A free-market energy blog

Yesterday (Mar. 9), the Houston Chronicle published an op-ed by Shell Oil CEO Marvin Odum titled, Why Shell Oil Co. and I are staying in the U.S. Climate Action Partnership. It’s pretty thin on substance. Kinda reminds me of that ’80s film, “The Unbearable Lightness of Rent-Seeking.”

Maybe Mr. Odum got his marching orders from The Hague (Netherlands), or maybe he really believes cap-and-trade is good for the oil business. These are strange times. Confusion abounds in high places.

In this post, I provide a running commentary on Odum’s column.  Odum’s verbiage is indented; my comments follow in bold type. 

Today, Washington is having the wrong energy and climate debate, and the future of the U.S. economy may be the biggest casualty.

A rather amazing statement, considering that the party of cap-and-trade controls the White House and the leadership of both the House and Senate. Saint Barack, Czarina Browner, Lisa Endangerment-Finding Jackson, General Boxer, and Inquisitor Waxman occupy the commanding heights of energy and climate policy in the nation’s capital, yet “Washington is having the wrong energy and climate debate.” How did they let that happen? Odum offers no explanation.

Rather than developing sensible legislation that creates a viable market for low-emission energy while developing more of our own oil and gas resources, Washington is engaged in a snowball fight over the science of global warming.

Yep, move along, nothing to see here. “Snowball fight” indeed. Top IPCC-affiliated scientists conspired to bias the peer-reviewed literature they would assess, ignored research that did not fit into the “nice tidy story” they wanted to tell, and violated the UK freedom of information act to prevent independent researchers from checking their data and methods. These IPCC insiders repeatedly flouted U.S. Government standards of openness and transparency, rendering the IPCC reports  unsuitable as basis for policymaking, as Peabody Energy documents in its 240-page examination of the Climategate files. 

In addition, the IPCC recently has been caught four times presenting false, biased, or unsubstantiated claims –that Himalayan glaciers will disappear by 2030, that hurricane damages are strongly linked to global temperature, that 40% of the Amazon rain forest is at risk, and that Antarctic sea ice is not growing significantly. 

More importantly, as Chip Knappenberger has shown (here and here), recent research calls into question the IPCC’s centerpiece assertion that “most” of the warming of the past 50 years is “very likely” due to greenhouse gas emissions.

Contrary to Odum, debating whether the IPCC really knows best is the right energy and policy debate. So is the debate over who should make climate and energy policy — the people’s elected representatives or politically unaccountable bureaucrats, trial lawyers, and activist judges. Alaska Sen. Lisa Murkowski’s Congressional Review Act resolution to veto EPA’s endangerment finding would safeguard not only our economy from regulatory excess but also the separation of powers and accountable policymaking (see here, here, here, and here). Murkowski’s resolution could come to a vote in the Senate as early as next week.  Although there is much debate about the Murkowski resolution, Odum says not a peep about it.

 Meanwhile, other countries are quietly going about building the vast infrastructure necessary to win the real fight — the one that will determine who will lead the new, clean-energy economy.

This is just a green variant of what Friedrich Hayek called the “fatal conceit,” the belief that the “best and brightest” know what the “next big thing” is, and therefore should be allowed to rig the market via mandates, taxes, and subsidies to create the infrastructure of the future. Just describing this mindset should be enough to discredit it. If Odum and others are the visionaries they profess to be, they could all make a killing just by putting their money where their collective mouth is. Instead, they lobby for policy privileges because the future they envision utterly depends on the triumph of politics over markets. Their plan would lead to a net loss of jobs and wealth, as I discuss in a related post, Energy Secy. Chu’s convoluted climate economics.

Recent news reports concerning the withdrawal of three companies from the U.S. Climate Action Partnership have been cited as evidence that energy and climate legislation is stalled. If anything, these decisions indicate that we are closer to, not further from, enacting climate and energy legislation because difficult choices are being made about the best way to achieve legislation. The fact is, USCAP members continue to demonstrate a solid commitment to addressing the nation’s climate and energy challenge through strong cooperation among businesses, environmental organizations and policymakers.

