Drilling For Oil to Preserve Nature?

Audubon Society Drills For Oil

Environmental conservation is a noble goal and is something we should all strive for – if it doesn’t cost too much. There are those that argue that regardless of the social cost, environmental protection must be pursued. But most people realize that, in order to live a higher quality of life, we are willing to impose some environmental damage. For most of us, we are willing to pollute by driving a car rather than walking to work or finding some other means of conveyance. On the margin – that is, on a personal level – the extra social cost of the added time and burden are not worth the benefit of reducing pollution by a negligible amount.

Does this mean we are doomed to ever-increasing pollution? After all, if I choose to drive to work and my neighbor chooses to drive to work and his neighbor chooses to drive to work and all of our co-workers choose to drive to work, then we have millions of people impacting the environment. What might have been negligible pollution at the individual level suddenly becomes a full blown environmental problem in aggregate.

The point is, choices are made at the individual level. If we can find a way to influence individual’s behavior, we might be able to come up with a solution to environmental protection. Mandates and regulations don’t work – at least not as effectively as other means. By just adding rules you have done nothing to change the incentives.

Rather what we need is a free-market approach to environmental protection. The Audubon Society can attest to this approach. For years environmental groups have been lobbying congress to create laws to protect the environment. These groups have been spending money for somebody else to advance their cause. Regulations, while maybe partially effective, are expensive to get put into place, come with a negative backlash, and offer no return on investment.

The Audubon Society realized it could better advance its agenda if bought property it valued instead of just lobbying for its protection. Property rights are the surest way to accomplish almost any economic goal. If we want to protect a diminishing or scarce resource, simply assign property rights.

The Audubon Society bought the Rainey Sanctuary in Louisiana. Buying property is the most efficient way to gauge our values. If we value protecting the environment more than we value other activities, we will choose to spend our money protecting the environment. The fact that the Audubon Society was able to purchase this land, that they were willing to pay more for it than any other potential buyer, shows that we valued that land as an environmental sanctuary more than other uses it could have been used for. The Audubon Society gets many donations from members and the general public. So they were using the people’s money to buy that land. That’s a good thing. It means that land is being put it most highly valued use.

To simply protect the land through laws means there very well might be a use for that land that society values more highly. Laws in no way can be used to reflect what we as a society value. The Audubon Society sought to buy the land instead of seeking protection for it because it made economic sense to do so. They put their money where their mouth is and actually bought the land, instead of standing on the sidelines and essentially paying somebody else to protect it. This tactic eliminated much of the negative backlash that comes from regulation.

Since they were spending money anyway to protect the land, they might as well use that money to purchase it. This way, they can use the land as they see fit to further advance their goals. This includes drilling for oil. Yes, the Audubon Society drills for oil in a wildlife refuge.

They see it as in their interest to allow the drilling and use the money they receive to purchase other wildlife areas. This is a win-win situation for everybody. Environmentalists get to advance their cause by generating revenue that they can use productively. Oil companies and those of us who benefit from oil (everybody) get to continue to reap the benefits, and personal liberty and economic principles are maintained. In all cases, the land is being put to its most highly valued use.

It’s easy to decry the environmental damage done from oil drilling when you don’t have a stake in the game. Without ownership of the property, it’s easy not to take into account the benefits of drilling. Since, if you don’t own the property, you don’t reap the benefits, drilling is seen as only costly. It’s easy to tell other people what to do with their property. But when you can benefit by allowing drilling, it suddenly makes sense to do so. The Audubon Society weighed the benefits of drilling against the costs and decided that the added revenue would be more valuable than keeping the land drill-free. With the money generated, they buy other land where they may decide to keep it pristine. Again, everybody wins.

Property rights are essential to solving almost every economic problem. We ensure the land is going to its most highly valued use, there is no excuse nor pressure for government to overstep its bounds, and we ensure that benefits to society are exceeding or at least equal to costs. None of these things are possible with simple regulation and government protection.

For a great article on this very subject, please read Dwight R. Lee’s article, To Drill or Not to Drill, from the Independent Institute.