Cheaper, Faster, Better, page 5
I remember asking him, “Did you really think you could win money playing three-card monte? You know how it works.”
“No, no, no, no, no,” my brother protested. “I watched it for a really long time, and I figured it out, and the guy ahead of me made a lot of money.”
I said, “Let me ask you a question: did that guy ahead of you look a lot like the guy behind the table? Did they dress the same? Did they act the same? Did they maybe seem like they knew each other?”
The fossil fuel industry is way more sophisticated than a couple of guys running a three-card monte scam in the park. But when it comes to bullshitting the public, they’re often not that different. They’ll make what seems, at first, to be a pretty appealing case. When you look a little bit closer, however, you’ll notice that everyone making that case seems to know one another—and more important, everyone stands to make a lot of money if the rest of us buy what they’re selling.
A good example involves “bridge fuel.” You’ll often hear fossil fuel executives say something like this: “Coal is dirty, and we need something much cleaner. But we can’t switch to renewable energy overnight. So, over the next several years, natural gas can provide a cleaner, temporary alternative as we move away from coal.”
For the record, here’s the somewhat complicated, technical reason the bridge-fuel argument doesn’t work. It’s true that gas, while dirtier than renewables, is much cleaner than coal in the lab. But that’s because in the lab, gas doesn’t leak. In the real world, leaks happen all the time: during transportation along pipelines, from the well, at power plants, and in homes and businesses. According to a recent study by the Environmental Defense Fund, a gas pipeline incident occurs somewhere in the US approximately every forty hours—and leaks are likely to be even more common in developing countries, which have smaller budgets, less oversight, and worse infrastructure.
All these leaks send methane into the atmosphere. From 2010 to 2021, in the US alone, leaks reported to the federal government caused over 26.6 billion cubic feet of methane to be released into the atmosphere. That’s even worse for the planet than leaking an equivalent amount of CO2. In fact, over a twenty-year timeframe—which is to say, during the most crucial window for stabilizing our planet before it’s too late—methane traps about eighty times more heat than carbon dioxide. Betting on gas as a bridge fuel would send global temperatures soaring. In fact, it doesn’t take a lot of leakage to make natural gas even dirtier than coal.
You might ask, “What if we plugged the leaks?” But methane is colorless and odorless, which makes leaks notoriously difficult to spot, let alone plug. Even when you can find them, they usually can’t be fixed right away—the Aliso Canyon leak, discovered near Los Angeles in 2015, sent over 100,000 metric tons into the atmosphere before it was stopped up about five months later. And let’s say, for argument’s sake, that we develop the technology to find and quickly repair natural gas leaks and deploy that technology in the United States and a few other wealthy countries via new infrastructure, in the next four or five years. That’s not likely, but it’s doable. The problem is, what about the other 80 percent of the world? Are we really going to build a global natural-gas infrastructure that will only be used for five or ten years, all on the assumption that the entire world will be able to contain leaks as well as the United States and Germany can, or that when they happen, the poorest countries will be able to spend the huge amounts of money it takes to fully contain them?
Also, as it turns out, gas isn’t even necessary as a bridge to clean energy. If we’d invested heavily in gas ten years ago, when lots of clean-energy technology was still at its earliest stages, that might have made at least some sense. But right now, the quickest way to transition to clean forms of energy is to transition to clean forms of energy. In addition to solar and wind, we can do much more geothermal. We can try to develop smart, safe ways to use nuclear energy. We can build all this faster than we can build a global natural gas system. And in most cases, it will cost less, too.
Basically, natural gas is a bridge to nowhere. At best, it’s useless, because by the time we’re done building it, we’re already on the other side. At worst, it speeds up climate change dramatically by leaking enormous amounts of planet-warming methane into the air at a moment when it’s never been more important to get to net-zero emissions. If you know how the gas industry works in detail, it’s easy to see that going all-in on gas as a bridge fuel is a risky and unnecessary choice.
But most people don’t know how the gas industry works. And even if they did, and totally rejected the bridge-fuel theory, the fossil-fuel people would just move on to some other talking point that sounds persuasive until you look more closely. That’s one reason bullshit can be such an effective strategy for desperate people and desperate industries trying to buy time. Picking apart misleading arguments is exhausting—and there is an endless supply of them. Every day that we are forced to spend debunking bullshit is another day the fossil fuel industry can continue to make obscene profits at humanity’s expense.
So what if we tried a different approach? Rather than analyze the fossil-fuel industry’s case in detail, and rebut it with technical knowledge most people understandably don’t possess, what if we take a step back and try to spot an idea bubble—a closed-off world where everyone shares the incentives, perspectives, and interests?
Suddenly, detecting bullshit gets really easy. Because when you look at all the people making the case for natural-gas-as-bridge-fuel, you notice a strange coincidence. They all own natural gas. In fact, they all stand to make a ton of money if the rest of us buy into their bridge-fuel idea. It’s like standing in the park and realizing that all the people trying to convince you to play three-card monte know one another.