This is whistling past the graveyard. Three companies withdraw from U.S. CAP, and “If anything these decisions indicate that we are closer to, not further from, enacting climate and energy legislation.” So if six members quit, that must mean we’re even closer to enacting climate and energy legislation. And if everybody quits, victory is assured!

So why has Shell Oil Co. remained an active member of this important organization? Consider that by 2050 the world’s population will increase 50 percent to 9 billion people and 98 percent of that growth will occur in what today are considered developing countries. In only 15 years’ time, about two-thirds of the world’s economic activity will be in these developing countries. Citizens there will naturally want the same standard of living we enjoy today — and this will create an enormous demand for energy.

These are reasons to oppose cap-and-trade policies! Cap-and-trade is designed to increase the cost and decrease the supply of fossil energy. Yet the pressing need in developing countries is to make energy more abundant and affordable. The top priority of the global warming movement is to stop new coal power plants from being built. Yet countries like India and China absolutely depend on the expansion of coal-based power to lift millions out of health- and life-destroying poverty (see here and here).

For Shell, the scale of our activities puts us on the front line of the global energy challenge. Shell operates in more than 100 countries, producing more that 3 million barrels of oil and gas every day. Worldwide, there are some 45,000 Shell service stations, selling transportation fuels to some 10 million customers a day. And we run more than 25 major refineries and chemical plants around the globe.

Yes, and that’s evidence of what exactly — that the world will need more fossil energy in the foreseeable future or that governments should gang up to restrict access to fossil energy and promote more costly, under-performing alternatives?

Our belief is shared by many, that in the coming decades all countries must find more energy at a much-reduced cost to the environment as we transition to a low-emission fuels economy. That transition will take time — decades. In the interim, a leading option is to expand access to oil and natural gas. Together these sources meet 60 percent of U.S. needs because they are reliable and abundant and technology has allowed new and innovative ways to lessen the environmental footprint of oil and gas operations.

Huh? How does “expand access to oil” help us “transition” to a “low emission fuels economy?” Odum might as well say that drilling more oil will help us transition to a “beyond petroleum” economy. Yes, access to oil is critical to prosperity and wealth fosters innovation.  But that’s not what Odum means. He means that government should pick winners and losers. As soon becomes apparent, he wants government to hammer coal, which his company does not produce, in order to increase market demand for natural gas, which his company does produce. Such Enron-like behavior is par for the course at U.S. CAP.  

Natural gas, in particular, will play an important role. It is the fastest-growing and cleanest-burning fossil fuel, and some estimates say the U.S. contains enough natural gas resources to meet current demand into the next century. Shell and others are advancing technologies to safely access and develop these supplies. Enabling reasonable and environmentally sensitive access to these resources would strengthen U.S. energy security by making more domestic supply available to American consumers. It would also support the creation of American jobs and strengthen our economy while allowing research to continue on exciting new forms of energy, including biofuels and other alternative sources of energy.

Policymakers should lift moratoria and other political impediments to the development of natural gas supplies. But it would be folly for government to put all (or most) of our energy eggs in a single basket. Only a few short years ago, high natural gas prices were destroying manufacturing jobs and squeezing consumers. There is no guarantee this won’t happen again, especially if climate policies eliminate coal as an alternative to gas.

What does this mean for the United States? By working together, stakeholders, both individually and through organizations like USCAP, can set the course for comprehensive energy and environmental legislation that puts us on a path to a secure and sustainable energy future.

Okay, I’m sold, let’s all hold hands and sing Cumbaya!

It is easy to call for this kind of unified action. Delivering on-the-ground progress is a lot tougher. One thing is clear, though: Without cooperation across party boundaries and ideological divides, we run the risk of finishing the race for responsible energy and environmental legislation behind the pack.

Translation: Don’t let trifles like “party boundaries and ideological divides” hinder Shell’s quest for windfall profits!

