Friday, September 01, 2006


Many pundits try to characterize global warming as a golem created by greedy corporations. Much environmental policy is developed under this guise. Unfortunaltey, giving the federal government the power to regulate commerce in the name of soaking the rich leads to ‘rent seeking’ that in the end benefits large corporations and hurts the poor. In the name of ‘green’ and responsible refining, Unical successfully lobbied for tight restrictions on refining in California during the 90's. Once the standards were passed it was revealed that noone could refine gas and remain compliant without violating Unical’s patented refining technology. This resulted in windfall profits for Unical, restricted gasoline supplies, and higher prices at the pump.

Restrictive environmental laws that decrease the incentive for oil exploration, the building of refineries, and expanding our electrical grid all lead to ( at least to some degree) increased market power for incumbent corporations. If anyone complains about ‘price gouging’ and ‘abnormal profits’, these are the polices that help make it possible.

Free markets, growth, and investment are perhaps the best solutions for achieving energy stability that is in the interest of everyone as opposed to just politicians and big business.

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