Category — Book Reviews

“Edison to Enron … [is] the second part of a three-volume series on the history of American energy, told through the distinction between productive and predatory capitalism.  Bradley is a very much underrated economic historian, largely because of his ‘amateur’ [nonacadmic] status, but there is a remarkable amount of learning in his books.”

- Tyler Cowen, ‘What I’ve Been Reading,’ Marginal Revolution, November 15, 2011.

Last Friday afternoon in our nation’s capital, Robert L. Bradley, Jr., a prominent figure in the esoterica of energy markets, unveiled the Project on which he has labored for a decade before a full room at the American Enterprise Institute. Kenneth Green moderated, and comments were provided by Stephen Hayward and yours truly. My formal remarks follow.

The Project

Enter stage right, our protagonist with The Bradley Project. He has three arrows in his quiver, a trilogy of books that will be the authoritative commentary on American political capitalism and energy policy inspired by the rise and fall of Enron (where Bradley worked for 16 years).

He artfully aims his first arrow, (Capitalism at Work: Business, Government, and Energy) a political economy text that forges a path for his second onslaught (Edison to Enron: Energy Markets and Political Strategies), a history text that applies the economic principles of Book 1 to the natural gas and electric industries from their 19^thcentury inception to about 1985.

Both books are dense and lengthy–but very readable. Bradley tackles the vast literature behind subjects and provides hundreds of pages of documentation. For the most serious scholars (are there many anymore?), he provides Internet appendices per chapter, no less than 52 for Book 1 and 74 for Book 2. The extra mile seems to have been run in virtually all instances.

His actions set the economic, political, and historical stage for his yet unleashed third arrow, a text that will mine the Enron debacle and its aftermath for trenchant insights that will help both academics and energy professionals better understand what happened but more importantly, develop insight for the future regarding the nexus of politics and the market economy.

· Act I (today): the Bradley Project is brilliantly conceived, brilliantly executed, and will stand the test of time.

· Act II (tomorrow): his perspective pierces the veil that hides the excrescence that passes as the current sorry state of energy policy.

· Act III (Saturday): dare we venture that there is such a thing as sound government intervention, heretical as that may be in this crowd.

· Act IV (Sunday): the future or, who is John Galt? [Read more →]

Reconstructing Climate Policy: Beyond Kyoto By Richard B. Stewart and Jonathan B. Wiener 193 pp., Washington, D.C.: American Enterprise Institute Press, 2003. This review was published in Regulation magazine (Cato Institute). MasterResource revisits Mr. Singer’s book review and asks: how does it read today?

What is it about academic economists that makes them salivate like Pavlovian dogs whenever they hear the magic words “market solution”? Sure, market-based solutions are always more efficient and less liable to be politically influenced than those based on command-and-control. But before we apply solutions, should we not first ask if there is a problem that needs to be solved?

And so it is with this book. The authors confidently assert the existence of a future climate problem more or less on faith, but they also see many difficulties with the 1997 Kyoto Protocol that is supposed to reduce emissions of greenhouse gases. So they propose a clever alternative to Kyoto — yet another solution to a non-problem.

They visualize a U.S.-China bilateral deal to limit emissions (mainly of carbon dioxide from fossil-fuel burning) that would operate in parallel with the Kyoto Protocol (which neither country plans to ratify). In their plan, the United States buys emission rights from an arbitrary excess quota allotted to China. The authors call it “headroom” but I call it a subsidy. The United States pays, China gets, and the atmosphere does not benefit because emissions continue essentially unabated.

Eventually and somehow, this U.S.-China deal is supposed to merge with Kyoto. Every nation in the world would then actually limit its emissions, and thereby save the climate, humanity, and Lord knows what else. What a pious hope!

Gentlemen’s Agreement

What else is wrong with the Stewart-Wiener scheme? Plenty, although it may be no worse than another dozen or so clever schemes thought up by other lawyers, economists, and policy analysts that are duly referenced in this volume but never critically discussed. Is there some kind of gentlemen’s agreement here? [Read more →]

It was five years ago that I began to become aware of energy and the importance of its role in everything. Now as a regular contributor/columnist for many online commentary sites and newspapers, as well as a regular guest on radio and TV programs, people often comment on my passion for the subject of energy. They wonder how I became so engaged in a topic few people even care about.

My newest book, my twentieth but the first in the current affairs genre, explains my passion. Energy Freedom attempts to present energy in such a way that it becomes a subject everyone is aware of, can understand, and wants to influence.

