“Falling commodity prices in general are a good thing in a free market because, as economist Ludwig von Mises emphasized, the sole end of production is consumption. Consumption first, production second. Also the US is a net importer of both oil and natural gas, which means we consume more than we produce. So provincially speaking, the US gains more than it loses from well-to-pump or well-to-burner-tip price drops.”

Business consultant Carlos Lara and I produce a monthly financial publication, the Lara-Murphy Report, which highlights the Austrian School of economics in both academia and the financial markets. The January 2016 issue interviewed Rob Bradley of Houston, Texas, who was trained in Austrian-school economics and is a longtime historian of oil markets. This interview is reproduced below.

Robert L. Bradley Jr. is the founder and chief executive officer of the Institute for Energy Research (IER), a 501(c)3 educational foundation with offices in Houston, Texas, and Washington, D.C.

[This interview of Robert L. Bradley Jr. by Stephen Hicks (website here) is part of a series: Part I (Libertarianism and Energy); Part II (Expanding Energy Horizons); and Part III (Enron as a Political Company).]

Kaizen: You mentioned that Enron was also involved in lots of alternative energy sources—wind power, solar power, “green” energy, and that it was one of the first at the political table. Did Enron think that with the right kind of farsighted investment the new energies could be profitable?

Or was this again part of a political strategy: Alternative energy was a political favorite, certainly during the Clinton Administration years, when Al Gore was vice president? So Enron is getting a seat at the table; and whether alternative energy actually succeeds or not, it’s a good business strategy at least in the short term.

[Part III of an interview of Robert L. Bradley Jr. by Stephen Hicks (website here). Part I (Libertarianism and Energy) and Part II (Expanding Energy Horizons) have been published.]

“Ken Lay lives in Jim Rogers! The master of the regulation game for natural gas transmission brought Lay’s get-out-in-front political strategy from Enron to a company called Public Service Company of Indiana, which became Cinergy, which was bought by Duke Energy. Rogers positioned his coal-laden company as very concerned about climate change and wanting cap-and-trade regulation.”

Kaizen: Enron operated in a highly mixed political and economic environment. In the decades that Enron was operating—the 1980s through the early 2000s—to what extent was the U.S. energy market a free market, and to what extent was it regulated economy?

Bradley: The energy industries—oil, natural gas, and electricity—have all been politicized.

[This is Part II of an interview of Robert L. Bradley Jr. by Stephen Hicks (website here). Part I was published last week.]

Kaizen: You began as a specialist in oil and gas regulation. How did you evolve from there to where you are now?

Bradley: There are four or so stanzas in my intellectual career to date. The first was certainly oil and gas regulation, taxation, and subsidization, the subject of my Cato book, Oil, Gas & Government: The U.S. Experience. The research for that was essentially complete by 1985 when went to the corporate world by joining HNG-InterNorth, soon to become Enron.

In my first years at Enron, I became conversant with the electricity market and its regulation, which was really a new area for me, a second stanza in my development.