I recently posted on the unintended consequences that often come along with energy technologies. An article by Forest Reinhardt in the Harvard Business Review 10 years ago presented a framework for making environmental strategy and investment decisions. It also provided another example of the unintended consequences of energy technology. In this case, technology that reduced smog ended up polluting ground water.
The article relates that high urban smog levels were prompting regulators to
consider actions that could have threatened gasoline refiners’ markets in California. The refiners reacted by introducing reformulated gasolines that contained a compound called MBTE to reduce smog emissions. The refiners then gained regulatory mandates that effectively required the use of these fuels. It’s a case study in using adopting a proactive environmental strategy to protect business interests.
“Although the overall strategy was sound,” the article notes, “the reformulated-gasoline policies have not been as effective as hoped. MTBE reduces air polution, but leaks of the chemical have polluted groundwater. MTBE was found in municipal drinking-water wells in Santa Monica in 1997; it subsequently appeared in groundwater supplies elsewhere in the state.”