Friday, December 23, 2005

Should We Be Bugged About Not Drilling in ANWR?

My first reaction was “yes we should be bugged”. I am a strong supporter of development of ANWR resources. A small list of reasons why I support ANWR…
* More access to a variety of sources.
* Maintain the level of output of older wells in Prudue Bay. The synergy of the industry is that if the pipeline is not maintained then all oil drilling in the north of Alaska may cease.
* A vast majority of Alaskans want this development. This includes all but one of the Native Alaskan Tribes in favor of it.
* Jobs and economic growth for the USA and Alaska.
* It will take 10 years before the oil can be brought to market, so delaying this exploration longer is senseless. We need to start test wells now to see the amount and who will bring this oil to market.

Going back to the blog, it is interesting that lkiesling used his students to study this issue. And for any decision, knowing what the amount is crucial. Environmentalists keep saying it is too small to worry about, but block any attempt to explore and see what can be produced.

In "Topic Three" George Will lambastes the environmentalists.

I can understand why lkiesling criticizes the "attaching unrelated pet things to big, crucial bills", but if he understood why the people of Alaska and Senator Stevens gets so mad that the rest of the states act like environmentalist on this issue then he may see that since the other side resorts to filibusters then Alaska is just trying to use every possible way to put their needs into the bills of Congress.

So here's my policy proposal: privatize ANWR. Better yet, have the federal government grant the title to the land to a joint venture of the Nature Conservancy and the residents of the area, and let them figure it out. Then if it's worth it to drill, let the firms interested in drilling make them purchase offers. That will satisfy those worried about income distribution effects of "big oil" being able to buy their way in. Establish the property right on the other side. But if we believe Coase, establishing the property right and reducing the transaction costs will end up with the optimal combination of drilling and caribou migration.

As my last post points out, lkiesling does not understand Alaska property rights. But I have thought about if the "State of Alaska" could divide these property rights between different factions and let "Coase" theory work out the best possible results. Although a basic bid process open to all is what I think would be best.

I have been reluctant to say "give" environmentalists the drilling rights, but knew that once that was done then the oil situation would be solved. Why reward bad behavior? One group that I joked about getting the rights would be the Jews of Israel. This arose because the President of Iran said the Jews could settle in Alaska. You know 19 million acres for 6 million Jews.

Another interesting group that we could give the rights to is African Americans. There has been much written that they never received their 40 acres and a mule. I looked at the numbers and we would have to add more than the 19 million acres of ANWR to get the 3.5 million slaves *40 acres. It may have referred to only the male’s head of household and as such would be less than the 3.5 million. Not that I give credence to reparations, but something to ponder.

Links:
VI. The Civil War and Reconstruction

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