Lessons from the global warming industry

Enron, joined by BP, invented the global warming industry. I know because I was in the room. This was during my storied three-week or so stint as Director of Federal Government Relations for Enron in the spring of 1997, back when Enron was everyone’s darling in Washington. It proved to be an eye-opening experience that didn’t last much beyond my expressing concern about this agenda of using the state to rob Peter, paying Paul, drawing Paul’s enthusiastic support.

In fact, this case was not entirely uncommon in that the entire enterprise was Paul’s idea to begin with. Which left me as the guy on the street corner muttering about this evil company cooking up money-making charades, to nothing but rolled eyes until the, ah, unpleasantness and the opportunity it afforded to take a few gratuitous swings at George W. Bush. Buy me a beer and I will regale you with tales of reporters from Newsweek and the Washington Post desperately seeking assistance to spin, respectively, Enron as having urged Bush away from the Kyoto agenda as opposed to having crafted it, and Enron’s global warming activism as its one redeeming feature.

The basic truth is that Enron, joined by other “rent-seeking” industries — making one’s fortune from policy favors from buddies in government, the cultivation of whom was a key business strategy — cobbled their business plan around “global warming.” Enron bought, on the cheap of course, the world’s largest windmill company (now GE Wind) and the world’s second-largest solar panel interest (now BP) to join Enron’s natural gas pipeline network, which was the second largest in the world. The former two can only make money under a system of massive mandates and subsidies (and taxes to pay for them); the latter would prosper spectacularly if the war on coal succeeded.

Enron then engaged green groups to scare people toward accepting those policies. That is what is known as a Baptist and bootlegger coalition. I sat in on such meetings. Disgraceful.

Flashing forward in time, these companies’ flagship agenda item, cap and trade, has passed on to its final resting place. But the global warming industry presses on, joining President Obama in his call to find “other ways to skin that cat” (an inventory of which is found here).

Addressing such taxpayer-funded boondoggles bestowed by pals in government, Holman Jenkins has an item in today’s WSJ bringing readers’ attention to the substantive issues providing context for a prurient email scandal unfolding in Indiana. This involves cozy relations between Duke Energy and a state regulator cum Duke Energy executive, himself also briefly tenured thanks to said email revelations.

The following excerpt should remind us of the juvenile “inevitability” canard employed (by people like Duke’s Jim Rogers, a former Enron VP under Ken Lay who took the business plan to Cinergy and now Duke) to weaken what little principled opposition to cap and trade, etc., remained within the regulated community. It should also remind us of the folly of rent-seeking businessmen thinking they can finally be the ones to ride the political tiger of climate politics and not end up inside with the rest:

Hovering over all is Duke’s Edwardsport coal-gasification plant, whose high-tech white elephanthood is a direct product of Mr. Rogers’s attempt to position his company to prosper in the age of climate politics.

The plant, which is nearly $1 billion over budget, was always destined to mean higher prices for consumers compared to the low-tech coal plants it would replace. But it was sold to the locals as supplying not just electricity but a “clean coal” future for Indiana’s “dirty” coal-mining industry. More to the point, the plant’s economics were supposed to be rescued when Congress passed cap and trade, dramatically hiking costs for traditional coal power plants.

Mr. Rogers here was betting on Mr. Rogers, the closest thing to a celebrity CEO in the utility business, profiled in the New York Times magazine two years ago as a “green coal baron.” No executive has lobbied as noisily or consistently for a national price on carbon output. His wish seemed certain to come true after both major parties nominated climate worrywarts in the 2008 presidential contest.

But something about a 9.8% national unemployment rate has now made politicians less keen on imposing higher utility bills. Nor did Mr. Rogers count on what we’ll boldly call the public’s growing sophistication about climate science. Where the public was once prepared to believe in a pending climate meltdown because “scientists” said so, now it entertains the possibility that “scientists” are human, capable of mistaking theory for fact, of confusing belief with knowledge.

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  • bigsigh

    Quick thoughts? Yet….you prove nothing.

    • bigsigh

      That was in response to aucontraire.

    • aucontraire

      My intent is not to prove anything. In fact, I’m trying to draw attention to the fact that a lot of decisions must be made on the basis of understandings derived from observations and analyses that can only ever indicate probabilities. Whether or not people realize the fact, we proceed on such a basis in our own daily lives constantly.

      To pose “fact” against “theory” is a rhetorical trick – a way of making it seems as if all science has to offer is a bunch of guesses, and that the right thing to do is to wait until “facts” can be established with certainty. I have attempted to point out that (1) Those “facts” can *never* be established, because that’s just the nature of cause and effect relationships – it’s never possible to know for sure what causes what, we can only say that some cause/effect relationship has been established with some degree of certainty, which in the case of the CO2 –> global warming case is very high, much more so than is indicated by any other reading of the evidence, and (2) We cannot afford to wait until we can nudge the degree of certainty up another percentage point or two, since the decisions (or lack thereof) that we make now are crucial if we are ever to be able to slow down the rate of warming, which is certain to have disastrous effects.

