“Looking back with hindsight, the business opportunities were on the generation side, and the utility was going out for bid with all these big renewable-energy projects. But in retrospect, it seems clear, we weren’t as focused on these fire risks as we should have been.”

– Doug McLeod, former Maui county energy commissioner (quoted in WSJ, below)

Opportunity cost is a central concept in economics. Economics is about the unseen versus the seen. Resources spent in one direction are not spent in another. The same goes for corporations as politically correct, economically incorrect priorities crowd out good. Climate change policy is a premier example.

Government-forced substitution of dilute, intermittent energies for reliable incumbents has not only cost taxpayers and ratepayers. It has also cost the environment–dearly. The recent saga of Hawaiian Electric’s preoccupation with “the energy transition” at the expense of grid safety and reliability is the latest example of this.…

“… why doesn’t a congressional subcommittee call these companies and a few more to tell us exactly what they are up to and what is going to happen to energy prices where parties have to buy credits for something that is not a pollutant?  After the meeting the company that has done the most to sell Kyoto should be awarded naming rights.”

I had a front row seat to many things energy and climate during my 16 years at Enron (1985–2001). At Political Capitalism, I described my Enron experience debating climate science and renewable policy (here).

Enron, in the words of a Greenpeace ex, was “the company most responsible for sparking off the greenhouse civil war in the hydrocarbon business.” [Jeremy Leggett, The Carbon War (London: Penguin Books, 1999, p.…

“Another factor [for the inaugural project] is a new federal tax credit of 1.5 cents per kilowatt hour on wind power that begins Jan. 1. There was an earlier federal subsidy that fueled the first boom, but it expired in 1985.”

“Wind Farm Awaits State’s Go-Ahead,” read the title of a Houston Chronicle business article (November 18, 1993). The state’s first major wind power project was timed to receive the brand new federal Production Tax Credit enacted in the Energy Policy Act of 1992 (1.5 cent/kWh, inflation-adjusted).

Note the following:

• This is on government land.
• A government agency is making the long-term sales commitment.
• The Production Tax Credit is crucial.
• The company putting in the turbines would declare bankruptcy in 1996, leaving Enron Wind (formerly Zond Corp) as the major U.S.

The demise of the “Climate Bank” SVB makes a look back at ‘Woke Enron’ timely. This post is an excerpt from Robert Bradley, Jr. Capitalism at Work: Business, Government, and Energy (2009), pp. 309–310.

In the fall of 2001, Ken Lay set the tone for what would be Enron’s last Environmental, Health, and Safety Management Conference:

We believe that incorporating environmental and social considerations into the way we manage risk, govern our projects, and develop products and services will help us maintain our competitive advantage. As we move forward, we will leverage our intellectual capital and innovative capabilities to promote sustainable business practices around the world.

At this meeting, Enron’s Corporate Social Responsibility (CSR) task force listed its “Accomplishments to Date,” which were:

• Secured board oversight of social/environmental performance
• Expressed support for Universal Declaration of Human Rights
• Completed corporate responsibility task force
• Developed and pilot-tested human rights audit
• Developed security and human rights guidelines
• Established formal partnerships with WBCSD [World Business Council on Sustainable Development], IBLF [International Business Leaders Forum], and CI [Conservation International]
• Identified language to strengthen code of ethics
• Providing project support—Calypso, Transredes, Dabhol and Cuiabá
• Responding to stakeholder concerns on an ongoing basis

The goals for 2002 included:

• Formally adopt CERES Principles
• Complete indigenous peoples’ policy
• Specify social/environmental expectations in formal relationships with vendors and contractors
• Review results of stakeholder survey and develop strategy to address outcome
• Create awareness of social/environmental trends among [Enron’s] origination and investment groups
• Add corporate responsibility performance attribute to PRC [Performance Review Committee] process
• Present task force recommendations to Dr.