Environmental Near-Sightedness

Originally, the environmental movement counted many in its leadership with scientific backgrounds who were thoughtful advocates of improving the environment.  Unlike many "conservatives", as a libertarian that thinks more about being for property rights rather than just "pro-business", I understand that emissions guidelines are critical to the proper functioning of free markets:

In fact, environmental laws are as critical to a nation with strong
property rights as is contract law. Why? Imagine a world without any
environmental legislation but with strong property rights. What happens
when the first molecule of smoke from my iron furnace or from my farm
tractor crosses over on to your land. I have violated your property
rights, have I not, by sending unwanted substances onto your land, into
your water, or into your airspace. To stop me, you might sue me. And so
might the next guy downwind, etc. We would end up in an economic
gridlock with everyone slapping injunctions on each other. Since
economic activity is almost impossible without impacting surrounding
property owners, at least in small ways, we need a framework for
setting out maximums for this impact - e.g., environmental legislation.

Unfortunately, while many thoughtful people still call themselves an environmentalist, reasonable and scientific people no longer run the environmental movement.  Increasingly, the environmental movement has been taken over by
anti-growth and anti-technology Luddites as well as anti-free-market

As evidence, I offer what has become an effective thirty-year moratorium on refinery construction. Forget for this post the obvious effect this has on gasoline supply stability, particularly with the EPA-mandated proliferation of special local gasoline blends.  Think instead about the true environmental implication:

The opposition to building new refineries ignores the dramatic
technological improvements that have been made since an oil refinery
was last constructed here in 1976. New, clean refineries emit far less
pollution than older refineries, with new scrubbers and design changes
that dramatically reduce sulfur and other emissions. And at the same
time our ability to model and map emission characteristics and
distribution lets us choose the best locations for new facilities "“
where they will have the least possible impact on people and the

Refineries are dirty places.  There are thousands of seals and flanges and safety valves that are going to leak some hydrocarbons.  But think on this:  Every single refinery in this country was built with at least 30 year old technology.  Sure there have been upgrades, but much of the core is still there.  I was an engineer at a refinery near Houston for 3 years and we had equipment still operating that was 50 years old, and that was twenty years ago and much of it is still there.

So what does this mean?  Imagine if every car in this country was over 30 years old.  Think of the improvements we have made in fuel efficiency and pollution control over the last 30 years- no cars would possess any of this technology.  The roads are full of cars with modern technology that are fuel efficient and relatively clean because we don't moronically prevent them from being replaced with new ones.

But this is exactly the case with refineries.  The single best, most intelligent thing we could do today for the environment, as far as refineries are concerned, is to let about 10 brand new ones be built with all modern technology, and let these newer refineries compete the older ones into closure.  And who is blocking this single most impactfull environmental step?  Environmentalists, of course.

This is not an unusual issue. I wrote about this same issue with new source review rules and Bush's Clear Skies initiative:

New source review is long and complicated, but basically
says that existing power plants don't have to upgrade to new
technologies, but new ones have to go through a very extensive
environmental review and permitting process and have a suite of
government mandated pollution control technologies installed.  OK, that
has all been clear for 3+ decades.  The rub comes when a company
considers upgrading or replacing a portion of a power plant.
For most of the life of the Clean Air Act, the government allowed
utilities to upgrade and modernize plants without having to install the
expensive suite of new controls.  The Clinton administration clamped
down on this, making it harder to upgrade existing plants.  All the
recent hullabaloo has occurred as GWB proposed to go back to the
pre-Clinton rules.

This issue is a great test for environmentalists, because
it separates them into those who really understand the issues and the
science and legitimately want improvement, and those who care more
about symbolism and politics.  Those who like symbolism have cast this
move as a roll-back, and are fighting it tooth and nail.  Those who
care about results know the following:

Experience under the Clinton rules has shown that most old
plants will never be upgraded if they have to go through the planning
process and install the new scrubbing and other technologies.  So, they
will just keep running inefficiently, as-is, until they are finally
shut down.  However, if allowed to be upgraded without review and new
scrubbers, etc., they will become much more efficient.  No, they won't
have the most modern scrubbing technology, but because they are more
efficient, they burn less fuel (coal) to make the same amount of
electricity and therefore will pollute less.  In some cases these rules
even prevent switching to cleaner fuels like natural gas. 

In other words, most scientists, including
scientific-oriented environmentalists, agree that GWB's proposal will
result in less pollution, but environmentalists still oppose it because
they don't like the symbolism of any pollution regulation appearing to
be rolled back.  You can read a lot more about New Source Review and how it actually increases pollution in practice here.

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  1. Earl:

    Please. Find a new reason to pick on environmentalists. The lack of new refinery construction has been due at least as much to the NIMBY crowd as environmentalists.

  2. Matthew Brown:

    Responding to Earl: It's both, in my opinion. And there are a lot of people who turn all environmentalist only when it's their backyard.

  3. BridgetB:

    Please look into this further. There is little reason for environmental law. Many of the imporovements in technology to limit emissions was done voluntarily, long before any environmental laws, and for many reasons. Some included getting people to live nearby so that the refinery could have a larger employement resource. Not alot of people want to live next to a nasty refinery when they can work on a ranch.

    Environmental law like any law is redundant at best and destructive and irrational at worst. The Rule of Law and judicial precedent can help to control pollution punish property rights violations (as pollution) as much and more justly than any legislation.

    Why let the politicians control our lives with environmental law when we can work it out as genetlemen, in court and otherwise?

  4. Big Cat Chronicles:

    Katrina's path versus Gulf of Mexico oil platform and refinery locations

    To put into perspective the impact of Katrinas crunch on the oil industry, heres a graphic from the Energy Information Admin(EIA)website sitethat sh...

  5. Jack Benway:

    Coyote, have you been kidnapped by aliens?

    Pro-business does not equate to pro-free-market. This goes beyond the (idealistic) "gentlemen's" self-regulation of BridgetB's post.

    Do you think that the environmentalists would simply go away if the government ceased environmental legislation? Quite the contrary -- they'd increase in strength, influence demand, and clean industry would create a competitive edge. But unlike the changes coerced through environmental legislation, this change would occur in line with normal business innovation and development. Rather than penalizing companies who do not abide by contrived environmental regulations, a self-regulating market will reward those companies who innovate in response to envrironmentalist pressure. This is the way a market is supposed to work, and does work, without the coercive interference of government.

  6. Mike:

    Without having bothered to actually inform myself of the facts, I think the environmentalists are goaded on by weak emissions laws/enforcement.

    I live pretty close to Bayway, the large refinery on the Turnpike that gives New Jersey its rep as the armpit of the nation.

    The refinery actually got pretty clean in the later years of Exxon's ownership. But they sold it to Tosco (10 years ago?) and things got ugly. We're back to rolling up the windows as we drive by. The operators are constantly sending product to Flare. The poor schnooks living near by occasionally have to clean an oil slick off their cars and houses when Bayway really blows it.

    I'm all for adding refineries and reducing regulatory complexity, but something has drastically gone wrong here. I don't know if it's poor training or what. I have trouble believing that Exxon was not also running the plant near capacity.

  7. Travis:

    We do not need environmental laws to protect environment. Read Roy Cordato's excellent
    essay: "An Austrian Theory of Environmental Economics" at mises.org/story/1760.