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  • aucontraire

    Just a couple of quick thoughts on this article for now.

    First, though I don’t doubt that Enron, BP and Duke Energy have all, whether acting independently or in concert with one another, worked to position themselves to take advantage of a turn toward cleaner energy sources. They may have even pushed public interest in global warming as a means to influence sentiment, as well as legislation and policy, in a direction that would benefit them as a result of the investments this article details (wind, solar, natural gas, etc.). However, to suggest that global warming itself is a manufactured concept does not follow logically from such plotting and scheming being a reality. Global warming is itself a reality, even if corporate interests have with some success, perhaps, put their public relations and lobbying machinery to work promoting awareness and concern about that subject.

    Second, speaking of facts, there is a major misunderstanding of science and how it operates shown at the end of this article. To counterpose “theory” and “fact” relies on a popular misconception about what these words actually mean (please consult your dictionary – or, better yet, speak with someone trained in science). When it comes to a careful consideration of any complex phenomenon, it is *never* possible to say with absolute certainty what causes what – we can only generate and test hypotheses and derive theories and generate confidence in those theories as a result of presenting arguments and evidence in their favor. Our progress in scientific and technological endeavor is, and can only ever be, based upon well-established theory. Here’s the text of something I posted last night in the comments section of another article from _The Daily Caller_ ( http://tinyurl.com/2fjmzno ), which I hope will be helpful.

    (Lines preceded by a “>” are from the posting of someone to whose words I was attempting to respond.)

    > SCIENCE is NOT A DEMOCRATIC endeavor.

    Individual scientists develop hypotheses, do research and experimentation, from which substantiated theories are produced. There is not a formal vote among members of the scientific community on any particular matter, but some theories tend to “take hold” on the basis of how well supported they are and how well they describe the observed phenomena they have been designed to explain. So there is a sense in which democratic principles hold, though you are right in a technical sense that there is a big difference in how science and political affairs are conducted.

    Policies, unlike theories, come about in democratic societies based upon the electorate choosing those about whom they feel most confident, and leave it up to them to develop those policies. But in a tripartite government like exists in the U.S., Congress also is involved, holding hearings, developing legislation, and interacting with the constituents of individual members of Congress. There is general trust that in matters such as the one under discussion, scientific advisors will be called in to provide their expert opinions, which they will do upon the basis of what they know personally and what represents the general consensus within the scientific community with regard to whatever issue is under consideration. So there is a way in which democratic principles are involved, whether domestically or with regard to international policy.

    > For theories to be claimed true they need to be based on proof. Or they are just theories.

    “Theories” are not really what most people in the general population seem to take them to be these days. A theory provides what we hope is a good explanation of observed phenomena. Science never does any better than developing theories – a scientist can never say with utter certitude why something happens, since there may be cases that have yet to be encountered that the theory fails to adequately cover. So we can only ever do our best, and continually revise theories to deal with new observations and discoveries. Meanwhile, we have to go on the best of what has been developed to date. Some theories have been around for a long time, and would take a great deal of argumentation and evidence to displace – so much, in fact, that the task is well-nigh impossible. We live in a world built upon reliance on such theories, which should not be thought of in negative terms.

    Just as in life generally, we often have to make decisions on the basis of the best of what we know at the time the decision has to be made. The alternative is to avoid making the decision and let events take their own course, which will probably not lead us to desirable results. So scientists devise the best theories they can, try to achieve a high degree of consensus, provide assistance to policy-makers and the public at large, and hope that the results will be to the best advantage of us all.

    > Your assertion that “nearly all” scientists agree on ANYTHING is founded on bias. I mean.. I’ve heard that a million times.. even in the face of a great number of dissenting opinions.

    I don’t have to deal with the general case here, only with the subject under consideration. I found an interesting passage in a book review at http://tinyurl.com/264whn7 for Spencer R. Weart’s 2004 book _The Discovery of Global Warming (New Histories of Science, Technology, and Medicine)_ that reads:

    “The author presents a history of global warming studies in an easy to read style covering the last 200 years. He does not use any mathematical formulas but he does produce scientific data on the earth’s temperature and the rise in CO2. He does spend a lot of time discussing the work and the impact of politics and public relations by the polluters. The book is neutral but presents a fairly convincing case that we are in the throes of a climate change that might take many decades to become clearly apparent to everyone. But among the scientists themselves, there is a general consensus in the scientific community that global warming is occurring – contrary to stories in the media that scientists do not agree on global warming.”

    These words say better than any I could possibly hope to write to able to express what I have been attempting to say. Reading this statement, along with the explanation of the meaning of the term “consensus within the scientific community” at http://en.wikipedia.org/wiki/Scientific_consensus , we have a good basis for understanding why almost all atmospheric and climate scientists hold the view that human-produced (“anthropogenic”) CO2 is in fact the basis of global warming, and our best hope of counteracting that warming, which threatens all life on the planet, is to reduce levels of atmospheric CO2.

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