I have to ask how the oil companies, government, and others might benefit from this.
Al Gore Jr. has a company that trades carbon credits. He has major ties to oil companies. More so that Cheney did.
My friend Mark had a well researched piece he posted once on how the scam works. He used the example of MTBE in the midst of a discussion on California's energy crisis. Same players, same game. I'll copy some of it here but I can't copy the graphs so I won't repost the whole thing even though I have permission. It's fairly long and well worth the read. It just might open some eyes. http://www.freerepublic.com/focus/f-news/999451/posts?page=67#67The supply regulation game is at least as old as the Dutch East India Company's manipulation of coffee prices by controlling access to the plants. Understanding that sorry history of economic tyranny by European corporate royalty, the founders of this nation tried to design a limited government, one that didn't have the power to control private property or have control of resources. Control of access to resources is too much temptation for the wealthy to purchase corrupt influence that depresses everybody else. They Founders failed.
The key to cracking the Constitutional system was international law, a loophole in Article VI Clause 2 of the Constitution, governing the adoption of treaties and the scope of their powers (IMO the rat Patrick Henry and others smelled only too clearly; if you want a good chuckle read Hamilton's defense of the manner of treaty ratification in Federalist #75). To implement the plan European investors needed a foothold in the US before they could get into the market. Until the Civil War, corporations were haltered in the US because they were not allowed to own land and were not protected under the Constitution in a manner co-equal to citizens. After the Civil War the US was deeply in debt to that very European investor class. The 14th Amendment changed that balance of power between the individual and corporate. Once the appropriate Supreme Court cases were in place interpreting persons "subject to the jurisdiction thereof" as including corporate persons, corporations then derived equal protection under the laws and could own property, the investment floodgates opened, and that not only created an American industrial colossus, it produced an American investor class owning enormously influential private tax-exempt foundations.
So it isn't exactly by coincidence that it is those same colossal foundations that are making all those "charitable" donations to those icky Greens. The Environmental Grantmakers Association? That's Rockefeller. The Pew Charitable Trusts? That's Sunoco. W. Alton Jones? That's Citgo. The World Wildlife Fund? BP and Shell. You do see a pattern, don't you?
These are more than investors in energy, their assets include timber, mining, banking, food production… They aren't fools. They use the same simple and ancient recipe as did their European forbears by which to manufacture a predictable return: Kill the competition with regulations, create a shortage, and cash in. It's become so common there is even an excellent book out on the topic that I suggest you read, .
It's a simple process that has accelerated over the last five decades.
1.Foist the necessary treaty law via (primarily American) NGOs at UN environmental agencies (largely funded by the US government).
2.Get the implementing legislation through Congress.
3.Use lawsuits by those same NGOs in federal courts to alter the meaning of the law.
4.Overwhelm the agencies with graduates brainwashed by professors who subsist of government and foundation grants.
5.Establish the regulatory power on the local level to control the decision-making with the cheapest politicians money can buy.
It's a vertically integrated racketeering system that extends over the entire planet. American investors in multinational operations are perfectly happy taking a hit on US operations destroying domestic production because their investments abroad get the business. They either convert domestic resource land to real estate or mothball it under tax exempt conservancies, Federal monuments, and such.
It's been done in industry after industry: timber, energy, mining, beef, fish, agriculture, real estate development, soon water… ALL taking advantage of economies of scale in environmental compliance and sometimes selective enforcement. Tax-exempt foundations buy the research "data" they need, fund a few ideological groups trained by the same professorate that lives off their grant money, and not a word need be breathed to the companies in which they are invested. Their pet executives wail about the regulations and scream how stupid and counterproductive they are, just like you do. It makes great theater. There is virtually no way of getting caught.
This is exactly what SPI and Simpson did in the timber business in California (seeing as it is only their two representatives sitting on the Board of Forestry), and it's the same reason we don't log National Forests any more. Weyerhaeuser and Boise Cascade would not approve. They are logging Russia, Borneo, Chile, Sweden… and if you think this is strictly a Democrat gambit I hate to dieabuse you. Mark Rey was a lobbyist for AF&PA.
Enviro-racketeering is a way of shaking out small competition. Subsequent to the power crisis over the last two years, the State still owes big to the producers. Last I heard, the companies that were having the hardest time getting get paid were the little guys, the small private power producers of hydro, wind, etc who sell their output to the larger distributors. Now, in California's regulated market, many of these are "green power" sources, who, by law, get paid at higher than normal producers' rates. I understand how bizarre that subsidy is when all one thinks of is electricity, but there is an economic rationale for it driven by real estate interests. If a critical air basin fails to meet EPA standards, development is curtailed by the Feds. Development interests are the principal investor sponsors of the Democrats in this State. So, if those green producers go bust, we either have to import the power, do without, or build cleaner plants burning more natural gas. Now, what is it that you were talking about and how necessary was it, really?
You never did mention that we don't have the pipeline capacity to feed all those new plants or that there is an impending natural gas shortage nationally.
So, what you and the existing producers in California want is price deregulation, but you aren't exactly enthralled about that crash that happens later. So, you speak as if there's nothing to be done about those stupid air quality regulations and wail about all the money you'll have to raise to build new equipment, and we'll just have to let you have your windfall so that new plants can be purchased with cash. Fancy that, as if cash were that important in a time with effectively zero interest rates. You talk about price deregulation and never mention what to do about SUPPLY REGULATION that will hold up that price by keeping out new entrants and slowing new construction while you get that windfall.
Enter your natural allies, the environmental groups! Enter Arnold, Jim Brulte, RFK Jr. and his advisors at Earthjustus. Just shocks the hell out of me.
