First Russia, then Mexico. 

Russian President Vladimir Putin sparked the current price war with Saudi Arabia and other members of the Organization of Petroleum Exporting Countries (OPEC) more than a month ago with a nyet to further limits on Russian output. In a snit over Russia’s snub, Saudi Crown Prince Mohammed bin Salman (MBS) opened the taps and increased global production by 20 percent almost overnight. 

Oil prices plummeted in response, decimating national budgets and compounding the economic pain caused by the global response to the coronavirus pandemic.  

With the world’s biggest economies against the ropes, Putin and MBS agreed to put down their drill-bits and play nice, which is when Mexico’s President Andres Manuel Lopez Obrador decided to cause trouble. 

To a market managed by this lot, good riddance. 

Even though the Saudi-led OPEC and Russia eventually struck a bargain late Sunday to reduce production by 9.7 million barrels a day, Mexico’s ability to turn global oil markets into a telenovela—with an equally unbelievable resolution—begs the question, why does the world put so much power in the hands of a cartel? 

Every oil-producing country involved in the unprecedented negotiations attempted to get a leg up on the competition. Mexico was even able to extract a promise from President Trump to cover most of its portion of the cuts so that it could carry on with plans to rebuild its oil and refining sectors. 

It is time to accept that collective international action will not overcome the national self-interest of individual politicians and that attempts to intervene in the market are doomed to deliver bad results. The answer to countering this type of national self-interest is simple—let the market work. 

The market is far more efficient at solving the problem of supply and demand than governments—the ongoing international circus of tweets and virtual meetings influencing markets is all the evidence needed to end the debate about that. 

The problem is that markets can be brutal and they don’t play favorites. 

Left alone, the market will reward the lowest-cost producer and punish producers with higher breakeven costs. Those forces could lead to more failed companies and job losses in the U.S. oil sector, and in other places with robust private energy sectors (Canada, looking at you), but those jobs are being destroyed now by the decisions of a tiny group of authoritarian leaders. 

Do we really want to continue to leave our economic and national security vulnerable to the whims of Putin or Saudi Crown Prince Mohammed bin Salman or Mexico? 

The traditional argument in favor of active management is that wild fluctuations in the price of oil have global implications because of its universal importance to defense and heavy industry. In that case, we either need to find better management or diversify our energy supply. 

On a global free market, national oil companies that benefit from generous state support could have an unfair advantage over private companies—if they are well managed. The oil world is littered with examples to the contrary. If Mexico wants to keep pumping out 1.6 million barrels of oil and building refineries instead of buying lower-cost gasoline from its northern neighbor, best of luck to it. 

The United States is one of the few countries without a national oil company, so a free market for oil will require adequate protections against states that subsidize domestic production and then export it. But every market requires clear rules and strict enforcement mechanisms to ensure a level playing field. 

Supply is not the immediate challenge, though. Removing 10 million or 15 million barrels a day from global markets will at best establish a floor below which prices won’t fall further. That price, though, may still be too low for a great number of U.S. oil companies to continue to produce, especially small and mid-sized independents that have traditionally been at the forefront of new discoveries. 

A global agreement on production levels will result in a price that works for Russia and Saudi Arabia—and in the economic strangulation of those U.S. companies. Better to live and die on the free market where a company can decide its own fate.  

Restore demand and the market will right itself. Prices will eventually rise as excess oil is drained off, making room for new competitors to enter the market. Real competition will encourage innovation and efficiency, hallmarks of U.S. producers. 

In the meantime, global leaders should stop squabbling over who gets the biggest slice of the oil market and focus on developing a vaccine to the COVID-19 virus so we can lift the global quarantine and get back to work. 

Restart economic activity and demand for oil, along with demand for everything else, will likely follow. Massive infrastructure projects require lots of labor and fuel, so governments could prioritize planned maintenance and expansion projects as well. Modernizing transportation, energy, and communication infrastructure would help work off the build-up of crude in storage and the growing spare tire many of us have acquired after a month of watching Netflix’s “Tiger King” from our couches. And when the bill comes due, hopefully, we’ll have far fewer potholes and crumbling bridges to contend with.

The post What The World Needs Now Is A Free Market for Oil appeared first on Reason Foundation.

In 2012, the National Highway Transportation and Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) issued new CAFE standards for vehicles manufactured in the years 2017-2025. Under these rules, the minimum fleet wide average fuel economy for passenger cars would rise from 39.6 mpg this year to 55.3 mpg in 2025. For light trucks, minimum fuel economy would rise from 29.1 mpg this year to 39.3 mpg in 2025.

Final rules were only set for model years 2017-21, with subsequent rules to be established after a mid-term evaluation. In that evaluation, EPA and NHTSA found that between 2016 and 2028 the standards would reduce total carbon dioxide emissions by up to 748 million metric tons. In its regulatory impact assessment of the new CAFE standards, NHTSA estimated the annualized cost of implementation at between $5.4 billion and $7.6 billion. Even at that low end — $5.4 billion per year — the CAFE standards represent an implicit cost of $87 per ton of carbon dioxide (CO2) reduced. That is higher than most estimates of the cost that carbon dioxide imposes on society – and more than twice the EPA’s own estimate (since withdrawn by President Trump).

Additionally, these estimates almost certainly overstate the benefit of the new fuel economy standards and underestimate their costs. When consumers buy more fuel efficient cars, they typically drive more because their per-mile cost of driving is lower. And many other consumers prefer large, powerful vehicles. Because the new CAFE standards drive up the cost of new large vehicles disproportionately, consumer demand for older, large “gas guzzlers” rises and those vehicles stay on the road longer than they might otherwise. In combination, these two factors could reduce the effectiveness of CAFE standards by as much as one-half of EPA and NHTSA’s estimates.

Even assuming a more modest total effect, the new CAFE standards might optimistically reduce CO2 emissions by around 50 million metric tons per year, which equals just one percent of total U.S. emissions.

Researchers at the Heritage Foundation found that the costs of meeting the new CAFE standards could range from $61.2 billion to $186.1 billion per year. The higher figure represents approximately 1 percent of U.S. GDP – a staggering cost. If the true cost of the new CAFE standards is even $50 billion per year and the true emissions savings were as much as 50 million metric tons a year, CAFE standards would represent an implicit cost of $1,000 per ton of CO2 reduced – making them among the least efficient ways to reduce CO2 emissions.

CAFE standards distort the market, forcing companies to build vehicles that are more fuel-efficient than consumers want. When consumers purchase these more-expensive-than-necessary vehicles, they have fewer resources to invest in other things, including conservation and other practical environmental improvements. Moreover, companies forced to invest in the development of more fuel-efficient vehicles have fewer funds to invest in more useful innovations, such as the development of autonomous vehicles, which are likely to save fuel and reduce emissions and traffic congestion.

NHTSA recently announced plans to prepare an environmental impact statement for CAFE standards for model years 2022-2025. One of the options under consideration is to keep the fuel economy standards at the levels set for the model year 2021. Doing so would reduce market distortions, save consumers billions of dollars, and enable companies to invest more in the development of improvements that actually benefit consumers and the environment.

This column first appeared in the Hill. 

The post Federal Fuel Economy Standards are Costly, Inefficient and Harm the Environment appeared first on Reason Foundation.

If my experience working for the California Energy Commission taught me anything, it’s that the California way is more a cautionary tale than a model for the world.

In 2006, California aimed to make a splash when it passed AB 32, its landmark energy law requiring greenhouse gas reductions to 1990 levels by 2020. The centerpieces of the plan are an energy mandate forcing utilities to purchase one-third of their electricity from unreliable renewable sources, and a costly and convoluted carbon cap-and-trade system.

Instead of environmental gains, the plan resulted in lost prosperity for residents in the form of soaring electricity, gasoline prices and joblessness, all among the highest in the nation. Higher prices and stagnant employment have led to, on a cost-of-living basis, California’s poverty rate being much worse than the rest of the country.

Now Brown is promoting legislation that will make things even worse, requiring that half the state’s electricity come from renewables while cutting petroleum use in vehicles by 50 percent. This new legislation would accelerate California’s trend of rising energy prices and unemployment rates, yet offering zero climate benefits.

If the Obama administration gets its way, California-style energy policies, and the harm they cause, would be spread across the country. In the coming months, the Environmental Protection Agency (EPA) is scheduled to finalize its so-called Clean Power Plan requiring states to reduce carbon dioxide emissions by 30 percent by 2030.

The EPA has called on states to submit their “own plans” to outline how they propose to adhere to the new rule. To achieve these strict reductions, states can choose only from an EPA approved set of “building blocks.”

Under threat of withheld federal dollars for everything from transportation projects to sewer treatment facilities, each state will be forced to follow California’s “lead” by imposing costly taxes, carbon trading and mandates on energy. In practice, states that succumb to the EPA’s plan will be following California’s lead into economic purgatory. Beyond quality of life concerns, there are simple reasons the California way isn’t a model for the nation.

The state is blessed with mild temperatures, so heating and cooling expenses take less of a toll there than most other places. But it still manages to have higher energy prices than most of the country due to nonsensical policies.

For the rest of the country to comply with the EPA’s Californication of the electric grid, states will be forced to switch from affordable, reliable coal and natural gas to costly, unreliable and patchy sources. NERA Economic Consulting estimates residents of 43 states would see double-digit rate hikes under the EPA rule.

The spike in energy prices will harm all Americans, particularly the poor, who spend more on energy and will thus have less to spend on basic necessities such as food and medicine, compromising their own and public health.

The EPA’s rule also subjects states to electric reliability problems. Currently, California imports much of the power it needs. Its own grid operator has warned that, with the increasing reliance on unreliable renewable resources, “the system becomes increasingly exposed to blackouts.”

The EPA is moving quickly to finalize its costly climate rule before the Paris summit. This is because, by itself, EPA’s climate regulation is purely symbolic. By EPA’s own calculations, it has a negligible impact on global temperatures.

To achieve its symbolic victory, EPA seeks to submit all states to the threat of high energy prices and a less reliable grid. Instead of surrendering to the EPA, states should do everything in their power to resist.

Tom Tanton is a senior fellow at Reason Foundation and former policy advisor at the California Energy Commission. This article originally appeared in Investor’s Business Daily.

The post California Is the Wrong Energy Model for the Nation and World appeared first on Reason Foundation.

Yet the Federation and Coalition make little if any mention of two far more significant threats to the crane; wind turbines and transporting oil by rail instead of by pipeline.

“The truth is, these incredible whooping cranes desperately need our help. With the very real risk of oil spills from this dangerous pipeline, these endangered birds could be swimming in pools of oil before our eyes – and at that point it might be too late to save them,” claims the National Wildlife Federation. The Endangered Species Coalition ups the ante with an article titled “Keystone Pipeline Could Push Endangered Whooping Crane Into Extinction.”

In reality, the threat the whooping crane from Keystone XL is extremely small because the pipeline would be buried about four feet underground. Also, the chance of a leak is very low because pipelines are the safest method for transporting oil, and because the technology for constructing pipelines, as well as monitoring them for corrosion and leaks, has improved over the past several decades.

There are, however, two much more significant risks to the whooping crane, the foremost of which is the potential for cranes colliding with the increasing number of wind turbines along the migratory route, from the Texas Gulf Coast to North Dakota, for the 250 birds that constitute the species’ largest and only self-sustaining population.

Even environmental activists are concerned. “Are wind turbines killing off the whooping crane population?” is the title of an article on Watts Up With That?, which bills itself as “The world’s most viewed [web]site on global warming and climate change.”

Yet a search of the National Wildlife Federation’s and Endangered Species Coalition’s websites reveals little if anything on the threat to whooping cranes from wind turbines.

At the same time, the Federation also claims the 300 miles of power lines that will need to be built to supply pumps for Keystone XL pose a threat to whooping cranes. While this claim is actually accurate, it conveniently fails to mention that the thousands of miles of power lines put up for wind turbines pose a far more serious threat. “Collisions with power lines are already the largest known cause of death for migrating whooping cranes,” states the Endangered Species Coalition.

If activists like the Coalition and National Wildlife Federation get their way, and Keystone XL is not built, the result will be a bigger threat to the environment, including the whooping crane, as more Canadian oil is transported by rail through the crane’s migratory route. “The State Department report estimates that the Keystone XL carrying 830,000 barrels a day would likely result in 0.46 accidents annually, spilling 518 barrels a year,” according to Terry Anderson, president of the Property and Environmental Research Center. “Under the most optimistic rail-transport scenario for a similar amount of oil, 383 annual spills would occur, spilling 1,335 barrels a year.”

The Keystone XL pipeline is a divisive issue, but as the exaggerated and ignored threats to the whooping crane from the pipeline reveal, if you want accurate information about Keystone’s environmental impacts you would better served not relying on environmental pressure groups.

Brian Seasholes is director of the endangered species project at Reason Foundation. This article originally appeared at The Daily Caller.

The post Keystone XL Poses Very Little Danger to Whooping Crane appeared first on Reason Foundation.

All of this will likely come as a surprise to many North Dakotans because until now the Endangered Species Act has had a relatively modest impact on the state. This is due in large part to the fact that over almost the entire Act’s 40-year history only eight species in North Dakota have been listed.

But with the recent listing of two butterflies, the Dakota skipper and the Poweshiek skipperling, North Dakota is entering a new era of Endangered Species Act. The state’s number of endangered species is likely to increase by around 75%, which has the potential for significant negative impacts on the state’s economy, especially the agriculture and energy sectors, as well as conservation efforts for imperiled species. The reason for the new era stems from four factors:

• A “tidal wave” of over 750 species nationwide that are going to be considered for listing over the next decade or so, which will increase by about 50% the number of species protected under the Act
• The increasingly aggressive implementation and enforcement of the Act by the federal government
• Environmental pressure groups that are very willing to use the citizen suit provision of the Act to direct the federal government to make the Act even more onerous
• Growing evidence that the Act’s punitive approach works directly against species conservation.

For much of its 40-year history, the Endangered Species Act has been thought of as largely a Western issue that has also impacted limited regions of country, such as in Texas and some of the South. But with the tidal wave of species in the process of being listed, huge portions of the country that have been relatively untouched by the Act are going to be heavily impacted, such as the Great Plains, Midwest, Intermountain West, East, as well as much of the South that has thus far escaped the ESA (as I wrote about in a previous post, here).

The tidal wave of species is the result of a 2011 lawsuit settlement between the federal government and the two most aggressive pressure groups-the Center for Biological Diversity and Wild Earth Guardians-under which the U.S. Fish and Wildlife Service is obligated to consider for listing more than 870 species (to date, about 120 of these species have been listed). North Dakota contains six of these lawsuit settlement species, two of which are the just-listed butterflies. In the pipeline are several species that have significantly more potential than the butterflies to cause problems for North Dakota, most notably Sprague’s pipit, a grassland bird that lives in the western three-quarters of the state, including in the oil rich Bakken region.

The just-listed butterflies aptly illustrate two of the main problems with the Endangered Species Act that are now facing North Dakota, one of which is the poor quality of the data upon which species are usually listed and decisions made about restricting land and resource use. North Dakota contains 25% of the known historical U.S. populations and 39% of known current populations of the Dakota skipper. According to the Fish and Wildlife Service, of the 54 known historical populations of Dakota skipper in North Dakota, 16 are extant, 13 extirpated, 11 possibly extirpated, and 14 (26%) are of unknown status. The situation for the Powesheik skipperling is much the same. North Dakota contains 17 (or 6%) of the known historical U.S. populations, and of these 3 are extirpated, 6 possibly extirpated, and 8 (47%) are unknown. Imagine a private sector business trying to make decisions based on no information about 25-50% of its inventory and assets. Furthermore, these butterfly data are very likely incomplete because some landowners, fearful of the Endangered Species Act’s penalties and distrustful of the Fish and Wildlife Service, are probably not revealing that they have butterflies and suitable butterfly habitat on their land. Yet this is business as usual under the Endangered Species Act, which is very problematic because these poor quality data are used by the federal government to restrict land and resource use and by litigious environmental groups to push the feds toward even more restrictions.

A more significant problem is that the Endangered Species Act is used as a powerful land and resource use control tool, which imposes substantial costs on the private sector and works against the goal of conserving imperiled species. The final rule listing the butterflies is filled with ominous language about the threats to the butterflies from farming, ranching, and the oil and gas industry. According to the Fish and Wildlife Service, “prescribed burns, haying before July 16, broadcast herbicide treatments, some insecticide treatments, and permanent conversion of the Dakota skipper’s grassland habitats,” are threats.