Background

I do not come from an energy, science, or public policy background. I’ve spent my life in speaking and writing either as a communicator or a trainer of communicators. When circumstances in my personal life mandated that I get a real job, I never imagined that I could be so enthusiastic about something not of my own making.

In September 2006, I accepted a position at Citizens’ Alliance for Responsible Energy (CARE) and became Executive Director on January 1, 2007.  Back then, like most people, I knew little more about energy than putting gas in my car or flipping a switch on the wall. Since then, I’ve had some great teachers and been an eager student.

In my personal energy education, I’ve read many exhaustive tomes offering a thorough treatment on the subject. Engineers or professors wrote the books. If you want to understand the difference between a watt, horsepower, and a joule, I can recommend several books for you—but not Energy Freedom. My book is for the average American energy consumer who knows that energy costs are going up, but doesn’t understand why; and for the person who is newly politically engaged out of concern for the direction America is heading. [Read more →]

“This scholarly work fills in much missing history about two of America’s most important industries, electricity and natural gas.”

   – Joseph A. Pratt, NEH-Cullen Professor of History and Business, University of Houston

“An engaging look back at the market and political development of the U.S. energy industry. Industry and policymakers will benefit from reading this book.”

   – Dr. Robert Peltier, PE, Editor-in-Chief, POWER magazine

Edison to Enron is the second book in my trilogy on political capitalism inspired by the rise and fall of Enron (order information: Amazon, Scrivener Publishing, John Wiley & Sons).

Book 1, Capitalism at Work: Business, Government, and Energy, provided a worldview of market-based versus political business, as well as an interpretation of energy sustainability. The present volume (Book 2) examines the individuals and companies that are related to Enron’s prehistory.

Book 3, Enron and Ken Lay: An American Tragedy, will chronologically describe the rise and fall of Enron and the post-Enron world.

The trilogy and other writings on the intersection of business and government are featured at my website, Political Capitalism.

A video on Book 2 in the context of my book output is here.

Dust Jacket Description

Energy is the resource of resources—the master resource. The fossil fuels in particular—and the electricity generated from them—have made human life longer and better. For many, they have made life possible. Without energy, there would not be the modern world of production and consumption.

During the last 150 years, the United States has been at the forefront of energy development. Edison to Enron chronicles important swaths of that history, focusing on the great entrepreneurs in electricity and in natural gas, who turned potential into plenty and privation into prosperity.

Author Robert L. Bradley Jr. traces individuals and companies that made America an energy nation, from Thomas Edison and Samuel Insull in electricity, to John Henry Kirby in oil, to Clint Murchison, Ray Fish, Robert Herring, and Jack Bowen in natural gas. Companies such as General Electric, Houston Oil, Southern Union, Fish Engineering, Houston Natural Gas, TransCanada, Florida Gas, and Transco Energy are integral to Bradley’s energy history, which links the country’s nineteenth-century past to its twenty-first-century present. [Read more →]

Ten years ago this month, a landmark book was published that put neo-Malthusianism on the defensive. The unvarnished facts were there to weaken doom-and-gloom prognostications, but it took a rare individual named Julian Simon (1932–1998)  ) to uncover the anomalies and present them in integrated and compelling form–and to win the most famous wager in the history of economics!

Then came a young Dane named Bjørn Lomborg set out to refute Simon but instead rediscovered the bogey of fixed-pie, depletionist thinking. This audacious 36-year-old also found that whether the result was of market progress or regulation, virtually all environmental indicators were trending positively, not negatively. Lomborg could agree with the title of Simon’s last major public address, “More People, Greater Wealth, Expanded Resources, Cleaner Environment.”

A Heated Debate

And then, with the debate joined, came a slew of establishment neo-Malthusians, led by John Holdren, now Obama’s science advisor, who got emotional and nit-picked.

This story is told in the introduction to an essay I wrote, The Heated Energy Debate: Assessing John Holdren’s Attack on Bjørn Lomborg’s The Skeptical Environmentalist,” published by the Competitive Enterprise Institute in 2002.

I spent months on the 160-footnote essay and even worked with Dr. Holdren’s personal secretary at Harvard University’s Kennedy School to receive the entire corpus of Holdren’s writing. But when I sent Dr. Holdren a draft of my paper for critical review and rebuttal, this is what the not-so-good Doctor wrote back to me: [Read more →]

“I wrote this book because the rising cost of energy is an increasingly important feature of the political landscape, as it massively affects the cost of living for families across Britain. Excessive green taxes make everything from driving to work to taking a well-earned holiday more expensive and make it a lot harder for manufacturers to compete and keep employing people here in Britain.

Motorists are particularly hard hit and unfairly penalized well beyond the cost of maintain the roads and the environmental harms their emissions create. The Government need to give families a better deal and cut unfair green taxes.”