And if there is one thing we all can agree on, it is that America cannot afford to receive the bronze medal in the race for our energy future.

The only race worth having is one in which contestants compete on a level playing field. Odum envisions a race in which government handicaps coal on behalf of oil and gas companies. If there’s a medal at the end of this race, it’s bound to be made of fool’s gold.

All interconnected transmission and distribution (T&D) grids have one thing in common. Their operators must continually dispatch generators to keep the network’s supply and demand in balance at all times and to maintain its voltage and frequency within very tight tolerances.

The “simultaneity problem” is not shared by oil or natural gas or coal. It is a tough reality for electricity that Thomas Edison and countless inventors since him have tried to solve via affordable battery storage. 

So where are we today in terms of cost per kWh to use batteries to store power and, in the case of intermittent technologies, firm power? For utility scale battery systems, expect to pay between $1,000/kW and $4,000/kW, according to the Electricity Storage Association. The DOE’s optimistic assessment estimates those costs will drop to around $500/kW by 2012.

Such adds at least a half cent per kWh to the cost of electricity.

Latest Technologies

There are about a dozen technologies vying for a piece of the utility-scale energy storage market, especially advanced battery technologies such as lithium ion and sodium sulfur batteries, pumped hydro, and compressed air energy storage. In this post, we’ll review the state-of-the-art of battery technology, a few interesting projects, and get a glimpse of the next generation of utility-scale batteries.

You should also note the few U.S. projects over the past few years and the large number number of battery technology companies chasing those projects. Several companies have since left the battery market or redefined their products. Little data on installed costs is available but included when available. Expect a major market shake-out over the next year or two.

The ongoing dissolution of the traditional electricity sector structure also seems to call for increased reliance on big batteries wherever feasible. One consequence of deregulation is that, in many states, generation and T&D are no longer planned in an integrated fashion by one entity—the local utility. Energy storage in general, and batteries in particular, can help stabilize the intermittent nature of nondispatchable renewable energy sources, for load leveling and peak shaving, substation standby power, or as fast acting reserves for system regulation control (ancillary services). Storage also has a critical role to play in securing the nation’s energy infrastructure, much as the Strategic Petroleum Reserve does for oil, and bulk gas storage does for balancing seasonal natural gas demand and supply. [Read more →]

The U.S. Department of Agriculture (USDA) has estimated that one quarter of America’s corn cereal production in 2009 went to biofuels, which in effect turned cheap food into expensive fuel.

Despite pushing up food prices and having unintended consequences for the environment, the U.S. Environmental Protection Agency (US EPA) recently reiterated its support for ethanol. President Obama also promised continued investment in advanced biofuels in his recent State of the Union address.

Bad Economics

A leaked paper on the 2007/2008 food crisis by the World Bank Development Prospect Group estimated that U.S. and European Union biofuel production was responsible for 75% of the price rises–a far cry from the 3% estimate by USDA.

Biofuels from crops like corn, sugar, and palm oil have more than tripled since 2000. In accordance with its 2007 energy bill, America is targeted to increase biofuels production to 15 billion gallons by 2012 and 36 billion by 2022, up from the current 10.6 billion. Of that 36 billion, ethanol is capped at 15 billion gallons.

Just last month, US EPA announced that despite doubts as to its energy and environmental record, they would still support further ethanol production. The new guidelines will allow for the production of an additional 2 billion gallons of corn ethanol and potentially much more.

These subsidies are about political pandering, not cutting greenhouse gases.

The EPA admitted that a considerable amount of current ethanol production would, as a result, fail to meet the 20% reduction criteria. It is difficult to see on what grounds these subsidies to biofuels can be justified–if not outright agricultural protectionism. [Read more →]

Another error in the influential reports from the Intergovernmental Panel on Climate Change (IPCC) reports has been identified. This one concerns the rate of expansion of sea ice around Antarctica.