At the same time, the Service is also trying to sell the listing of the skipper as not much of a threat to agriculture because the butterfly is listed under the less-imperiled status of “threatened,” and the agency promulgated a 4(d) rule, which presumably provides regulatory flexibility. “The 4(d) rule now exempts take of Dakota skippers caused by grazing on all non-federal lands in the United States,” according to Fish and Wildlife. The Service adds, “take of Dakota skipper caused by haying in transportation rights-of-ways and corridors after July 15 is exempt under the 4(d) rule, as long as it is associated with livestock ranching activities. The 4(d) rule exempts take of Dakota skippers caused by mowing recreational trails, a term that is defined in the rule, even when it is not associated with livestock grazing.”

The problem with this portrayal of the alleged regulatory flexibility made possible by a threatened listing is that the Endangered Species Act is so powerful and federal government’s discretion to implement the law so broad that the difference between species’ status as “threatened” and the more-imperiled status of “endangered” can be rendered effectively meaningless. For example, the northern spotted owl was listed as threatened in 1990, but this still led to massive land use restrictions that had a devastating impact on the timber industry in the Pacific Northwest.

Under the Endangered Species Act, even habitat unoccupied by endangered or threatened species can be regulated. Consider the Fish and Wildlife Service’s view of the potential effects of the oil and gas industry in North Dakota on the two butterfly species (note the highly speculative way in which potential future impacts are phrased):

“Specifically with regard to our evaluation of impacts from oil and gas activities, much of this activity is currently occurring in areas of native prairie overlying the Bakken and Three Forks formations, to the west of known locations for both butterfly species. However, current Bakken oil and gas development is occurring in two counties that have records of Dakota skippers (McKenzie and McLean counties in North Dakota). In those areas, oil and gas development is a stressor to the populations that may be present. Because there are few locations where the butterflies may still be extant, significant stressors to these few populations can be threats to the species as a whole. Furthermore, although oil and gas development is unlikely to occur throughout the entire range of the two butterflies in the foreseeable future, there may be future development or increases in current activities associated with the shale-oil formations (such as the Bakken formation in North Dakota) that may affect butterfly populations in those areas.”

While these two butterfly species pose a challenge to North Dakota because they have habitat in scattered patches across the state, the more serious threat is Sprague’s pipit, the grassland bird, because the state lies at the heart of its U.S. breeding habitat. The Fish and Wildlife Service often focuses on breeding habitat when invoking the Endangered Species Act’s land use control provisions. Under the 2011 lawsuit settlement, the Fish and Wildlife Service must, if warranted, publish a listing proposal for Sprague’s pipit by September 2015. If listing is proposed, then a final listing decision must be made by September 2016.

For a sense of the likely impacts if Sprague’s pipit is listed, as well as the economic activities pressure groups and the federal government would likely target, a good place to start is Wild Earth Guardians’ petition to list Sprague’s pipit. According to the petition:

“The Sprague’s pipit is particularly sensitive to anthropogenic disturbance. The birds avoid roads, for example. Increased oil and gas exploration and extraction have likely increased disturbances throughout the pipit’s range and caused habitat losses as well. Pesticide applications and harassment techniques to prevent crop losses to birds, particularly blackbirds, in the pipit’s migratory corridor may be a growing threat to safe stopover points needed during migration.”

The threat posed to oil and gas development by the two just-listed butterflies is more speculative, but this is not the case for Sprague’s pipit because the bird’s habitat overlaps the entire Bakken region that has made North Dakota the nation’s second-largest oil producing state, with production of about 1 million barrels per day. Wild Earth Guardian’s listing petition provides a road map of how activists and the federal government will likely use the Endangered Species Act to go after the oil and gas industry if Sprague’s pipit is listed. The petition states:

“Oil and gas exploration and extraction is likely a severe threat to Sprague’s pipit habitat. The imposition of infrastructure for oil and gas extraction facilitates the spread of weeds and establishes structures and roads that pipits avoid. Drilling for oil and gas has increased significantly in the past decade.

“Migration routes may be disrupted, feeding and nesting sites may be isolated into parcels too small to use, and the general effect of widespread activity creates noise, emits pollutants, and generally disturbs animal behavior. Specifically, mineral extraction development causes habitat fragmentation that perpetuates and exacerbates degradation.”

The listing petition adds:

“Possible environmental disruption includes, but is not limited to: noise pollution, human intrusion, alteration of vegetation and land and introduction of harmful substances. Habitat alteration, one of the greater threats to Sprague’s pipit, is caused by seismic trail clearing, clearing and grading of right of ways, site development, excavation of storage and mud pits, borrow pit excavation, construction of process, treatment and storage facilities, installation of flow lines, erection of power lines, communication systems development, trenching and pipe installation, pipe burial and backfill, effluent accidents and development of ancillary industry (i.e., boomtowns associated with labor forces).”

In addition to major impacts on the economy, the other aspect of the Endangered Species Act that people in North Dakota will become increasingly familiar with is that the Act’s penalty-based approach harms the very species that are supposed to be protected (as I discuss at length in my recently release study, available here). The reason for this is the Act’s draconian penalties-$100,000 fine and/or 1 year in jail for harming one butterfly, bird, or even their habitat, regardless of whether the habitat is occupied or simply deemed to be of a suitable type-turn species into financial liabilities. In response, landowners harboring endangered and threatened species do what anyone with a financial liability does; they try to eliminate or lower it. This process happens in four ways, the three most damaging of which are:

• Landowners actively destroy habitat for endangered species
• Landowners refrain from managing habitat so as to render it unsuitable for species
• Landowners and others go silent and hope the presence of species and habitat on their land goes unnoticed by regulatory authorities and aggressive environmental pressure groups.

These three responses are so damaging because habitat destruction and degradation are by far the leading causes of species imperilment, and having basic knowledge about species numbers and distribution is essential to successful conservation. The fourth way, which tends to get a lot of attention because it is sensationalistic, is when landowners kill species, otherwise known as shoot, shovel, and shut-up.

In short, the Endangered Species Act goes about achieving its goal of conserving imperiled species in exactly the wrong way. As a result, there is widespread evidence landowners are taking actions to rid their property of species and habitat. And this is also why the ratio of declining to improving species is an abysmal 9 to 1 on private land but a much better 1.5 to 1 on federal land.

Fortunately, there is a much more productive approach to conserving endangered species, which is based on the voluntary cooperation of landowners, that has been pioneered over the past eight years by the Texas Comptroller (as I wrote about here). This approach, which is modeled on the U.S. Department of Agriculture’s Conservation Reserve Program that pays landowners to conserve environmentally sensitive land, will immediately make sense to many North Dakotans because the state has over 13,000 farms and more than 1.6 million acres enrolled in the Conservation Reserve Program. There is a reason why landowners across the country willingly pick up the phone and call their local Department of Agriculture extension office but would not dream of contacting the Fish and Wildlife Service if they have imperiled species on their property. The Department of Agriculture personnel come with the open hand of friendship, while the Fish and Wildlife Service brings the closed fist of regulations.

North Dakota is unfortunately learning that the Endangered Species Act’s penalty-based approach to conservation harms the species the law is supposed to protect, the people who harbor these species and the state’s economy. This lose-lose-lose situation can be turned around if a new, incentive-based approach is used. North Dakotans, like most Americans, are proud, patriotic people who want to conserve their state’s land, water and wildlife so long as they are not punished for doing so. Those serious about endangered species conservation should seek to tap the enormous goodwill, energy and talent of America’s landowners by charting a new course that respects property rights and compensates landowners for the costs incurred conserving endangered species.

The post North Dakota in the Crosshairs of the Endangered Species Act appeared first on Reason Foundation.

More broadly, the court’s decision is a vindication of the approach taken by Texas Comptroller’s office over the past several years to find creative solutions to endangered species issues, which are often complex, conflict-ridden, and involve a dizzying array of public and private sector interests-all of which are trying to cope with the country’s most powerful environmental law. Don Barry, a longtime senior official at the Interior Department and various environmental groups, including his current job at Defenders of Wildlife, famously stated to the New York Times “The Endangered Species Act is the pit bull of environmental laws.” He characterized the Act in this way because “It’s short, compact and has a hell of a set of teeth. Because of its teeth, the act can force people to make the kind of tough political decisions they wouldn’t normally make.” The Act is also so powerful because of its unprecedented ability to stop economic activity and supersede just about any state or federal law.

A law that is so strong and has such a fearsome bite requires a firm guiding hand, lest the “pit bull” get off its leash. The Texas Comptroller’s office has been very effective in taking on this role, which is centered on striking a balance between endangered species protection and economic activity through a more proactive approach to finding creative solutions to the often-intimidating Endangered Species Act. Striking this balance is of considerable concern for states because they are at the intersection of maintaining their economic and environmental well-being and the requirements of federal Endangered Species Act.

As for the conservation of the dunes sagebrush lizard, at first glance it seems counterintuitive that the lizard would be better off not being listed under the Endangered Species Act because the point of the Act is to protect, not harm species. But the aspect of the Endangered Species Act many are not aware of is how the Act’s fearsome penalties discourage landowners from engaging in conservation efforts, which ultimately harms species. This is especially the case for species like the dunes sagebrush lizard that depend on private land for much of their habitat. In the lizard’s case about 46% of its habitat is privately owned.

A bit of background provides context for Tuesday’s court decision. In 2010 the U.S. Fish and Wildlife Service proposed to list the dunes sagebrush lizard under the Endangered Species Act. This caused a great deal of concern in large part because the lizard’s 745,000-acre range is in the Permian Basin, which produces 15% of U.S. oil and 5% of U.S. natural gas. In addition, the lizard’s habitat (73% of which is in New Mexico and 27% in Texas) overlays land used by the agriculture industry. The regulated community was very worried that if the lizard were listed the Endangered Species Act’s regulations could seriously impact their operations and impose substantial costs.

Yet starting in 2008 conservation efforts were under way for the lizard. About 95% of the lizard’s New Mexico habitat is covered by some sort of conservation agreement that limits oil and gas exploration, exploitation and transportation, prevents habitat fragmentation, and improves habitat quality.

Meanwhile, Texas, though its innovative and proactive approach to imperiled species conservation, undertook a couple of efforts, including surveys to determine if the lizard merited listing. When Fish and Wildlife proposed to list the lizard in 2010, there were only 3 known populations in Texas. Subsequently, the Texas Comptroller’s office provided funds for surveys in 2011 by a Texas A&M University professor who is a leading authority on the lizard that found an additional 28 populations. But in order to conduct these surveys on private lands, which is where the lizard is found in Texas, researchers had to sign confidentiality agreements with landowners. These agreements had the force of state law and were made possible through a provision in Texas Government Code passed in 2011 as part of the larger effort led by the Comptroller’s office to help the state become more involved in and proactive about Endangered Species Act issues.

The need for landowner confidentiality is understandable given the Endangered Species Act’s strong teeth. The Act has a notorious reputation in large portions of the country because it restricts otherwise normal and legal forms of land and resource use, such as ranching and oil and gas drilling, which penalizes landowners financially for harboring endangered species. Due to fear of suffering financial losses, many landowners refuse to grant access to their property to researchers and regulatory authorities (as I’ve documented in my just-published study on the ESA). This is damaging because accurate data and monitoring are crucially important to conservation, whether for imperiled or more common species.

Surveys for the dunes sagebrush lizard are part of the larger strategy pursued by Texas, led by the office of the Comptroller, to strike a balance between endangered species conservation and economic development and give the state a greater role in Endangered Species Act issues. In 2009, the state legislature passed a bill to create the Interagency Task Force on Economic Growth and Endangered Species, with the Comptroller as the presiding officer, that includes the Department of Agriculture, the Parks and Wildlife Department, the Texas Department of Transportation, and the State Soil and Water Conservation Board. The Task Force has several purposes: help municipalities and regional governmental bodies cope with the often bewildering and intimidating world of the Endangered Species Act through technical assistance; help formulate and implement species conservation initiatives and plans; assess the economic impact of federal, state and local endangered species regulations; and create advisory committees to help the Task Force (a good overview of all of this is available here).

After the successful survey for the dunes sagebrush lizard, in 2013 the Texas Legislature appropriated $5 million, through zero-based budgeting, for the Comptroller, through the Habitat Protection Fund (which is specified under the 2011 Texas Government Code) to contract with state universities for further surveys and research on species that might be listed under the Endangered Species Act. As with all aspects of the endangered species initiative led by the Comptroller’s office, the survey initiative has a robust system of checks and balances to ensure the validity of the process and the research conducted, which includes peer review, third party audits, compliance with state procurement guidelines, conflict of interest provisions, and working groups consisting of state and federal agencies (including the U.S. Fish & Wildlife Service, which oversees implementation of the Endangered Species Act), state universities, trade associations, conservation organizations (including the Environmental Defense Fund), and biologists and scientists from outside of Texas in a further effort to ensure the validity and impartiality of the process.

Another key aspect of Texas’s progressive approach to endangered species issues led by the Comptroller’s office is innovative conservation plans based on the successful voluntary, non-regulatory effort led by the state to conserve the endangered golden-cheeked warbler in the vicinity of the Fort Hood military base in central Texas in the mid-2000s and free-up land for military training that was encumbered by Endangered Species Act protections for the warbler (a good article on it is available here, and Texas A&M University, which helped coordinate the initiative has a very informative website here). In the case of the lizard, the Texas Conservation Plan for the Dunes Sagebrush Lizard is based on a number of provisions, including; a robust scientific process, beneficial and measurable conservation outcomes, participation by a wide range of stakeholders from the state and federal levels, the regulated community, and academia, effective monitoring and oversight by independent third parties, regular reporting on the plan’s progress and implementation, and a highly innovative habitat mitigation mechanism called the Recovery Credit System.

The Texas Conservation Plan, including the Recovery Credit System, for the lizard had to get sign-off from the U.S. Fish and Wildlife Service so the plan was formulated as a Candidate Conservation Agreement with Assurances (CCAA) under the Endangered Species Act’s Habitat Conservation Plan provision. While all this jargon may be confusing, it basically means private landowners are given assurances from the federal government that “they will not be subject to additional restrictions if the species becomes listed under the ESA,” according to the Fish and Wildlife Service. But in order for the Fish and Wildlife Service to approve the CCAA for the dunes sagebrush lizard there needed be an approved permit holder, and the Comptroller volunteered to take on this role (the supporting documents are available here). This, as well as the leadership role played by the Comptroller’s office in endangered species issues in Texas, resulted in criticism from several quarters, including the environmental pressure groups that were plaintiffs in the recently-decided lawsuit. They are unhappy with a state stepping into the arena they have grown accustomed to dominating.

Under the Recovery Credit System, lizard habitat impacted by, for instance, oil and gas operations is mitigated through the purchase of credits from nearby landowners who agree to specified actions to conserve and improve lizard habitat. While habitat mitigation schemes have been around for decades, the Recovery Credit System is cutting-edge for a number of reasons, one of which is that the plan’s very strong scientific, monitoring and governance structures ensure meaningful conservation outcomes and a transparent process for all stakeholders. One of the most remarkable aspects of the System is that the exchange of credits is based on a reverse, or low-bid, auction, which serves to drive down the cost of credits, thereby resulting in more efficient use of scarce resources to conserve endangered species.

As with the lizard surveys, a key part of the Recovery Credit System is protecting landowners’ confidentiality because of their fear of the Endangered Species Act. In Texas, landowners’ confidentiality has been protected under state law, which provides a more durable and stronger form of protection than if this were done administratively. This is crucially important because while public officials come and go, landowners often possess their properties for decades, if not longer. Furthermore, landowners are so gun-shy of the Endangered Species Act and suspicious of the U.S. Fish and Wildlife Service, as well as environmental pressure groups that like to use the Act as a club, that landowners’ confidentiality must be protected in meaningful ways if they are expected to participate in endangered species conservation efforts. Overall, the voluntary, non-regulatory nature of the Recovery Credit System, and more broadly the innovative Texas approach to conserving endangered species, is successful precisely because it does not alienate landowners, create anti-conservation incentives, and lead to unproductive, distrustful relationships. In fact, it leads to the opposite of all these problems.

From an institutional perspective, the lead role played by Texas’ Comptroller of Public Accounts has been key because it has permitted a broader, more innovative and flexible approach to endangered species issues than almost certainly would have occurred had a state agency focused solely on environmental issues taken the lead. The Endangered Species Act is a very tricky issue, especially for states, which need to balance many often-competing interests, including economic and financial, environmental, and various levels of government (i.e., municipal, state and federal). The Endangered Species Act’s power and complexity discourages innovation, which is all the more need for states to become more assertive and proactive, as Texas has done. An example of this is that the Texas Comptroller holds the permit issued by the U.S. Fish and Wildlife that made the sagebrush lizard conservation plan pass legal muster, and this is also why the Comptroller was granted lead intervenor status in the lawsuit brought against the Texas Conservation Plan.

