In the red ... from going green

Environmental extremism threatens Nevada's economic health.

By Doug French
  • Thursday, July 10, 2008

Federal laws prohibiting the drilling for fossil fuels punish no state in the union more than Nevada. Not that there is any oil or gas to drill for in the Silver State. It's just that nobody is walking or riding his bike into Las Vegas or Reno to tempt Lady Luck.

As Bill Anderson, chief economist for the Nevada Department of Employment, Training and Rehabilitation, recently explained: "For an economy reliant upon cheap travel options for its visitors, high fuel prices can have a particularly negative effect."

Nevada greenies can spout off all they want about wind power, solar power or flapping-your-arms power, but for the next decade or more, if tourists are going to make it to Nevada to part with some of their hard-earned money, it's fossil fuels that will get them here. And the more expensive that fuel is, the less likely the marginal fun seeker will make it to Sin City or the Biggest Little City in the World.

Leisure and hospitality amounted to 27 percent of Nevada's industrial distribution back in 2006, and as of May of this year, more than 300,000 jobs were in the leisure category, according to the Nevada Department of Employment, Training and Rehabilitation's website. But of course these figures don't completely capture Nevada's dependence on tourism. For instance, the top three manufacturing employers in Clark County make gaming machines. And how many people would be employed by the sign and cab companies without a thriving tourist industry?

So while the public would rather go to Vegas or Reno and have fun, because the cost of satisfying their green consciousnesses has become too expensive, politicians on Capital Hill continue to restrict the supply of fuel, attempting to ward off the climate change boogeyman.

For example, there is plenty of oil and gas under the ocean floor in the Gulf of Mexico. But oil and gas drillers and producers have been left to wonder "what if?" since the late 1970s, when amendments to the Outer Continental Shelf Lands Act gave state and local governments, along with their environmentalist friends, more opportunities to challenge drilling in federal waters off their coasts. And of course, these groups have done just that, with "the enthusiasm of terriers chasing rats," as Jim McTague wrote recently in Barron's.

These green types say they are all for reducing the carbon footprint and use the power of government to restrict supply in the name of what Wall Street Journal writer Bret Stephens refers to as the "sick-souled religion" of global warming. "A light carbon footprint has become the 21st century equivalent of sexual abstinence," Stephens explains.

So are the folks living in the gulf states of Texas and Florida doing their part and abstaining from energy use? Not hardly. Green Floridians may be crying "not in my backyard" (or gulf, as the case may be), but their state is second in the country in the use of natural gas to generate electricity, behind only Texas. All of the natural gas used in Florida is pumped from other states. But thankfully, the increase in prices has 61 percent of Floridians warming up to the idea of drilling.

Still, Florida politicians cry that the nearly one million tourism jobs in their state would be threatened if drilling off their coasts were allowed. In doing so, those politicians are carrying water for coastal business owners who claim that oil rigs will spoil the view and oil slicks will ruin the beaches.

Recently, however, Florida's governor has changed his mind. He now sides with the majority of his constituents. At stake are an estimated 18 billion barrels of oil and 77 trillion cubic feet of natural gas beneath the 574 million acres of federal coastal waters that are currently off-limits.

This new supply would put disposable dollars in the pockets of all Americans, money that could be spent at Nevada resorts. However, Florida Sen. Bill Nelson, like others unfamiliar with the workings of supply and demand, contends: "Oil companies and their allies are using the shockingly high price of oil and gasoline, which largely is the result not of a supply problem but speculative fever, to scare the public into thinking coastal drilling offers a real solution to our dependency on oil."

Unfortunately, Sen. Nelson is not alone in his misguided view. A certain other senator recently said: "Coal makes us sick. Oil makes us sick. It's global warming. It's ruining our country. It's ruining our world."

If drilling isn't expanded soon, it's Nevada's primary industry that will be ruined.

Doug French is a policy fellow of the Nevada Policy Research Institute.

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