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Thomas Friedman's Big Deal on Fracking and Global Warming

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Wednesday, 07 May 2014 04:53

Thomas Friedman wants to "go big, get crazy" when it comes to energy policy in order to both deal with Vladimir Putin and global warming. The idea is that if the United States can drastically reduce its demand for foreign oil it would put downward pressure on world prices and thereby hurt Russia's economy. His way of reducing demand for foreign oil is a combination of promoting clean energy and allowing increased oil drilling and fracking, "but only at the highest environmental standards." He also would allow the XL pipeline, but a quid pro quo would be a revenue neutral carbon tax.

There are a few problems in Friedman's story. First, it's hard to see why the frackers would take it. The main limit on fracking at the moment is not regulation but low gas prices. In real terms, natural gas prices are less than half of their pre-recession levels and less than a third of their 2008 peaks. In states like Pennsylvania, where they have a drill everywhere policy, production is dropping because new sites are not profitable.

If we put new regulations on fracking, for example making the industry subject to the Safe Drinking Water Act and thereby forcing it to disclose the chemicals it uses, that would likely mean less fracking rather than more. That means both that the industry is not likely to buy it and that his policy would go the wrong way in terms of increasing U.S. production.

The same applies to his proposal for a carbon tax coupled with approving the XL pipeline. The tar sands oil that would go through the pipeline would be especially hard hit by a carbon tax. That would likely make it unprofitable, a point that Friedman himself notes. For this reason the industry is unlikely to see the XL pipeline as much of quid pro quo for a carbon tax. In short, it doesn't seem like he has much of the basis for a deal here.

His description of the Europeans, and in particular the Germans, is also inconsistent with his description of his "big" and "crazy" plan. Friedman tells readers:

"Europe’s response has been more hand-wringing about Putin than neck-wringing of Putin. They talk softly and carry a big baguette."

Actually Europe and in particular Germany have done a great deal to reduce their use of fossil fuels over the last two decades. Germany's energy intensity of production (energy use per dollar of GDP) has fallen by 30 percent over the last two decades to a level about half of the U.S. level. Almost a quarter of its energy comes from clean sources and this share is increasing by 2 percentage points a year. 

In short, Europe has been doing a great deal to reduce its demand for fossil fuels. It certainly could do more, but if the United States had been following the European path over the last two decades, the price of fossil fuels would certainly be much lower than it is today. Of course, a big part of the story is that Europeans are more likely to carry a big baguette than to drive a big SUV.

 

Addendum:

A friend reminded me of one of Thomas Friedman's great energy plans from the past, this time with China as a partner. The piece is here and my comment here.

Comments (8)Add Comment
Putin Bait: Go Green and Take Out Putin as a Bonus
written by Last Mover, May 07, 2014 7:00
The White House just released a study that found the effects of human-induced climate change impacting every corner of our country, not to mention the world. So such a grand bargain could not be a more timely and necessary win-win-win strategy.

It would simultaneously increase our leverage against Putin and Mother Nature. And it would drive a suite of technologies down their cost-curves so we can deploy them at scale and ensure that America is the leader in the next great global industry: clean technology. Obama should throw caution to the wind and go big.

If Republicans won’t meet him even halfway on this (yes, I know, unlikely) it would expose them as unwilling to do the things that would meaningfully deter Putin, not to mention buy some insurance against climate change with policies that would make us stronger and healthier even if climate change turns out to be milder.


Uh, and just who was it cheering on the takedown of the Ukrainian Prime Minister, the ouster of which resulted in a takeover by fascist extremists who ended up handing Crimea over to Putin.

Friedman is in over his head from the sock puppet league as usual. Ask any taxicab driver in the Ukraine how many suckers have taken the bait from Putin and paid for it big time.