The results of the Texas Conservation Plan for the dunes sagebrush lizard have been impressive. Under the plan, 227,385 acres have been enrolled, and a remarkable testament to the plan’s success is how little lizard habitat has been disturbed. Under the plan, 1% of the lizard’s habitat in Texas, or 2,173 acres, is permitted to be disturbed over the plan’s first three years. Yet as of August 2014, two years in to the plan, only 30.6 acres, or 1.4% of the allowable amount (which constitutes 0.014% of Texas’s lizard habitat) has actually been disturbed.

When the federal government decided in 2012 not to list the dunes sagebrush lizard under the Endangered Species Act, it cited the Texas Conservation Plan as a key factor in its decision. Ken Salazar, then-Interior Secretary, said:

“This is a great example of how states and landowners can take early, landscape-level action to protect wildlife habitat before a species is listed under the Endangered Species Act. The voluntary conservation efforts of Texas and New Mexico, oil and gas operators, private landowners and other stakeholders show that we don’t have to choose between energy development and the protection of our land and wildlife – we can do both.”

And Dan Ashe, Director of the U.S. Fish and Wildlife Service stated:

“The states of New Mexico and Texas have worked tirelessly with the Fish and Wildlife Service, the Bureau of Land Management and scores of landowners and operators in the Permian Basin to conserve and protect habitat that supports the dunes sagebrush lizard and many other species. These ongoing efforts will play a key role in ensuring the future of the lizard, while allowing responsible oil and gas development to continue.”

All of this is a real win-win, especially in the increasingly conflict-ridden landscape of the Endangered Species Act. The lizard wins because it gets beneficial and innovative conservation efforts, the regulated community wins because it gets a predictable and affordable process that allows it to stay in business and the cloud of an impending species listing is removed, and there is buy-in at every level of government. This is a huge success story to everyone except the Center for Biological Diversity and Defenders of Wildlife. These groups filed the lawsuit that they lost Tuesday because they contended the New Mexico and Texas conservation plans did not adequately protect the lizard. While the evidence argues otherwise, it is also telling that these groups are not actually involved in the difficult and time-consuming work of making these conservation plans function, much less using their multimillion dollar budgets (Defenders of Wildlife, 2013 revenue, $33.9 million; Center for Biological Diversity, 2013 revenue, $9.3 million) to do some boots-on-the-ground conservation. $43.2 million can buy you a lot of dunes sagebrush lizard habitat.

Two aspects of the Texas Conservation Plan the Center and Defenders strongly objected to in their court filings (which are available here, along with all court documents from the case) were the confidentiality agreements under which landowners are included in the plan (under a provision known as a Certificate of Inclusion) and the scientific standards underpinning the plan. On the issue of confidentiality, the court stated “Plaintiffs argue that the FWS’s reliance on the Texas Plan was arbitrary and capricious because the Service did not-and could not-review the Certificates of Inclusion detailing conservation measures adopted by each participant, which are confidential under Texas law.” The court added, “Plaintiffs also claim in passing that the Service’s inability to access the Certificates of Inclusion precludes finding any ‘certainty’ in the Texas Plan’s implementation or effectiveness.” On the other side of the issue, according to the court ruling, “Federal Defendants and Intervenor Defendants submit that access to each individual Certificate is unnecessary given that the FWS is fully able to monitor the Texas Plan at an aggregate level.” The court, however, found in favor of the defendants: “Because the Texas Plan had sufficiently clear objectives and enabled regular monitoring, the FWS’s reliance upon the Texas Plan was reasonable, notwithstanding the confidentiality of the Certificates of Inclusion.” As for the science supporting the plan, which the Fish and Wildlife Service used in its decision not to list the lizard, “the Court finds that the FWS’s withdrawal decision rested on ‘the best scientific and commercial data available,’ as required by the ESA.” And the judge stated the environmental pressure group plaintiffs “proffer no scientifically superior data from the administrative record that FWS failed to consider.” All of this was quite a ringing endorsement of the regulatory and scientific validity of not only Texas’ dunes sagebrush lizard conservation plan but more generally of the approach taken by the Texas Comptroller’s office to deal with the Endangered Species Act.

Part of the bigger picture, which the Center for Biological Diversity and Defenders of Wildlife fail to see, is that the Endangered Species Act represents an especially counterproductive approach to endangered species conservation. The reason stems from the Act’s penalty-based approach, which discourages landowners from conserving species, including disclosing the presence of species on their land. Worse, the Act creates very strong incentives for landowners to rid their property of species and habitat. Happily, there are growing numbers of people who understand this, including those in Texas who are leading the way toward a more successful approach to conserving endangered species.

A cornerstone of such an approach consists of protecting landowners from the Endangered Species Act and federal government, as well as finding more of a balance between economic activity and endangered species protection. The reasons for this are disarmingly simple. Landowners control most endangered species habitat in this country. Also, landowners are on the land day-in, day-out, have intimate knowledge of their property, and most of them are proud stewards and outstanding conservationists. Furthermore, if landowners’ property values and livelihoods are threatened by restrictions for endangered species, then landowners will take actions to rid their property of species and the habitat necessary to support these species. So if effective conservation is to occur-as opposed to the type of armchair conservation pressure groups who like to litigate excel at-it must be done with the willing cooperation of landowners. The ongoing successful effort to conserve the dunes sagebrush lizard through Texas’ conservation plan is testament to this.

Some words of wisdom about the dunes sagebrush lizard and endangered species conservation in general are offered by Dr. Benjamin Tuggle, Southwest Regional Director of the U.S. Fish and Wildlife Service (the Southwest Region contains New Mexico and Texas), in an NPR interview:

“Whenever you talk about big gas and oil and you talk about a listed species, particularly a reptile – a little-bitty lizard – there’s always the opportunity for cynicism. There’s always the opportunity to say that big government is coming in and trying to tell us what to do, and being over-officious and regulatory. I think this is a classic example, a monumental example, of when people sit down, talk to one another, communicate what it is that they need to continue the economic development on a landscape, and have an opportunity to listen to what it is that needs to take place on that landscape to protect species of this ilk. When they get together and can reach agreement then it works. So there isn’t this situation where the government is being dictatorial. It very much is a collaborative process that everybody gets something out of. We very much would like to see that take place because it creates less of a polarizing situation between people that are trying to make a living on the landscape and the resources, particularly the species and habitat that are dependent on that same landscape.”

Fortunately for the dunes sagebrush lizard and the state of Texas the U.S. District Court sent a strong message that cutting-edge, state-based conservation plans can survive legal challenge and will be respected under federal law. In a larger sense, the District Court’s ruling is a vindication of the ground-breaking and successful path taken by the Texas Comptroller’s office to chart a path though the political and regulatory minefield that is the Endangered Species Act. The court’s decision also has very important implications for states, landowners, businesses, and non-governmental organizations across the country that are involved in efforts to conserve endangered species with innovative conservation initiatives, especially those initiatives that are designed to keep species from being listed. Hopefully with Tuesday’s court decision more states will feel emboldened and confident to chart their own path forward on the Endangered Species Act. If this happens, we may finally move towards substantive reform of the Act that is more successful for species, states, landowners, federal government, regulated community, and non-governmental groups.

The post A Big Win for Endangered Species, Texas and Real Conservation: a Big Loss for Lawsuit-based Conservation appeared first on Reason Foundation.

If listing occurs, however, it will send a chilling message not only to states and communities in the Gunnison sage grouse’s range that their efforts were for naught, but to all states and communities across the country that are working hard to conserve imperiled species and prevent their listing under the Endangered Species Act. This is especially the case for states and communities throughout the 11 state, 165 million-acre range of the greater sage grouse, which have made enormous efforts and spent tens of millions of dollars on conserving the grouse and preventing listing.

Sadly, if the Gunnison sage grouse is listed the bird will very likely face a bleaker future. It is difficult for most people to understand how this is possible because they live in urbanized areas, and their idea of the Endangered Species Act is a virtuous law that helps the most vulnerable species. Yet the on-the-ground reality in the sage grouse’s range and large portions of rural America, where most endangered species live, is far different from abstract notions of the Act.

A powerful example of this, and how the Endangered Species Act works against species conservation, involves the extraordinary conservation efforts undertaken across the range of the Gunnison sage grouse. Ground zero for these efforts is the appropriately named Gunnison County, Colorado because the Gunnison Basin population of the sage grouse, which exists almost totally in the county of the same name, contains nearly 90% of the bird’s total population and 63% of its habitat (of which 67% is federal land, 30% private, and 3% state). Moreover, private landowners in Gunnison county and rangewide own almost all of the crucially important moist habitat–wet meadows, irrigated pastures, and streamsides–sage grouse adults and chicks depend on in late spring and summer for food, especially high quality forage and insects.

The key point to grasp about conserving the Gunnison sage grouse, and most endangered species for that matter, is that people are the linchpin. Successful endangered species conservation depends on the willing cooperation of landowners who harbor these species, especially because private lands are more important than public lands. Almost 80% of endangered species depend on private land for some or all of their habitat, compared to 50% for federal land. In addition, about two-thirds of endangered species have 81-100% of their habitat on private land, and more than one-third of species have all of their habitat on private land. The crucial role of private lands for endangered species also applies to states and municipalities that have large amounts of federal land, such as those in the range of the Gunnison sage grouse; Colorado (36.2%), Utah (66.5%), and Gunnison County (78%). This is because private landowners in states with large amounts of federal land have most of the well-watered land, which is typically of highest value for wildlife.

Without willing and voluntary help from landowners, endangered species have much diminished prospects. Unfortunately, this situation is all-too-common because of the Endangered Species Act’s penalty-based approach; $100,000 fine and/or one year in jail for harming, for example, one grouse, egg, or even habitat, whether the habitat is occupied or just of a suitable type. As a result, the Act turns species in to financial liabilities, which creates strong incentives for landowners to rid their land of species and habitat, refuse to get involved in endangered species conservation efforts, and simply go silent in the hope regulatory authorities don’t notice they have endangered species or suitable habitat on their land. There is increasing evidence all these things are occurring (as I’ve mentioned here, and here), and is most likely why the ratio of declining to improving species is an abysmal 9:1 on private land, while it’s a much better 1.5:1 on federal land. There is a tragic aspect to all of this because most landowners are good conservationists and happy to chip-in to help wildlife so long as they are not penalized for doing so.

Fortunately for the Gunnison sage grouse, Colorado, Utah, counties, landowners and a wide array of people have made enormous efforts to conserve it, most notably over the past two decades in Gunnison County. As with so many counties across the sage grouse’s range, Gunnison County’s conservation efforts have revolved around getting buy-in from the ranchers who own much of the bird’s habitat, especially the crucially important moist habitat, and creating a big-tent-approach. “We’ve brought everybody to the table who has an inkling of saving this species,” Paula Swenson, chair of the Gunnison County Board of Commissioners, remarked to the Denver Post. “Nobody could do more than we’ve done.” Swenson started her job on the County Commission in January 2005, and “by March it was my number one issue and it still is all these years later.”

One indication of Gunnison County’s dedication to sage grouse conservation is that it has what is thought to be the only county-based wildlife biologist in the U.S. working solely on endangered species issues. Around the time Swenson began her tenure, the county hired Jim Cochran, a retired federal and state wildlife biologist, to work on sage grouse conservation. The county initially retained Cochran on a contract basis but soon brought him on board as a fulltime employee. He is paid a yearly salary of $84,000, and this is a lot of money for a small county like Gunnison, which has a population of just over 15,000 people.

Much of Gunnison County’s conservation of the sage grouse has involved three initiatives the U.S. Fish and Wildlife Service and environmental pressure groups advocate, one of which is zoning for endangered species. Jim Cochran has spent a lot of time persuading property owners to alter their land-use practices and plans to conform to the county’s sage grouse-specific land-use regulations, such as moving planned buildings away from important sage grouse habitat. It hasn’t always been easy. “The first year when we were developing those regulations [in 2006] we could fill a room instantly because the landowners thought we were going to ruin them,” Cochran told the Denver Post. But over time Cochran was able to convince landowners that sacrifice up front was a good idea because it would help prevent the sage grouse from being listed down the road. According his remarks to the Post, “I’ve had developers come to me and say, ‘Jim, you cost me a bunch of extra money but at the same time we understand why you did what you did.’ The regulations are aimed at minimizing impacts for the sage grouse.”

A big focus of county and state conservation efforts for the Gunnison sage grouse has been conservation easements to protect habitat. Upwards of $50 million has been spent for the Gunnison sage grouse, mostly from state funds, to secure conservation easements on 64,000 acres. This was also a big sacrifice for Gunnison County because with 78% of it consisting of federal land, reducing the value of and ability to develop private land as a result of conservation easements could have potentially significant economic impacts.

An additional conservation initiative for the Gunnison sage grouse is seasonal road and trail closures. This involves closing miles of trails and roads on public lands during the spring, typically from March 15-May 15, when grouse are very sensitive to disturbance while engaging in courtship. The Gunnison Basin Sage Grouse Strategic Committee, a public-private partnership run by the county to coordinate sage grouse conservation, supplies a well-marked map of the closures. An indication of the civic-mindedness and spirit of cooperation that has been the hallmark of Gunnison County’s sage grouse conservation efforts is the work of Gunnison Trails, a non-profit organization founded in 2006 to collaborate with federal and state agencies on public land trail maintenance, management and education. A big part of Gunnison Trails’ efforts is to help implement and educate the public about seasonal trail closures for the sage grouse.

Yet all of these conservation measures, in addition to a raft of conservation plans and other initiatives (which will be discussed below), were not enough to prevent the U.S. Fish and Wildlife Service from proposing, in January 2013, to list the Gunnison sage grouse under the Endangered Species Act.

After the proposed listing, county officials were very upset and felt deeply betrayed by Fish and Wildlife because of the extraordinary efforts they had made over the preceding nineteen years to conserve the sage grouse and prevent listing. Paula Swenson said she was “furiously frustrated,” according to a story in the Denver Post. And Jonathan Houck, a county commissioner and former mayor of the town of Gunnison, said he felt “cut off at the knees.”

Gunnison County is an eclectic mix of ranchers, outdoorsy types, people affiliated with a branch of the state university system, municipal employees, and ordinary folks, all of whom enjoy the beauty of the region and its relaxed pace of life. So for the normally laid-back people of Gunnison County to be so fired up over the possible listing of the sage grouse is an indication that something is seriously amiss.

Another factor that is galling to Gunnison County, the state of Colorado, and private groups and citizens involved with Gunnison sage grouse conservation is that even though their extraordinary conservation efforts have paid off with a healthy, stable sage grouse population, Fish and Wildlife still proposed to list the bird. Over the past twenty years, the sage grouse’s Gunnison Basin population increased steadily. Starting in 1995, which coincided with the initiation of intensive conservation efforts, the population grew from 1,800 birds, leveled off at around 2,500-3,000 from 1996-2002, declined to approximately 2,000 for two years, shot-up to around 3,700-4,200 from 2005-2007, and then held steady up until the present but this time at a markedly higher population level of between 3,000 and 3,500 birds.

The other six sites that contain populations of Gunnison sage grouse have the remaining 10-12% of the bird’s population spread among them. As a result of these populations being so small, they tend to fluctuate more than the Gunnison Basin population, and the Fish and Wildlife Service cites this as a reason why listing under the Endangered Species Act is necessary. But given the tenuous nature of these populations, in many ways they require the voluntary cooperation of landowners willing to harbor sage grouse on their property even more than the Gunnison Basin population. Listing under the ESA would bring the Act’s draconian penalties in to play, which would create very strong and in all likelihood overwhelming disincentives for landowners to voluntarily harbor sage grouse on their property. This would be the worst outcome for these small populations.

The other loser if listing occurs, in addition to people across the sage grouse’s range, will be the Gunnison sage grouse because many landowners will be very reluctant to continue making efforts to conserve it. As Gunnison County Commissioner Houck remarked to the Denver Post:

“A listing will have a lot of people saying, ‘I’m done.’ I don’t mean we’re going to purposely bring harm to the bird and the habitat. But if you voluntarily alter how you work your land and that’s not enough, it sends a clear shot across the bow. It says, ‘Why put in the effort, why put in the money, why tax your resources? Because in the end it will never be enough.'”

