During June 30th's "Larry King Live," Robert F. Kennedy Jr., senior attorney at the National Resource Defense Counsel, made a head-turning statement regarding subsidies to the oil and coal industry, and not a single panelist challenged him on it. Not that one would expect King himself to do it; however, the other panelists included Chevron's David O'Reilly and ABC's John Stossel. Relevant portion of the transcript follows:
JOHN STOSSEL, ABC'S "20-20": I think a lot of it is silly. I think we have an energy policy in America and the world and it's called the free market. When oil is above 100 dollars a barrel, coal, as he's saying, becomes viable. We don't need Washington to do it. It's a fatal conceit to say the politicians can lead this. Higher prices will lead to alternatives.
KING: How do I put coal in my gas tank?
STOSSEL: You won't have to. They'll refine it and make it into oil.
KING: They'll do that?
STOSSEL: Yes. Governor Schweitzer can tell you all about that.
KING: You're not troubled then by five dollars a gallon?
STOSSEL: Of course I'm troubled. It seems a little excessive when it costs twice that in some countries. I think these oil companies are heroes. Think what it takes to bring this stuff to us, across an ocean, refine it into three types of gasoline, put it in trucks that cost 100,000 dollars each, ship that to gasoline stations that have to have this expensive equipment so we don't blow ourselves up pumping our own gas. It still costs less per ounce than the bottled water they sell at some of these gas stations.
KING: David, makes you feel good?
O'REILLY: That's nice to hear someone on our side.
KING: Robert, would you elaborate a little what you said a little earlier about offshore drilling and going over seas with it?
KENNEDY: One of the points Mr. O'Reilly made and Mr. Stossel has made a lot is that it's safe for us to drill offshore. Chevron is the biggest producer of oil in Cook Inlet in Alaska and it dumps billions and billions of gallons of highly toxic production waste every year into Cook Inlet. It has contaminated the salmon stocks. It has contaminated the beluga whales. We have the technology to reinject those wastes, but they're not doing it. Now, they're saying we should open up Florida and we should open up California and the offshore places there, and we're going to do it right.
The other point I would make is what John Stossel is saying, a free market would be good. We don't have a free market in the energy industry. Everybody knows that. We give a trillion a year in subsidies, direct and indirect subsidies, to oil, and somewhere near a trillion dollars to coal. We also -- nuclear energy is also highly subsidized. If we had a real free market that does what a market is supposed to do, which is to reward good behavior and punish bad behavior and inefficiency, wind, solar, geothermal and tidal would easily triumph in the marketplace. You would see them immediately taking over the marketplace. The biggest impediment is these huge subsidies we're pouring into incumbents.
Two trillion in subsidies to oil and coal ... out of a total federal budget of $2.9 trillion? Obviously, his figure is highly suspect; Kennedy, as one would expect, must be invoking the most liberal of "interpretations" regarding the term "subsidy." For instance, in this report from the International Center for Technology Assessment, we see the only possible avenue for Kennedy to get close to a one trillion dollar figure -- and that is by including the [very nebulous] "environmental, health and social costs" of U.S. gasoline reliance.
It takes a lot of verbal stretching to label such costs even an "indirect subsidy," and the study itself notes that "the total dollar value is rather difficult to quantify." But hey -- it's RFK Jr. Let's just take his word for it.
(h/t to NB reader Steve S.)