Posts Tagged ‘utilities’

Environment roundup

  • “Ninth Circuit Dismisses Kids Climate Case for Lack of Standing” [Jonathan Adler, more; John Schwartz, New York Times; earlier here, here]
  • Administration finishes replacing much-criticized Obama rule on Waters of the United States (WOTUS) [AgInfoNet, WilmerHale, earlier]
  • Prop 65 mini-roundup: the California chemical-disclosure regime “has not been shown to provide benefits that justify its high cost.” [Michael Marlow, Cato Regulation magazine last summer] It has also created a $300 million/year industry that includes not a few shakedown artists [Cameron English, ACSH] Take two Tylenol and label them as hazardous chemicals or else [Masha Abarinova, Reason] Gas utility’s Prop 65 insert warning of exposure to, yes, natural gas [SoCalGas] From Cal Biz Lit, lists of 2019 settlements and consent judgments;
  • Forcing insurers to renew risky policies: “California Politicians Double Down on Encouraging People To Live in Wildfire-Prone Areas” [Christian Britschgi]
  • Exchange on the Price-Anderson Act and the liability regime it creates for nuclear power generation [John Cochrane; Tyler Cowen, Marginal Revolution] “Germany’s closing of nuclear power stations after Fukushima cost billions of dollars and killed thousands of people due to more air pollution.” [Alex Tabarrok]
  • Two Cato Daily Podcast episodes hosted by Caleb Brown: why scaling back National Environmental Policy Act review of infrastructure projects “won’t have much of an impact on environmental quality.” [Peter Van Doren] Should Presidents wield unilateral power to lock or unlock use of federal land, as is conferred on them under the 1906 Antiquities Act? [Cato Daily Podcast with Caleb Brown and Jonathan Wood]

Nuclear power: the tort system angle

Discussed by economists Tyler Cowen and John Cochrane. Cowen:

…in general American society has become far more litigious, and it is much harder to build things, and risk-aversion and infrastructure-aversion have risen dramatically. ,,,

So the odds are that without a Price-Anderson Act America’s nuclear industry would have shut down some time ago, with no real chance of a return.

Cochrane in response:

A society that allows its lawyers to nearly bankrupt Toyota and Audi over non-existent auto defects, and now is shutting down Bayer over completely unscientific claims that Roundup causes cancer, is obviously going to quickly destroy any nuclear company over harms real and imagined. If we’re going to have nuclear, we need some limitation on this kind of adventurism, along with the legal and regulatory knots that make it almost impossible to build any infrastructure in the US today.

I file this in the “lack of state capacity” department. A good (adjective) Libertarian wants clear property rights, and a sensible tort system that pays some vague attention to scientific evidence. That is part of state infrastructure. When we say “infrastructure” people envision roads, but good courts, laws, regulations, property rights, and so forth are perhaps the most essential state-provided infrastructure.

California’s demands on utilities don’t add up

Already driven to the bankruptcy courts by liability over past wildfires, and facing further legal exposure when its equipment sparks new fires, Pacific Gas & Electric generally does not face liability for cutting power supply [Tyler Cowen, Bloomberg Opinion and related with reader comments; Ted Frank on Twitter] “California’s ratepayers like to imagine that someone else can pay the bill… In 2017, the commission refused to let San Diego Gas & Electric raise rates to cover its liability for wildfires that took place in 2007, which is why utilities are now terrified of any risk, however small, that their equipment might start a fire.” [Megan McArdle, Washington Post/Santa Cruz Sentinel] More: Ed Driscoll with link roundup including account of opposition to trimming of trees near PG&E power lines to reduce fire risk; earlier including link to Susan Shelley column.

Now you’re (not) cooking with gas

A New York utility says the politically arranged blockage of a pipeline project may mean an end to new gas hookups for residential and commercial customers [Bernadette Hogan and Ben Feuerherd, New York Post]

A demand for “no new fossil fuel infrastructure” seems to be rapidly emerging from the green wing of world politics (Seattle, IEA, Vermont, Maryland, New York, earlier), making clear that its objection is not to a particular pipeline or fracking project or oilfield development or export terminal but to any and all of them, period.

