Statism Is Safer for the Environment?

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Statist journalist and staunch defender of Bill- and Hill-ism, Joe Conason asserted Monday that "[Norway’s oil company] Statoil operates the most environmentally friendly offshore oil rigs in the world — because it’s state-owned."

He advocates that Americans accept this fact, especially in light of the ongoing BP gusher 5,000 feet below the surface of the Gulf of Mexico. If only the state owned our off-shore drilling, it would be so much more environmentally friendly.

Conason explains, with a Halliburton counterpoint:

What makes Norway so different from the United States — and much more likely to install the most protective energy technology — is that the Norwegian state can impose public values on oil producers without fighting off lobbyists and crooked politicians, because it owns and controls the resources. Rather than Halliburton-style corporate management controlling the government and blocking environmental improvement, Norway’s system works the other way around. It isn’t perfect, as any Nordic environmentalist will ardently explain, but the results are considerably better than ours.

Let me break this down. First, Norwegian Statoil is currently 67% owned by the Norwegian government. Eight of the remaining top 20 shareholders are U.S. banks, including multiple sectors of Bank of New York Mellon and State Street Banks, both of which incidentally partook of hefty TARP funding, meaning that Statoil is also partially owned by the US government. Sounds like our own government contract-dependent Halliburton.

One wonders why Statoil, founded in 1972 as a 100% government-owned oil company, was partially privatized with an initial public offering (IPO) in 2001. Presumably, the company was losing market share, facing declining performance and internal waste, and generally becoming less competitive. That’s why most government-run businesses attempt to partially privatize — like any vampire, it occasionally needs to refresh itself with fresh human blood.

It is therefore not surprising to find that two years before the IPO, the Norwegian government fired the entire board, and Statoil’s chief executive resigned over a dispute about cost overruns. In 2001, "Norwegian police raided Statoil’s headquarters on September 11 following media reports alleging that the company had last year signed an 11-year contract with an Iranian consultant, Abbas Yazdi, for $15.2 million to smooth business development deals in Iran."

It is certainly no crime for a company to trade with countries like Iran just because the U.S. forbids it, and it is admirable when a foreign nation asserts its sovereignty. However, we can recall other firms that proudly had commercial dealings with Iran when it was forbidden by the Great Master of Washington. Cost overruns? Under the table dealings? On all three, Halliburton comes to mind.

More recently, Statoil was implicated in cutting oil deals with sub-regions of Iraq, and possibly doing so with the collusion of American diplomats. Well, like Dick Cheney always said about his own role in public/private service, Ambassador Galbraith advised Norway only when he was working in the private sector. Curiously (or not) his "consultancies" appear to have undermined (or not) his diplomatic mission. Granted, Galbraith was paid by a privately owned Norwegian oil company, DNO, and not Statoil. Bringing us up to the present, Statoil teamed with Russian Lukoil to win major contracts elsewhere in Iraq last December. Now, I’m sure Halliburton would never do anything like that just because it made business sense.

I don’t mean to criticize Halliburton — it was once an effective and highly respected engineering company before it hired Dick Cheney and allowed him and his federal government and Congressional cronies to warp it into just another wasteful and corrupt defense and Department of Homeland Security dependent contractor. My point is that it’s no better and no worse than Norway’s Statoil. And to the extent that both are bad, it is because of — not in spite of — its relationship to the state.

Conason shares a big conceptual problem with all statists, including Barack Obama. He optimistically anthropomorphizes the state. Obama abuses all the Tea Parties and the increasingly sick-to-their-stomach silent majority in this country by saying, "How can you not like/believe in/trust government? Why, government is us!" In assigning human ethics and human empathy to the inhuman bureaucratic state, we the people are faced with a choice. We may either believe the ruling-class fantasy being foisted upon us daily, willfully ignoring ample evidence to the contrary, or we may honestly reject anthropomorphism of the state, and understand it simply as a prescient American President once did, as fire and force.

Conason suggests that Norway, but he means specifically Statoil, is more likely to install the most protective energy technology because he believes the government is like a follower of Jesus, desirous of good works and of pure heart. "Good" works, of course, for Conason and his compadres, are not productivity and efficiency, but fat pensions, low carbon dioxide emissions, and quick "state" response to accidents and disasters.

Well, let’s look at Statoil’s record on leaks and spills. They’ve had them, including a major gas leak that shut down a refinery for several days just a few months ago. Drilling is a dirty and dangerous business. BP of course has been in the news, taking the heat on spills along the Alaskan Pipeline and in Prudhoe Bay, and now with Deepwater Horizon in the Gulf of Mexico. But BP’s activities in Alaska, and those of other non-state owned oil and gas companies in similar cases have been heavily taxpayer-funded and could, in an honest world, might be considered public-private partnerships.

Maybe Norway is different, and Norwegian state-owned oil companies are a model to be emulated somewhere. Before suggesting that a state-owned model would be good for the U.S., Conason might be interested in reading up on state corporatism, because like a bad case of leprosy, we already have that disease.

If state-owned means an improved safety record, better business morality, and a high level of respect for the environment, we should look no further for proof than the safety, morality and environmental record of the U.S. military around the world, and within our own borders.

Whether it is open pit burning, oil fires in one of our many wars in the Middle East, oil spills as a result of our acts of war, depleted uranium in the soil and water of Iraq and Afghanistan, contaminated military bases abroad and at home, and even noise pollution — the culprit is a wholly government-owned entity, led by public servants.

Americans who adore the government and attribute to it a higher morality and a greater appreciation for environmental purity should attempt to understand how things really work. The Chinese, those former residents of the Soviet sphere, and sufferers of socialist kleptocracies around the world all understand the reality of the state and the environment. They may not be as erudite as Conason or as "enlightened" as Obama, but they can recognize statist compost when it is dumped in their backyards, frontyards, and pumped ruthlessly into their air and water.

Have we learned nothing from the dissolution of the Soviet Union going belly up? From the fall of the Berlin Wall? From the very different experiences of state owned North Korea vs partially free market South Korea? Mises and Hayek have written eloquently about the evils and inefficiencies of state ownership, that is, socialism. Does economic law for some reason not apply to Norway?

In times of uncertainty and trouble, it can be tempting to look at the state and see kind eyes and gentle hands, a sweet-smelling personal goddess to make everything all better. Let’s hope Americans don’t have to experience Conason’s vision of nanny state wonderfulness before we finally recognize it for what it is, and retch it up. Or, as they might say in old Norse, to spit.

LRC columnist Karen Kwiatkowski, Ph.D. [send her mail], a retired USAF lieutenant colonel, has written on defense issues with a libertarian perspective for MilitaryWeek.com, hosts the call-in radio show American Forum, and blogs occasionally for Huffingtonpost.com and Liberty and Power. To receive automatic announcements of new articles, click here. Dr. Block [send him mail] is a professor of economics at Loyola University New Orleans, and a senior fellow of the Ludwig von Mises Institute. He is the author of Defending the Undefendable and Labor Economics From A Free Market Perspective. His latest book is The Privatization of Roads and Highways.

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