The Colorado Cattlemen’s Association (CCA), in comments submitted to the Fish and Wildlife Service about the proposed listing, had the following observations about how listing would likely be detrimental to conservation of the sage grouse:

“CCA, along with a broad array of stakeholders, believes the single greatest aspect for not listing the GUSG [Gunnison sage grouse] historically and into the future is the severe limitation such a listing will have on ongoing and additional conservation measures across public and private lands…It is our assertion that by listing the GUSG, landowners, local governments, state agencies and the general citizenry will not continue to enroll and engage in voluntary conservation measures at their historic level. In fact, CCA has anecdotal information that illustrates landowners will dis-enroll from some of the voluntary conservation agreements in which they are currently participating. Unfortunately, this affect will carry over to other conservation efforts currently underway for species such as the Greater Sage Grouse and Gunnison’s Prairie Dog.”

Chris Dickey is another community leader in Gunnison County who has some valuable words of wisdom on the proposed listing of the sage grouse. He is publisher of Gunnison County Publications, which includes the Gunnison Country Times, the weekly newspaper that also has an accompanying website, which folks in the Gunnison region, like so many people in rural America, rely on for their local news and that serves as vital “glue” that holds these communities together. Here’s what Chris had to say about the proposed listing of the sage grouse under the Endangered Species Act:

“The community most impacted – ours – overwhelmingly opposes it. And the efforts working toward a positive outcome will be severely jeopardized by enacting it.

“We think such a designation will backfire; that it will not help this bird in the least; and that it will cause significant hardships to a community – Gunnison – that has gone to extraordinary lengths to do the right thing when it comes to this species. Therefore, we adamantly urge the U.S. Fish and Wildlife Service to, once and for all, remove the Gunnison Sage-grouse from ESA consideration.”

Chris went on to ask “why enact a rather draconian measure like the ESA?” His answer:

“The only answer to that question that passes the straight-face test is this: Outside environmentalists. It’s no secret that WildEarth Guardians has cleverly backed the Fish and Wildlife Service into a legal corner by forcing them to make timely listing determinations on more than 250 species, including the Gunnison Sage-grouse, as part of a settlement reached in 2011. It’s also no secret – we’ve heard it from one of the group’s leaders, Mark Salvo, ourselves – that what WildEarth Guardians is really after is to end public-lands grazing.

While groups are free to pursue whatever radical agenda they want, it’s not the federal government’s obligation to help implement those agendas where they are overwhelmingly unwelcome and when they are legally unjustified. In our estimation, such an action would be nothing less than a travesty.

For more than a decade, the citizens of Gunnison County have come to the table in a good faith effort to protect the Gunnison Sage-grouse. Land use regulations have been enacted and enforced. Volunteer conservation agreements have been put in place. Evidence suggests these efforts are working, and legal precedent (think oil and gas oversight) strongly points to our county government’s masterful ability to seal these protective ethos into law, in perpetuity.

Simply put, there is no way the feds can do a better job of protecting this bird than we have proven capable of. Not only have local efforts resulted in a stronghold population of this species, but given an opportunity, these same efforts can be extended to other jurisdictions – possibly with the help of local leaders. The Gunnison Basin is a model for a community’s conservation-minded response to an imperiled species.

Lastly, because the ESA has been, over time, hijacked by extremists on both sides of the ideological spectrum, it’s turned into a lightning rod of controversy. Its enactment here would undeniably transform what’s been a widespread spirit of cooperation into an every-person-for-himself fight.

The final analysis, in our view, clearly shows everyone losing with an ESA listing of the Gunnison Sage-grouse, including the birds themselves. The only winner is an extreme environmental group that has no stake in our community. That is not the ending to a long and arduous struggle that we deserve.”

Sound words, indeed. Meanwhile, Mark Salvo, who is one of the people that petitioned in 2000 to have the Gunnison sage grouse listed, has moved on to Defenders of Wildlife where he is director of federal lands issues and continues to believe the Endangered Species Act is a productive approach to conservation. “I am always surprised to see this claim, that Endangered Species Act listing discourages continued state and local efforts to conserve imperiled species,” he remarked to Greenwire. “The Endangered Species Act does not in any way impede state and local efforts to conserve listed species.” While this assertion does not pass the laugh test, it is reminiscent of a similar one made twenty years ago by John Kostyack of the National Wildlife Federation in a letter to the editor of the Wall Street Journal (May 12, 1994) about the Endangered Species Act: “In fact, the Act has never prevented property owners from developing their land.” There is a terrific 1997 article, available here, by Ike Sugg, a former colleague of mine, on Endangered Species Act proponents making demonstrably false claims about the Act not restricting land use.

Wild Earth Guardians, which is pushing hard for listing the Gunnison sage grouse, excels at filing lawsuits over the Endangered Species Act but not actually conserving the bird. The group is based in Santa Fe, New Mexico and has offices in a number of locations, the closest of which to Gunnison County is 200 miles away in Denver. One would think that, given Wild Earth Guardian’s professed dedication to endangered species conservation, the group would be interested in getting involved in actual conservation efforts for the Gunnison sage grouse. But apparently Wild Earth Guardians is more interested in virtual “paper” conservation from afar. “The best way to pull them [endangered species] back from the brink is to obtain their formal listing under the Endangered Species Act,” the group claims.

Another proponent of the Endangered Species Act and listing the Gunnison sage grouse is John Fitzpatrick, Director of the Cornell Lab Ornithology, a non-profit unit of Cornell University that is one of the nation’s most influential authorities on birds. Fitzpatrick has mischaracterized sage grouse conservation efforts and the politics of listing (as I discussed here). While Fitzpatrick’s views on Gunnison sage grouse might not normally matter much, the influential New York Times published an op-ed by him, which reflects an elitist but widespread view that is totally out of touch with the on-the-ground realities of sage grouse conservation. “Some private landowners and energy companies have protested listing the Gunnison sage grouse as endangered, fearing that will result in federally imposed limits on how they use their land,” Fitzpatrick claims. Absent is any mention of municipal and state objections to listing. “Efforts by state agencies and private landowners to stabilize Gunnison sage grouse populations have failed,” he adds, again failing to acknowledge the crucially important role played by municipal efforts, especially those by Gunnison County that have resulted in 88% of the population being stable. Fitzpatrick urges the sage grouse be listed so a number of conservation actions can be taken, including “moving individuals to promote genetic exchange.”

In fact, according to the January 2013 proposal to list the Gunnison sage grouse, published two months before Fitzpatrick’s op-ed, over the past ten years the Colorado Division of Wildlife has translocated 217 grouse (68 of which were radio-tagged) from the Gunnison Basin to the other six populations. “These experimental translocations were conducted to determine translocations techniques and survivorship in order to increase both size of and the receiving populations and to increase genetic diversity [emphasis added] in the populations outside the Gunnison Basin,” according to the proposed listing. An additional 30 grouse from Gunnison Basin were translocated in 1971 and 1972 and resulted in the successful reestablishment of one of the six smaller populations.

It is these types of errors and dismissiveness from influential elites and organizations, which are transmitted by like-minded media channels and groups, that are very frustrating to rural people who have to live with the realities of the Endangered Species Act. Rural Americans, by dint of being few in number and less wealthy, often feel relatively powerless to have their voices heard, needs addressed and ways of life respected, especially when they are forced to bear the brunt of laws like the Endangered Species Act that many urban and suburban Americans support.

Proponents of listing the Gunnison sage grouse under the Endangered Species Act, and of the Act in general, would do well to heed the words of Stephen Edwards of the IUCN (World Conservation Union), one of the world’s foremost experts on wildlife conservation and meshing wildlife and human needs. According to Edwards ((Stephen R. Edwards, “Sustainable Conservation By and For the People,” in Endangered and Other Protected Species: Federal Law and Regulation, ed. Richard Littell, (Washington, D.C.: BNA Books, 1992), pp.vii-viii.)):

“Successful conservation depends on the commitment of the people living with the wild species-not us. Yes, we can give financial and technical support, but in the final analysis it will be those people who will make a difference. Not laws. Not government policies. And not our wishful thinking.”

A closer look at the history of Gunnison sage grouse conservation, with a focus on Gunnison County’s efforts, provides a better sense of the lengths to which the counties across the bird’s range, along with Colorado and Utah, have gone to help the bird. It also provides a much-needed antidote to the distortions, inaccuracies, and views of those in favor of listing.

In 1995 a number of stakeholders formed the Gunnison Basin Sage Grouse Local Working Group comprised of representatives from various levels of government, including municipal (Gunnison County Planning Commission, and Weed Commission), state (Colorado Division of Wildlife), federal (Bureau of Land Management, U.S. Department of Agriculture’s Natural Resource Conservation Service, U.S. Fish and Wildlife Service, U.S. Forest Service, and U.S. National Park Service), the Gunnison County Stockgrowers, non-profit environmental groups (Black Canyon Audubon Society and High Country Citizens’ Alliance), and ordinary citizens. The group’s work culminated in the 1997 publication of the Gunnison Sage Grouse Conservation Plan: Gunnison Basin, Colorado, a comprehensive 113-page document.

Following this, the other five regions in Colorado with Gunnison sage grouse populations also published plans: Crawford Area, 1998 (and updated in 2011); Monticello/Dove Creek in 1998 (and updated in 2003); Pinyon Mesa, 2000; Poncha Pass, 2000; and San Miguel Basin, 2000. In addition, several of these groups have active websites that serve as information clearinghouses; Gunnison Basin, Crawford Area, Monticello/Dove Creek, and San Miguel Basin.

Everything changed, however, in 2000 when the American Ornithologists’ Union (the final authority on U.S. bird taxonomy) recognized the Gunnison sage grouse as a separate species, instead of scattered populations of the greater sage grouse. As a result, the likelihood increased enormously that sage grouse in southwestern Colorado and southeastern Utah could be listed under the Endangered Species Act.

The mid-2000s saw the pace of sage grouse conservation increase. In 2005, Colorado, Utah and various federal agencies published the Rangewide Conservation Plan. The plan, a massive 526-page document, is in many ways the most comprehensive conservation document for the Gunnison sage grouse. The plan is also yet another indication of the serious and credible effort to conserve the Gunnison sage grouse on the part of Colorado and Utah.

2006 was a watershed year for Gunnison sage grouse conservation. In April, the U.S. Fish and Wildlife Service determined the grouse did not warrant protection under the Endangered Species Act. At this point, Colorado, Utah and the counties in the sage grouse’s range, especially Gunnison, could have declared victory and ceased conserving the grouse. Instead, they redoubled their efforts.

The Working Group changed its name in 2006 to the Gunnison Basin Sage-grouse Strategic Committee and is still going strong. The Strategic Committee contains most of the same member organizations as the Working Group, along with a representative of Saguache County, which borders Gunnison County to the south and contains a portion of the Gunnison Basin population of the sage grouse (FYI, the minutes of the Committee’s meetings, which often delve in to great detail on conservation issues, are available here, and are testament to the group’s sophistication, dedication and effectiveness).

In 2006, Colorado Parks & Wildlife and the U.S. Fish and Wildlife Service signed a Candidate Conservation Agreement with Assurances (CCAA). These agreements are one of a number of Endangered Species Act reforms initiated in the 1990s under then-Interior Secretary Bruce Babbitt. CCAAs are touted as giving private landowners the assurance that if they undertake agreed-upon conservation measures, then if the species covered by the plan is listed in the future landowners will not be subjected to additional requirements and land and resource use restrictions under the Endangered Species Act. Currently, 42 landowners who own 97,960 acres have agreed to be part of the CCAA for the Gunnison sage grouse. There are another 5 landowners with a total of 28,500 acres that are going to be part of the CCAA in the next few weeks, which will bring the total to 47 landowners and 126,460 acres.

Candidate Conservation Agreements with Assurances sound great, but there are three huge problems that make them much less secure than commonly portrayed. First, the entire CCAA program has been implemented administratively, not codified into the ESA, which means the federal government has a great deal of latitude to change the agreements. Second, CCAAs are not immune from legal challenge from third parties, such as from lawsuit mills like Wild Earth Guardians. Third, the federal government and groups like Wild Earth Guardians are constantly looking for new species to list under the Endangered Species Act, as well as new populations of species already listed. This is especially the case since a 2011 lawsuit settlement between Fish and Wildlife and two groups, Wild Earth Guardians and the Center for Biological Diversity, under which the federal government is obligated to consider to listing 757 species by 2018, and make final listing decision on 251 of these species. The lawsuit settlement will result in a roughly 50% increase in the number of U.S. species listed under the Endangered Species Act. With so many species in the process of being listed over the next decade or more, it is very plausible that a Candidate Conservation Agreement with Assurances, Candidate Conservation Agreement or other administrative agreement could be rendered worthless or of considerably less value to a landowner by species not covered (i.e., newly-listed species and newly discovered populations of already-listed species). This could well result in unanticipated costs and land and resource use restrictions for landowners, businesses, and states.

Proponents of listing the Gunnison sage grouse were undeterred by the Fish and Wildlife Service’s 2006 decision not to list the bird, and in 2007 filed a lawsuit to try to get the agency to reverse its decision. Curiously, San Miguel County in Colorado led a coalition of the usual suspects–the Center for Biological Diversity, Wild Earth Guardians and fellow travelers-filing the lawsuit. San Miguel County’s participation is explained by the fact that Telluride, the wealthy town filled with armchair conservationists, is the county seat. As a result of a consent decree over the lawsuit, Fish and Wildlife was obligated to reevaluate the status of the Gunnison sage grouse, which resulted in the agency determining in 2010 that the grouse warranted listing but doing so was precluded by other higher priority issues. But after the 2011 lawsuit settlement, a listing proposal became much more likely because the Gunnison sage grouse was one of the 251 species for which the Fish and Wildlife Service was obligated to make a final listing decision. It is ironic that San Miguel County advocates listing, which is opposed by Gunnison County. Yet had it not been for Gunnison County’s outstanding conservation efforts there would not have been sufficient sage grouse available to translocate 47 of the birds from Gunnison County to San Miguel County.

In 2009 the Strategic Committee published the Gunnison Sage-Grouse Conservation Action Plan, the purpose of which was to address the seven objectives in the 2005 Rangewide Conservation Plan and the five factors affecting the grouse cited by the U.S. Fish and Wildlife Services when it determined in 2005 the grouse did not warrant listing under the Endangered Species Act.

More recently, in 2013, a Candidate Conservation Agreement for the sage grouse in the Gunnison Basin, which covers 395,000 acres of public land, was signed by a number of federal agencies (Bureau of Land Management, U.S. Department of Agriculture Natural Resources Conservation Service, National Park Service, U.S. Fish and Wildlife Service, U.S. Forest Service), Colorado Parks and Wildlife, and Gunnison and Saguache Counties. In March 2013, the ten Colorado counties and one Utah county within the range of the Gunnison sage grouse signed a memorandum of understanding to reinforce their commitment to conserving the grouse.

In order to sort out the issues surrounding the proposed listing of the Gunnison sage grouse and gain a broader perspective, I contacted Greg Walcher, Executive Director of the Colorado Department of Natural Resources from 1999-2004, and a fifth generation native of western Colorado, where he and his family own a fruit orchard. Greg’s thoughts on the history of Gunnison sage grouse conservation and the consequences of listing under the Endangered Species Act are well worth a read:

“Listing of the Gunnison sage grouse would represent one of the worst broken promises in the history of conservation. The Gunnison Ranchlands Legacy project started in 1996 and thrived through the Administrations of four governors in both parties. The State of Colorado in 2006 completed an agreement with the federal government that allowed landowners to enroll in a program of protective habitat management, with the assurance that their farming and ranching practices would not get them into trouble if grouse nests are accidentally disturbed. As a result, the species was removed from the “candidate” list, and local participation has surpassed any similar program under the ESA. Massive investment and local participation was made with the clear understanding that the Gunnison sage grouse would not be added to the federal endangered species list.

Habitat partnerships and management agreements are not unique to Colorado, of course. But no other state/local partnership has ever come close to our level of commitment to such a program. Coloradans have invested well over $50 million of state, local, and private money in conservation easements to preserve ranchlands in the Gunnison Basin, and have preserved over 64,000 acres of open space, ranchlands, and sage grouse habitat. That’s a 20-year legacy, including another $3 million this year, and we are proud of it for many reasons. Besides preserving the historic character of majestic mountain valleys, it is a way to demonstrate that species can be protected without heavy-handed federal regulation, while preserving vital local economies.