I wonder whether the demand, if taken seriously, would also entail disallowing new gasoline stations.

More/related: strangling the New York power grid [Robert Bryce, Crain’s New York Business]

Climate change and energy roundup

Environment roundup

  • Organized efforts mount to blockade, shut down, and ban oil and gas infrastructure [David Roberts/Vox; Kevon Paynter] My two cents on Baltimore’s ban on new or expanded crude oil terminals, which follows moves against fuel infrastructure in Oakland and Portland [Free State Notes] Massachusetts judge approves “necessity defense” raised by protesters who blocked work on pipeline [Erin Mundahl, Inside Sources]
  • Related: calls to ban hydrocarbon (even gas) utility generation stir backlash among some Democrats [Amy Harder, Axios] And not illogically given the distributional effects [Ronald Bailey, Reason]
  • “$18 Billion Prize,” new stage play about Chevron/Ecuador case by Phelim McAleer and Jonathan Leaf, ruffles some Bay Area feathers [Daniel Kennard, National Review]
  • Questions about curious study of GMO safety [Dan Vergano, BuzzFeed]
  • “Creative Regulators and Environmental Protection,” Federalist Society panel video with C. Boyden Gray, Adam White, Robert Glicksman, Nathan Richardson, Caroline Cecot;
  • Europe optimizes its train system for passengers, while U.S. optimizes its for freight. Which is the greener choice? [Coyote]

Government as pollution violator

It’s a familiar libertarian insight that regulation often holds government itself to lower standards than it does private actors. Pension funds for public employees are mostly immune from the federal solvency and funding requirements that apply to their private counterparts; Federal Trade Commission rules against false advertising by private companies do not restrain false advertising by government actors on the same topics; the FTC can fine companies massively for data breaches even as the federal government itself suffers gigantic losses of sensitive data to foreign actors with few, if any, visible career consequences for those who had dozed; anticompetitive practices per se illegal under antitrust law become legal when the states engage in them, and so on and so forth.

Now David Konisky of Indiana University and Manuel Teodoro of Texas A&M, in a study published by the American Journal of Political Science entitled “When Governments Regulate Governments,” have taken a look at some data:

Our empirical subjects are public and private entities’ compliance with the U.S. Clean Air Act and Safe Drinking Water Act. We find that, compared with private firms, governments violate these laws significantly more frequently and are less likely to be penalized for violations.

More from an Indiana press release via Tyler Cowen:

For the study, Konisky and Teodoro examined records from 2000 to 2011 for power plants and hospitals regulated under the Clean Air Act and from 2010 to 2013 for water utilities regulated under the Safe Drinking Water Act. The study included over 3,000 power plants, over 1,000 hospitals and over 4,200 water utilities — some privately owned and others owned by public agencies.

* For power plants and hospitals, public facilities were on average 9 percent more likely to be out of compliance with Clean Air Act regulations and 20 percent more likely to have committed high-priority violations.

* For water utilities, public facilities had on average 14 percent more Safe Drinking Water Act health violations and were 29 percent more likely to commit monitoring violations.

* Public power plants and hospitals that violated the Clean Air Act were 1 percent less likely than private-sector violators to receive a punitive sanction and 20 percent less likely to be fined.

*Public water utilities that violated Safe Drinking Water Act standards were 3 percent less likely than investor-owned utilities to receive formal enforcement actions.

[After speculating that public operators may find it harder to raise funds promptly for needed facilities improvements:] Public entities also face lower costs for violating the regulations, the authors argue. There is evidence from other studies that they are able to delay or avoid paying fines when penalties are assessed. And officials with regulatory agencies may be sympathetic to violations by public entities, because they understand the difficulty of securing resources in the public sector.

Application of the principle to state-owned industry outside the United States can be left as an exercise for the reader. (cross-posted from Cato at Liberty).