Doing Good with Good OR: Energy & The Environment

How could analysis and Operations Research help us foresee trends and make intelligent and informed political decisions? Philip Sharp, the president of Resources for the Future, former Congressman from Indiana, US House of Representatives, attempts to answer this question in the Doing Good with Good OR series of plenaries. The humble but frank former congressman speaks to the scientific crowd about the importance of rigorous analysis for important political issues. Furthermore, Sharp elaborates on the institutional connections and the ability to communicate complex issues simply as the crucial factors to make the analysis matter.

From the 70’s to now, we have been on the roller coaster ride with oil prices. In the 1970’s, with the belief of an energy shortage, the National Energy Act was signed to protect the US from the over consumption of oil. Tax credits were handed out to engage people to convert gasoline cars to burning natural gas. The go-ahead for ethanol was also around the same time. However, in 1986, oil prices crashed down, which caused policies and investors who relied on conventional wisdom to withdraw. Then came 2004, when oil prices went up unexpectedly, and the government had to update the fuel economy mandate to adjust to the rise. Similar rise and fall goes for the natural gas industry as well. The ups and downs of natural gas influenced the liquefied natural gas (LNG) terminals development, the talks of an Alaska pipeline to serve the lower 48 states, the energy ties with the northern neighbor, Canada, and much more. In the US, the prices of oil and gas largely impact the country. When energy prices go through the roof, “all bets are off”, says Sharp, just like the stock market crash that the country is now deeply suffering from.

However, being open and frank, Sharp thinks analysis is powerful and important, but it is not the means to all ends. “It will help us organize and attack so many unknowns and uncertainties”, but persistency to get the ideas across to politicians is crucial. Responding to an audience’s question, Sharp stresses the importance of identifying institutional connections. In the world of politics, the voice of an individual scientist may have some impact, but a collective agreement of a group of politicians will have far greater reach. “The most difficult thing in the congress is to get people to agree on something”, says Sharp. The scientist’s ability to communicate simply the complex things and the level of confidence and trust s/he can offer to the politician is golden. Politicians need to find out who and what to trust, especially when reports are being thrown around to counter other reports. It is too tempting to just pick the easiest path or whatever supports one’s self interest.

It is always a pity to see brilliant ideas sitting on the book shelves because of ineffective communication. Politicians are typically the most powerful figures in a country and can make the biggest impact. If Operations Researchers want to do good with good OR, then as Sharp suggests, identifying institutional connections will be the key.

Credits: The talk was given at the INFORMS 2008 conference in Washington DC as a plenary in the series of Doing Good with Good OR).