Ranchers were understandably skeptical about preserving the sage grouse, and they had one central and difficult question: can we trust the federal government to do what it says? Without that trust, adding a species to the endangered list can actually harm the species, because its habitat is mostly on private land. People in the Gunnison area, and the State of Colorado, relied on that trust for a generation. Today, the Gunnison sage grouse population is strong and growing steadily – it is not in danger of extinction by any measure. Still, some national environmental groups and some federal officials simply will not give up on the regulatory approach. It is pathetic that decisions of this magnitude are sometimes motivated by lawsuits, not conservation. Yet here we are again, facing not only an endangered listing and the broken promise that represents, but a sad and avoidable end to a proud legacy of preservation efforts in the Gunnison Basin. If the goal is to end ranching and stop human activity, efforts to do so will go on endlessly. But if species recovery is the goal, the government and environmental groups are going about it exactly the wrong way.”

It is staggering that after twenty years of successful conservation efforts for the Gunnison sage grouse–which include the expenditure of over $50 million, conservation agreements on more than 126,000 acres of private land, countless hours of hard work by many people, non-profit organizations and various levels of government, and assurances to landowners that self-imposed land-use restrictions would result in the grouse not being listed–the federal government is poised to list it under the Endangered Species Act. Advocates of the Act contend that without the threat of listing most of these efforts for the Gunnison sage grouse, and many other species, would not occur. Perhaps. But advocates underestimate how counterproductive and harmful the Endangered Species Act is to species conservation, both for those species already listed and those that may be listed, because of the Act’s penalty-based approach.

There is still hope, however, the Fish and Wildlife Service will come to its senses and not list the Gunnison sage grouse. In August of this year, the Service decided not to list the Montana grayling, a species of fish, because of the effectiveness of state and local conservation efforts (as I wrote about in a previous post). Hopefully the Service will apply the same logic to the Gunnison sage grouse.

Another possibility is Fish and Wildlife will decline to list because of bi-partisan political pressure. Governor Hickenlooper of Colorado, a Democrat, has been very involved in making the case to the Interior Department, including trying to educate Interior Secretary Sally Jewell, that listing is not necessary and would be counterproductive. “What she’s hearing the first time is from her staff at Fish and Wildlife, and I think she gets a slanted version.” Hickenlooper stated to the Washington Times last November. “My job is to make sure that she gets a balanced version so she hears both sides of the story.”

On April 25, a bipartisan group of three members of Congress from Colorado, Sen. Mark Udall (Democrat), Sen. Michael Bennet (Republican), and Rep. Scott Tipton (Republican), wrote a letter to Dan Ashe, Director of the U.S. Fish and Wildlife Service, requesting an extension of the May 12 deadline imposed by a lawsuit to list the Gunnison sage grouse. On May 5 the Fish and Wildlife Service filed a motion in federal district court to extend the listing deadline by six months to November 12. In response, all three members of Congress expressed their appreciation, and Senator Udall said “Today’s actions are a win for Colorado and everyone working to save this bird.”

Unfortunately, it appears the Fish and Wildlife Service has not used the six month delay to reevaluate the effectiveness of conservation efforts to conserve the sage grouse. Governor Hickenlooper sent a letter on July 2 to Noreen Walsh, Regional Director of the Fish and Wildlife Service, to express his concerns:

“In our letter of April 28, 2014 requesting the delay, we asked that the additional time be used to ‘better understand the conservation currently in place and to evaluate the opportunities for satellite populations.’ Now USFWS have additional time both to review emerging science and to consider the extraordinary conservation efforts already underway in the Gunnison basin.

“Today we write to ask for the USFWS’s focused attention on the evidence thus far presented by Gunnison County and Colorado Parks and Wildlife (CPW). It is our understanding that while the USFWS have received comments and scientific information from them, we have not yet been provided substantive feedback or have had the benefit of meaningful dialogue from the USFWS. Instead, it is our understanding that the USFWS continues to push for the development of a 4(d) rule. Since that rule can only exist in the context of a ‘threatened’ listing, our communities are rightly concerned that the USFWS has effectively come to a final decision without due regard for the information they have submitted. Unfortunately, this is not in keeping with the intended use of a time delay.”

Two months later, on September 3, Noreen Walsh replied. It is interesting that Walsh took so long to reply about such a pressing issue to a governor of the same political party as the administration that employs her, and especially to a governor who is in a very tough reelection battle with a Republican due, in part, to anger about the Obama administration’s use of laws and regulations, such as the Endangered Species Act, to stymie natural resource use and economic development. Furthermore, governors typically receive more prompt responses from Fish and Wildlife, particularly from the eight Regional Directors, but perhaps Walsh felt no need since the Service had already made up its mind to list the Gunnison sage grouse.

The third factor that may dissuade Fish and Wildlife from listing the Gunnison sage grouse is the prospect of a messy and prolonged legal fight. Governor Hickenlooper has threatened to sue if listing occurs. John Swartout, the governor’s point person on sage grouse, stated to the Daily Sentinel (of Grand Junction, Colorado) “she will get sued,” in reference to Colorado’s stance towards Interior Secretary Jewell if the Gunnison sage grouse is listed. “It all comes down to litigation,” Swartout added. “We can win that case.”

At the same time, however, members of Congress, the governors of Colorado and Utah, and their point people on sage grouse have a very good grasp of the bigger picture of the bird’s conservation that the Interior Department leadership appears to lack. “We believe the collaborative and voluntary process our state has undertaken could be used as a model to protect other threatened species within Colorado and across the country,” Colorado Senators Bennett and Udall and Representative Tipton stated. “Given the unique landscapes and natural resources in Colorado, a Colorado-based solution is more practical that one handed down by the federal government,” Governor Hickenlooper said to the Colorado Observer. “No one understands state challenges and demographics better than the people who reside and govern there,” Governor Herbert of Utah told a Congressional committee. “No one is more committed to the most effective use of limited resources for the best possible outcome, for both our lands and our citizens, than those who will directly live with the consequences of those decisions.” When Fish and Wildlife decided in 2010 not to list the grouse, Utah’s point person on sage grouse, John Harja, said in the Salt Lake Tribune “We all appreciate them leaving it in state management.”

John Swartout sees the sage grouse issue in the context of battles that took place twenty years ago over the Clinton administration’s natural resource policies that alienated many ranchers, farmers, and natural resource users. The Colorado governor at the time, Roy Roemer, paved the way for a more collaborative approach between the state, federal government, landowners, natural resource industries, and environmental groups. At the time, Swartout had an up-close view of this when he worked for Colorado Senator Wayne Allard. The key to the more collaborative approach was to build trust among the parties involved, especially between the regulatory authorities and the rural landowners who controlled many of the resources and key wildlife habitat. “It took a long time to develop that trust,” Swartout told USA Today in July 2014, while reflecting on current Endangered Species Act controversies over the lesser prairie chicken and sage grouse and the threat the Act poses to Colorado’s innovative conservation efforts for these and other species. “If this goes south and we lose those partnerships…that will all have been wasted.”

Aldo Leopold, the late author, professor of wildlife management and conservation icon, grasped the need for wildlife conservation efforts to focus on providing incentives to landowners, and for such efforts to be innovative, varied and proactive, instead of laws that are reactive and create conflict. Leopold’s words from his classic 1934 paper, “Conservation Economics,” are a good place to conclude because they ring as true today in the case of the Gunnison sage grouse, and for so many species that are already listed or facing the prospect of listing under the Endangered Species Act, as they did eighty years ago:

“This paper forecasts that conservation will ultimately boil down to rewarding the private landowner who conserves the public interest. It asserts the new premise that if he fails to do so, his neighbors must ultimately pay the bill. It pleads that our jurists and economists anticipate the need for workable vehicles to carry that reward. It challenges the efficacy of single-track laws, and the economy of buying wrecks instead of preventing them. It advances all these things, not with any illusion that they are truth, but out of a profound conviction that the public is at last ready to do something about the land problem, and that we are offering it twenty competing answers instead of one. Perhaps the cerebration induced by a blanket challenge may still enable us to grasp our opportunity.”

The post Save the Gunnison Sage Grouse From the Endangered Species Act appeared first on Reason Foundation.

As oil production in the United States has exploded, shifting us from an oil-importing to an oil-exporting nation, it has created the new problem of getting all that oil from the middle of the country to refineries on the edges of the nation; mainly to California, Texas, Louisiana, New York and New Jersey. Traditionally, oil has moved mostly by pipelines. But in recent years few new pipelines were built thanks in part to strong opposition from environmental activists, so oil trains have picked up most of the slack. This is particularly true in California, where few oil pipelines connect to oilfields east of the Rocky Mountains.

The rail industry claims a 99 percent safety record, but with the rapid increase of oil trains on railroads, concerns about safety are legitimate, as demonstrated by recent severe oil train accidents in North Dakota and Quebec, the latter killing 47 people. A report by the National Transportation Safety Board emphasizes the seemingly obvious, “that major loss of life, property damage and environmental consequences can occur when large volumes of crude oil or other flammable materials are on a train involved in an accident.”

Oil pipelines are far from perfect, with leaks happening more often than oil train accidents. But pipeline spills almost never threaten human lives. Beyond safety, moving oil through pipelines is cheaper and more efficient than transporting it via train, and emits far fewer greenhouse gases.

Yet plans to build new oil pipelines between California and Texas have been scuttled. Environmental activists want to block construction of new pipelines, in part, to reduce the state’s access to oil, thus keeping gas prices high in an effort to reduce greenhouse gas emissions.

Businesses have realized they need to expand oil trains for now, even if more expensive in the long run. Investment is going to new rail terminals in the Central Valley and Mojave Desert to connect the flood of oil trains into California’s internal oil pipeline network. Money is also being spent to expand pipelines in Canada so more oil can be transported by ship to California refineries – a much more expensive option than a direct pipeline, but one that can be done in the current political climate.

It is no surprise in California that a rapid reaction to the growth of oil trains is to regulate, restrict and limit their numbers. Some environmentalists and local officials have called to halt the trains altogether, while Gov. Jerry Brown’s budget proposes a new tax on oil trains to discourage them. Instead of burdensome restrictions and taxes on oil trains, California needs a reasonable balance of cheap and safe oil pipelines and flexible oil trains to connect our refineries to oil supplies.

Policymakers should work quickly to permit some new pipelines with the latest safety technology and practices and thus reduce the waste, emissions and higher prices that come from ill-advised attempts to choke off the state’s access to oil.

Dr. Adrian Moore is vice president at Reason Foundation. This article originally appeared in the Orange County Register.

The post Oil Trains Run Because Pipelines Don’t appeared first on Reason Foundation.

That, however, would be a pity, because the plan is actually better than any proposed by any president in recent memory.

The liberal blogosphere is up in arms against it because it stands for everything liberals despise. Unlike that other yahoo from Texas, George W. Bush, who made curing America’s “addiction to oil” a guiding principle, Perry is absolutely unapologetic about this “addiction.” To the contrary, rapidly exploiting America’s fossil fuel reserves-coal, oil, gas-is a key plank of his energy agenda.

To this end, he wants to:

• Expand oil drilling in the Gulf and the mid-Atlantic, as well as federal lands including Alaska’s hallowed Arctic National Wildlife Refuge.

• Blast out natural gas trapped in shale basins through a new process called fracking. Fracking, incidentally, can help America unlock enough clean-burning natural gas to replace all its coal-generated electricity for 70 years. Enviros initially welcomed this development-until they realized it would make their beloved renewables even more uncompetitive.

• Rescue coal, as abundant in the U.S. as oil is in Saudi Arabia, from President Obama’s greenhouse gas strictures, which make it prohibitively expensive.

Perry isn’t hostile to renewables. He insists he would use an “all of the above” energy strategy, including wind, solar, and biomass. But he won’t give them government handouts, something that every president, Democrat or Republican, has done since Gerald Ford.

He also promises to end federal subsidies for non-renewables. This is more easily said than done, given the complex web of direct and indirect tax breaks and subsidies that have long distorted the energy sector. One would take his promise more seriously if he offered more specifics, but his plan is blissfully vague. Still, it represents progress (of sorts) that he hasn’t identified any sacred cows for special protections.

However, the part that has liberals really foaming at the mouth is his suggestion to severely check the power of the EPA and give states more leeway to set their own environmental regulations. The standard criticism of such rollbacks is that states, released from Uncle Sam’s iron fist, will engage in a race to the bottom and gut environmental standards to attract business. But states have a far greater incentive than distant bureaucrats to look for ways to protect their natural resources with minimal sacrifice of economic and other priorities.

All in all, Perry’s plan offers a radical blueprint for energy liberalization. So what’s wrong it? His sales pitch.

For starters, precisely because it is so ambitious, it won’t be easy to pull off. But instead of leveling with the American public, Perry is exaggerating the plan’s political feasibility, claiming that most of it can be implemented by executive fiat without congressional action.

Take the EPA, for example. It was created to enforce duly enacted federal laws, such as the Clean Water Act and the Clean Air Act, whose constitutionality courts have long upheld. Rolling back the EPA’s authority over states will require congressional approval, something harder to come by, these days, than divine grace. Pretending otherwise is just dishonest.

What’s more, Perry is touting his energy plan as a jobs program, claiming that it will create 1.2 million jobs. This is not as wild as Obama’s promise of generating 5 million green jobs by shoveling stimulus money into politically-connected duds like Solyndra. However, job projections are notoriously difficult to make accurately, and there is every reason to believe that Perry’s claims, largely lifted from oil industry studies, are way off. Michael Levi, senior fellow for energy and environment at the Council on Foreign Relations, estimates that Perry’s plan will create 620,000 jobs at best. If Levi is right, Perry has needlessly opened himself up to attack by using inflated numbers. And for what? The main point of energy liberalization is not to create jobs. It’s to make cheap and reliable energy available to individuals and businesses. That’s the message that Perry should be hammering.

Perry touts his plan as the road to energy independence, and in this lies its fatal flaw. The world market sets energy prices, especially the prices of oil and gas. Energy won’t cost any less because it is made in America. Yes, America should tap its energy resources if it can do so competitively. If it can’t, it should buy energy from abroad, just as it does food, clothing, electronics, and every other commodity. Chanting an energy independence mantra will commit America to generating its own energy, eviscerating the entire initial rationale for energy liberalization: letting the market determine where and how to generate supply to meet demand.

Perry has a solid energy plan that can distinguish him from the pack and force a real debate on the issue. But he has to stop claiming that it can cure every American ill. He’s pouring good medicine into a snake oil bottle.

Reason Foundation Senior Analyst Shikha Dalmia is a columnist at The Daily where this column originally appeared.

The post Rick Perry Makes a Good Plan Sound Bad appeared first on Reason Foundation.

In an effort to bring its global warming initiative back from the dead, the administration has announced that it wants automakers to raise the Corporate Average Fuel Economy, or CAFE, of their fleets from the 34.2 miles per gallon that it mandated in 2009 (which the companies are still scrambling to meet) to 56.2 mpg by 2025. Not a single car-big or small, hybrid or non-hybrid-currently delivers this kind of mileage (with the exception of electrics). But CAFE backers are pooh-poohing industry claims that these standards are unattainable. “Virtually every major improvement in U.S. fuel economy and emissions over the last quarter of a century started as a stringent government standard that automakers … initially insisted was impossible to meet,” harrumphed a recent Detroit Free Press editorial. “Then the same companies turned their engineers loose and met or exceeded the threshold.”

Did they?

Not really. Rather, they unleashed armies of lobbyists on Washington to poke holes in the CAFE regime. For example, companies that don’t meet CAFE standards face fines. But the fines are so low that many luxury brands prefer to pay up rather than comply. Likewise, companies get CAFE credits, the auto equivalent of indulgences, for flex-fuel vehicles built with gasoline as well as ethanol tanks. Fitting them with both doesn’t add much to manufacturing cost, which is why carmakers happily churn them out even though everyone knows that few drivers ever use ethanol.

But to the extent that carmakers have complied with CAFE, it is less through radical innovation and more by simply slashing vehicle weight. In the 15 years after CAFE standards were first introduced in 1974, vehicle weight diminished by 23 percent. But every 100-pound weight reduction results in a 4.7 to 5.6 percent increase in the fatality rate. A 2002 National Academy of Sciences study concluded that CAFE’s downsizing effect contributed to between 1,300 and 2,600 deaths in a single representative year, and to 10 times that many serious injuries.

