TXU to Judge: Global Warming Not Our Concern

The Huffington Post has an article on the TXU court debate in which the company makes clear its complete and utter lack of concern for the effects of catastrophic global climate change. If you ever needed a clearer example of why an unfettered free market isn't the solution to all our problems, consider this quote, which takes a page right out of the Lee Raymond school of public policy.

A lawyer for TXU Corp has told the judges who will rule on whether it can build a slew of new coal-burning power plants here that global warming is not on the docket, and none of their concern.

"It's for kings and presidents and world leaders to decide how to address global warming," argued TXU attorney John Riley. "It's not for air permit hearings."

With no kings in sight, Texans who oppose TXU's plan to build 11 new plants across the state are nonetheless looking to two administrative judges to block the plan.

They argue it would double CO2 emissions here overnight. Texas already emits more of the greenhouse gas than any other state in the country.

But in court Wednesday, Riley said all that was beside the point. "What we can do to forestall global warming?", he asked. "The scientists still quarrel over it. But it is a very big issue."

"For instance, India is going to build 300 of these plants over the next 10 years, and China 500. My point is, 10 plants is not the significant contributor to the problem that the counsel" is trying to make it into.

In a courtroom where the air conditioner was running on an 80-degree day in February, Riley also questioned whether the US should even want to get ahead of India and China on the issue.

"Does the U.S. want to take that step before others do?"

Now no one is denying that India and China's decision to rely heavily on coal to power their emerging markets is a terrible dilemma and one that needs more public discourse. But that didn't stop the European Union from recommending even tighter restrictions when the Kyoto Protocol expires in 2012.

Lawyers representing environmental groups opposing the permitting process argue that TXU has a monetary incentive to build as many coal burning plants as possible before a widely expected carbon dioxide emissions cap and trade program is instituted.

Court documents obtained from attorneys for the opposition show that in a conference call in August of '06, TXU officials did speak in detail about how CO2 regulations might work to their advantage.

"While we are not suggesting that a cap and trade program is the right answer, it is one of the many scenarios we modeled," said Jonathan Siegler, the company's vice president for strategy and mergers and acquisitions, according to a transcript.

"If a program similar to the Kyoto Protocol was put into effect in the US," Siegler said on the call, "it would impact TXU in the following ways. Based on the average allocations in the UK, TXU would receive allocations for 70 percent of its current CO2 emissions."

In other words, [attorney Steve] Susman said, the higher the emissions going in, the better for the company.

And elsewhere, Mitchell Schnurman suggests that allowing TXU to build its proposed coal burning power plants will provide a competitive edge that no other company would be able to overcome. According to David Litman, of Texas Business for Clean Air:

TXU getting its way would suck the oxygen out of the market because TXU's price basis would be so low, Litman says. Others couldn't match its costs because they couldn't build as many plants or have the same kind of existing environmental permits.

Hearings on the power plant permits are scheduled to resume June 27.

BP: It's Not Easy Being Green

Since the late 1990s, British Petroleum has been trying to woo the public as the oil company with an environmental awareness. The company changed its logo to a green and yellow sunburst and bought a significant stake in solar energy. Vanity Fair's recent green issue profiled Lord John Browne, the CEO of BP, alongside environmental champions such as the Natural Resources Defense Council:

The best chair in the boardroom of the world's second-largest oil company is not where you expect to find a committed environmentalist. But Lord John Browne of Madingley, chief executive of British Petroleum, is exactly that. Soft-spoken and highly regarded, he has vowed to take B.P. "Beyond Petroleum." It is seemingly contradictory, if not somewhat perverse, for an oil giant to place itself at the forefront of efforts to reduce carbon emissions. Old-style environmentalists may convulse at the idea of a "green" oil company, but under Browne, who sits on the board of the influential U.S. group Conservation International, B.P. has pledged to invest $8 billion in solar-, wind-, and hydrogen-energy technologies over the next decade. That's still minute compared with B.P.'s business in traditional oil and gas, but who has better resources, expertise, and incentive to forge our energy future than a profit-driven energy company? Since 1990, B.P. has reduced its greenhouse-gas emissions by 10 percent. Says Browne, "The whole point is that no one should be able to use the environment without restoring it."

Okay, when you are in competition with the likes of Lee Raymond of Exxon Mobil, sounding more progressive isn't hard to do. But even environmental groups like the Sierra Club rank BP among the better energy companies on environmental policies. Which isn't to say there haven't been concerns. BP has extensive holdings in Alaska and has been criticized for failing to report spills at its Prudhoe Bay operations and in 1999 was fined $22 million related to dumping of hazardous waste there.

Safety has been an issue, as well. On March 23, 2005, fifteen people were killed and 170 injured at BP's Texas City refinery when a "distillation tower flooded with hydrocarbons and was overpressurized, causing a geyser-like release from the vent stack." An investigation by the U.S. Occupational Safety and Health Administration led to a $21 million fine.

This week the Texas City refinery is back in the news. In an article in the Houston Chronicle, BP reported to the Environmental Protectional Agency that its emissions in 2004 tripled over the previous year, raising questions about the accuracy of its past self-reports. The controversy revolves around the method the plant used to calculate emissions, specifically formaldehyde and ammonia, common components of smog and soot, respectively. The newly reported numbers make the Texas City facility far and away the worst polluting refinery in the country, three times worse than the second-most polluting plant, Exxon Mobil's refinery in Baton Rouge.