While not an issue for estimates of future sea level rise (sea ice is floating ice which does not influence sea level), a significant expansion of Antarctic sea ice runs counter to climate model projections. As the errors in the climate change “assessment” reports from the IPCC mount, its aura of scientific authority erodes, and with it, the justification for using their findings to underpin national and international efforts to regulate greenhouse gases.

Some climate scientists have distanced themselves from the IPCC Working Group II’s (WGII’s) Fourth Assessment Report (AR4), Impacts, Adaptation, and Vulnerability, prefering instead  the stronger hard science in the Working Group I (WGI) Report—The Physical Science Basis. Some folks have even gone as far as saying that no errors have been found in the WGI Report and the process in creating it was exemplary.

Such folks are in denial.

As I document below, WGI did a poor job in regard to Antarctic sea ice trends. Somehow, the IPCC specialists assessed away a plethora of evidence showing that the sea ice around Antarctica has been significantly increasing—a behavior that runs counter to climate model projections of sea ice declines—and instead documented only a slight, statistically insignificant rise.

How did this happen? The evidence suggests that IPCC authors were either being territorial in defending and promoting their own work in lieu of other equally legitimate (and ultimately more correct) findings, were being guided by IPCC brass to produce a specific IPCC point-of-view, or both.

The handling of Antarctic sea ice is, unfortunately, not an isolated incident in the IPCC reports, but is simply one of many examples in which portions of the peer-reviewed scientific literature were cast aside, or ignored, so that a particular point of view—the preconceived IPCC point of view—could be either maintained or forwarded.

Background

The problems with the IPCC’s handling of the trends in Antarctic sea ice was first uncovered and presented a week or two ago in an article posted over at the World Climate Report—another blog with which I have been involved with for a long time. [Read more →]

Dr. Pierre Desrochers, Associate Professor of Geography at the University of Toronto Mississauga, is the scholar’s scholar. In an age where few read all important material on all sides of their subject, this professor stands out.

Can President Obama strike a deal with the University of Toronto to make this course available to his top energy and environmental aides, even smartest-guy-in-the-room John Holdren? Energy legislation is currently stalled, and the summer might be a good time for a “time out” to learn the basics of energy and the free society.

Here is the syllabus for GGR 333H5F

The development of new energy sources has had a major impact on the development of both human societies and the environment. This course will provide a broad survey of past and current achievements, along with failures and controversies, regarding the use of various forms of energy. Understanding of technical terms, physical principles, creation of resources and trade-offs will be emphasized as a basis for discussions about energy options. The local and global dimensions of the economics and politics surrounding the world’s energy resources will be recurring concerns in this course.

COURSE OBJECTIVES

The course has three main objectives:

• To cover the basic physical, technical and economic issues related to energy use;
• To cover broadly the history of energy development and use;
• To introduce students to past debates and current controversies.

Lecture 1 (September 8): Introduction
Lecture 2 (September 15): Concepts and the Big Picture
Lecture 3 (September 22): Fire and Agriculture
Lecture 4 (September 29): Fossil-Fueled Civilizations 1
Lecture 5 (October 6): Fossil-Fueled Civilizations 2
Lecture 8 (October 27): Electricity (Hydro and Nuclear)
Lecture 9 (November 3): Renewables and Alternatives
Lecture 10 (November 10): The Perennial Energy Debate
Lecture 11 (November 17): The Curse of Natural Resources
Lecture 12 (November 24): The Future of the Automobile
Lecture 13 (December 1st): Current Issues

[Read more →]

In a post on his blog and then again on the Huffington Post, Joe Romm challenged me to a wager on oil prices, claiming prescience concerning the price rise in the past decade compared to my 1996 forecast of low prices for two decades.  He seems to be implying that that I have refused to wager him, having closed the webpage to any further comments.

I find myself taken aback, as my experience with the blogosphere is somewhat limited.  My experience is primarily as an academic, writing articles for refereed journals and books, as well as working papers, with an intention to make them carefully sourced and referenced.  A blog can consist of nothing more than a rant, and the comments appended to them often worse (and usually anonymous).  I will not however yield to the temptation to follow suit (even if our illustrious moderator would permit it, which he won’t).

