IPI Policy Blog

Most reasonable people would probably agree that, ideally, drilling for oil and natural gas should take place on relatively large tracts of rural land, well away from residences and public places.  But here’s the poorly understood irony facing Denton voters on November 4: That’s the only kind of drilling that will be stopped if the proposed ban passes.

That’s right: It’s only out-of-the-way, inoffensive drilling on large tracts that will be affected under the ban.

Here’s why: While Denton had a weak drilling ordinance and issued some unwise drilling permits, that ordinance has now been significantly strengthened. Indeed, today’s Denton drilling ordinance has stricter requirements and larger setbacks than that of many other cities in north Texas. Anyone obtaining permits and drilling new wells today has to operate under the newly strengthened ordinance, including 1,200 foot setbacks. Fort Worth’s setback, for example, is only 600 feet.

Only wells on relatively large tracts of land and well away from property lines meet the test of the new ordinance and are thus even candidates to be banned.

Proponents of the ban are still seething over wells that were drilled close to residences and property lines under the old ordinance, or indeed that were drilled on unincorporated land. But the city’s hands are tied over those previously drilled wells.

I’m cataloging some of the misleading, distorting, uninformed and just plain awful reactions to the latest Wikileaked IP chapter of the Trans-Pacific Partnership treaty in a series of blog posts, in order to keep my response down to manageably sized bites.

My general reaction to this pattern of distortion can be found in my response to the previously leaked chapter, here. Frankly, not much has substantively changed since then, except for the ever greater heights of distortion from the IP skeptic crowd.

Perhaps the worst reaction was from Katheryn Thayer at Forbes, and I want to stress that Katheryn identifies herself as “staff” at Forbes, and not just as one of their many authorized bloggers. Katheryn uncritically accepts and then further inflates the inaccurate and policy-sloppy arguments of the IP skeptic activist groups, and her article is much more of an opinion piece. Most problematic, she works from the assumption that the TPP is “the latest threat to digital innovation and free speech online.” That’s just totally unjustified. You don’t get to throw around a charge of threatening free speech without backing it up. But she doesn't.

Because of our interest in trade policy and general opposition to government subsidies and other interference in private markets, we’ve done a few pieces on the issue of sugar subsidies, and lately about the best way to phase them out.

About this time last year we released “Solving the Sugar Subsidy Problem,” which outlined the basics of the issue and suggested that the solution must be some sort of global trade pact, most likely through a World Trade Organization (WTO) process.

And this past May we released “Seeking a Global Solution in Sugar Trade Policy,” which explained some of the enormous sugar subsidies and other trade distortions common to trading partners like Brazil, India, Mexico and Thailand. In the face of such global subsidies, only a global solution is probably workable.

Otherwise, you simply allow subsidized foreign competition to destroy our domestic sugar industry, after which time you could expect foreign suppliers to ratchet back up the price, as we explained.

Last week, Americans for Limited Government released a new paper reviewing the material on foreign sugar subsidies by those same four major producers (India, Thailand, Mexico and Brazil), and essentially pleading for free-traders and free-market promoters to embrace the global agreement model, as outlined by Rep. Ted Yoho (R-FL).

Essentially, the Yoho “zero-for-zero” proposal is a commitment by the U.S. that we would eliminate all our sugar subsidy programs if our trading partners would agree to come to a similar agreement. The Yoho plan would require some sort of trade agreement, either a bilateral or multilateral “Sugar FTA” or a WTO agreement. But, under Yoho’s plan, the U.S. takes the first step by making the commitment.

The alternatives are to either leave in place the status quo, which free-marketers and free-traders oppose, or unilateral disarmament, which free-marketers and free-traders (I argue) SHOULD oppose.

This morning the Federal Communications Commission (FCC) voted to eliminate its sports blackout rule, which helped the NFL justify blacking out the broadcast of NFL games that were not sold out.

The blackout rule was always a case of the FCC getting government involved in the business model of a company/league, which is always a mistake. Policy and business models should never be confused. Government sets policy, and then people go out and create business models. Government should not be creating or distorting or assisting anyone's business model.

This evening Grooveshark, the popular music streaming service that has up to now managed to skirt accusations by copyright holders that is was hosting music files without paying appropriate royalties, was found to be guilty of massive copyright piracy.

Grooveshark’s defense has long been that it is legal under the Digital Millennium Copyright Act, the federal law that protects websites that host third-party material if they comply with takedown notices from copyright holders.