Even the most seemingly independent proponents of bridge-fuel have turned out to be not so independent after all. For several years, from the early 2000s until 2012, the Sierra Club endorsed the bridge-fuel argument. At first, that was really persuasive—an environmental group agrees that natural gas is clean! But once people started poking around, they discovered a strange coincidence: Chesapeake Energy, a big natural gas company, was secretly giving the Sierra Club an enormous amount of money.
I’m not saying that the people at the Sierra Club, whom I have a great deal of respect for, were corrupt or trying to mislead—I’m sure they genuinely agreed with the bridge-fuel proponents. And to their credit, once the secret funding was revealed, they changed leadership and backed away from their support of natural gas. But as long as the Sierra Club relied on the natural gas industry for funding, it had incentives to see the merits in the bridge-fuel argument and to ignore its many flaws.
Part of what makes idea bubbles so dangerous is that you can fall into them by accident, and when you do, it clouds your judgment. The taxi medallion bubble in the early 2010s was a perfect example of this. From the outside, the moment Uber arrived, the writing was on the wall. But from inside the taxi industry, everyone had an incentive not to see what was obviously coming. They all benefited when the price of medallions went up, so they found new ways to convince themselves that the price of medallions would always go up.
I’ve seen this happen in climate, too. Just a few months ago, a friend who runs a climate-focused fund was preparing for a trip to Texas to raise money. “The science looks bad,” I said to him, “much worse than we thought it would be.”
“You know,” he replied, “I don’t agree with you.”
What I said was, “Really?” But what I thought was this:
Of course you think that! Because you’re about to go pitch all these oil millionaires and billionaires on your fund. You can’t go there and say, “Hey, if we keep pumping oil and gas at these levels, it’ll destroy the planet.” You have to say, “No one’s perfect, but don’t worry, you can keep pumping all the oil you want, and you don’t have to feel bad about it. Now can I please have a billion dollars?” I don’t think my friend was lying to me, but incentives are powerful things. I think my friend was bullshitting himself. No one bites the hand that feeds them.
For what it’s worth, this is one reason why, even though I disagree with people from the fossil fuel industry, I’m always interested in hearing what they have to say. First, their internal climate science has actually been very good—even if they’ve spent most of their time and energy denying its conclusions—so maybe they know something I don’t. Second, if you’re going to be in contention with somebody, it’s helpful to understand how they’re thinking and what they might do next.
That said, there’s a big difference between listening and believing. One of the things I learned as an investor is that a surprising number of people take arguments at face value, especially when those arguments are stated confidently. They feel overwhelmed by how much they don’t know, or they’re too busy to ask questions, or they’re just trusting and credulous. Whatever the reason, it makes them easy marks.
During my time on Wall Street, before moving to San Francisco to found Farallon, the easiest mark of all was known as “the Pasta King.” I never learned his real name, or even whether he was actually in the pasta business. All I know is that once a year this guy would arrive on Wall Street from Italy with a huge fortune in tow and announce he wanted to buy stuff.
You can imagine what happened. Across Wall Street, investment bankers waited all year for the Pasta King to arrive. They’d make lists of every dud they couldn’t unload, the assets that were so obviously terrible no one would buy them. And then they’d sell them to the Pasta King.
You might be thinking, “That guy sounds really stupid!” But the truth is that most of us are the Pasta King at some point in our lives: naïve, unquestioning, accepting the wisdom of the self-proclaimed adults in the room without thinking critically. And when it comes to climate, that’s exactly what oil and gas is counting on. They’re looking for pasta kings.
Take the opinion section of the Wall Street Journal. They’re not part of the oil and gas industry, exactly, but as the Murdoch family’s flagship American paper, they’re a crucial part of the ecosystem that supports the status quo. A 2015 study of several leading US newspapers found that the Wall Street Journal was the least likely to discuss the threat of climate change, as well as the most likely to use negative economic framing when discussing climate change solutions.
The Journal op-ed writers rarely engage in outright lies. What they frequently do instead is use facts without context in a flagrantly misleading way. For example, for a very long time, their columnists kept pointing out that 1998 was the hottest year on record, and then they would ask some version of, “If climate change is real, why did the world’s hottest year occur so long ago?” Here’s Holman Jenkins Jr., a member of the editorial board, in 2013: “The fact remains, in all the authoritative studies, the warmest year on record globally is still 1998 and no trend has been apparent globally since then.” And here he is again two years later: “When climate reporters robotically insist, as they did again this week, that the 2000s represent the hottest period in the rather skimpy, 134-year historical record, they are merely reiterating that the pre-1998 warming happened. No clear trend up or down has been apparent since then.”
Unlike with bridge fuel, you don’t need to know much more detail to understand why this argument is bullshit. You just need a little bit of context. Yes, it’s true that 1998 was abnormally warm. But nine of the other ten hottest years on record have come in the last decade. To try to be as fair as possible to Jenkins, he was suggesting that some major warming event happened before 1998, and that nothing’s changed since. But that was hard to believe even in 2013 and 2015, when those op-eds were written, and since then, unfortunately, global temperatures have increased even further.
