Picking on 'pessimists'

The 1998 state-of-the-union address by a desperate American leader raised an issue that the oil and gas industry cannot afford to ignore. "Every time we have acted to heal our environment, pessimists have told us it would hurt the economy," said President Bill Clinton. "Well, today our economy is the strongest in a generation, and our environment is the cleanest in a generation. We have always found a way to clean the environment and grow the economy at the same time. And when it comes to

Feb. 2, 1998

4 min read

The 1998 state-of-the-union address by a desperate American leader raised an issue that the oil and gas industry cannot afford to ignore.

"Every time we have acted to heal our environment, pessimists have told us it would hurt the economy," said President Bill Clinton. "Well, today our economy is the strongest in a generation, and our environment is the cleanest in a generation. We have always found a way to clean the environment and grow the economy at the same time. And when it comes to global warming, we'll do it again."

The message: Economic arguments against troublesome environmental initiatives will not be tolerated.

Name-calling

With all the argumentative sophistication of a 1960s antiwar riot, the President first resorted to name-calling: Only a "pessimist," after all, would stand in the way of an environmental measure out of concern for potential economic harm. Clinton then mischaracterized past positions of the "pessimists"-among which oil and gas companies must surely be counted, yet few, if any, of which have ever called economic growth and environmental progress incompatible.

Raising concern about costs of an environmental proposal is not the same as asserting that the economy won't or can't grow if the measure is enacted. Clinton's observation that economic growth has coincided with environmental progress, however true, is irrelevant to his blast at "pessimists." Yet if the sly confusion of microeconomic and macroeconomic effects were to gain a foothold in policy-making, the oil and gas industry would find itself stymied in environmental debates whenever it raised concerns about cost.

Retrospective analysis, selectively applied, can be a trap. In a recent example of concern to refiners, the Energy Information Administration last year published a report concluding that the U.S. requirement for reformulated gasoline had not significantly raised refining costs. The analysis was good as far as it went, which was operating margins. But it didn't account for another manifestation of cost: the refineries closed because owners couldn't justify the capital outlays for equipment needed to produce reformulated fuel.

EIA may not have intended its study to be used this way, but the Environmental Protection Agency can now ask what all the fuss is about as it implements a costly decision to toughen air quality standards and broaden requirements for reformulated fuels. Indeed, it is not at all difficult to envision EPA Administrator Carol M. Browner borrowing the rhetoric of her boss and dismissing dissenters as lowly "pessimists."

In the matter of climate change, this kind of reasoning could provide leverage to the most aggressive propositions. Among them is Vice President Al Gore's written suggestion that governments, by a date certain, rid Planet Earth of the reciprocating engine. Clinton's logical framework would identify anyone concerned about costs of such a policy as a "pessimist" who had incorrectly predicted economic doom before and ought not be taken seriously now.

Appeal to liberalism

Of course, last week's new brush-off of climate change doubters was just part of a grand appeal to American liberalism. Threatened by scandal, Clinton needed to secure support along the only segment of the political spectrum where he can expect automatic hospitality. The day he spoke, First Lady Hillary Clinton led a counteroffensive aimed at discrediting the other extreme. By the end of the state-of-the-union address, it was hard to tell who threatened the nation more: pessimists resisting the environmentalist agenda or conservatives in collusion to run Hillary's husband out of office.

Credibility of a crucial dimension of environmental discourse thus has fallen victim to an unwarranted assault, motivated by desperation, from the highest level of government. Oil and gas companies should set the record straight or endure flippant rebuff the next time they worry out loud about environmental costs.