So in California, a nifty strategy would be to kill the competition by getting into trouble and then stall in court on paying suppliers. Bigger companies have the advantage of being supported by overseas operations. The little guys go out of business and sell off their assets for a song. The big ones can reorganize and, unless I misunderstand, who gets paid, how much, and when, that all depends upon the bankruptcy judge followed by a lengthy appellate process. Then deregulate only prices during a supply shortage and cash in. The cost of environmental regulations and local NIMBY groups such as TURN and RFKJr.'s buds at Earthjustus will attack anyone with the temerity to build a new plant as Mr. Bryson's associates in the NRDC did decades ago when they helped shut down Rancho Seco. Lock in the long-term contracts. Refinance the contracts with bonds from Wall Street banks...
That is how has been going, isn't it? There is no other explanation for NRDC founder John Bryson's tenure at Edison, other than perhaps playing the carbon credit market pursuant to that Kyoto treaty we never ratified, reiterating a question you never confronted. Are you really going to sell me on the story that people were financing payments on power costing over $1/KWh and nobody was making money?
So let's see if our little hypothetical gambit has a precedent, shall we? We'll start with that famous scam when the State required that gasoline retailers remove ALL steel underground storage tanks and replace them with new fiberglass tanks because they were supposedly a threat to leak. Of the 12,000 tanks at service stations sampled in California, 48 leaked (some threat). Assuming that the average cost of replacing an underground fuel tank is approximately $100,000 (it can be three times that) and that there are approximately 200,000 such tanks in California, the estimated capital cost was about 20 billion dollars, not to mention the amount of money made burning contaminated dirt. Over 10,000 independent sellers of gasoline went out of business because of the cost thus leaving the major oil companies with a vertically integrated oligopoly. But at least we were safe, right?
Wrong. Enter the Clean Air Act of 1990 mandating oxygenates for both the LA basin and the Central Valley. I don’t suppose you know that it was David Doniger of the NRDC (surprise, surprise) who was the ONLY representative of an environmental NGO at the EPA meetings that approved MTBE as an oxygenate for gasoline? I am told that it was NRDC lawyer Mary Nichols who presided at the CARB hearings in LA as well (I'm still getting source documents on that).
Up until that time methyl tertiary butyl ether (MTBE) had been a byproduct of gasoline production requiring expensive disposal. The oil refiners had been handling the stuff for years; thus the requirements for processing and containment of the material were well understood, as were the byproducts of combustion. (Measurement and documentation of all these things are required for construction of a processing plant, an air quality permit, or for disposal.) Subsequent to their early experiments with MTBE in Anchorage and Denver, it was well understood by BOTH the oil companies and the EPA that MTBE was likely to leak out of plastic fuel tanks and contaminate groundwater. The EPA had documentation to that effect before 1990. It was so well understood that when the EPA demanded of Congress that the oil companies that produce reformulated gasoline (particularly ARCO), demanded they be indemnified in advance for any damage to public health or private property.
I can't imagine you don't know about the contamination of drinking water wells across the State. Well it gets worse. Guess who is now making big moves in forcing State control of private and small municipal water supplies now that the groundwater has been poisoned for ten years? Yup, the NRDC.
NRDC is a LOT bigger player in this mess than I hope you realize and their historic behavior and that of the oil companies in the oxygenate fiasco are clearly parallel to the gambit in electrical power I proposed above. In addition to the prominent role played by Mr. Doniger, I am told that it was NRDC lawyer Mary Nichols who presided at the CARB hearings in LA (I'm still getting source documents on that). The addition of MTBE to gasoline cost everyone in the California an extra 30 cents per gallon for ten years. It made ARCO so happy they put Pete Wilson's wife on their board of directors. Believe me, a lot of that was profit due to the closed market in refinery capacity. Now, guess how hard it is to build more refinery SUPPLY capacity and why? Now guess who would stand squarely in the way of adding more?
~snip for the charts~
These people are energy investors who use federal money and their own tax-exempt "charitable" donations to fund lawsuits that manipulate access to resources, control processing of energy feedstocks, and set attainment targets in a manner preferential to their own investments. ALL of the resulting capital gains in their trusts are tax-exempt. You may be surprised to find the Hewlett and Packard fortunes listed as energy investors, but they just gave over 130 million to Stanford to research extraction of methane hydrates and are directly tied in with Exxon/Mobil in that effort. Keeping it in the family they've put Lynn Orr, who is married to Susan Packard, in charge of the global energy project. The idea is that they can use the energy revenues and the carbon credits for removing a principal source of atmospheric methane, a powerful greenhouse gas. They need Kyoto or this will be a big loser of an investment. Curiously, if they disturb those nodules foolishly, they may end up releasing a great deal of methane to the surface which would release the gases into the atmosphere. You don’t think that they might need protection from the NRDC in case they screw up, do you?
Did anybody sue the NRDC for the cleanup costs of MTBE?
They can’t be sued. Clinton EO 12986 indemnified them from such lawsuits as members in good standing at the IUCN, the United Nations' equivalent of the EPA.
Using a charitable foundation, to use the law to force people to use your product, to use regulatory power to keep competitors out of the market or force them into selling or go bankrupt, and to protect you from liability for your product in order to reap a guaranteed profit is tax-exempt racketeering, and on a grand scale.
Now, how much of all of this do you think most executives at Sunoco or Citgo really understand? I’d bet they haven’t a clue. Bryson on the other hand…
So, in reality, there's a damned good reason to do everything possible to reform the regulatory environment of power SUPPLY capacity. To deregulate prices without deregulating supply is a catastrophic recipe for the eventual CUSTOMERS. Remember those? They vote. We should simultaneously restructure the demand side of the market BEFORE price deregulation. The difference means more to customers and the state than just power.
