When the Environmental Protection Agency (EPA), after years of hearings, passed a rule requiring that specific equipment be put into smokestacks to filter Benzine, a harmful pollutant, Amoco complied and spent $31 Million at its Yorktown, Virginia, refinery. In a chance encounter on an airplane between James Lounsbury of the EPA and Debora Sparks of Amoco led to a discussion about the frustrations and inadequacies of environmental law. One thing led to another and, with some trepidation, Amoco let a team from the EPA into its Yorktown plant to see how the environmental rules, written in windowless rooms in Washington DC piled high with scientific evidence and legal briefs, actually worked in practice.
The EPA found that its precisely drawn regulation almost totally missed the pollution. The Amoco refinery was emitting significant amounts of Benzine, but nowhere near the smokestacks. The pollution was at the loading docks, where gasoline is pumped into barges. Just as fumes escape when you use an old-style nozzle when filling up your car at the gas station, large quantities of Benzine were escaping as Amoco pumped several hundred million gallons of gasoline every year into barges. Once the EPA and Amoco officials actually stood on the dock together and realized the problem, the solution was easy and relatively inexpensive. Meanwhile, pursuant to the rigid dictates of a thirty-five page rule that many government experts had spent years fine-tuning, Amoco had spent $31 Million to capture and insignificant amount of Benzine at the smokestack. The rule was almost perfect in its failure: It maximized the cost to Amoco while minimizing the benefit to the public.
Philip K Howard – The Death of Common Sense
Actually, Mr. Howard forgot to include that the equipment in the smokestacks cost Amoco nothing, since they simply passed the cost of the nearly uselss equipment on to the consumer, as every well run business would do.
But as the eco-socialists would tell us with a straight face; it was for our own good.
I still haven’t gotten all the quotes I wanted transcribed, but this one had been staring me in the face for far too long to hold it back any further.
Whether the smokestack equipment cost Amoco $31m or that cost was passed on to consumers, the point remains the same: $31m was spent and did next to nothing to solve the problem. Sure, the equipment manufacturer, his employees, and suppliers were better off but the rest of us aren’t.
“The Death of Common Sense” is an excellent read, and I commend it to anyone who engages me in these types of discussions. It’s a little long in the tooth, though, I’m sure a current revision would be useful and drive the main point home with even more vigor.
I just wish people would start to realize that the Pareto Principle applies to environmental issues as well as it does to inventory control.