The Journal’s editorial page was hoping that, with their authoritative tone and prestigious masthead, they could cow their readers into not asking basic, commonsense questions: “Why are these guys choosing one highly specific data point, with no other context to support it? And why are they using that data point again and again?”
And it’s not just the Wall Street Journal that’s been looking for a pasta king. These days, when you talk to oil and gas executives, they’ll often discuss their commitment to reducing emissions per barrel of oil. They can even break out some impressive numbers to show you how much progress they’re making. It sounds pretty good—until you ask a single question. “Is the total number of barrels you drill going to go up or down?” It turns out that their plan for the next several decades involves extracting far more oil per year than they do already, which will more than cancel out any gains they make in efficiency.
It’s easy to think, given their reach and power, that the fossil fuel companies are masters of manipulation and spin. But sometimes all it takes to expose their arguments is the willingness to ask the most basic questions. With just a small commitment to maintaining your skepticism, you can avoid being the pasta king—and make your bullshit detector much sharper in the process.
There’s another, even easier way to get better at spotting bullshit: instead of focusing on misleading statements, focus on misleading people.
My friend Billy and I once discussed this, in a roundabout way. Billy ran one of the largest independent studios in Hollywood. Before that, he was a big-deal agent, and one day, about twenty years ago, he called me from his desk at the agency.
“Tom, do you use a voice stress analyzer?” he asked.
“Billy,” I replied, “I don’t know what a voice stress analyzer is. What are you talking about?”
“You know, to see if people are lying.”
He explained that a voice stress analyzer is a small device you attach to your phone. When someone calls you, your analyzer picks up the vibrations in their voice, and when they lie, their vibrations go up.
“It’s subconscious,” Billy told me matter-of-factly. “Everyone in Hollywood uses it.”
“No way. You have one of those?”
“Are you kidding me? I wouldn’t even think of having a conversation without it.”
In case you’re considering buying a voice analyzer of your own, you can save your money. They’ve been proven not to work. But what struck me most about that conversation was Billy’s overall approach. He was looking for a foolproof way to separate the verbal wheat from the chaff.
In my experience, there’s a much better strategy. Stop trying to figure out where the lies are and start trying to figure out who the liars are instead.
But don’t take it from me. Take it from one of the world’s great bullshit detectors: Jane Austen.
I’m not kidding. You can spend years trying to invent your own techniques for becoming a better reader of human character, or you can rely on a smart, sensitive writer who peered as deeply into human nature as any of us ever will, and you can learn from her insight and wisdom for less than the price of a Big Mac. Plus, you’ll probably feel happy at the end. (Virtue always triumphs with Jane.) That seems like a pretty good deal to me.
My favorite Jane Austen novel is Pride and Prejudice. I love the way (spoiler alert) Mr. Wickham seems too good to be true. He’s charming, he’s got great manners, he tells a moving sob story about how Mr. Darcy treated him badly—and then he turns out to be a total jerk. Meanwhile, Mr. Darcy appears cold and aloof but he’s completely trustworthy. By the end, you don’t have to evaluate every one of Mr. Darcy’s statements to know that you can trust him, just as you don’t have to rebut every one of Mr. Wickham’s to know he’s a liar.
Today, the fossil fuel industry is the climate world’s Mr. Wickham, putting on a full-scale charm offensive. The oil and gas companies want you to think that they understand the threat to the planet and that they’re ready to change. To decide whether to believe them, you can employ your own version of a voice stress analyzer, going through each greenwashing statement or upbeat ad trying to determine if it’s false. Or you can apply the Jane Austen test and ask: “Are these guys trustworthy?”
The record is pretty clear. The fossil fuel companies have lied through their teeth for decades. First, they denied that climate change was happening. Then they denied that climate change was caused by humans. Then they said the science was in question. Then they said warming wasn’t happening as fast as independent researchers said it was.
They weren’t just wrong. They knew they were wrong. They’d read the same research as everyone else. Their own research even confirmed it—in fact, for a long time their climate models were better than NASA’s. And they continued to lie anyway. They were willing to put millions, maybe even billions, of lives at risk to protect their profits.
That doesn’t mean that everything a fossil fuel person says is guaranteed to be a lie. But it means that oil and gas doesn’t deserve to be trusted implicitly. They’ve been making suckers out of us for way too long, and it’s only reasonable to treat what they say as bullshit until proven otherwise. We don’t have the time to debunk every talking point made by an industry that’s consistently lied through its teeth. Think about the number of years we spent arguing that climate change was real instead of doing something about it. We won that argument. Even the oil and gas companies now admit that the climate crisis is happening. But we lost at least a decade of action, which meant an additional decade of rampant profits for the fossil fuel industry as it pumped more and more pollutants into our atmosphere for the rest of us to deal with.
Climate denial has become climate delay. The dead-enders know that eventually our world is going to change, and that the fossil fuel industry, like American whaling in 1860 or New York taxicab medallion-hoarding in 2010, is going away. We can side with the fossil fuel folks and try to delay the inevitable for as long as possible—with dire consequences. Or instead, we can find, and listen to, the climate Mr. Darcys. I’m lucky to have plenty of them in my life.
