A Lesson in Limited Government: Dow Chemical vs. Natural Gas Industry

Today’s lesson in why “limited government” is the best government comes courtesy of Dow Chemical and the natural gas industry.

There’s a glut of natural gas today because of fracking. As natural gas is a primary feedstock for its chemical manufacturing, Dow Chemical likes today’s low gas prices. The gas industry, however, is struggling to find new markets for its products in order to ease the glut.

Legendary oil and gas man T. Boone Pickens, in particular, has spent the last several years pressing lawmakers on Capitol Hill for a bill promoting the use of natural gas in vehicles, particularly in long-haul trucks. Pickens is pushing a bill in Congress (the NAT GAS Act”) that would subsidize natural gas-powered vehicles. As the bill has more than 180 House Members that support it, Dow Chemical is worried and is spreading fear.

As reported by Climatewire today,

“Just the fact that you’ll have that much natural gas demand coming into the system, we believe that will create a massive price spike and volatility issue for gas down the road,” said George Biltz, Dow’s vice president for energy and climate change… “When you start adding these things into it, there’s just not enough gas,” he said.

As part of its push back, Dow is casting aspersions on the safety of shale gas:

In the short term, Biltz said, gas will continue to be produced. But he said the concern is what happens in the next five or 10 years. “There are a lot of issues on the supply side,” he said. “Just because we found the gas in the ground doesn’t mean we’re going to get it out in a reasonably environmentally sensitive way.”

Keeping in mind that there is no evidence that shale gas development has contaminated any water supplies — that’s from the lips of EPA administrator Lisa Jackson — Dow likes and wants the shale gas supply, but is willing to smear it and limit its production should anyone else want to tap into that supply of cheap energy.

For the record, we oppose energy subsidies and we oppose artificial constraints on the development of natural resources. As JunkScience has already amply lambasted the Pickens’ lamebrain plan, we will now take a couple of shots at Dow Chemical.

First, readers may remember that Dow Chemical is a member of the U.S. Climate Action Partnership, the coalition of radical environmental groups and big businesses lobbying for cap-and-trade. Thanks to Dow Chemical’s support of carbon hysteria, the Obama EPA is poised to issue a host of rules penalizing utilities should they continue to burn coal. Should the Obama EPA prevail against a rising tide against the rule in Congress, the utilities will be forced to switch out of coal and into gas, thereby driving up natural gas prices. Way to go, Dow.

Next, Dow CEO Andrew Liveris is a proponent of big-government-for-big-business. He calls it USA, Inc. Dow’s web site touts a recent Daily Beast fluff piece about Liveris’ vision with this teaser:

Bill Clinton touts Dow Chemical chief Andrew Liveris’ new book, which provides a government blueprint for reviving manufacturing and restoring growth.

That should tell you all you need to know about Liveris. The Daily Beast quotes Liveris as saying that:

… the U.S. needs to move beyond the false dichotomy of free markets vs. state socialism, and use government resources and private sector know-how to re-invigorate the country’s dwindling manufacturing sector.

So an example of Liveris’ philosophy in action, apparently, is government use of junk science to suppress natural gas demand.

The way out of the Washington DC jungle of twisted agendas and even more twisted personalities is to shrink the government to a size where it focuses on protecting individual rights and assures the national defense. A limited government can only do limited harm.

4 thoughts on “A Lesson in Limited Government: Dow Chemical vs. Natural Gas Industry”

  1. Prof. Victor Yakoventko (a physicist/economist) of U of Maryland has been working on an elegant model of microeconomics that draw the analogy between money and energy. This has enabled him to treat an economy as a thermodynamic system. One significant upshot of this treatment is that “taxes” become analogous to fricitonal heat losses. Another is that gtovernment intervention in an economy (of whatever flavor – stimulus, subsidies, taxes, etc.) are simply an energy consuming disturbance to the equilibrium condition. As soon as the government action is removed, the system seeks to return to equilibrium.

  2. No EscapeFromCalifornia, he’s not a capitalist. He’s a Merchantilist. Lately they coined the alias Crony Capitalist to mean the same thing.

    Otherwise I completely agree with you.

  3. This is the first time I’ve seen a ‘capitalist’ say low prices were bad for long-term growth. I get the ‘volatility is hard’ point in capital intensive industries, but that strikes me as just plain stupid – or perhaps word gymnastics of the most warped kind.

    If it were true, let’s extend the insight and quadruple the cost of all scarce and precious minerals/metals, foodstuffs and energy so we can structure our economy to the most penurious condition we can imagine.

    Government and big business are toxic ‘partners’ – if you’re a human being, that is.

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