Having put up approximately 20 posts on the subject of peak oil, it might be thought that Romm is an expert on the subject. But so far as I know, he has a grand total of one article on oil, his famed, “Mideast Oil Forever” Atlantic Monthly piece (co-authored with Charles Curtis), which is the source of his pride on the subject.

A careful reading of “Mideast Oil Forever” shows that his argument was not so much that prices would soar, but that global dependence on Middle East oil would soar, which has not happened.  My argument was that the forecast of rising Middle East market share was likely to be incorrect, and it was (see Figure), so that economic fundamentals would not imply ever rising prices.

Forecasts of OPEC Market Share from 1996/97

Which is a far cry from saying my forecast was wrong and Joe’s correct.  In my testimony, I specifically stated,

“The reality is that prices may go up in the future.  And Persian Gulf oil production and exports will rise.  However, the most likely scenario, given what we know about oil supply and demand and what we have learned about forecasting in the last 10 to 15 years, is that OPEC is going to be under continued pressure for at least the next 10 years, possibly for much longer, that they will be fighting with each other for market share.  And, it’s going to require some very substantial changes in the world to see prices rising.” (See my opening statement on pp. 127-128.)

Arguably, the price collapse leading to the rise of Hugo Chavez, the September 11 terrorist attacks and the Bush Administration’s decision to invade Iraq, are those ‘substantial changes’.  Certainly, not the soaring Middle East market share predicted by Romm.  (Since he downloaded the transcript of the hearing, it’s not clear how he missed this.) [Read more →]

In August 2009, the U.S. Nuclear Regulatory Commission (NRC) issued its fourth Early Site Permit for two new units at Southern Nuclear’s Vogtle site and its first for the Westinghouse AP1000 pressurized water reactor design. The two new units planned for Vogtle also became the reference plant for the AP1000 under NuStart in June 2009. This means Vogtle Units 3 and 4 will be the first licensed installations of the new AP1000 reactor design.

On February 16, President Obama announced that the DOE has offered Plant Vogtle terms for a loan guarantee that could provide up to 80% of the project estimated cost of $14.5 billion with the Southern Nuclear only paying a credit subsidy fee.

That’s a lot of commitment from taxpayers–$11.6 billion worth. Perhaps rapidly rising construction costs of new nuclear plants is partly why the owners want such large protection up front. But there are problems with fundamental economics comparing nuclear to the best foregone opportunity.

My back-of-the-envelope calculations comparing a natural gas-fired combined cycle plant to a new nuclear plant raise more questions than answers.  For example, assume a utility has a baseload need of 2,400 MW in the future (like the new Vogtle units). Next, use the EIA future price projection of about 12 cents/kWh for nuclear and 8 cents/kWh for a gas-fired combined cycle produced electricity.

At today’s gas prices (yes, the prices have historically been extremely volatile), the combined cycle plant would use about $750 million a year of fuel. The 4 cents/kWh difference in busbar cost of generation is also equivalent to about $750 million per year in lower cost electricity generation. In essence, it’s an economic dead heat. However, the first cost of the no-risk gas combined-cycle plant is about a fifth of the nuclear plant, the latter which requires large government subsidies.

Simple math suggests that the gas-fired option should be back on the table. Moderate the fuel price risk with financial instruments with Grade A corporations. Obviously, there are major competitive problems with the nuclear plants to require such a large government subsidy–more explanation is invited in the comments by those in the know.

Background

The Alvin W. Vogtle Electric Generation Plant (Plant Vogtle) is one of Georgia Power’s two nuclear facilities and one of three nuclear facilities in the Southern Company system (Figure 1). Southern Nuclear, a subsidiary of Southern Company since 1990, is the licensed operator of Plant Vogtle, which is located about 25 miles south of Augusta, Ga. The plant is jointly owned by Georgia Power (45.7%), Oglethorpe Power Corp. (30%), Municipal Electric Authority of Georgia (22.7%), and the Dalton Utilities (1.6%). [Read more →]

“Key senators are weighing a request from Big Oil to levy a carbon fee on the industry rather than wrap it into a sweeping cap-and-trade system that covers most of the U.S. economy.