Occasionally IPI president Tom Giovanetti and I get the opportunity to speak with scholars, journalists and government officials from other countries who are in the U.S. as part of a State Department outreach program. I recently spent time with this group from India, discussing the role think tanks play in developing government policies, especially foreign policy.

I've always thought it was somewhat self-incriminating that critics of copyright tend to excuse copyright piracy. They usually claim to believe in some form of copyright (though they can almost never describe what they would support), and claim to believe in obeying the law, yet they excuse and explain away piracy.

Very often, the technique is to deflect "but don't you think piracy is wrong?" with a quick "yeah, but Hollywood . . . " and then you either get:

• Hollywood doesn't make content available to consumers they way they want it (what they really mean is that Hollywood should make its products available to consumers immediately, easily, in a variety of formats, and for almost nothing).
• All those rich Hollywood fatcats make too much money. I'm just depriving them of their next Bentley
• Hollywood is defending their old business model instead of adapting to changing technology
• Copyright term is too long (what this has to do with pirating a movie that's been out for a week is not obvious to me)

or some other foolishness.

Simon Lester, who I met earlier this year speaking at a Cato event, has a blog up over at Cato at Liberty giving a somewhat nuanced response to my new IPI Ideas on including IP protection in trade agreements.

His point, essentially, is that I'm being very general rather than granular in my argument. And he's completely right, of course. My argument in the piece IS a general argument; namely, that it's appropriate and important to include IP in trade agreements.

And, in fact, my general argument in favor is a response to the general argument that is being made by many, including Cato personnel, that IP should NOT be included in trade agreements.

We've spoken several times about how the United States has the potential to become energy self-sufficient through the shale revolution. Indeed, the U.S. could become the world's #1 exporter of energy, if the right policies are put into place.

As evidence that this is beginning to happen, Bloomberg reports that, in August, U.S. exports of petroleum hit record highs, and imports of crude oil hit record lows.

U.S. exports of petroleum products reached a record in August for the month as refiners boosted rates, the American Petroleum Institute said.

Wednesday the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property and the Internet will hold a hearing on the portion of the Digital Millennium Copyright ACT (DMCA) that makes legally possible and enforceable strong digital rights management (DRM) and other forms of technical protection measures (TPMs). Section 1201 of the DMCA makes it illegal to circumvent such technical protection measures, and was designed in part to implement the WIPO Internet treaties.

Section 1201 has been the subject of much ire from both technologists (who didn’t see the point and who like things simple) and from the IP skeptic community (who don’t like IP and certainly don’t like anything that reinforces IP). TPMs are occasionally inconvenient, but the track record of TPMs has been one of facilitating numerous new business models for the distribution of music, video and software. Today’s content-rich environment is due largely in part to the fact that content owners have sufficient confidence that they can make their content available through reasonably secure channels, and those channels are made reasonably secure through TPMs.

I have one of those "Earth at Night" maps from National Geographic on a wall in IPI's offices. Among the things it shows is places in Russia, the Middle East and East Africa that seem to be on fire. That's flaring--the burning off of gas or oil because for one reason or another it isn't being captured and refined.

Most of the time this is because of inefficient operations, lack of pipelines, etc. But according to a piece a few days ago in the San Antonio Express-News, there's quite a bit of flaring going on in U.S. shale formations like the Eagle Ford.

The article is reasonably fair and balanced, but, as Jon Cassidy at Watchdog.org points out, the main reason for flaring in the U.S. is the federal export ban on oil & natural gas.

There is one key fact, however, that went missing from the series, which explains a lot of what’s going on. If the reporters knew of it, they may have just decided it was beyond the scope of their story. It’s this: low natural gas prices are not some inalterable fact of the free market. They are largely the result of a federal ban on natural gas exports that dates back to the Arab Oil Embargo.

According to a piece in the Wall Street Journal, the U.S. energy boom is not about to run out:

The number of rigs drilling in the U.S. is basically flat, but production is rising. The federal Energy Information Administration calls this "drilling productivity" and says it is showing no sign of slowing.

Lynn Westfall, the EIA's director of energy markets and financial analysis, points out that the rig count in South Texas' Eagle Ford Shale "has not changed since 2012, but the production per new well has doubled."

Innovation makes the difference. The federal government recently predicted that oil production would rise through 2019 and then flatten off. But a second scenario in the report assumed that extraction technology would continue to improve, leading crude output to rise through 2040, if not longer.