Environmental Economics

So this is why Knowledge Networks is so expensive

One of the greatest academic typos ever?

Knowledge Networks attempted to obtain mailing addresses for all sampled telephone numbers and succeeded in doing so for about 60 percent of them. These households were then sent advance letters stating that they had been selected to participate in a survey panel, that they would not pay any cost, that confidentiality was assured, and that a Knowledge Networks staff member would call them within a week. A $5 or $10 billion was included with the letter to encourage cooperation.

Yes. I would be encouraged to participate in that survey.

Source: Change, Linchiat and Jon A. Krosnick, National Surveys Via Rdd Telephone Interviewing Versus the Internet: Comparing Sample Representativeness and Response Quality, Public Opinion Quarterly, 73(4):641-678. URL: http://poq.oxfordjournals.org/content/73/4/641.short

Waste not, want not

From the inbox:

Every day across the western half of North Dakota 100 million cubic feet of natural gas is deliberately burned by oil companies rushing to extract oil from the Bakken shale field and take advantage of the high price of crude. The gas bubbles up alongside the oil, and with less economic incentive to capture it, the drillers treat the gas as waste and simply burn it.

Here is the caption on slide 3 of 5:

At a well site near Stanley, N.D., a flare burned in the distance as a trucker loaded his rig with crude from the well. Drilling leases are typically short, and building the infrastructure to handle the gas for sale would substantially raise costs, so drillers have found it to be more profitable to just grab the oil and burn the gas.

Here is a link to the slideshow.

Here is a quote and picture from the longer article:

Every day, more than 100 million cubic feet of natural gas is flared this way — enough energy to heat half a million homes for a day.

The flared gas also spews at least two million tons of carbon dioxide into the atmosphere every year, as much as 384,000 cars or a medium-size coal-fired power plant would emit, alarming some environmentalists.

Picture of the day

Photo Credit: CHRIS SEWARD - [email protected]

Caption:

A section of N.C. 12 at the edge of Rodanthe was destroyed by Hurricane Irene. The northern island villages of Waves, Salvo and Rodanthe are not yet open to tourists.

Read more: http://www.newsobserver.com/2011/09/26/1518432/island-is-open-but-ferries-full.html#ixzz1Z4dtFber

We've got gas

Ohio is quickly becoming ground zero for natural gas debates:

While state regulators, industry officials and environmental advocates debate the benefits and pitfalls of horizontal shale-gas drilling and hydraulic fracturing, or “fracking,” the work to create Ohio’s shale-gas boom is going on in county offices across the state.

and...

Speculation abounds about what drilling will bring to Ohio. Many estimates are based on studies of drilling’s economic impact in Pennsylvania.

The July study from Penn State — the one that estimated that shale gas added $11.2 billion in economic value and supported 140,000 jobs — predicts that both figures will grow to $17.2 billion and 216,000 jobs by 2015.

via www.dispatch.com

Just a quick reaction, but I'm guessing those numbers are...well...wrong.

OK, maybe they're not wrong, but maybe tell an incomplete story?

How many jobs did drilling cost other industries? 

For all of you who callously talk about moral hazard this and perverse incentive that

And yes, I'm looking at me:

Standing in the living room of their house, now full of mud, slime and debris, Helen and Peter Kelly cannot believe that Congress is bickering over disaster aid to people like them.

The stories are truly heartbreaking and yes, I feel like a total heel. But still, the economics is impeccable. Am I right?

But note that one's wasteful spending might be someone else's government program with positive social net benefits:

The government, [a female flood victim] said, would have more money for disaster assistance if it spent less on inessential amenities: “a park where people sit to watch the river and eat lunch; a playground in the middle of an empty field.”

Er, I imagine the hapless lunch eater might say if folks didn't live in risky places and ask to get bailed out all the time there might be more money for parks. Am I right?

Memories

There are things you remember and things you don't (mostly because you try to forget) from the time you wrote your dissertation. One thing I remember is I would receive two comments on my dissertation chapters: "Great!" and "Very good." I quickly learned that "Great!" meant "This is OK but it needs a lot of work" and "Very Good" meant "Oh my gosh, why did I agree to direct this idiot's dissertation?"

Source: PhD Comics

The cause of and solution to all of life's problems

Matesich Distributing Co. will celebrate the expansion of Yuengling beer distribution into Ohio at 5 p.m. Friday, when Yuengling executives visit the local distributor, 1190 E. Main St., Newark.

D.G. Yuengling and Son, America's oldest brewery, will begin distribution in parts of Ohio in October. The Pottsville, Pa.-based brewery, family-owned and operated since 1829, announced Ohio will be the 14th state in which it is sold.

via www.newarkadvocate.com

Just a feel good story for a rainy Friday.

It's Friday, so this must be a sports economics post

Nascar economist Pete Groothuis and I are guest team teaching a sports and society course today (and to show our dedication to our profession we're missing the noontime basketball game). We're covering the economics of sports subsidies. We tell the familiar (at least to sports economists) story that sports stadiums and arenas (and the teams that play there) have little to no economic impact. They do generate public goods but these are most often less than the subsidies provided by city governments.

Here is the presentation (PPT). Thanks to Bruce Johnson for providing most of the slides. Note: we deleted the map of the Commonwealth of Kentucky with PRP inexplicably highlighted.

Stop making sense

I'm not used to this sort of sense-making from my government:

A Senate committee approved legislation Wednesday that would direct billions of dollars in fines from last year’s oil spill to Gulf Coast states to help restore the region.

Passage of the bill is a win for Gulf Coast lawmakers, who have been working for months to develop a bill that would ensure their states, not the federal treasury, receive the majority of money from penalties imposed on BP and the other companies deemed responsible for last year’s massive oil spill.

The Senate Environment and Public Works Committee approved the bill on a voice vote Wednesday and Sen. Barbara Boxer (D-Calif.), the chairwoman of the panel, said she hoped leadership would bring the legislation to the floor quickly.

“We think this is a good bill that needs to be addressed very, very quickly,” Boxer said.

The legislation mandates that 80 percent of Clean Water Act penalties eventually imposed on BP or other companies deemed responsible for the spill go to five Gulf states.

BP and the other companies deemed responsible for the spill face billions of dollars in penalties. If BP is deemed negligent under the Clean Water Act by the courts, the company will have to pay $1,000 for every barrel of oil spilled into the Gulf. If the courts find that BP was grossly negligent, the company will have to pay $4,200 per barrel.

Last year's spill spewed about 4.9 million barrels of oil into the Gulf, meaning BP could face fines ranging from $5.4 billion to $21.1 billion.

via thehill.com

Picture of the day: Constructing a temporary bridge on NC 12 after Hurricane Irene created a new inlet

Photo Credit: WCU PSDS