Daily Archives: 15 February 2018

Infrastructure Funding

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Much has been made about the deteriorating state of our nation’s infrastructure, from past todos that worked out to be just political chit-chat with nothing done to today’s efforts and commentary.

The commentary, as far as it goes, isn’t far wrong: our infrastructure, our roads, bridges, railroads, airports, even our communications infrastructure are in terrible shape.  But the commentary continues to be largely chit-chat, and the NLMSM isn’t helping.

Take this opening from a piece on President Donald Trump’s latest budget proposal from Fox News, for instance.

President Trump is calling to pump $1.5 trillion into fixing America’s infrastructure while streamlining the often-cumbersome permitting process, as part of a $4 trillion-plus budget plan unveiled Monday.

We’re going to spend 3/8 of our 2019 Federal budget on infrastructure, are we?  That’s the impression the author of this piece has chosen to give.

The truth of the matter, though, is buried deeper into the piece.

The infrastructure component, however, would not necessarily be a huge driver of Washington’s red ink.

Well, NSS.  It turns out the infrastructure spending component of Trump’s budget proposal is just $200 billion—just about 1/8 of those $1.5 trillion.  The Federal part of that spending is just seed money, with the States and local jurisdictions, and importantly, private enterprise, putting up the rest.

And that’s entirely appropriate.  While our national infrastructure benefits our nation as a whole—is critical to it, in fact—the vast majority of use and of benefit is local: it’s the States and local regions that get the first and the most of the benefit of a functioning and sound set of bridges, roads, airports, and so on.  Of course, then, it’s the States and locals who should front most of the money for infrastructure rehab.  After all, why should Illinois or Missouri, with their citizens’ tax dollars, contribute a whole lot to improving Iowa’s lousy highway system?  A bit, yes; some interstate commerce traffic into and out of Illinois and Missouri uses Iowa roads.  But far and away the bulk of Iowa highway traffic is intrastate.  It’s Iowans who are the largest users of Iowa roads.

There’s another reason to put the cost of improvement on the State and locals.  They’re the ones closest to the problem, and so they’re the ones with the most impact from regulations and permitting and other red tape; they’re the ones who can have the most impact on these impediments to improvements.  Private enterprises best know the surrounding regulatory and permit environment, and it’s private enterprise that will employ local workers.

Private Moves and Regulations

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The Trump administration’s Bureau of Land Management is moving to rescind and replace an Obama administration regulation that would drastically limit methane gas emissions by companies drilling for hydrocarbons on Federal land.

While the move is salutary—the Obama regulation would have imposed too much cost, would have stunted energy innovation, and would have limited energy supply with resulting higher prices to us consumers—there’s one tidbit in the Wall Street Journal article carrying that news that needs emphasis.

Environmentalists rejected that claim [of impeding energy development] and decried the decision, pointing out that several companies had already moved on their own to start cutting methane emissions.

Because some in private industry think a move is a good idea, Government, says the Left, must get involved and require everyone to do the same thing.

And

Many oil-and-gas companies—including some of the world’s biggest—have been anticipating further rules to slow climate change and have decided to invest in better methane-capturing technology. They can recoup some of the investment and potentially add to profits by capturing more stray gas and selling it with the rest of their output.

Of course, they still will be able to with the new regulation in place.  Methane gas produced as a side effect of oil drilling or fracking still will be a marketable product, still will be competitive with coal, still will produce profit for the drillers and frackers.  This is innovation in a free market, something the Left and their environmentalists.