Even ignoring this loss of life, the era of improving fuel economy by slashing vehicle weight is drawing to a close. Indeed, Sean McAlinden, chief economist at the Center for Automotive Research, notes that it is technologically impossible to squeeze anything beyond 45 mpg in fuel economy from current vehicles. That’s why Europe’s fuel economy has plateaued at that level, despite $8 per gallon gas. The 56-mpg-mandate will require a total, top-to-bottom overhaul of cars. Every part of a vehicle from its transmission to its engine would have to be replaced. “Even a vehicle’s screws and fasteners would have to be secured with epoxy glue,” McAlinden maintains.

Unless automakers once again manage to write massive loopholes into the proposed CAFE regime, the upshot will be similar to the fiasco created by the light bulb mandate that Congress recently tried unsuccessfully to repeal. The mandate required light bulbs to consume 25-30 percent less energy by 2012. But this effectively outlawed cheap incandescent bulbs while artificially boosting more expensive and annoying fluorescents, triggering a consumer revolt.

Likewise, the Obama CAFE standards will drive out pickups and other large vehicles, American automakers’ biggest profit makers, and usher in hybrids-their biggest money losers. That’s because pickups that are CAFE-compliant will be have to be constructed from aluminum or some equally light material, something that will bump their cost upwards of $80,000 per vehicle while rendering them useless for towing.

Meanwhile, even the Environmental Protection Agency admits that the market share made up by hybrids and electric plug-ins will have to touch 49 percent if the industry is to come anywhere near compliance. Given that these vehicles now occupy only 3 percent of the market despite hefty subsidies, it is a foregone conclusion that expanding their presence will mean massively expanding subsidies to them.

Taxpayers are going to be on the hook for more than just hybrids, however. Indeed, average vehicle prices will shoot through the roof, pricing many car buyers out of the market, shrinking the industry and jeopardizing millions of jobs. But if Washington could not resist showering taxpayer dollars on General Motors and Chrysler to prevent job losses now, it is unimaginable that it will sit back when the entire industry confronts a carmageddon. Indeed, the $100 billion that taxpayers have spent on the current bailout will look like chump change compared to what’s to come. This is making even the UAW nervous, causing it to join ranks with automakers to oppose the standards.

The administration’s proposal in one fell swoop manages to screw over taxpayers, drivers, car buyers and autoworkers. The least it can do is give lawmakers a chance to thoroughly weigh the tradeoffs on the country’s behalf. But the president is trying to impose the new standards through regulatory fiat without Congressional approval. No administration-blue or red-has ever done this before. This is tantamount to declaring war on autos without a formal declaration from Congress.

Someone needs to rein this president in.

Shikha Dalmia is a senior analyst at Reason Foundation and a columnist at The Daily, where this column originally appeared.

Editor’s Note: When this column was written, the UAW was against the CAFE standards. Now its president, Bob King, is for them.

The post The Coming Autopocalypse appeared first on Reason Foundation.

Here’s a tough fact to face: World prosperity is critically dependent upon the stability of a single decrepit, corrupt dictatorship in Saudi Arabia. While the regime there has been quick to put down calls for expanded rights, the protests for political, civil, and economic rights continue. Chaos in Saudi Arabia, which produces about 12 percent of the world’s oil, would cause such shortages of oil in Asia and Europe that the whole world could be thrust into major economic crisis. Closed factories in China, Japan, and Korea would crash commodity prices and world trade. Banks would again be tottering and calling in loans. Russia with its supplies would have a stranglehold over a dependent Europe. And Americans might be lined up for hours at gasoline stations, maybe with ration cards.

Saudi Arabia’s status quo hangs by a thread on the lives of an 86-year-old king and an 85-year-old prince. They are the last surviving direct heirs of old King Ibn Saud. After them will come jockeying and infighting among thousands of princes descended from Saud’s many wives and concubines from different tribes, none with a clear mandate to become the new absolute monarch. The Economistexplains the complicated maze of palace intrigue and notes that there are no rules for succession except for the ruling family to chose the “best qualified” prince, which in Arabic can mean “most capable” or “most virtuous.” There’s no way to know exactly how succession will play out, but even the present government is more vulnerable than it appears. The sick king’s hurried promise last week (finally) to allow first time municipal elections and his offer to create 60,000 new public sector “jobs” shows weakness, not a position of strength.

Yet for America, there is a way to greatly minimize, if not fully end, our dependence upon shaky Middle East dictatorships, including Saudi Arabia. With dependable Canadian production and using our own shut-in resources, we can vastly reduce our need for imports. This should be a vital, immediate national interest. America imports some 10 million barrels per day (bpd). Of this Canada sends us 2 million bpd (the amount is constantly increasing) and Mexico sends about 1 million bpd. Nigeria, Angola, and Venezuela send another 1.5 million bpd, all of which is pretty reliable. That comes to around 4.5 million bpd, which means that there’s 5.5 million bpd coming from less-reliable sources, including the Middle East.

If it were able to produce more freely, American oil production could ramp up significantly, reducing reliance on Saudi Arabian, Libyan, and other similar sources. Instead our oil industry is stymied, delayed, and denigrated by a president and Congress that continues to daydream about tiny and very expensive amounts of energy from solar power, windmills, and ethanol. Even with vast subsidies (Obama’s stimulus bill tossed $80 billion toward alternative energy), these sources produce a tiny fraction of American energy usage: One percent for windmills, and 1 tenth of 1 percent for solar. Most renewable energy comes from aging hydroelectric dams. Electric cars are expected to sell a few tens of thousands this year, compared to over 250 million registered gas-dependent cars on the road. These figures show some of the absurdity of most alternative energy hype.

In the Gulf of Mexico, deep-water drilling and exploration has been shut down for almost a year while permitting shallow wells in known fields is agonizingly slow. On land, Interior Secretary Ken Salazarrevoked oil drilling permits issued under the Bush administration, retroactively canceled already approved coal mining permits, and has thrown many new investments under a cloud of risk as companies fear more retroactive permit revocations. Environmental extremists file crippling, unending lawsuits precisely to cause costly, interminable delays and frighten off investors. As Alaska Gov. Sean Parnell’s recent speech to the National Press Club makes clear, environmentalist proposals to further limit oil drilling have been picked up by Obama’s appointees.

Here are six things the federal government could do to increase domestic oil production:

1) The Alaska pipeline now runs two-thirds empty. It alone could carry 1.5 million barrels more per day if Washington was to allow drilling at ANWR and in the shallow, 100-foot-deep waters close in offshore from fixed platforms or manmade islands. Instead, for example, Shell Oil has been sandbagged with purposeful delays, including a five year wait for a clean air permit over the Arctic Ocean.

2) The Gulf of Mexico could be producing another half million barrels per day within five years if permitting were expedited by the Department of the Interior. The catastrophic spill last April came after thousands of successful and safe deep water wells have been drilled. It was a freak accident compounded by serious human errors committed by BP, the (foreign) drilling company with one of the highest large company accident records in the industry. Various new procedures have made deep drilling even safer.

3) A crash program to provide abundant LNG (liquid natural gas-compressed to reduce its volume by a factor of 600) pumps at major interstate truck stops would encourage conversions from using diesel oil, which is imported. A thousand cubic feet of (compressed) gas equals the energy equivalent of seven gallons of diesel oil costing some four times as much. Merchandise transport accounts for 18 percent of oil usage. Already municipal trucks and buses are converting to natural gas; taxis could too. The price spread between diesel and compressed gas is very unlikely to change for many years, so there is plenty of incentive for truckers to buy their new trucks with LNG engines, but they need to be assured of fueling stations. For peanuts compared to all the subsidies for ethanol and solar cells, the government could help pay for these costs.

4) Modern oil production allows drilling horizontally miles and miles out in all directions from a single platform. Formerly wells could only drill straight down with a single pipe. Just a few platforms can now drill and produce from a wide area. They are not the eyesore of years ago. Allowing coastal states some of the royalties from offshore drilling would do wonders for curtailing opposition. Reasonable permissions for drilling off our Atlantic and Pacific coasts could produce more billions of barrels of oil. New technology is constantly triggering higher production, for example, with previously unusable oil shale (such as the Bakken fields in North Dakota) which actually caused an increase in yearly U.S. production. The prolific oil off the coast of Santa Barbara, California, scene of a spill 40 years ago, is in waters only 300 feet deep with wells 3,000 feet deep. Oil companies now routinely drill in 5,000 feet of water down to over 20,000 feet. Within a year California could be producing from fixed platforms which have a 15 year record of almost no serious spills out of 11,000 wells drilled.

5) Allow building of the proposed Keystone XL Pipeline from Canada’s massive tar sands, which would bring in another half million barrels per day as production ramps up. However, environmental groups are fighting the project tooth and nail, arguing that it would contribute to global warming, because the sands need heating to separate out the oil. As the debate unfolds, China is already offering to buy the oil instead.

6) Congress needs to correct the Environmental Protection Agency’s rules to force it to make decisions within 30 days and to use rational measurements instead of a few parts per million as grounds for declaring any product hazardous and illegal. Special fast-track courts for environmental issues, as suggested by Tea Party leader Rep. Michele Bachman (R-Minn.), could be established to expedite environmental lawsuits.

The above projects could cut imports roughly in half from their current 10 million barrels per day andend dependence upon Middle Eastern oil. They involve very little cost for taxpayers, unlike alternative-energy schemes, and would produce hundreds of thousands of new jobs and tens of billions of new tax revenue for Washington. Admittedly, we may have to wait until Americans are waiting in gasoline lines to consummate any or all of the above, but these measures are the way to save ourselves and possibly the world economy from an oil shortage catastrophe. Additionally, it would undercut the rationale for the seemingly unending wars we’re now waging while trying to secure Middle East oil.

Jon Basil Utley is associate publisher of The American Conservative. He was a foreign correspondent for Knight Ridder newspapers and former associate editor of The Times of the Americas. For 17 years, he was a commentator for the Voice of America. In the 1980s, he owned and operated a small oil drilling partnership in Pennsylvania. This column first appeared at Reasonn.com.

Editor’s Note: The Obama administration’s $80 billion alternative energy subsidies were part of the stimulus, not a proposed budget.

The post The Case for Increasing Domestic Oil Production appeared first on Reason Foundation.

What’s happened is that Obama has given the environmental extremists the power to make some of their wish list come true. Modern measurement techniques allow scientists to measure tiny parts per million; much of the technology did not exist when the Clean Air Act was first legislated in 1990. Using these new techniques environmentalists are able to impose their fantasies upon American business and labor. For industry, removing the last parts per million is prohibitively costly. For instance, technology which could have removed the Gulf of Mexico oil spill was prohibited by the Environmental Protection Agency (EPA) because the discharged ocean water would still contain more than 15 parts per million of oil.

When the American economy was growing fast these EPA job killers were not so damaging. Now, in slower times, they are proving deadly.

Below are eight areas where the environmental extremists hope to wreak havoc on the American economy.

Carbon Dioxide. Human activity accounts for less than 4 percent of global CO2 emissions and CO2 itself accounts for only 10 or 20 percent of the greenhouse effect. Water vapor accounts for most of the other 80 percent. The actual quantity of C02 in the Earth’s atmosphere is about 0.0387 percent, or 387 parts per million. The Christian Science Monitor recently published an excellent analysis of how the EPA’s plans for reducing carbon dioxide could cause the loss of over a million jobs and raise every family’s energy costs by over $1,200.

Factory boilers. The EPA wants new, more stringent limits on soot emissions from industrial and factory boilers. This would cost $9.5 billion according to the EPA, or over $20 billion according to the American Chemistry Council. A study released by the Council of Industrial Boiler Owners says the new rules would put 300,000 to 800,000 jobs at risk as industries opted to close plants rather than pay the expensive new costs. The ruling includes boilers used in manufacturing, processing, mining, and refining, as well as shopping malls, laundromats, apartments, restaurants, and hotels.

Home Remodeling. Some contractors are refusing to work on houses built before 1979 (when lead paint use was discontinued) because of stringent new EPA permitting required for lead paint removal. Lead paint in powdered or edible form can hurt growing children. It was once used in the hard gloss paint for wood surfaces, but has been painted over with non-lead-based paint during the past 30 years. The new fines of $37,000 per day are ruinous for smaller contractors and individual workers. Many jobs will therefore not be created as smaller contractors stop replacing window frames or turn down other work where lead paint may be present.

Ground Level Ozone. AutoBlog reports that the EPA has asked the U.S. government to enact draconian new smog regulations for ground-level ozone. The request to cut levels to .006 to .007 parts per million comes less than two years after standards were set at .0075 particles of pollutants per one million. As AutoBlog notes, “That doesn’t sound like a very big change, but the New York Times reports that the agency quotes the price tag of such a change at between $19 billion and $100 billion per year by 2020. Oil manufacturers, manufacturing and utility companies are the main source of air pollution and they will have to spend heavily to meet the proposed regulation.”

The Arctic National Wildlife Refuge (ANWR). The Fish and Wildlife Service is drawing up plans that define more parts of ANWR as “wilderness” thereby permanently removing any possibility for oil drilling in the vast field. The full Alaskan nature reserve is the size of South Carolina while the proposed drilling area would be the size of Dulles Airport.

Alaska Oil. Interior Secretary Ken Salazar has prohibited all off-shore drilling until further notice, although Shell Oil and others’ proposed sites are in less than 150 feet of water and use fixed drilling platforms, not the floating kind used for deep water in the Gulf of Mexico. Potentially vast oil fields and the accompanying jobs are therefore on hold.

Cement Kiln Regulations. Sen. James Inhofe (R-Okla.), who led the fight to expose so called man-made global warming, warns of a new EPA job-killing plan. “EPA’s new cement kiln regulation could shut down 18 plants, threatening 1,800 direct jobs and 9,000 indirect jobs,” he writes. “According to an analysis of EPA’s rule by King’s College (London) Professor Ragnar Lofstedt, EPA could send 28 million tons of U.S. cement production offshore, mainly to China.”

The above are all large-scale restrictions. There are also many smaller, mostly unreported new regulations. A Heritage Foundation study describes 43 such restrictions imposed during 2010 and totaled up their cost as well over $26 billion. As Sen. Blanche Lincoln (D-Ark.) complained before her defeat, farmers, ranchers, and foresters “are increasingly frustrated and bewildered by vague, overreaching, and unnecessarily burdensome EPA regulations, each of which will add to their costs, making it harder for them to compete.”

Gulf of Mexico Oil. While Salazar ostensibly lifted his illegal and unnecessary suspension of all oil drilling in the Gulf of Mexico, we don’t yet know if he has put up interminable, cost-wrecking regulations in the ban’s place. Just one of his changes, allowing government bureaucrats 90 days instead of the prior 30 days to issue every decision, may be enough to ruin future oil drilling. The big floating rigs rent for over half a million dollars a day to operate. Just the threat of non-decisions along the chain of government command may be fatal and do to oil drilling what the environmentalists did to nuclear energy-namely, shutting down all new plants by making the costs and risks prohibitive. Michael Bromwich, Salazar’s director of the Bureau of Ocean Energy Management, said that there were only 10 new well permits pending, but according to The Washington Post there were 69 unapproved exploration and development plans sitting in his office. Even simple, continued drilling in already producing oil sands, where the geological conditions are measured and known, has been suspended.

Salazar also suspended shallow well drilling in less than 500 feet depth from fixed platforms. Washington only issued 13 such shallow well permits in the seven months since the Macondo blowout in April. Before that it was issuing about 13 shallow well permits per month. As is often the case with Washington’s heavy-handed regulators, it is the smaller companies, doing less costly drilling closer to shore, that are bankrupted or driven out of business by these costly and burdensome rules. All this comes after 40 years of successful drilling without a major blowout or spill.
Government restrictions and environmentalist lawsuits also affect other mining activity. For example, there is currently a shortage in Chinese rare earth elements, which are essential to a number of technologies, including hard drives and environmentalist-friendly hybrid-car batteries. Yet despite an abundance of rare earth reserves in the U.S., domestic production has been essentially shut down by the president’s allies.

It’s time for Congress to investigate what the EPA and its reckless agenda is costing American workers, businesses, and taxpayers.

Jon Basil Utley is associate publisher of The American Conservative. He was a foreign correspondent for Knight Ridder newspapers and former associate editor of The Times of the Americas. For 17 years, he was a commentator for the Voice of America. In the 1980s, he owned and operated a small oil drilling partnership in Pennsylvania. This column first appeared at Reason.com.

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There was one big problem, however: Powers didn’t look at the forum. What he thought was a pro-drilling forum turned out to be the opposite and the woman, retired U.S. Air Force Officer Virginia Cody, a drilling opponent. In just one email, Powers inadvertently revealed that Pennsylvania’s Office of Homeland Security had not only been monitoring the activities of law-abiding citizens who oppose natural gas drilling for fear of its environmental damage, but passing the information on to the companies involved in the drilling. Powers had chosen business interests over Pennsylvanians’ rights of free speech and association.