As the Houston Chronicle article notes:

In 2004, a report from the EPA's inspector general concluded that the government was not ensuring that the nation's refineries were reducing emissions, despite a court order to do so. Part of the problem, according to the report, was that the agency was not monitoring pollution to double-check the industry's numbers.

How can it be that company compliance can be based on theoretical calculations, not actual sampling? Harris County ranks among the worst in the country for toxic air emissions. The implications for increased emissions are significant.

But the pollution review also could have ramifications for the Houston region's efforts to clean up smog, plans based, in part, on emission estimates provided by companies to the government. If BP's estimate to the EPA turns out to be correct, the additional and previously undocumented pollution could be enough to influence the state's plan to reduce the region's smog, experts said.

For a company working hard to convince shareholders and the public that energy production and environmental protection are not mutually exclusive, the refinery report represents a dark smudge on the reputation of BP and its media savvy CEO. And also a golden opportunity to prove that being green goes deeper than the pages of the latest annual report.

Congress Eyes New Taxes on Energy

The robber barons of the energy industry may soon be getting a surprise visit from the IRS. In response to widespread disgust over energy profits, the Senate is considering an audit of the tax records of fifteen top oil and energy companies. The last time the Senate chose to do this was for another li'l Texas start-up by the name of Enron.

In their request, the senators noted not only the industry profits, but "an extremely lucrative retirement plan by one oil and gas industry executive, benefits which may have been subsidized in part by the taxpayers."

Now who do you suppose that could be? Can't you just see ConocoPhillips' James Mulva giving Exxon Mobil's Lee Raymond the look and saying, "See what you did? Now you've ruined it for everyone!" On second thought it's more likely he's thrilled. Raymond's excesses have set a new benchmark for the golden parachute that other CEO's can someday hope to emulate.

But this part can't make them too happy:

House-Senate conference, negotiating a large tax bill, is considering a provision that would change accounting rules for oil inventories and require the five biggest oil companies to pay $4.3 billion more in taxes. The measure passed the Senate but was viewed as essentially dead this week because of opposition from House GOP lawmakers. The White House opposed the idea, too, when it surfaced in November and threatened to veto the entire bill because of it. Grassley said Wednesday that high fuel prices revived the inventory tax plan and it "is still being negotiated." His House counterpart in the negotiations, Ways and Means Committee Chairman Bill Thomas, R-Calif., said the issue has not been decided. He denied he had rejected it. Additionally, there is broad bipartisan support for scuttling other breaks given to oil companies only eight months ago when President Bush signed an energy bill.

It's amazing what Presidential and congressional approval ratings in the low 30's and 20's respectively, not to mention an upcoming election, can do to bring out the prairie populism, isn't it?

All in a Day's Work

Pigs get fat, hogs get slaughtered. Unless, of course, you're Lee Raymond, the Irving, Texas CEO of Exxon Mobil. Mr. Raymond is leaving Exxon and his golden parachute is worth $400 million. From 1993-2005, Mr. Raymond made $686 million, which amounts to a total of $144, 573 each and every day.

Raymond, you will recall, was one of the oil executives who may or may not have conferred with Vice President Dick Cheney on his 2001 Energy Task Force. He denied it before Congress, testimony which the Republican leadership made sure was not under oath. That same congress (whose members earn an average annual salary of $165,200) also scoffed at the concept of a windfall tax on Exxon Mobil's $36 billion profit (a profit, mind you, greater than the GDP of more than half the world's nations.) Of course, you can bet the Republican Party, and to a lesser extent the Democratic Party, too, have seen a bit of that largesse. But what's a million here or there when you have the Bush-Cheney cabal to make your dreams reality? The energy bill of 2005 was such a corporate give-away, critics have deemed it the "No Oilman Left Behind Act." That's what the board of Exxon no doubt would consider a good investment.

As far as oil dependency, Raymond has some advice for America. Better get used to it. Global climate change? Raymond is from the Ronald Reagan school of science -- blame it on the plants. Concerns over drilling in the Arctic National Refuge? See Ted Stevens, he'll be happy to explain. In a business hardly known for its tree-huggers, Raymond stands out, unwilling to concede an inch no matter how many people prove him wrong. Kind of reminds you of some other Texans we know, doesn't it?

But back to that corporate compensation package. It isn't all sweetness and light. Even though Bush's tax cuts mean that Mr. Raymond can keep millions more than he might have, he'll still need a few tax breaks. May we suggest a charity?

How about the Intrepid Fallen Heroes Fund? This group is building a rehabilitation center at the Brooke Army Medical Center at Fort Sam Houston to assist wounded soldiers from Iraq or Afghanistan (average daily combat pay bonus $7.50). Or maybe the Fallen Patriot Fund? Established by our own Mark Cuban-- who earned his billions the hard way, by founding a company-- this fund awards grants to families who have lost soldiers in the war. Mark will even match you dollar for dollar up to one million. Too depressing? Well, there is the Texas Military Family Foundation, run by Julie Curtis-Win, who provides soldiers departing Fort Hood things they won't easily find at the front. It would be only fair to send them a little something, considering we sent these folks to war to project our military might over the oil fields of the Middle East.

We launch an illegal war against Saddam Hussein, thousands die and oil moguls get rich. Iraq's oil production is lower now than it was before the war, Iraqis suffer, and oil moguls get rich. Bush sounds the drumbeat of war in Iran, markets get the jitters and oil moguls get rich. Obscenely rich. In today's corporate welfare system, charity begins at home.