Fueling Conservation

The recent drop in oil and fuel prices has raised a new question: will Americans' recent decreases in driving (which seemed to be a consistent phenomenon as prices rose) evaporate like gasoline vapors on a hot day?

The answer -- at least in the teeth of severe economic turmoil -- seems to be "not yet."

Of course, this isn't all good news. As Jenna Wade of Roseville, California explains:

Q: How have plunging gas prices changed your driving habits?
A: Not at all. I’ve no job to go to any longer so I no longer drive.

Of course, others simply see their reduced driving as a good habit worth maintaining, and a way to keep money in the bank.

Speaking of keeping money in the bank, some utility companies want to be paid -- just as they would be paid for delivering a kilowatt-hour of electricity -- for investments that help reduce consumer consumption of energy. Their argument is that conservation is capital intensive, and that utilities have a lower cost of capital, so they should be paid to deliver what consumers aren't necessarily in a position to afford -- but to be compensated for it. Depending on the lifespan of some of those improvements, and the accuracy with which savings can be modeled, that might make sense. On the other hand, efficiency that leads to excess -- making the house colder in the summer than previously, because the home holds more of the chill -- might not lead to net gains. There may be some expenses users don't care to avoid, if the total cost isn't big enough to them. The idea is interesting, but I'd like to see the math. And maybe a local demonstration project to see that it works on a city-wide basis, among people unaffiliated with the power company.

If we really can induce good energy practices, all the better.

Houston After Ike

It turns out my place doesn't have power back on yet, so the first thing I do when I return will be to empty the refrigerator into a Dumpster.  

I'll have to time my return carefully, though, because the 9PM-6AM curfew is still in effect, and apparently enforced:  over a hundred ninety tickets were written for curfew violation the first night it was in effect.  

Houston Independent School District's inclement weather hotline says that the public schools will be closed through Wednesday, and a local tipster informs me that there's talk of keeping schools closed all week.  

Intersections controlled by lights are de facto 4-way stops.

All grocery stores reported to me (Randall's on Weslayan and anything near the Medical Center) are all selling only things that don't require refrigeration, except for Whole Foods on Kirby, which was selling fresh meat and dairy products -- all at normal prices -- and lines are heinous at any of them.

Lack of air conditioning will make the city miserable -- Houston is naturally a swamp, and except in winter tolerable only indoors -- the second the cold front fails.  However, Ike was immediately followed by a different storm, brought by the cold front that drove Ike East.  Houston is temporarily blessed with natural cool air.

Some folks, recognizing the finitude of their ability to keep perishables in their deep freezers, are throwing block parties for their neighbors so as not to lose the benefit of the vennison, ice cream, or other treasures that had been in cold storage.

Some restaurants (e.g., Luther's Bar-B-Q) were open Saturday -- Day Ike-1 -- and made good business feeding people who couldn't run their electric stoves.  Restaurants may have been without power, but those with gas heat have been working to sell perishables before they, you know, perish.  Ziggy's Grill on West Alabama was pushing turkey burgers this way, I understand.  Without electricity, keeping fed could become expensive.

I"ll be keeping tabs on the electricity.  Condominiums near the Greenway area are known to have power, as are many neightborhoods adjacent to the Medical Center.

If you visit friends for dinner in Houston, bring a toothbrush:  the curfew is 9PM, and you don't want a $500 citation.

United States to Exxon: Just Kidding!

Today, Justice David Souter led five justices of the United States Supreme Court to take what had been a fairly stark warning against those capable of preventing environmental catastrophes and massive economic and aesthetic damage, and reverse it into a wrist-slap.

One may debate whether Exxon should have been held liable for the damage caused by its drunken officer (had Exxon fired him for alcoholism, would it have been subject to suit under federal antidiscrimination law for failing to accommodate him with a sobriety program?), but that's not what the Supreme Court was about. Instead, it decided in effect to turn the concept of punitive damages on its ear and allow economic damages to serve as a sort of guidepost for total damage awards.

Punitive damages exist for a specific reason: punishment. While the specific kind of evil varies from state to state and from statute to statute, sufficient wrongdoing can give rise to a damages award that is larger than the actual damages caused by the wrongdoer -- not as a lottery award to the injured party, but as a guarantee that other wrongdoers won't decide that it's possible to calculate "actual damages" as a cost of business and intentionally inflict them on the public in the context of ongoing business operations.

Let's imagine the world without punitive damages. A petroleum refinery knows its high-volume plant is behind on maintenance, but it also knows that (a) shutting it down for maintenance will cost a fortune, and (b) the maintenance that needs to be done will take so long they might as well wait until something breaks, because the repair would be about as much delay. The third thing they know is (c) the folks working on the plant site are uneducated manual labor whose incomes are small enough that if they are put out of work -- killed or paralyzed -- that the worst possible cost is pretty modest. They'll just set aside a damages fund from which to fight claims, and after they wear down the broke plaintiffs' bankrupted families, settle them. The genius of this is that since the salaries and pay schedules of all the at-risk employees are known, the only thing the risk management types need work out is the likely number of fatalities caused by the expected plant failure, so they can budget for it in the eventual reconstruction project. That way, everybody can be sure the company's long-term safety is assured and still make bonus this quarter.

Punitive damages are intended to throw a wrench into this calculation by adding an unknown damage variable that is based on the assets of the perpetrator, or the perpetrator's profits, or some other measure unrelated to the damages done but intended to get the evildoer's attention. Again, this isn't a lottery: to avoid punitive damages, you need only exercise appropriate care. You can't stop all industrial accidents, but you can conduct yourself with enough care that you don't need special punishment. Punitive damages are for folks who don't bother to care.

In the case of environmental recklessness, the case that punitive damages are some kind of windfall is even harder to make than if the recipient is some poor ex-employee who can't ever walk again. This is because the injury impacts all kinds of people whose utility and value obtained from the environmental resource is difficult to ascertain. In the case of the Exxon Valdez, the employer (according to the court) knew full well their captain had a history of being on the sauce. The employer also knew the captain had a ship full of crude oil that was well-known to cause costly beach clean-ups and to impair the livelihoods of everyone whos business (fishing? tourism? leisure boating rentals or sales?) depended on water being sort-of clean.

By capping punitive damages at a low multiple of economic damages, the court reassures industrial tortfeasors that their risk management teams can go back to costing out the value of human life and intentionally consuming humans and the environment in the pursuit of near-term financial objectives. And imagine the bonanza when their victim is a socialite whose primary activity is humanitarian work and the support of charitable organizations. She doesn't make a dime. When she dies, her family loses nothing. Killing her is free.

Whee!

It's a great time to be in business in the good ol' U.S. of A.

Thanks, Dave!

UPDATE: Dave's discount wasn't the first Exxon (now ExxonMobil, XOM) has received off the original jury verdict. The award as it stands is about a tenth of that declared proper by the folks tasked with deciding the facts of the case. (from the LA Times)