Regulation Creates Jobs, But Neither Safety Nor Energy

Regulations don't make things safer, just more expensive.

Technical progress has got to be a real discouragement to the doom-and-gloom fraternity.  Just as they were gearing up to pass laws that would let the government control all our energy use in the name of Saving the Planet, someone hacked a computer and showed that man-caused global warming was pretty much a fraud.  The fraud was perpetrated by True Believers who, coincidentally, happened to be in a position to make money spending federal research funds.

As the doomsters were moaning about our continued reliance on foreign energy supplies, lo and behold, the energy companies discovered enough natural gas in the United States to power the nation for a century or so.

So what's a doomster to do?  The usual cries of BANANA! or Build Absolutely Nothing Anywhere Near Anything (or Anyone) won't work because gas companies already have leases near or in most of the new gas fields.

When there's no other way to stop Americans enjoying a new source of energy, the anti-growth crowd usually falls back on regulation.  They can generally count on the EPA to decide that anything new will pollute too much and regulate new energy sources out of existence.

In this case, that strategy won't work due to a counter-strategy which the New York Times calls the "Halliburton loophole."

Among the many dubious provisions in the 2005 energy bill was one dubbed the Halliburton loophole, which was inserted at the behest of - you guessed it - then-Vice President Dick Cheney, a former chief executive of Halliburton.

It stripped the Environmental Protection Agency of its authority to regulate a drilling process called hydraulic fracturing.

Hydraulic fracturing is the key technology needed to release the century-worth of natural gas which seems to be found under most of the continental United States.  It involves injecting water and other carefully-chosen chemicals into a gas well under high pressure.  The pressure cracks the rock and releases the natural gas.

The process was invented in the 1940's, but it's taken until now to develop equipment that can stand the extremely high pressures and to learn precisely which chemicals to use.  Knowing that the technology would soon unleash a bonanza of natural gas, Dick Cheney seems to have pre-emptively spiked the BANANA crowd's guns by taking away the EPA's authority to regulate the process.  With the regulatory hurdles removed, new supplies of natural gas are flowing into the nation's pipelines and the price has been dropping.

It's extremely simple to make an automobile engine run on natural gas instead of gasoline.  The new gas source has the potential to let us de-fund terrorism by buying a lot less oil from the Middle East, but the Times will have none of it:

An even more important bill is waiting in the wings. Cumbersomely named the Fracturing Responsibility and Awareness of Chemicals Act, it would close the loophole and restore the E.P.A.'s rightful authority to regulate hydraulic fracturing. It would also require the oil and gas industry to disclose the chemicals they use.

The industry argues that the chemicals are proprietary secrets and that disclosing them would hurt their competitiveness. It also argues that the process is basically safe and that regulating it would deter domestic production. But if hydraulic fracturing is as safe as the industry says it is, why should it fear regulation?  [emphasis added]

Why should the industry fear regulation?  The answer's simple - regulation has very little to do with making a process safe, and everything to do with creating jobs and allocating power.

When a crane fell off a building in New York City last year, the building department said a) it would take months to determine what went wrong and b) they'd immediately require that a building inspector stand by whenever a crane was lifted or lowered.  Not knowing what had gone wrong, there was no way the building department could prove that having their guy stand by would make cranes any safer - or even advise the inspector on what to be inspecting - but they wanted more work and more power to stop construction projects on whim.

It later turned out that the crane fell because of a faulty Chinese weld while it was being manufactured; all the building inspectors in the world standing by would not have prevented the accident unless they happened to be clambering around wielding X-ray machines, no doubt in violation of some other safety regulation.  But the useless new rule still stands.

It gets worse.  The Times later reported that the head of the city building department had been arrested for taking bribes to help people pass examinations and... to help cranes pass inspections.  In a shocking revelation, the department claimed that none of his crimes had caused accidents.

What can we conclude from this admission?  It's nothing less than confirmation that their safety inspections are useless - if falsifying inspections doesn't lead to accidents, why have the regulations in the first place?

In its abject ignorance of the Constitution, the Times believes that the EPA has a "rightful authority" to regulate hydraulic fracturing as if all rights belong to government instead of to the people.

They also don't seem to read about what goes on in their very own home of New York City - contractors have every reason to fear the building department, even if they operate safely.  The building inspectors can shut the entire project down for any reason or for no reason, costing the company millions with no possible blow-back to the inspector.

Such regulations are a recipe for bribery as the Times reported.  How would EPA regulations be any different?

Once again, Dick Cheney emerges the hero in this case.  His company not only got oil flowing in Iraq, he managed to keep the EPA's clumsy mitts off an energy source which has the potential to replace a great deal of the oil we now buy while reducing the need for coal-generated electricity.  Energy independence is the last thing the enviros want, of course, which makes energy companies their enemy.

Companies that uncover new energy sources are our friends, especially when they do it without any government subsidies at all.  What's that old proverb about the enemies of our friends?

Will Offensicht is a staff writer for and an internationally published author by a different name.  Read other articles by Will Offensicht or other articles on Economics.
Reader Comments
Good article.

I would say that Natural Gas cars might not be such a great idea or safety reasons. Natural Gas is explosive, gasoline is not.
February 4, 2010 12:17 AM
In fact Hydrogen really doesn't work well - it gives off heat, but doesn't expand much. However, as an adjunct to gasoline, a bit of hydrogen or Brown's Gas in the fuel mix creates an almost 100% burn in the combustion chambers of your motor.

This effectively eliminates the need for a catalytic converter, boosting both gas mileage and power, while almost flatlining emissions at the same time.

Thus, those little kits on the internet should, in theory, work somewhat, especially on older cars.

However, trying to run a vehicle on Hydrogen or Brown's Gas alone is, in my estimation, a tall order.

We need some STRAIGHT TALK on oil - it is inextricably paired in people's minds with negative, evil greed and environmental disdain.

Yet I hear it is now hoarded like diamonds, thus there is no shortage at all - even that oil is renewed somehow by Earth's internal processes, and old wells become functional again after 50 years or so.

What is the truth? Because if the real challenge is to make what we have cleaner, we are already light years ahead on that, and should take advantage of this source of energy to explore and develop new sources.

But forcing ourselves down one road out of self-effacing stupidity and an almost palpable disgust for our own accomplishments, is nothing less than cultural mental illness.

Beware the Scarcity Capitalists!!
February 4, 2010 2:00 AM
Add Your Comment...
4000 characters remaining
Loading question...