One of the most frightening things I ever saw was the Androscoggin River running red.
This was in the early 1960s when our family was driving into Rumford, Maine on the south side of the river toward the paper mill that straddles the river. The river was red because there were then few rules about how the company could dispose of liquid wastes that contained dyes, acids, and other chemicals used in or produced by the process of dissolving spruce trees to make paper.
Lack of regulation and the power of the industry at the time had reduced Maine’s mighty rivers to sludge dumps.
To the credit of both government and industry leaders of the time, new regulations were devised that addressed many of the most odious industry practices, and those efforts led to a decades-long effort to protect the state’s water, air and land from the detriments of its largest industry, one that employed thousands of workers and generated millions in tax revenue that supported state government, local schools and towns and made the state a better place.
It was a joint recognition that both sides had much to gain by agreeing.
It was a recognition that water was more important than writing paper.
The old scene came to mind the other day after the Mitt Romney outlined his possible energy policy if he is elected U.S. President in November.
The plan is heavy on the production of oil, natural gas and coal, light on the development of newer technologies and death on regulation.
Supply side energy policies are like supply side economic theories. They don’t work. They presume that nothing changes.
Romney’s call for more oil exploration comes at a time when there is more oil production taking place in the U.S. and the world than in recent memory. History shows that the amount of exploration is cost sensitive: Oil companies drill for more oil when the price is high than they do when the price is low.
Somehow the Romney plans take on an approach that the oil industry is in its infancy, that crews are still out there randomly punching holes in the ground hoping to find a gusher, when in truth the amount of science that is applied before drilling takes place is staggering.
Look, without judging through other factors, at where oil is being produced today: From tar sands in Canada, in North Dakota hills, in deep waters offshore and near the North Pole, and we get natural gas from layers of shale in Pennsylvania and other Eastern states.
So the call for more production is an empty promise. It surmises that more production equals lower gas prices, when if just the law of supply and demand is used, the over supply of oil in the world would be producing lower prices. Especially since due to conservation practices and a slower world economy, demand for oil products is down.
But the price is not down. The mere rumor of a tropical storm before it eventually formed led to a recent jump in the price at the gas pump, and any headline that includes both Iran and Israel sends pump prices soaring.
The fallacy of Romney’s assumption is evident in this equation: When gasoline reached $4 a gallon in the U.S. in 2008, the price of oil was $140 a barrel; today it has reached $4 a gallon when the price of oil is about $95 a barrel. More production will not change that ratio.
Another reason Romney’s policy is irrelevant is that regulation has not killed off industries, but made them stronger. Maine’s paper industry survived the regulatory push and thrived. Actually, Twitter and Facebook and the iPhone are bigger threats to the paper industry than regulation because they produce communication without paper. The email birthday card you sent to your brother does more harm to the industry than making a paper mill treat its wastewater before discharge because regulation does not reduce demand for their product, but an email does.
With heavy industry the need for regulation is evident. Remember acid rain? Pollutants, basically sulfuric and nitric acids, from Midwestern coal-powered electric plants were dropping into lakes and ponds in the states east of those plants and killing off the aquatic life. New rules reduced the threat, and the water bodies slowly began to recover.
Does Romney really want to go back to that scenario? His beloved Lake Winnipesauke would be in the line of fire and it would be interesting to see his response if Northern New Hampshire’s tourist economy was harmed if the lake went bad.
Oil and coal are not more important than water.
We can replace oil and coal as energy sources and eventually will. The greatest current threat to the coal industry is not regulation, but cheap natural gas.
We can’t replace a depleted or ruined water supply.
The key reason the policy is irrelevant is that entire industries have embraced conservation standards.
The auto industry is using lighter, but stronger steel in most of its vehicles and based on a report I read, within two years it will be used in all vehicles built worldwide. Increased use of redesigned technology like turbochargers is helping make engines smaller and more powerful. Increased computer use in vehicles makes them run better and cost less to run. Does Romney want to turn away from that effort?
I remember well the day in 2008 when gasoline in New Jersey reached $4 a gallon. The day before, Route 78 was filled with SUVs and pick-up trucks as all those commuters headed to work.
The day after, the highway was filled with Corollas, Jettas, Ford Focuses, Chevy Cruzes, and Priuses. All the pick-up were parked at the edge of the lawn with a for sale sign in the window. I know. I was one of those truck drivers.
Mack Truck, the heavy truck maker, has redesigned its entire line of vehicles to meet customer demands for higher mileage and efficiency. It has even designed a natural gas model.
Building construction standards, and customer demands, now require lower energy uses, so buildings are designed to include more natural light, water reuse, redesigned heating and air conditioning systems and even things like motion detectors that turn off hall and room lights when the facilities are unoccupied. The buildings are cheaper to operate. Add solar panels, and the demand on the electric power grid is reduced.
That is a long-term factor we are still examining. But would that question even be asked if Romney’s policy was put in place?
Marketplace demands and innovation driven by those demands make Romney’s energy policy irrelevant. Change has pushed forward; policy has not. It seems that the need is for policies that aid this transition, not ignore it.
Those motion detectors?
They are higher technology versions of The Clapper, the device that made lights go on or off with a clap, whether or not you were an elderly woman falling asleep in her bed.
So this election in a sense is Mitt Romney versus The Clapper?
Who thinks the Clapper will win?
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