Louisiana and the “Resource Curse”

As the Vice-President rushes back to provide the deciding vote (if needed) on the latest deficit reduction bill, and as Congress battles over whether or not to drill in ANWR, Louisiana’s fortunes are once again tied to the future of domestic oil drilling. $29 billion dollars of Katrina relief are in the same bill as the provision opening up the Arctic Refuge in Alaska to drilling. And the vote appears tight.

Once, Louisiana was an oil state. Big Erl made its millions here as it did anywhere else in the world where there was oil. But the oil slowed down, the profits went down, and Big Erl left town. And we were left with the aftermath from what NY Times Magazine contributing author Peter Maass calls the “resource curse”:

Though it seems counterintuitive - countries with a lot of oil are lucky and rich, right? - a succession of studies… show that countries dependent on natural-resource exports experience lower growth rates than countries that have nonresource economies, and they suffer greater amounts of repression and conflict too. The reasons are complex - and there are exceptions to these dismal rules - but in general, a reliance on oil discourages investment in other industries, makes governments less responsive to the desires of citizens and fosters corruption by officials seeking and receiving funds that are not their due. An oil state is, almost by definition, a dysfunctional state.

He’s talking about countries. But, it sounds like Louisiana, doesn’t it?

Maass makes some good points:

The latest battle has not touched upon a depressing fact: every barrel of oil that is not extracted from America must be drilled from someone else's backyard, often with little regard for the consequences. Because our appetite for energy has grown over the decades, new drilling, along with the damage it tends to create, has not been halted; it has been outsourced.

And asks some good questions:

If the protection of our environment comes at the expense of others, might it be an expression of selfishness rather than virtue? The more we focus on defending our environment, the less we may focus on environments outside our borders; activism can become anesthesia. Domestic restrictions on drilling have had the unintended effect of insulating our tender consciences from the worst impacts of oil extraction. Out of sight, out of mind.

From reading his article, I would think Maass is basically saying: If we are to do ugly things, should we not be ugly ourselves?

I don’t know about that. I’m not into self-flagellation. I want to do pretty things and be pretty. I don’t want to drill for more oil here, nor do I want the Saudis, Iraqis, Iranians, Venezuelans, Bruneians, or anyone else drilling more oil in their countries for me.

But, I want $29 billion dollars to come to the Gulf Coast. So it’s drilling in ANWR versus not getting aid – kind of like Edwards versus Duke. I don’t know how I would vote. It seems to me that to be a politician, you must defy your principles equally as often as you uphold them. It must be fun.

Who, following Maass’ criteria, is being selfish in this case? We who want to sacrifice the environment of ANWR for our $29 billion dollars? Or, those who wish not to pay *us* back for *our* environmental sacrifice without dooming another region to the same fate? Just asking.

(This boring post inspired by The Oil Drum.)