If green energy needs the downfall of Putin to survive it is not green energy.
...
written by Kat, May 07, 2014 7:26
"but only at the highest environmental standards"
See, it's statements like that that catapult Tom to the top of the global thinker list. He wants to do things the right way.
Why do I foresee a NYT column ten years down the line(and we all know he'll still be there) chiding US citizens for their reluctance to cut SS so that we make investments in desalination plants and perhaps drain the Great Lakes "only at the highest environmental standards".
Debt Crisis in Ukraine
written by John Shaplin, May 07, 2014 7:58
A good solution to the debt crisis in Ukraine would be a wealth tax though this would require a hitherto unthinkable transparency with respect to the deposits of the oligarchs 'East" and 'West'. Even if it didn't immediately succeed in putting the Right Sector back in a box the precedent would be very useful 'going forward' for all parties concerned.Failure to consider such a proposal inevitable gives rise to all sorts of what Gibbon often called in 'insensible' interpretations and solutions to the conflict. In exposing the extremities to which such insensibility' is capable of going, Friedman is a useful idiot.
Demonizing Putin is bad policy
written by Dave, May 07, 2014 8:25
None of us like what Putin is doing, but demonizing him like we did the old Soviet Union is not generally a good idea. I think we really need to look upon that situation with an objective lens. It is fine to really hate what he's doing, it is fine to punish him for doing it, but it isn't ok to try to counter it by pushing US capitalism back through Ukraine. Eventually we're going to have to get along.

What we really need right now is a commitment to using government programs, including direct spending to push green energy. Somebody has to get the ball rolling, and there aren't enough Elon Musks out there for the private sector to get started alone. Apparently we also desperately need the government to start the push to find new antibiotics.

All this really takes is a belief by somebody in power that we need to do some really smart deficit spending right now. They need to stop trying to look balanced and just start presenting the solutions. It isn't that hard. Reagan was able to sell voodoo because he believed in voodoo. Somebody should be able to sell reality if they only believed in reality.
Compromises
written by David M, May 07, 2014 12:25
Okay, so the actual bargains that Friedman proposes may not work, but I'm sure he'd be willing to compromise. Approve the KXL pipeline and fracking and he'll call it a deal.
Cabbie not know economics!
written by Dave, May 07, 2014 5:05
That was a great response worthy of print. My response is not worthy of print, and so it is just comment material.

Memo from Friedman to America:

Let me tell you something I know about the China man: They're good at working with their hands! Maybe they were better off working as manufacturers, taking our cerebral stuff and making stuff from it. We Americans are really smart, and we really appreciate those China men that make our stuff for us!

End of memo

His arrogance and ignorance is offensive as a representation of the American perspective.
Friedman has difficulty with assigning likelihoods to his suggested solutions
written by John Wright, May 08, 2014 12:04
Tom Friedman never seems to include numbers in his columns.

In this column, he does not assign some probability of surviving the political process to his suggestions.

For example, in the column he has advocated for nuclear energy, the Keystone pipeline and fracking (with highest environmental standards. of course) and for a revenue-neutral carbon tax.

Past experience should have taught TF that the chance of something industry likes (nuclear energy, Keystone pipeline or fracking) getting into law is far higher than the possibility a new tax law that industry doesn't like such as a "revenue-neutral carbon tax".

So of his suggestions, some are far more likely to get into legislation than others.

But this is good for Tom's business as he can write a subsequent column saying he was only for the resultant increase in fracking, nuclear power, Keystone pipeline IF the revenue neutral carbon tax had been passed. And he will be able to accuse the politicians of lacking courage to pass the carbon tax he proposed.

I looked through some of the readers' comments, and one stated "Fracking at the highest standards? Did Mr. Friedman fall out of bed on his head?"

Perhaps the story of WHY Friedman continues to have a NYT job is told in the readers comments.

The #1 NYT pick, chosen by Times employees, is a comment supportive of Friedman BUT this comment has garnered all of 2 readers recommendations.

The top readers' pick comment, which is skeptical of Friedman, has 196 recommendations.

Perhaps Tom Friedman's ideas are not viewed favorably by many of his readers, but the Times does not care because the Times management likes his message.

Iraq
written by Terry Scott, May 08, 2014 7:15
Friedman was a champion of the invasion of Iraq.

That alone should disqualify him from any more prognosticating.

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Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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