"ECO-FADS AND ENVIRONMENTAL POLICY: HOW THE RISE OF TRENDY ENVIRONMENTALISM HAS TAKEN US OFF TRACK"
WASHINGTON OIL MARKETERS ASSOCIATION CONVENTION
SUNCADIA RESORT, CLE ELUM, WASHINGTON, JUNE 20, 2012

We are all hikers, hunters, fishermen, sailors. Protecting the environment is something we all care about.

We have gotten off track.

Every time somebody buys oil and somebody sells it, both people are speculating. Oil speculation goes in two directions. It doesn't just go up. It also goes down.

Much of what we do in environmental policy is like what Mark Twain used to say: it's not what you don't know, it's what you do know that ain't so.

Food miles is one of the most recent trends. The idea is you eat local food, there are fewer food miles, and there is less impact on the environment. You've heard the term locavore.

You might be a redneck locavore if you refer to the squirrels in your front yard as 'free range'

Food miles is a false idea. Less than 10% of the energy involved in food production is involved in transportation. If you focus on local food production where yields are lower, you are actually spending more energy than you would if you grew food elsewhere where yields were higher and transported it.

Politicians want to show they are looking for alternative fuels.

Green jobs. We are now told that green jobs and the green sector is where we are going to help recover our economy. It's worth pointing out that four years ago the people who were advocating this were looking to Spain, which at the time, had an 8% unemployment rate. Spain now has a 25% unemployment rate. They're not pointing to Spain any more. They're pointing to China.

What are the best states for green jobs? Oregon and California. They are still above the national average with their unemployment rate. I don't have to tell you that California is not an economic model to emulate. We're being told to emulate Spain, China, Oregon, and California.

Green jobs are about doing less with more. The should be about doing more with less. If you want to create a lot of green jobs in agriculture, ban tractors. That's what they're talking about. It's not a good idea. But they say how can this policy be bad? It creates more jobs.

Being green makes people feel good. Who can look outside and look at the trees and say 'No good?' There is an appeal to leave things better than we found them. It makes people fall for green ideas that are trendy but not scientific. This concept does more harm than good to the environment. Because instead of asking questions about science or the economy, it's just asking 'How does this make you feel?'

This doesn't mean you shouldn't buy green products. It means you shouldn't buy green products just because it makes you feel good. But that is the primary motivation for most people.

When you see a Prius, you know what it is. It has a unique shape and style. That is not true of all hybrids. The Honda Civic looks like a regular Honda Civic except for a little plate on the back that says hybrid. A study found people in Washington state were willing to pay $1,300 more for a Prius than a Honda Civic. In Boulder, they were willing to pay $2,500 more. They are paying for that look and that style and they want people to know they are driving a hybrid. And that's the free market and I'm all for it.

Seattle had a program called car-free days. They closed down roads and said you should walk or ride a bike instead. They did not measure the outcome. The purpose was to just make a point. They didn't care if it actually helped the environment.

Green buildings in Washington State — in 2005, all schools had to meet green buildings standards. At the time, the legislature was promised it would only cost 2-3% more to build these schools and they would get the money back because energy costs would go down, they would see fewer sick days from students, and they would see students' test scores go up.

So we did some research on this. We found that in virtually every case the green school used more energy than the non-green schoools in the same districts. In fact, in Tacoma, we found some green schools used 30% more than the non-green schools in the same districts. And we're paying $750,000 more per school to make them green schools. And, by the way, I looked at the state's accountability results and found that the test results from the green schools were slightly worse than the non-green schoools. I would argue that the influence from being in a green school is neglible.

There is a reason we tolerate the never-ending rain here. Washington is a place we love to live. We are all environmentalists. We have find a better way, one that achieves our goals that makes economic sense.

Look at two cars: the Chevy Volt and the Prius C. Production on the Chevy Volt was stopped this year for "at least" five weeks because no one was buying it. There was no demand. What was politicians' solution? To increase the subsidy they are paying from $7,500 to $10,000 per car. They're basically paying people to take the car. Then there is the Prius C. It is also rated 50 mpg. Demand for this car is so high right now that some dealers are charging a $7,000 premium to sell the car. And people are paying it. What is the difference? The free market.

The free market gives you a lot of options. If you want to get rid of plastic bottles altogether, you can buy a Brita water filter and refill your own bottle. Or you can use Aquifina's eco-shape bottle, which has less plastic in it. Or you can buy a Plantbottle, Coca-Cola's green bottle which is made with up to 30% plant materials and is 100% recyclable. These are the kind of choices that a free market allows.

Government has been pushing electric cars for years. But what is starting to make the electric car viable? The cell phone. The batteries that were developed for cell phones and laptops is the technology that they are now using in electric cars. It came from the free market.

It is no accident that the richest countries in the world have the cleanest environments. We are shooting ourselves in the foot if we weaken the economy. If it isn't economically sustainable, it isn't environmentally stable.

Forcing people to try and change their lifestyle to try and do what we think they should do doesn't work. They will rebel. How many ads do we have to pay for for light rail? They want to drive their car. When there is a technology they want, they will use it.

Government isn't designed for innovation.

If you want to waste a lot of money doing nothing for the environment, buy a solar panel. But it is a great symbol for the environment.

If you don't measure, you don't care. Accountability is critical. If you're not measuring, you don't really care about the environment. You care about the press release.

The free market is doing it. All of you are finding ways, every year, to do more with less. That's the heart of environmentalism. You are an environmentalist, and you didn't even know it.

If you call something green, it fixates into people's minds. They don't want to get rid of it, just because it's green. It doesn't matter if it works or not or has any benefit or not because it's 'green.'

Washington State has one of the lowest electricity rates in the country because of the dams and hydroelectric energy. The bad news is we are trying, rapidly, to undo this.

We are not even the craziest in this area. Oregon looked at Washington said, so, you're going to have 15% renewables by 2020. We're going to have 25% renewables by 2025. And then California said, okay, we'll do even better and go 33%. We are all on the same grid. So when it gets to 9% in 2015 there is going to be real competition for that energy and prices are going to go up.

A plastic bag uses 1/4 the amount of energy as a paper bag. A cloth renewable bag uses 170 times the amount of energy as a plastic bag. So you're substituting low energy products with high energy products.

Plastic does get into the water. But the discussion about the impact is exaggerated. The study was not about plastic bags. It was about plastic fishing gear. Fishermen have nets and they get caught on something and they just cut it away. And it sinks under the sea and all it does is keep catching fish. It's a terrible practice.

It's hard to quantify the impact of plastic bags on the environment. They haven't studied this. But they make these decisions anyway. They don't have any information. It's political.

Fracking is not a new technology. The new technology allows you to not just go down but also go out. That allows them to hire people in the Dakotas as fast as they can drag them in there. Do you know what the unemployment rate is in the Dakotas right now? Two percent.

The arguments about these things are largely political. They asked the EPA for examples where fracking has contaminated the groundwater and Lisa Jackson — it must have killed her to say it — said, no, they have no examples of fracking contaminating groundwater.

That said, we can't go off willy-nilly. We should still watch. But if there is any contamination that does occur, you know who should pay for it? The frackers. I'm all for taking responsibility for your actions.

The Smart Grid. We are today, basically, using the grid that was designed in the 1800s. A smart grid would digitize the analog system. It also allow you to put a meter in your home and say when prices of energy go up, turn off my appliances. I don't need to wash my dishes right now. It gives you, the consumer, the power. The more power you put in the hands of the consumers, the more they'll do it because they have incentive to do it.