Although a more than half-billion-dollar 10-year-long 1980s “acid rain” study of damage to lakes and forests (which some people attributed to emissions from Midwestern utilities) yielded no “smoking gun” evidence, the highly-publicized scare set off a chain of events that continues to have enormously broad and costly regulatory consequences. A key player in this saga was Enron.
That “Acid Precipitation Assessment Program” study ultimately determined that those widespread fears were largely unfounded since only one species of tree at a high elevation suffered any notable effect, and acidity in lakes was traced to natural causes. Nevertheless, the EPA acted quickly to establish the groundwork to regulate sodium dioxide (SO2) even before those results were in.
Sen. John Heinz, R–Pa., and Timothy Wirth, D-Colo., had previously cosponsored the so-called Project 88 to provide a pathway for converting environmental issues into business opportunities. So that media-fueled alarm about acid rain provided a great basis for new “allowance trading” legislation to create markets for buying and selling excess SO2 credits. Project 88 became the Clean Air Act of 1990.
One of the big traders in the SO2 allowance market was Enron. Back at that time the company was diversifying its energy business, and already owned the largest natural gas pipeline that existed outside of Russia, a colossal interstate network. However natural gas was having difficulties competing with coal.
Global media hype about global warming, which had been ginned up by then-Sen. Al Gore’s famous 1988 congressional hearings on the matter, provided what Enron recognized as a dream opportunity. After all, since a cap-and-trade market had been established for SO2, why not do the same for CO2 which was already being blamed for a climate crisis?
Natural gas was a lower CO2-emitter than coal. Besides, they knew exactly where to go in Washington to get some help.
Enron’s CEO, Kenneth Lay, had met with President Clinton and Vice President Gore in the White House on Aug. 4, 1997 to prepare a strategy for the upcoming Kyoto conference that December. Kyoto was the first step toward creating a carbon market that Enron desperately wanted Congress to support.
But there was one very pesky problem. Unlike SO2 which really does produce unhealthy smog, CO2 wasn’t considered to be a pollutant . . . at least not yet . . . and therefore EPA had no authority to regulate it.
So after Al Gore’s Senate pal Timothy Wirth was appointed to become undersecretary of state for global affairs in the Clinton-Gore administration, Enron’s boss Lay began working closely with him to lobby Congress to grant EPA necessary CO2 regulatory authority plus gain public United Nations Kyoto Protocol support.
And lobby they did. Between 1994 and 1996 the Enron Foundation contributed nearly $1 million to an energetic and successful global warming fear campaign which included attacks on scientific dissenters.
An internal Enron memorandum stated that Kyoto would “do more to promote Enron's business than almost any other regulatory initiative outside the restructuring [of] the energy and natural gas industries in Europe and the United States.”
The rest, as they say, is history. Al Gore and his partner David Blood, the former chief of Goldman Sachs Asset Management (GSAM) took big stakes inthe Chicago Climate Exchange (CCX) which was poised to make windfall profits selling CO2 offsets if and when cap-and-trade was passed in Congress. Speaking before a 2007 Joint House Hearing of the Energy Science Committee, Gore told members: “As soon as carbon has a price, you’re going to see a wave [of investment] in it . . . There will be unchained investment.”
Thanks to a 2010 Republican mid-term House cleaning that didn’t occur.
So just how well did this sort of this political science pay off in supporting the various agendas? Well, in the case of Enron . . . obviously not so great. As for Al Gore, even though his carbon cash-in plans got capped, he has still harvested lots of the green he was peddling.
Larry Bell is a professor and endowed professor at the University of Houston, where he directs the Sasakawa International Center for Space Architecture and heads the graduate program in space architecture. He is author of “Climate of Corruption: Politics and Power Behind the Global Warming Hoax,” and his professional aerospace work has been featured on the History Channel and the Discovery Channel-Canada. Read more of his reports — Click Here Now.
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