If accepted, the approach — supported by ConocoPhillips, BP America and Exxon Mobil Corp. — could rearrange the politics of the Senate climate debate and potentially open up votes that may not be there otherwise.”

- Darren Samuelsohn, “Senate Trio Hopes to Hit Pay Dirt with Carbon Fee on Transportation Fuels,”  Environment & Energy Daily, March 3, 2010, (subs. required)

History matters. And the record suggests that small, wedge taxes are a dangerous thing.

Consider one of the most interesting examples of political capitalism in the history of the U.S. oil and gas industry. The story concerns the first state motor fuel tax, passed in Oregon in 1919 at, you guessed it, $0.01 per gallon. (But that penny is worth about 12 pennies today!)

Was this tax the work of a far-sighted reformer? Or was it a confluence of private and public interests creating a demand for and supply of government favor?

Interestingly, “Big Oil” was behind the Oregon gas tax. The major oil companies calculated that the demand for gasoline and thus the price of gasoline would rise more from tax-financed new road construction than demand for the same would fall from the tax.

Oregon’s beginning led to road taxes in all 48 states within a decade to fund road construction.

Problem was that gas tax revenue started to be diverted to other uses to the chagrin of the oil majors, now organized as the American Petroleum Institute (API). “Phantom roads” became an issue.

Government intervention giveth and taketh away. (Could the same be predicted for the ‘starter’ carbon levy?)

Here is the story of the first motor fuel tax reproduced verbatim from Oil, Gas, and Government (Cato Institute: 1989), pp. 1375–76.

————–

Events in Oregon were the genesis of the motor-fuel tax revolution. The state legislature, desperate to secure new funding for public roads, proposed in 1917 to increase motor vehicle fees. The rationale was that any increase would be saved in automobile repairs once improved roads were in service. Leading the fight with the author of the plan, C. C. Chapman, was I. N. Day, a former state senator turned paving contractor. After a long fight, the legislature approved the tax bill thanks to Chapman’s oft-revised roadmap. As he explained:

The political problem involved was chiefly that of map making…. I was asked to draw a state highway map that would win the votes of a majority of the members by placing roads [so] they could take them home with them as pork wrested from Portland…. This map ran in front of the farm homes of enough legislators that . . . 37 representatives joined in introduction of the bill…. It took all day . . . to get the map changed so a majority of the Senate would vote for the bill…. My poor map was almost unrecognizable, but it served its purpose.

With the motor-vehicle tax, the motor-fuel levy was only a step away. Earlier, a gas tax had been proposed in conjunction with the state gasoline inspection law, and with more revenue needed, Chapman, now editor of a leading newspaper, editorialized for a gas tax, which was seized upon by road interests and legislators. A bill was drafted by the highway committee, and a 1 cent per gallon levy became law on February 25, 1919, with the help of regular editorials by Chapman. Years later, Chapman expressed his thanks before the American Petroleum Institute (API):

In passing, may I pay a deserved tribute of credit to the big oil companies. They cooperated with us every session in the application of the gasoline tax idea. We had reports that they were opposing it in some other states, but in Oregon at no time did they attempt to obstruct it. Their counsel aided in perfecting details of the legislation.

[Editor note: Mr. Lewis's musical parody, "How I Was Not Al Gored Into Submission," released three weeks ago, has exceeded 20,000 views on YouTube.]

“Polluter-funded” is the global warming movement’s favorite pejorative to discredit anyone who questions the reality of a climate crisis or opposes their policy nostrums. Google the term and you’ll find about 18,300 sites where it appears.

