to the growth that it has experienced as a result of the shale revolution. But this article by Mark Hill claims that those lower prices are a "blessing in disguise." Essentially, he argues that the lower prices have forced the industry to streamline and become more efficient. He points out that:
The U.S. Energy Information Administration (EIA) recently reported that oil production in the lower 48 states is stable, despite expected near-term reductions in rig count. The report says, "Other key factors include the efficiency of drilling…the rate of decline in production from existing wells, and changes in the amount of time between the start of drilling and the completion of the well."
As little as five years ago, it could take as long as nine months to get oil out of the ground. Today, thanks to rapid advances in drilling and information technology, it now takes no longer than 30 days to see results. You can literally go on holiday at the start of the process and come back to a producing well, just like that.
What’s more, because production has not dropped, the need for transport to market has not dropped. Oil tankers, pipelines, rail systems and the tracking technology behind these modes have all gotten more sophisticated in the past five years. As a result, there may be no better time to be in the global oil-transportation business.
He goes on to point out that:
It is not unusual, considering advancements in the way wells are drilled in present day, for production rates at any given site to peak early and yield faster than in the past. The peaks are nearly three times higher than they were just five years ago, creating enhanced production rates, even during decline, due to drilling efficiencies realized by more effective horizontal drilling and hydraulic fracturing practices.
All this is great news for oil consumers, i.e. all of us. Increased efficiency in production always means greater output and lower prices. Assuming this article has it right, unless the government thwarts all of this with new oppressive environmental regulations and taxes, the future will be a win for producers and consumers alike.
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