- Matthew Sinclair, Press Release, Let Them Eat Carbon (London: TaxPayers Alliance: August 2011)

Matthew Sinclair, director of the TaxPayers’ Alliance, has penned an educational tract to get his fellow countrymen to reconsider what in their good graces has been accepted as sort of a public duty–to buy into climate/energy alarmism and to do their fair share.

In addition to covering all aspects of Britain’s green taxes, what they are and why they were implemented, the book (available from Amazon here) examines subsidies for renewable energy; emissions trading; windfall profits for industry; and environmentalist and corporate lobbying. The introduction (see excerpts below) is downloadable.

Press Release

The biggest threat to taxpayers right now is expensive new green taxes and subsidies. In the first ever mainstream book on this subject … Matthew Sinclair has exposed how this is the critical new threat to family finances. With rising fuel bills and petrol prices, it will be a defining feature of the political landscape over the coming year.

‘Let Them Eat Carbon’ shows how Fuel Duty is putting huge pressure on motorists. An energetic campaign against the tax is arguing for it to be frozen for the rest of this Parliament, after the cut at the last budget, and is among the most popular on the new government e-petition website.

Increases in Fuel Duty and other green taxes have frequently been justified by the need to cut greenhouse gas emissions, but estimates in the new book show that argument isn’t credible. Providing new figures and using a method pioneered in earlier studies for the TaxPayers’ Alliance and used by researchers at the Department for Transport, it finds that green taxes were excessive compared to the harms they are meant to address: [Read more →]

[Editor note: With the Atlas Shrugged movie enjoying a strong opening, MasterResource this week is examining the book (Part II–today), the philosophy behind the book (Part III–Wednesday), the moral obligation of capitalists according to Rand (Part IV–Thursday), and Atlas shrugging in the energy market (Part V–Monday).]

Ayn Rand’s first major novel, The Fountainhead, is the story of a lone architect struggling against the altruistic, collectivist norms of his profession. Atlas Shrugged describes the process by which men and women of accomplishment and honor withdraw their talent to defeat a parasitic, collectivist society.

Rand described her major plot device, an anti-Industrial Revolution:

Reverse the process of expansion that goes on in a society of producers: Henry Ford’s automobile opened the way for industries: oil, roads, glass, rubber, plastics, etc. Now, in a society of parasites, the opposite takes place: a shrinking of industries and productive activities. (1)

Originally titled The Strike, the novel revolves around John Galt, a theorist and inventor in the field of energy who leads the exodus, refuses under torture to save the bankrupt society, and then returns with the strikers to rebuild America on a rational, individualistic basis. “Who is John Galt?” has become a literary phrase that, like “Atlas Shrugged,” is still in use today.

Atlas Shrugged contains a variety of business and business-government situations that impart Rand’s views of positive and negative attributes of firms and their leaders. Although the work is fictional, a number of its insights anticipated the real-life blind spots of major business and political figures from Ken Lay to Barack Obama.

Energy in the Novel

Rand’s book about the anti-industrial revolution finds government and society working against the master resource of energy.

There is John Galt’s abandoned motor, his secret energy, that represents a foregone quantum leap for energy creation and usage.(2)

There is Ellis Wyatt’s oil, which Atlas Shrugged refers to “the black blood … because blood is supposed to feed, to give life….” (p. 9). Rand continues: “[The discovery of oil] had shocked empty slopes of ground into sudden existence, it had brought new towns, new power plants, new factories to a region nobody had ever notices on any map.” [Read more →]

At a time when energy realists need to take the high ground, corporations are bringing us low. Some of this is old fashioned rent-seeking; some greenwashing; and some just political correctness (as if California was the world).

For weeks, Siemens has been running full-page ads for wind technology. Last week Chevron and Weyerhauser, in full-page ads, agree “IT’S TIME OIL COMPANIES GET BEHIND THE DEVELOPMENT OF RENEWABLE ENERGY.”

The same slush is coming from GE, AES, BP, Shell, NRG, and a legion of corporations whose fundamental commodity is fossil fuel.

Do these multinationals really believe that wind and solar will put a dent in their fossil fuel market share? Or is something else afoot? One should note that nowhere does this renewable ballyhoo from today’s energy goliaths mention a word about saving the world from the devastation of climate change wrought by the consequences of fossil fuel use, although this was the tack Ken Lay took to steer Enron’s aggressive renewables course.

