In the News

Methane is a greenhouse gas 25 times more potent than carbon dioxide, so when it’s leaking by the ton, it’s a $50 billion problem. The New York Times described the phenomenon of methane leakage in a recent article which raised questions about the true costs of this waste.

EPA has been quietly working on some serious changes to the guidelines it uses to conduct cost-benefit analysis. Tweaks to the powerful but low-profile Guidelines for Preparing Economic Analyses could have major impacts on the environment. The Guidelines is little known outside of EPA, but is used in the design of every major environmental regulation.

Is the increased spending working, though? Michael A. Livermore, executive director of the Institute for Policy Integrity at New York University, says in TNR that by comparison to say, utilities, big oil is left out in the cold:

But there is one major industry that Waxman and Markey have left out in the cold: Big Oil. Lobbyists for the oil industry are now running around Capitol Hill in panic because the bill hands out big subsidies to keep electricity prices down, but does nothing to subsidize gasoline consumption. Combine that with the Obama administration’s plans for tighter vehicle fuel-economy standards, and Big Oil appears to be on the ropes.

Last summer, when oil prices shot past $140 per barrel, offshore oil drilling became the biggest topic in politics for a short while. In the months leading up to the election, congressional Democrats went ahead and let the offshore-drilling moratoria expire—kicking the issue up to the administration. At the moment, President Obama and his Interior Secretary Ken Salazar are under no obligation to open up new areas to oil companies. They just have to come with a plan to auction drilling rights, and they have broad discretion to decide where and when to allow drilling.

Our next President will face triplet crises on the economy, environment, and energy. A fiscal crisis teetering on recession, uncontrolled greenhouse gases, and oil-rich dictators profiting from sky-high prices at the pump. With these three major storm fronts rolling in and threatening to collide, we’d better be prepared with a good plan. And I don’t think evacuation is an option.

On September 12, Congress will vote on a new energy package that addresses the offshore drilling moratorium among other issues. Given the large divisions among and between the parties, it’s unlikely a final solution will be enacted. That might not be a bad thing. A breather before the new Congress would give us some time to really flesh out the pros and cons of this decision. Questions, heated opinions and conflicting information have been bandied about for months. With so much confusion, we need to do a better job of figuring out the costs and benefits of this major choice.

In other words, what are the real costs and benefits of opening up America’s coast to more oil exploration? That’s just what a couple of NYU academics want Congress to figure out as it regroups this week to tackle the energy crisis. Richard Revesz and Michael Livermore sent a letter today to House speaker Nancy Pelosi and House Republican leader John Boehner urging Congress to put economic—not political—concerns at the forefront of the energy debate for a change.