There was more. The state’s Office of Homeland Security didn’t generate the intelligence bulletin–a private contractor Powers hired did. Since 2009, the Institute of Terrorism Research and Response (ITRR), a private intelligence firm with offices in Philadelphia and Jerusalem, was paid over $100,000 in a no-bid contract to create intelligence bulletins on possible threats to Pennsylvania’s critical infrastructure.

Apparently, the threats were everywhere. Aside from anti-drilling activists, the 137 bulletins ITRR produced reported on the activities of anarchists, animal rights activists, anti-war activists, black power activists, Federal Reserve critics, Tea Partiers, even groups associated with Pennsylvania Gov. Ed Rendell’s own education policies. In one ridiculously absurd bulletin, ITRR warned that “anarchists, anti-prison ideologues and Indian rights activists” were going to attack the federal prison in Lewisburg by clogging the prison’s phone lines with calls. In ITRR’s reports, anyone with a political cause or complaint, whether left or right, was eyed as a potential security threat.

After the leaked bulletin and Power’s email were passed to the press, public outrage and bipartisan condemnation from the state house ensued. On September 14, Gov. Rendell called a press conference where he apologized for violating Pennsylvanians’ civil rights, terminated ITRR’s contract, and then publicly released the 137 bulletins the firm had produced. Last Monday, both Powers and ITRR co-director Michael Perelman faced outraged state senators, some of whom called for Powers’ termination. And on Friday, Powers’ inevitable resignation came.

The public attention, contract termination, and Powers’ resignation all make it easy to say case closed: A homeland security bureaucrat overreached and fortunately he was smacked down by the state’s citizens and their elected representatives. But what Pennsylvania’s surveillance scandal shows is that a disturbing federal trend has trickled down to the states. In July, The Washington Post released its two-year investigation “Top Secret America.” The three-part series exposed how homeland security and intelligence have become big business at the expense of taxpayers. Currently, the federal government outsources a substantial amount of intelligence duties to unaccountable armies of contractors that produce redundant reports that are routinely ignored by the intelligence community. These reports remain secret, thus ensuring no public oversight, accountability, or fiscal responsibility.

The recent scandal in Pennsylvania looks eerily similar. For one, Pennsylvania’s state police already run an intelligence shop that monitors threats to the commonwealth. Even worse, spokespeople for both the state police and the attorney general’s office told the press that ITRR’s reports were ignored because they were valueless. “I would liken it to reading the National Enquirer,” the head of the state police’s criminal investigations division told a state Senate hearing last week. “Every so often they have it right but most of the time it is unsubstantiated gossip.” The reports often caused alarm and led police to waste manpower by chasing down phantom threats until state police told “local stations” to stop responding to the threats ITRR identified. Finally, the funds used by Powers to hire ITRR didn’t come from Pennsylvania, they came from the federal government, which has time and again said that creating a domestic intelligence apparatus at the state-level is a main priority to upset developing terrorism plots.

And Pennsylvania isn’t the only state using federal funds to hire a private firm to search the Internet for threats. Last year, the North Central Texas Fusion System headquartered in Collins County also found itself at the center of a controversy after a contractor drew up an intelligence bulletin that conflated the constitutionally protected activities of antiwar activists and American Muslims as a threat to the region. Like Pennsylvania, the contractor, ADB Consulting, also received no-bid contracts, but the fiscal damage was much worse. ADB Consulting had been paid at least $1.3 million for fusion center operations, primarily financed through federal funds. Much like what occurred in Pennsylvania, the county’s director of homeland security barred private contractors from writing the intelligence reports.

Much as the Post uncovered a secret world of widespread surveillance inside the federal government, the incidents in Pennsylvania and Texas suggest the same thing is happening inside the nation’s statehouses. Collected together, these incidents show that a vast, multi-tiered surveillance state is under construction, greased by federal funds and aided by private companies willing to fatten up on the public dime.

Addressing the state senate hearing last Monday, Pennsylvania State Police Commissioner Frank Pawlowski knocked Powers’ decision to hire ITRR. “This is one of the problems you have when you contract intelligence work to amateurs,” he said.

Fair enough, but Pawlowski missed the point. The real issue here isn’t that the government should have a monopoly on domestic intelligence gathering, it’s that such gathering shouldn’t be done at all.

Matthew Harwood is a writer living in Washington DC. His work has appeared in the Washington Monthly and online at the Guardian, the Huffington Post, Truthout, and elsewhere. He is currently working on a book about evangelical Christian rhetoric and aggressive U.S. foreign policy. This column first appeared at Reason.com.

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An economic crisis with high unemployment is the best time to confront and even possibly reform Washington’s job-killing laws. Most Americans are either uninformed about the quantity and consequences of these laws or they regard them as normal. So now is the time to recognize, enumerate, and challenge the worst of them. But to reform bad laws, first you need to get them debated in public.

All too often we hear that cheap Chinese labor is wrecking havoc with our industries. In reality, it is a host of costly, job-killing burdens from Washington that are responsible. How many investments and job creations are not made because of compliance costs associated with excessively strict regulations (and the lawsuits they generate)? It’s no wonder that our great achievements nowadays are in fields such as electronics, movies, and games, where entrepreneurs and innovators face less government obstructions, lawsuits, and labor costs. Compare this to an investor trying to build new factories or mines.

For example, in a remote area of Alaska, efforts to start up one of the world’s richest copper and gold mines is stymied by unending Kafkaesque regulations and lawsuits. In Utah, Interior Secretary Ken Salazar arbitrarily cancelled 77 previously issued oil/gas leases because the smell produced by the drilling might affect air quality in the desert near national parks. New mining ventures today have mostly moved to Canada to avoid such unnecessary hassles.

Another prime example is nuclear electric power, which could be cheap and abundant. China is building 60 new nuclear plants over the next 10 years, while in Washington it takes 10 years to build even a single plant. Both the Chinese and the French build them in a bit over 3 years. President Barack Obama said he favored such plants and proposed billions of dollars in subsidies, but he made no mention of the obstructive permitting process that makes nuclear power so uneconomical. Remember also that nuclear energy plants are an established technology. Why does each plant have to go through such a bureaucratic rigmarole?

The EPA’s extremism and vicious fines and penalties are a primary reason why America is falling behind much of the world. Yet we hear complaints from the usual suspects that the only jobs America produces are service ones. The consequence of that view is growing trade protectionism, since we blame foreigners for “unfair” competition. This causes even more job losses: Witness the inability of Congress to ratify new trade agreements with Korea and Colombia.

Government created jobs appear to cost an average $200,000 each according to various studies. Many are for non-economic, artificially-created jobs such as those in alternative energy, which is extraordinarily expensive. Washington does all that it can to obfuscate the costs of its subsidies and tax favors.

Fortunately we still have breakthroughs, such as with the new discovery of horizontal oil drilling and rock fracturing. America has such dynamism that economic growth still occurs despite the government’s many efforts to hinder it.

Herewith is a list of immediate ways to create more jobs.

• Review EPA limits to identify and modify excessive and job-destroying regulations. As the oil cleansing limits discussed above indicate, many EPA restrictions are not based on realistic threats, but rather seem based upon the limits of its measuring abilities. They are often irrational and punitive and do nothing to secure health, safety, or prosperity.

• Revise depreciation schedules. American real estate companies, for example, must depreciate new roofs or new boilers over 27 years. Lowering that rate to 5 years would instigate enormous new activity for the building trades, providing tens or hundreds of thousands of sold blue-collar jobs.

• Reform the public sector. Billions in state funds could be directed towards hiring and construction if the money wasn’t committed to exorbitant pension and health benefit packages for public sector workers. Possible solutions include court challenges, firings, sub-contracting, and laws preventing public sector unions from going on strike. Louisiana and New Jersey are leading the way.

• Stop fighting endless foreign wars. Just think if the trillion dollars spent on Iraq had been used to rebuild our infrastructure. China, for example, is using its money to build massive new highways and high-speed rail between every major city. Meanwhile, it costs us 250,000 bullets for each dead guerrilla, half a million dollars to place each soldier (and his back-up) overseas, and $45 per gallon of fuel landed in Afghanistan. Little of this spending creates jobs in America.

• Stop passing vague laws. The new bank reform act, for instance, is expected to make small business loans harder to get and put new burdens on small banks. Among other restrictions, it requires bankers to verify that a loan is “suitable” for a given customer. That sort of vague language will inspire lawsuits, which in turn will result in the banks denying future loans.

• Make cheap electricity accessible. Government regulations (and regulation-inspired lawsuits) now prohibit or delay the building of new coal-generated plants as well as nuclear plants. Freeing up access to this cheap electricity would allow firms to prosper and hire more workers.

• Lift the ban on deep water offshore drilling. Tens if not hundreds of thousands of blue-collar jobs are in peril-or are simply not initiated-because of investors’ fears of arbitrary government regulations. Real estate magnate Steve Wynn relates his dealings with Washington here.

• Reform health care by promoting price competition and curtailing spurious lawsuits. Wasteful and expensive health care is a tremendous burden on American business, pushing up labor costs beyond the rates of even Western Europe, where withholding taxes include health insurance. It used to cost General Motors 8,000 dollars per worker for health insurance, compared to $800 in Canada. Reforms, blocked in many states, include Minute Clinics and Wal-Mart’s similar program where skilled nurses-backed-up by databases and by doctors on call-see patients for about $69 and dispense $4 generic medicines. This cuts out the money wasted on unnecessary tests and operations. These simple reforms would promote competition and save billions in health insurance costs.

• Stop subsidizing Ethanol, solar, and wind power. The billions wasted here could be used for real investments to expand America’s economy and re-build our decaying infrastructure.

The above are just a few ways in which millions of new jobs could be created. Sparking debate on these issues is the way to create real jobs, reduce government deficits, and bring prosperity back to America.

Jon Basil Utley is associate publisher of The American Conservative. He was a foreign correspondent for Knight Ridder newspapers and former associate editor of The Times of the Americas. For 17 years, he was a commentator for the Voice of America. In the 1980s, he owned and operated a small oil drilling partnership in Pennsylvania. This column first appeared at Reason.com.

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Now CNN reports that almost all new drilling activity has been suspended for over two months. This includes shallow wells in less than 500 feet of water-despite Obama’s statement that such wells would not be affected by his orders to cease all deep-water (over 1,000 feet) drilling. After thousands of deep-water wells have been drilled successfully without spills, the Interior Department, under Secretary Ken Salazar, has so delayed permitting and continuing operations as to possibly bring financial ruin to countless smaller companies. It would be similar to shutting down all airlines after a single crash. It may be that Salazar and his gang are just so ignorant of business that they think the government can simply shut down the super-sophisticated flow of supplies and men and then later restart it like flipping an electric light switch. It’s already estimated that it will take two years or longer to get Gulf production back to its pre-suspension levels. Meanwhile, deep-water drilling rigs-which cost over half a million dollars per day to operate-are being sent away from the Gulf to work in Africa and Asia where they are wanted. It will take months, if not years, to bring them back. Some 100,000 high-paying jobs are now at risk. Already the number of deep-water rigs has dropped from 42 to 19.

Most startling is the news that large boat skimmers could have sucked up much of the spill and cleansed it long before the oil reached shore. At the outset of the spill the Dutch offered skimmer boats with experienced crews that could have handled most of the spill. As The Christian Science Monitor reported in “The Top Five Bottlenecks“:

Three days after the accident, the Dutch government offered advanced skimming equipment capable of sucking up oiled water, separating out most of the oil, and returning the cleaner water to the Gulf. But citing discharge regulations that demand that 99.9985 percent of the returned water is oil-free, the EPA initially turned down the offer. A month into the crisis, the EPA backed off those regulations, and the Dutch equipment was airlifted to the Gulf.

A giant Taiwanese oil skimming ship, The A Whale, is only now working on the spill. It can process 500,000 barrels of oily seawater per day, but it also needed the same waiver from the EPA which, expressed in another way, limits discharged water to trace amounts of less than 15 parts-per-million of oil residue. It also needed a waiver from the Jones Act, which prevents the use of specialized foreign ships from the North Sea oil fields because they use non-American crews. Previously, the skimmers had to return to port to offload almost pure seawater each time they filled up with water.

In his 6 month moratorium on deep-drilling, President Obama said he was setting up a special commission to issue a report on the safety of drilling. He’s certainly not rushing. It took almost two months to appoint the “experts,” yet they won’t even meet until mid-July. Also none of them are oil engineers; they are scientists and environmentalists. The Wall Street Journal detailed their backgrounds in its report, “The Antidrilling Commission.” We also know that Obama and Salazar lied when they claimed that the six month shutdown had been supported by their panel of experts.

In Europe the laws governing oil spills are distinct from ours. They are prepared for spills and handle them as national emergencies to be quickly resolved. In Congress, however, the extreme environmentalists are now urging impossibly severe “punishment” conditions and sky high uninsurable liability on individual companies that will almost certainly shutter all medium-sized oil companies, since they would be unable to acquire the needed insurance. In America it has been smaller companies which have led technological discoveries, such as the horizontal fracking which has now made natural gas abundant. Yet Obama’s energy advisor, Carol Brawner, says non-major oil companies could be excluded from Gulf drilling when they, of necessity, are much more careful since spills could ruin them and put them out of business.

In conclusion:

• We have learned that the oil could have been skimmed early on so that very little-if any-would have reached shore.

• BP failed to follow established industry procedures and made several consecutive major errors which caused the blowout. This was not a reason to stop all drilling.

• Revamping Minerals Management in the middle of a crisis has created a catastrophe in the Gulf that permitted the government to shut down continuing operations, even in the shallow waters where Obama previously said drilling would still be allowed.

Wanting-or creating-scarcity has always been a part of the leftist agenda, on the theory that scarcities create the need for government allocation and control. One of the greatest threats of the current situation is that environmental extremists will use it as a justification to further their misguided agenda.

Jon Basil Utley is associate publisher of The American Conservative. He was a foreign correspondent for Knight Ridder newspapers and former associate editor of The Times of the Americas. For 17 years, he was a commentator for the Voice of America. In the 1980s, he owned and operated a small oil drilling partnership in Pennsylvania. This column first appeared at Reason.com.

The post The Government’s Catastrophic Response to the Oil Disaster appeared first on Reason Foundation.

First, just as one would expect, higher prices led to lower demand. U.S. demand for petroleum in 2008 was 5.4 percent lower than in 2007, falling by 1.1 million barrels per day (bpd) from 20.7 million to 19.6 million barrels per day. As prices rose Americans curtailed their driving. The Federal Highway Administration reported that in August 2008, Americans drove 15 billion fewer miles, or 5.6 percent less, than they did in August 2007. On the other hand, recent high prices have called forth new sources of supply. For example, Canadian oil sands now produce 1.1 million barrels per day. And new deepwater offshore production rigs like the Thunder Horse (250,000 barrels per day) and Tahiti (125,000 barrels per day) platforms are coming online. Falling demand and increasing supply mean lower prices.

In addition, a good portion of the lower demand for oil is the result of the global economic slowdown. “This time the usual petroleum boom/bust cycle lined up on top of the business cycle,” said Tim Evans, an energy futures analyst at Citigroup’s Futures Perspective. In March 2008, Evans warned that we were in the midst of a bubble and that oil prices would drop. When the investment firm Goldman Sachs suggested the possibility of $200 per barrel oil, Evans predicted that prices would fall to $60 to $70 per barrel. He observed presciently that “this is the riskiest time to be long in crude oil since 1980.”

So as prices drop will demand increase? Yes, but Evans believes that U.S. demand will rise slowly. Why? In part because various federal government policy responses to recent high oil prices are unlikely to be reversed. For example, the Federal government has mandated that Corporate Average Fuel Economy standards for automobiles rise from 27.5 miles per gallon now to 35 miles per gallon by 2020. Evans thinks that hybrid automobile technology may look economically attractive even at current prices. Plug-in hybrids like the Chevy Volt should use about 2 cents of electricity per mile compared to 12 cents per mile of gasoline. In addition, Evans says, “The biofuels initiatives aren’t going to go away. Even if they are not economically smart, the votes are there to make sure that we stick with these programs.” So subsidized biofuels will displace some demand for gasoline, putting downward pressure on the price of crude oil.