Not to be outdone—and deploying Lay’s wry rhetoric of environmental concern—organizations like The Sierra Club and Greenpeace continue to assert that an immediate switch from fossil fuels to renewables, at any cost and among other actions, is imperative to bring the planet back from the brink of global warming.

Green Timing: Here Comes Lomborg

Now they are joined at some remove by Denmark’s Bjorn Lomborg, the self-styled skeptical environmentalist, who once opined, “We need to stop our obsession with global warming” and instead target problems that can be realistically solved with limited budgets in a reasonable time frame.

Could this convergent push for renewables have anything to do with the effort to adopt national renewable energy standards, which would require the country’s utilities to use approved renewables, overwhelmingly wind, for a certain percentage of the nation’s electricity supply? [Read more →]

Many scientists are concerned about the future and continue to study various aspects of our environment, including the climate. But, for Dr. James Hansen there is no doubt. Our world is headed for disaster unless we take immediate and drastic action to control greenhouse gases, especially carbon dioxide (CO2).

You have to give the man credit: He actually believes what he preaches. He shows pictures of his wonderful grandchildren and his concern for them is certainly evident. There is only one problem with what he shares: There is little evidence to support what he says.

Take this example:

Planet Earth, creation, the world in which civilization developed, the world with climate patterns that we know and stable shorelines, is in imminent peril. The urgency of the situation crystallized only in the past few years. We now have clear evidence of the crisis, provided by increasingly detailed information about how Earth responded to perturbing forces during its history (very sensitively, with some lag caused by the inertia of massive oceans) and by observations of changes that are beginning to occur around the globe in response to ongoing climate change. The startling conclusion is that continued exploitation of all fossil fuels on Earth threatens not only the other millions of species on the planet but also the survival of humanity itself—and the timetable is shorter than we thought. (Emphasis Added P. IX)

Now, the one thing that Dr. Hansen is not going to share with us is the “clear evidence” of a coming crisis. In fact there is plenty of evidence to the contrary. Dr. Hansen may understand some scientific principles but he seems to lack any common sense. He talks about plants becoming extinct because they cannot migrate because cities and farms are in the way. Yet, any person who has ever planted a garden knows that seeds find a way of getting where they want to go.

Dr. Hansen, along with a number of other climate change alarmists (like Al Gore), believes that man is the chief cause of global warming, and that warming is generally harmful. In fact more people die from cold than die from heat. Not only that but increasing levels of carbon dioxide are generally beneficial to plants, enabling them to survive with less water. [Read more →]

[Editor note: Some analyses are worth revisiting, including this book review in the  Energy Journal of Cutler Cleveland, ed., Encyclopedia of Energy (6 volumes, Elsevier). Bradley shared his review with Professor Cleveland, who stated his surprise that it passed peer review. The reader can the judge the quality of the review in six years' hindsight.]

This is the Hummer of energy books. The Elsevier Encyclopedia of Energy is almost twice as large as two predecessor energy encyclopedias combined. The price tag is commensurate. This set is only for the wealthy, the addicted, large libraries, and paid-in-kind reviewers.

Encyclopedia editor Cutler Cleveland, an ecological economist, introduces the compilation (p. xxxi) as “the first comprehensive, organized body of [energy] knowledge for what is certain to continue as a major area of scientific study in the 21^st century.” The nearly 500 authors are advertised as leaders in their respective fields—and from forty countries. However, the diversity stops where it is most needed. While many entries are exemplary and the scope of the effort laudable, this encyclopedia showcases the alarmist wing of the energy sustainability debate and excludes contrary views.

Alarmism & Mandates

The politicization begins right up front. The foreword paints a dire picture of the carbon-based energy economy and opines, “Major changes are required in energy system development worldwide” (xxvii). Business-as-usual is the foe because the “desired energy futures will not happen” given “present policies and conditions in the marketplaces that determine energy generation and use” (xxviii).

The solution—“combinations of technologies that meet all sustainable development challenges at the same time”—is advertised as ready to go. Policy reforms include “cost-based prices” that incorporate “external environmental and health costs and benefits (now sometimes larger than the private costs).” For maximum effect, this opening is reprinted in all six volumes.

The encyclopedia’s bias and righteous tone appears in other entries. Eric Heitz of the Energy Foundation states in “Philanthropy and Energy” (5:1), “Smart philanthropy … can help spur markets for the next generation of clean energy technologies that address the energy/environmental nexus, especially global warming pollution.” In “Nongovernmental Organizations (NGOs) and Energy,” the authors describe the role of Greenpeace, Natural Resources Defense Council, and the thousands of smaller sisters as “design[ing] improved energy policies…to [meet] the needs of citizens and marginalized stakeholders” (4:313). [Read more →]