For a Triple Play, add a carbon tax on imports

If you could spur the U.S. economy, reduce the budget deficit, and help climate change, all with one action, wouldn’t you jump on it?

U.S. carbon emissions are at a twenty year low, thanks to natural gas fired electricity plants, efficiency gains and conservation. Meanwhile, by the end of this year, China will be emitting twice as much as the U.S., according to Richard Muller, a faculty senior scientist at the Lawrence Berkeley National Laboratory. This is largely due to China’s dependence on coal for electricity generation.

Thanks to the shale oil boom, the International Energy Agency predicts the U.S. will overtake Russia and Saudia Arabia as the leading oil producer by 2020.

In effect, our public policy, technology, and the recession have combined to give the U.S. an effective energy strategy that also may improve the environment.


How to cement these gains on a global level? The U.S. should add a carbon tax to imported oil and imported goods. These tax revenues will accelerate deficit reduction, strengthening the economy. And, they will provide incentives for foreign countries to move more aggressively away from coal, and utilize natural gas, oil, and renewable energies, all areas of current and emerging strength for the U.S. and making energy a potential export product for the first time in decades.

A carbon tax on imports delivers a triple benefit of economic development, deficit reduction, and incentives for lower carbon usage. It’s a public policy triple play!

Leaky wells are not good business

Oil and Gas executives are claiming that well water contamination by the new horizontal, deep frac wells are due to faulty well construction, not the technology itself. Mark Boling, executive vice president and general counsel of Southwestern Energy Co., a major natural-gas producer, said he has examined several incidents in Colorado and Pennsylvania where gas drilling appears to have caused gas to get into drinking water. “Every one we identified was caused by a failure of the integrity of the well, and almost always it was the cement job,” he said.

The Wall Street Journal has an excellent article on the situation. Since cement failures occur at a regular rate, and because the new horizontal wells have more complicated installation and setting processes, it is no relief to the industry to place the blame on well construction. This head-in-the-sand approach will only make repercussions larger down the road. For its own sake, the industry needs to get ahead of this problem, with documented best practices and standards for construction, comprehensive ground water testing, and transparency of information to all concerned. Only then will they gain the confidence of the public, political leaders, and interested parties. Landholder royalty payments are not enough.