On the supply side, those “windfall profits” that oil companies have been earning in the last couple of years are paying for exploration and development of more oil supplies. It is true that the oil companies have been using their record profits to buy back stock and thus increase shareholder value. Some members of Congress believe that the oil companies should spend their profits on alternative energy projects that the companies don’t believe can be justified economically. And if the oil companies don’t stop enriching their shareholders, Congress will see to it that the “windfall profits” are taxed away and spent by government bureaucrats on alternative energy projects. It is possible that the members of Congress know better how to spend oil company profits than do their executives, but the Federal government’s record in this area is not impressive.

Naturally, suppliers don’t like lower prices, so the members in the Organization of Petroleum Exporting Countries (OPEC) want to drive up prices by restricting supply. In October, OPEC members pledged to cut oil production by 1.5 million barrels per day beginning on November 1. They plan to hold another meeting later this month to discuss further reductions. Even as consumers enjoy lower prices at the gas pump now, analysts at the International Energy Agency fret that they will lead to underinvestment in oil production capacity, resulting in a crude oil supply crunch by the middle of the next decade. Disturbingly, 80 percent of the world’s known oil reserves are owned by government oil companies whose revenues are looted rather than reinvested in production. In any case, lower prices and the credit crunch are already causing oil companies to shelve some projects. Alternative energy promoters also fear lower petroleum prices because they make their projects even less economically feasible. Some are advocating a higher gasoline tax in order to counteract the deleterious effects of lower crude oil prices on the glorious alternative energy future.

So what’s next for oil prices? For the coming year, Evans thinks that the price of oil will bounce around in a trading range of $50 to $90 per barrel, averaging around $70 per barrel.

Ronald Bailey is Reason magazine’s science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is available from Prometheus Books.

Disclosure: Yes, I still own those 50 shares of XOM that I bought with my own money. The shares are down 12 percent from their high this year.

The post The Oil Price Bubble Bursts appeared first on Reason Foundation.

The stakes are high. We’re not just faced with the problem of how to maintain and repair our roads and rails. We also need to find a way to come up with billions of dollars to redesign and reconfigure our transportation network for the 21st century. That’s a big challenge because we are already facing an annual transportation deficit of at least $75 billion, according to groups such as the American Society of Civil Engineers and the National Cooperative Highway Research Program, the National Surface Transportation Policy and Revenue Commission.

But where will the money come from?

Some are holding out for a major increase in the gas tax to fund infrastructure needs. The National Surface Transportation Policy and Revenue Commission recommended a hike of 60 cents. Many in Congress would like to see a gas tax increase increase, but most insiders doubt they can get much more than a few pennies at the end of the day. Few see Congress rushing in to hike the gas tax in the midst of record-high gas prices and a slumping economy.

Further complicating a gas tax option is its scale: even if taxes were increased dramatically the gas tax still wouldn’t provide all of the needed funding for road projects.

Meanwhile, the US is in danger of leaving billions of infrastructure dollars on the table for other countries to eagerly snatch up. Private investments funds are capable of leveraging $525 billion for infrastructure investments worldwide, more than 10 times the amount available just eight years ago. These funds are simply looking for the right places to invest. And thus far they’ve found them outside of the United States.

Europe and Asia have decades-long histories of tapping into private equity to fund their transportation infrastructure using public-private partnerships. France has virtually its entire limited access highway system under the management of privately-owned firms, including Cofiroute, ASF, APRR, and Sanef. Australia has been tapping into private capital using companies such as Macquarie and Transurban to build tunnels and tollroads in its major cities since the 1990s. Italy and the United Kingdom claimed nearly half of the private investment in public infrastructure between 2003 and 2006 among the 20 nations that make up the Organization for Economic Cooperation and Development (OECD), according to Standard & Poor’s.

China may be the most aggressive in using private capital to build its transportation infrastructure. The nation is embarking on an epic road-building program that will match the size of the US Interstate Highway System and be completed in less than half the time. Its expressway network is intended to link all provincial capitals, 80 percent of the nation’s population, and 90 percent of the nation’s ports, according to a report prepared by the China Construction Bank Corporation (CCBC). Most of these expressways are being financed by tolls, and the tollway companies depend on private capital to finance them.

The US lags behind all of these countries. Just a handful of projects have closed in the US for a fraction of the amount of capital available on the global market, most notably the $3.8 billion Indiana Toll Road and the $1.8 billion Chicago Skyway. In a positive sign, three Greenfield (new) toll road deals were signed recently in California, Texas and Virginia. The combined investment value, however, doesn’t even match the Indiana deal. While a consortium of domestic and foreign companies submitted bids to lease the Pennsylvania Turnpike, the winning bid of $12.8 billion is still far from a done deal even though it is strongly supported by Democratic Governor Ed Rendell.

The US market appears to be limited largely for political reasons. In the immediate aftermath of the Indiana and Chicago partnership deals, Congressmen James Oberstar (D-MN) and Peter DeFazio (D-OR) sent a letter to governors and state highway officials warning them that the US House Committee on Transportation and Infrastructure would “work to undo any state public-private partnership (PPP) agreements that do not fully protect the public interest and the integrity of the national system.”

A strong response from state officials quelled some the protest from Capitol Hill and the short-term momentum to rein in public-private partnership projects. Nevertheless, proponents of public-private partnerships were put on notice that the federal government might become active in discouraging the further use of private capital in highway and transportation projects.

We may be giving private capital, even US-based funds, little choice but to invest their billions in fruitful, but less lucrative projects abroad. That would be unfortunate for the US, undermining our global competitiveness and undercutting efforts to shore up a transportation system desperately in need of an extreme makeover. Unless national transportation policy gets on track and embraces private capital, our transportation system will continue to lag far behind our global competitors.

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Sen. John McCain wants to suspend the gas tax. Sen. Barack Obama wants a “windfall profits tax” on oil companies. And both major political parties seem to support funding various programs to find alternatives.

But are high gas prices really a “crisis”?

“For many Americans there is no more pressing concern than the price of gas,” President Bush said at the White House on June 18th. “Congress must face a hard reality. Unless members are willing to accept gas prices at today’s painful levels or even higher, our nation must produce more oil.”

At its root, today’s gas prices reflect a simple market reality: the world pumps 85 billion barrels of oil out of the ground each day while the world wants to consume 87 billion barrels. Moreover, developing nations, primarily India and China, but also Brazil and eastern European countries, are growing rapidly, pushing long-term demand even higher.

It also doesn’t help that our capacity to pump and refine oil is stubbornly resistant to expansion. A new refinery hasn’t been built in the US since the 1970s.

Some of this inelasticity is economic-oil companies and refiners remember all too well the industry wide recession triggered by falling gas prices in the 1980s and 1990s after an equally severe price spike in the 1970s. Most of the inelasticity, however, is political-unrest in Nigeria and Iraq, saber rattling in Venezuela and Iran, or special interest opposition in the US and Western Europe.

So, in reality, today’s prices reflect the mismatch between supply and demand. The prices we face today, at the gas pump and on the world market, are really a normal and essential market outcome.

So what will we do? First, as in previous cases, we’ll cut down how much we drive. In fact, vehicle miles traveled, a common measure of demand, has fallen over the last year in the US.

Second, once we think the high prices will stay around for a while, we will begin to change how we get around. Fortunately, most of us won’t be forced to dramatically change our lifestyles. Simply dumping the SUV for a hybrid, four-door sedan essentially neutralizes the effect of the run up in gas prices over the last two years.

The more important step, however, will be long-term changes. That’s when, with the help of the profit motive, new kinds of vehicles will be available on a broad basis for consumers throughout the economy. That’s when we take advantage of an emergence of electric-only vehicles, perhaps even a version of the new Tesla sports car – currently over $100,000 for a car that goes about 220 miles per charge – will be priced low enough for the middle class. Honda has already launched the emissions-free, hydrogen fuel cell FCX Clarity for a limited run before going into mass production within 10 years. Drivers already have 20 different hybrid models to choose from. There should be 65 hybrid models by 2010.

While many working-class families will have to change their lifestyles or spending habits to deal with higher gas prices, most won’t. The median household income in the US is now $48,000 per year. Higher gas prices would be equivalent to about a 1 percent reduction in their total income at today’s prices. Most families will have the financial flexibility to make adjustments needed to accommodate higher prices.

As painful as it is for many, the correct response to high gas prices is to simply let the market work, not use them to justify billion dollar programs on inefficient fuel alternatives or adopt politically expedient gimmicks like a gas tax holiday. Market economies provide the natural incentives to both suppliers and consumers to ensure the needed adjustments will be made at the right time with the right technologies. We don’t need politicians or energy planners to trump market decisions.

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Conventional wisdom, of course, says otherwise. Some environmental activists and other anti-car ideologues are practically beside themselves with joy as gas prices climb higher. Public transit use is up, and some early evidence suggests that home prices are falling faster in far-flung places with long commutes. Perhaps, they hope, Americans are finally breaking from their “addiction” to gas guzzling automobiles and making the “right” choices by living in smaller homes in dense neighborhoods in congested cities closer to their jobs.

Many politicians, including, presidential candidate Sen. Barack Obama are on the bandwagon. Obama recently criticized the “Big 3” automakers during a stop in Warren, Michigan for making cars people wanted to buy – trucks, minivans, and SUVs – rather than the money-losing smaller cars produced by their Asian competitors.

“Now, a big part of the reason autoworkers are struggling on the factory floor is because of decisions that were made in the boardroom. Rather than invest in the fuel-efficient cars of the future,” the senator-turned-economic soothsayer said, “auto executives invested in the SUVs and large trucks that may have helped meet a rising demand, but that essentially guaranteed that they would be outpaced by foreign competitors and that the industry’s long-term problems would be harder to solve.”

Republican candidate Sen. John McCain has also called for increased fuel efficiency standards on cars sold in the U.S., but the real world shows the backseat driving by politicians and others is wrong. While gas prices are likely to increase over the long-term, technology and innovation are likely to keep the car and automobility at the top of our livability agenda.

First, take the experience of Europe. Gas prices now exceed $8 per gallon in Belgium, France, Germany, Italy, and the United Kingdom according to the U.S. Department of Energy. Yet automobile travel is booming. “Despite efforts to promote the popularity of other transport modes,” the European Commission writes, “the car remains the personal means of transport par excellence.” The number of passenger cars per capita has increased five times faster in Europe than in the U.S. since 1990.

Second, let’s take a look at U.S. public transit. Undoubtedly, higher gas prices are pushing more people out of their cars and onto buses and trains. In some cases, transit ridership is up 10 or 15 percent over last year.

But, how significant is this jump? Only public transportation in New York and San Francisco can claim a metropolitan wide market share of more than 5 percent. Regional transit accounts for less than 4 percent of all travel in Boston, Chicago, and Washington, DC, despite hosting some of the most extensive systems in the nation. Transit’s share of travel in growing cities such as Los Angeles, Phoenix, Houston, and Atlanta barely even registers on the travel radar screen.

A far more important indicator is how Americans will adapt to maintain their standard of living and quality of life.

Higher gas prices will not just spur more oil exploration. They will drive the search for new ways to provide the mobility American consumers want by reducing the need for oil. Twenty-two hybrid car models were already sold in the U.S. market when Toyota sold its one-millionth Prius in 2008. JD Power and Associates estimates that 65 hybrid models of cars, trucks, and SUVs will be available by 2010. As Obama pointed out in Michigan, “GM is releasing an average of one new hybrid model every three months for the next two years. So we’re certainly taking steps in the right direction.” As gas prices climb even higher, automobile companies will inevitably ratchet up their efforts to compete on energy efficiency just to survive.

Even if automobile technology lags consumer demand, we shouldn’t underestimate the ability of Americans to find new ways to preserve their lifestyles. Already, telecommuters outnumber public transit riders in half of the top 50 American cities. Job growth in the suburbs has outstripped traditional cities for decades. High gas prices will likely accelerate these trends.

In the end, elected officials would be far better off letting international oil markets work on their own without interference from Congress or regulatory agencies. In a dynamic, market-based economy, consumers will make the adjustments necessary to maintain their standard of living and provide the proper incentives for car and energy companies to develop new products to meet these shifting desires. Intervention by misguided backseat drivers will do more to prevent these changes than encourage them.

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In the new era, it is American car consumers who will suffer collateral damage–while victory over climate change will remain elusive.

The cornerstone of the energy bill signed Wednesday by President Bush is the raising of so-called Corporate Average Fuel Economy (CAFE) standards to mandate a 40 percent increase in auto fuel efficiency by 2020. First conceived in the wake of the 1970s oil embargo (at a time when global cooling hype was at its peak), CAFE sought to reduce America’s “dependence” on foreign oil. But since passage in 1975 the policy has had the opposite effect as better fuel economy made it cheaper for Americans to drive more, increasing U.S. auto fuel consumption 20 percent and imported oil’s share of the U.S. market from 35 percent to 59 percent.

Despite CAFE’s failure, Washington has opted for the program’s biggest expansion in 30 years. Global-warming fever, rising gas prices, and Detroit’s declining economic importance conspired to make this CAFE’s moment. Though Republican presidents have historically stood against tougher regulations, in this case the Bush administration actually initiated the increase. Desperate to prove his Iraq adventure was not motivated by a lust for oil, President Bush has made curing America’s “oil addiction” a domestic policy priority.

But the biggest push for CAFE came from within the Democratic party. Democratic circles once regarded foreign cars as a treasonous assault on American workers. Now, however, Detroit’s once iconic carmakers have become environmentally incorrect. Indeed, congressmen Ed Markey (D-Mass.) and Greg Walden (R-Ore.) publicly bragged about owning Toyota hybrids during a recent hearing of the House Select Committee for Energy Independence and Global Warming.

Given this backdrop, Detroit’s goal this time was not to dodge stricter CAFE standards–but to minimize their damage. In this the automakers succeeded rather well, thanks to octogenarian John Dingell’s unflinching advocacy.

For starters, Dingell not only reinstated the ethanol loophole the Senate bill had scrapped–but he actually expanded it to include other alternative fuels such as biodiesels. The loophole gives automakers fuel economy credits for building vehicles that can run on alternative fuels–whether consumers fill them with these fuels or not. Dingell also bought the industry new efficiency credits. For example, if a company achieved more than the mandated 40 percent increase in fuel economy for its smaller-vehicle fleet, it could apply the balance to its SUVs. And the industry kept differential fuel economy standards for cars and light trucks–instead of requiring that trucks meet the same stringent standards as cars, as the Senate bill, under pressure from environmental groups, had mandated.

But Dingell’s special gift to Detroit was his success in forcing a radical overhaul of CAFE standards that is far more favorable to them than their Asian competitors. The original CAFE standards set a fixed standard of 27.5 mpg for cars and 20 mpg for trucks. This amounted to a doubling of fuel economy and disproportionately affected Detroit, which manufactured a fuller range of vehicles than Japanese auto companies, with their specialization in fuel-efficient compact cars.

The new CAFE standards do not set absolute gas-mileage requirements for vehicles. Rather, they require every company to increase its fuel efficiency by 40 percent. This will effectively hold Japanese carmakers to a higher fuel economy standard given that their vehicles get better gas mileage to begin with. Thus, a spokesman for the Alliance of Automobile Manufacturers, Charles Territo, notes that the 40 percent increase will likely translate into an overall 32 mpg for Chrysler vehicles but 38 mpg for Honda.

The Bush administration estimates the new standards will cost the industry $85 billion. Though they may cost Japanese carmakers more, American carmakers will still have a harder time complying given their worse financial situation. But both will have to divert research dollars from cars that consumers prefer.

A recent Consumer Reports survey found that 70 percent of buyers want more fuel-efficient vehicles–but only 50 percent are willing to sacrifice size and performance in that quest. This market reality is why, even as engine efficiency improved 1.5 percent annually for the last 20 years, automakers have channeled those gains not toward better gas mileage but toward greater horsepower. v

The net effect of the new CAFE standards therefore will be to thwart consumer desire as carmakers are forced to overhaul their product lines to emphasize either smaller cars or large hybrid-engine vehicles that, on average, cost $5,000 more than the nonhybrid versions. Jesse Toprak, an auto analyst with Edmunds.com, maintains the 35 mpg mandate is so onerous that large, gas-powered SUVs might well go the way of the dinosaur–despite their popularity and superior safety record.

But will this sacrifice curb climate change? Not really. John Christy, University of Alabama climatologist, maintains that even if the entire world adopted a fuel efficiency standard of 45 mpg, “the net effect would reduce projected warming by about 0.05 degrees Fahrenheit by 2100.”

John Dingell bought time for U.S. automakers endangered by the quixotic crusades of climate warriors–but he won’t live forever. Their fate will remain precarious, unless cooler heads–or cooler air–prevails.

This column first appeared in The Weekly Standard.

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