Pelosi Wants to "Save The Earth"

Hmm...How About Wanting to "Save Our Economy and Defend Our Country and the Environment"?

We're all for Nancy Pelosi being attracted to the title of "Environmentalist-in-Chief" as reflected by her comment that she wants to "save the earth". But she must do a much better job of educating the American people that her desire to get off fossil fuels reflects concerns about the economy and national security as well as the environment.

The Speaker could start by teaching the American people that environmental damage is an example of marketplace failure. The market does not require business to internalize the cost to the environment. Just the opposite, it encourages them to externalize these costs and impose them on others--whether it is global warming (which is just another form of pollution), oil spills, impact on health... whatever.

Product prices should reflect all of their costs. Otherwise, businesses are receiving a form of subsidy, hardly the only hidden oil subsidy given the amount of military spending to protect its delivery.

But these subsidies hide the real cost of fossil fuels--as well as impede the development of new technologies. Gasoline, like other products, should be priced so that the environmental and other costs are internalized. Of course, gasoline prices would be higher than people desire--and other policies should then be adjusted to help people cope. But Americans need to be wedded to economic rationality, which includes full internalization of costs.

This argument also should be built on the fact that there is no "marketplace", at least as we think of it, in oil to begin with, as the supply is controlled by a cartel.

The Dems have also been pointing to the disconnect between the oil companies holding "unproductive" leases yet wanting more. But the case has not been well made. How can there be predictions of over 100 billion barrels of untapped oil reserves on US property, when so many leases are unproductive? This seems to mean either that the oil companies are holding back on exploiting productive leases or that the reserves aren't nearly as great as the oil industry claims. Which is it? This loop needs to be closed.

Finally, if U.S. oil is so valuable and if we hold only a fraction of the world's reserves, should we be running to use all of it? Should we be draining America first?

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