McWilliams: A failure in third wave economics
March 16, Gov. Jared Polis signed an executive order directing the oil-and-gas sector on the front range, to cut nitrogen oxide (NOx) emissions over the next two years. Polis’ order directed the Colorado Oil and Gas Commission and the Colorado Department of Public Health and Environment to design rules by the end of next year, requiring upstream O&G operators to cut their NOx emissions 30% by 2025 and 50% by 2030.
Once again the central planning socialist mindset of Boulder’s Polis has failed in third wave marketplace economics. Gov. Polis is clueless to the fact that by the Front Range oil-and-gas industry cutting NOx emissions, theoretically these oil-and-gas operators are simultaneously creating new greenhouse gas emission offsets that can be monetized into carbon credits and sold in the global marketplace for cash. Furthermore, NOx is a greenhouse gas 300 times more harmful to the climate than carbon dioxide (CO2), and a ton of CO2 is currently trading in the California cap and trade market for $29.14.
Theoretically, when each ton of NOx is eliminated by the Front Range oil-and-gas industry, simultaneously the industry has created in California CO2/ton equivalent, a marketable “carbon-credit” worth $8,742.00/ton of NOx ($29.14/ton of CO2 X 300).
Producing and selling carbon offsets is becoming a lucrative business in the United States. Accordingly, Gov. Polis should expeditiously sign a second order mandating the Colorado Oil and Gas Commission and the Colorado Department of Public Health and Environment to design a California modeled cap and trade program for the Front Range oil-and-gas operators required to reduce their NOx emissions. That would allow the oil-and-gas industry to recoup their investments in complying with the first Polis order by selling carbon credits/offsets for money in the third wave.