Monday, April 15, 2013

Uncle Thomas, Grandpa James and an honest economist

I don't consider myself terribly patriotic, but when a New York Times article appeared, written by a Canadian professor at a Canadian university, I was offended as soon as I started reading:
IF President Obama blocks the Keystone XL pipeline once and for all, he’ll do Canada a favor.
Uncle Thomas Homer-Dixon went to the New York Times to ask the American president to do what's best for Canada.

Days later, a newly retired James Hansen would author a column in the Los Angeles Times.  I'm somewhat a fan of Mr. Hansen, which made it rather unpleasant to see him use "Canadian" as an adjective in a sentence structured to enrage an American isolationist:
...a Canadian company, TransCanada, gets a permit to build a pipeline to transport toxic tar sands through our heartland, connecting to refineries in the Gulf of Mexico, for likely export to China.
With plans like that no wonder we need Americans to do what's best for us!
Lions and tigers and bears won't be the villains when Hansen reads to the grandkids.
Canada and Mexico and China 
Oh my!

Economist Severin Borenstein has a blog post today providing a welcome contrast to the patriotic appeals of climate scientist Hansen and Canada's Uncle Thomas.
... the narrow economics of exporting LNG is not the strongest argument against restricting natural gas exports. The pure hypocrisy of such restrictions — after decades of the US arguing for free trade in resources – would undermine any claim that US policy is based on economic principles rather than pure self-interest (albeit misguided). We are, in fact, still dependent on imports for nearly half the crude oil we use. That is why the US continues to argue that Venezuela, Saudi Arabia and other oil-rich countries should export more crude and stop using their abundant supplies to maintain artificially low domestic gasoline and diesel prices.
Exporting LNG will benefit the American economy by creating economic value and capturing much of that value in the US. But just as important, exporting LNG will show that the US energy policies are based on sound economic principles, not the hypocritical politics of cheap energy .
Read Severin Borenstein's full article at Energy Economics Exchange:

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