Social Darwinism in the energy business
Commentary by S. Tom Bond, Resident Farmer, Lewis County, WV
Darwin’s theory characterized as “red of tooth and nail,” by some of the clergymen of the time, influenced something called “Social Darwinism,” which claims evolutionary processes explain a lot of the world’s social inequality.
This worked into the fabric of social science. The justification of one business establishment succeeding another is that the replacement provides a product that better meets the needs of society. It is cheaper, does the intended job better, lasts longer or has some characteristic the public wants, and that’s why it “won.”
For decades it was the excuse for stepping on other people, other races, other nations, usually less developed. Now, in our century it has lost its respectability. People who think about it are too sophisticated to accept the idea. Simple superiority does not explain differences in societies.
In economics, however, mutation of accounting accomplishes the same end. You can justify an initiative by not counting all the costs. Then you claim the product is good for society. I have talked about “externalized costs” previously, that is the business man putting off costs of a business initiative on other people. If your neighbor grows pigs in his back yard, near your house, you have to tolerate the smell of his pigs without benefit to your family. Zoning is based on such considerations.
Energy is the principal “food” of industrial society, it’s what makes it run. Everyone is desperately dependent on it. But burning hydrocarbons is not the only way to get energy. And, certainly not the best way to get it. Pollution of many kinds, particularly caused by fracking, as opposed to conventional extraction, results in environmental disruption in a time when the demand for food and clean water is rising rapidly. The fracking causes demands on services such as roads, legal services, permanent records provided by the public, uglification of the drilling fields, and global warming never enter the accounting.
The fundamental idea in accounting is that the benefits are hopefully greater than the costs. The mutation of the cost side of the ledger by leaving out these costs is required to justify some enterprises. Sure we need energy, but at what cost? Like the famous Indian snake, the head is swallowing the tail of industrial society.
Perhaps the only industry more free to avoid the rational consequences than the hydrocarbon industry, is the financial industry. The relatively rapid return from investment in early fracking is strong encouragement to loan to it. Buildings, roads, airports, etc. take decades. Fracking takes only two to four years.
And like the subprime housing boom that went bust in 2008, the investors get their profit first, and when the householders couldn’t pay off, the taxpayer did (because we the public have to be able to borrow money). Government bailed the big banks out with tax income, i.e. the public’s taxes. Banking is thus, as they say, “a ‘purty’ good job if you can get it!”
Actually, government has been bailing out the fracking industry since it began. Largely ignored in the story as it is usually told, the key research for fracking was done at the Morgantown Energy Research Center, Morgantown, WV. Then George P. Mitchell received government subsidy to try it, and it worked commercially. Mitchell is a hero of fracking, but without government subsidy it would never have happened. Slowly everybody and his brother climbed on the band wagon, each with a slightly different technique.
Every effort was made to keep regulation in the individual States, keep the Federal Government out. The industry was afraid of honest research and regulation, and as was expected, states were ductile, easily drawn in the shape wanted by industry. (West Virginia and Pennsylvania notoriously so.) Lobbying was a business expense.
There never had to be any kind of accounting, just simply the will to drill and the resources required. The accounting had to satisfy investors, and externalized costs were always ignored. State legislators are not full time, and most of their political effort is in getting reelected. They don’t have time to study issues beyond the surface, and largely respond to pressure. States are strapped for money, for reasons we can’t get into here, and any promise of money to a state is very attractive. However legislatures are willing to forgo any but a pittance from production to keep an industry in their state.
Between some states the effort to get fracking is like the phrase in boy’s books about Pirates, “Every man for himself and devil take the hindmost!? Or “All’s fair in love and war.” Pubic relations have paid a large part, too. Ads buy newspaper support, and smooth speakers don’t get much critical analysis from the Chamber of Commerce.
A lot of effort originally was to find hot spots, highly productive areas. Estimates of ultimate production are based on what drillers are getting now. It is certain that ultimate reserves are only a guess and must be considered a maximum. Something like 92 percent of the gas or oil is left in the ground, with no technique in sight to get the rest. The rock must be broken to extract oil or gas, when conventional oil or gas can flow through pores in the rock, so secondary and even tertiary recovery is possible. There is an immense amount of toxic waste produced by fracking.
Although the U. S. is now the leading producer of oil, it is unlikely that U. S. independence of imports will ever be achieved. We are still importing far too much to have the difference made up at home. The “independence from imports” phrase is hoopla. And with the situation in the previous paragraph considered, how long can U. S. production be kept up?
Both wind and solar power is increasing in efficiency, lowering cost. They make more and better jobs. Increases in efficiency by frackers result from longer horizontal runs and the fact they have been able to beat suppliers of goods and services down to lower prices. Recovery is only marginally better, if any at all. Shouldn’t government support go to research on new improved carbon free methods that don’t hurt water supply, poison people, require pollution be pumped underground?
Global warming is now as conspicuous as the nose on your face. Burning coal, oil and gas and exhausting the carbon dioxide in the atmosphere is a primary cause of it. The student product of a good high school chemistry course can calculate that twelve tons of carbon puts 44 tons of carbon dioxide in the atmosphere. How much cost is attributable to that? Nearly 6 billion tons of carbon dioxide a year. How does it go into the accounting? In fact, it doesn’t.
So the accounting for burning oil and gas is tremendously skewed. The public story is skewed. Darwinism is the explanation to those affected – “You have to break an egg to make an omelet.” And if you live in the fracking zone, or own property in the fracking zone you happen to be the egg.
Social Darwinism applies to you. Consider the loss of your assets, including your health and capacity to work being lost to society. Darwinism, red of tooth and nail.
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