“Polluter-crafted” brings up about 7,500 sites. The warming lobby uses this buzzword to trash legislation they oppose, most recently Sen. Lisa Murkowski’s resolution of disapproval, pursuant to the Congressional Review Act (CRA), to stop EPA from dealing itself into a position to make climate policy – a power Congress never approved when it enacted the Clean Air Act.

Who are these “polluters” who craft and fund? Any big company that emits carbon dioxide (CO2) because it supplies, refines, or combusts carbon-based (fossil) fuels.

CO2 ‘Pollution’: A Rhetorical Trick

This is all a rhetorical trick. Yes, CO2 is a “greenhouse” (heat-absorbing) gas. However, water vapor (H2O) is also a greenhouse gas, yet nobody calls it “air pollution.” Since 1975, EPA has required automakers to install catalytic converters to clean up automobile exhaust. The core function of these devices is to turn other substances into the aforementioned greenhouse gases, H2O and CO2. It would be nutty to say that catalytic converters pollute the air.

Carbon dioxide is an odorless, colorless trace gas that is non-toxic to humans and animals at more than 30 times ambient levels. An essential plant nutrient, CO2 is the basic building block of the planetary food chain. Plants raised in CO2-enriched environments grow larger and faster, use water more efficiently, and are more resilient to environmental stresses such as drought and air pollution. Since animals directly or indirectly depend on plants for food, CO2 emissions nourish the entire planetary biosphere. Name another “pollutant” that does that!

But okay, for the sake of argument, let’s stipulate that CO2 emissions are “air pollution.”  Some of the nation’s biggest CO2-emitters support the American Clean Energy and Security Act, the Waxman-Markey cap-and-trade bill. Waxman-Markey supporter American Electric Power (AEP) is the nation’s top CO2-emitter, according to Benchmarking US Air Emissions (2006), a joint report by Ceres, NRDC, and PSEG. Duke Energy, which merged with Cinergy, is the nation’s third-largest CO2-emitter. CEO Jim Rogers crowed about Duke’s role in crafting Waxman-Markey shortly after the House passed it last June.

U.S. CAP–’Polluters’ Too

Waxman-Markey arguably takes the cake in the industry-scripted bill category. The U.S. Climate Action Partnership (U.S. CAP), a coalition including some of the world’s biggest corporations, outlined the bill’s main provisions months before it was introduced in A Blueprint for Legislative Action: Consensus Recommendations for U.S. Climate Legislation (January 2009).

So is Waxman-Markey a “polluter-crafted” bill? And are recipients of campaign contributions from AEP, Southern Company, Duke, and other U.S. CAP member companies “polluter-funded” politicians? Yes, if you apply green “logic” without fear or favor. [Read more →]

Often it’s hard to tell whether highly questionable actions by federal and state government officials that reward special interests at the expense of U.S. taxpayers, job seekers, and electric customers are due to honest but misguided intentions, skullduggery, malfeasance, incompetence, or simple mistakes.

Consider, for example, the connections between: 

• Spain-based Iberdrola’s recent announcement that its net profit had doubled, and
• Actions affecting Iberdrola during the last few months by members of the New York State Public Service Commission (NYS PSC), NY Senator Charles Schumer, US Energy Secretary Steven Chu, and US Treasury Secretary Timothy Geithner.

Please recognize that “connecting the dots” among the actions of these officials will require careful reading of the following four pages.

Iberdrola (Spain) announces doubled profit on February 24:

“MADRID (AFP) – Spain’s Iberdrola, the world’s biggest wind-power generator, said Wednesday its annual net profit in the fourth quarter more than doubled to 795.3 million euros (1.07 billion US dollars)

“But the company reported that for the full year 2009 net earnings weakened due to weakness in core markets, which was offset by higher renewable energy output and greater income from its US unit.

“The results were boosted by income from its US unit Energy East, which helped make up for lower demand in its two main markets, Spain and Britain.” (emphasis added).

 

There is little doubt that the following actions by New York State and U.S. government officials were significant factors in Iberdrola’s enviable profit picture: [Read more →]