TCS Daily

Cooking The Books

By Duane D. Freese - June 27, 2002 12:00 AM

What does Independent Vermont Sen. James Jeffords have in common with former WorldCom chief Bernie Ebbers? How about a penchant for cooking the books and engaging in a little nefarious accounting practice.

WorldCom's $4 billion accounting "mistake" - pencils count as computer equipment, don't you know, because they serve a communication function - could lead to some serious fines and jail time for those involved. But in politics, you can get away with phony gifts to constituents as long as you cover it up right.

That's exactly what Jeffords is attempting to do with his new version of S.556, the Clean Power Act, that is expected to be marked up in his Senate environmental committee today.

The bill is an ugly piece of work.

Countries don't normally give up either military or economic advantages without some proof that they'll end up more secure or better off in the long run as a result. Unilateral disarmament just has never proven to be very smart.

Yet the Jeffords' bill willingly discards this nation's primary energy and economic advantage - inexpensive electricity supplies fueled by abundant coal reserves. Cheap power helped spur the growth of the high tech economy through the 1990s, and coal fuels 51 percent of the nation's electricity generation. Coal, if you didn't know, accounts for 85 percent of the nation's energy resources. At current rates of usage we have a 250-year supply.

But Jeffords is out to kill coal, and the use of all fossil fuels. And his bill would dry up any future investment in making it a cleaner fuel by setting impossible timetables for slashing emissions, particularly of carbon dioxide (CO2).

Under his bill, the Environmental Protection Agency would have to have regulations in place by Jan. 1, 2008, reducing aggregate power plant emissions for four "pollutants." Nitrogen oxide (NOx) emissions would be cut to 75 percent below 1997 levels; sulfur dioxide (SO2) emissions by 75 percent below a base of 6.04 million tons (the level achieved by the Clean Air Act); mercury (Hg) emissions by 90% below 1990 levels, and CO2 -- which is as much a "pollutant" as water and is as important to life -- to the level in 1990, or about 30% below those anticipated in 2008.

If the EPA doesn't get out its regulations on time, then, under the newest version of the bill, each power plant would have to reduce NOx by 85 percent, SO2 by 95 percent, Hg by 90 percent and CO2 by 25 percent below emissions relative to an uncontrolled source.

By any common sense measure, such a short time frame - less than six years - makes no sense.

It now takes three to five years to get a plain old natural gas plant up and running. You have to buy the land, go through zoning boards for approval, and jump through a host of other hoops before you begin to build it. Furthermore, think about how long it takes to get just a major highway interchange working. Nearly a decade in most urban areas. And they encompass only a few square miles.

Jeffords is counting on massive building of not old technological tools, but entirely new marvels to meet energy needs. Solar arrays and wind turbines - to generate an equivalent amount of electricity from one coal fired plant - will take up hundreds of squares miles, with roads, buildings and assorted amenities and safety equipment to maintain them. And once built, their production is iffy. Prototypes both here and in Europe for solar and wind as well as geothermal and biomass plants have hardly proven they are close to ready for prime time.

Sensible legislation would give such technologies more time to be tested and proven. It also would offer sufficient lead-time to put in the appropriate infrastructure for more natural gas technology.

But, then, given the lead-time for other electricity technologies, coal itself might prove to be the very clean fuel the nation is looking for in the energy picture. The Department of Energy's Vision 21 Technology Roadmap, for example, done in collaboration with academia and industry, has set 2015 as a goal for achieving a cost competitive commercial coal plant design that would be 60% energy efficient (nearly double current levels), emit pollutants below Jeffords' range and cut CO2 emissions by 40 percent to 50 percent (100 percent with sequestration).

Of course, planning on something and getting it are two different things. But clean coal technology has developed an impressive track record. In the last three decades, even as coal plants have tripled their output of electricity, they've reduced overall emissions by 21 percent. Still, "green" groups, such as the Friends of the Earth and U.S. Public Interest Groups, rather than applauding such gains, condemn coal and federal efforts to reduce its emissions almost out of hand. It's a carbon-based fuel so it has to go, even if it could be made clean.

Jeffords Cookbooks

Indeed, that may well explain the impossible timetable set by Jeffords in his bill for meeting new emissions standards, particularly for CO2. He, like them, is at war with carbon-based fuels. Together they bought and then began spreading the hype about global warming being caused by man's use of fossil fuels without looking closely at the reality of whether it was really happening, the actual damage it might cause and the economic and humanitarian cost of acting precipitously with futile measures to change nature's course. They don't want to give technology or science the time to find answers that make economic sense.

But Jeffords' attempt to garner public support for his measure goes even beyond hyping that concern. To get past people's practical pocketbook considerations, he's performed a WorldCom, by cooking the electricity books.

Because of the unrealistic timetables, many plants likely will not perform well enough, yet their electricity will be needed if the nation is to avoid blackouts. The neat answer that environmental groups have come up with is to give those polluters the right to buy permits from plants that beat the averages.

But that scheme likely would encourage massive use of natural gas as the clean alternative, and the Energy Information Agency of the DOE had warned that could lead to price shocks similar to California's for all natural gas users.

Further, the reports by DOE's Energy Information Agency and of the EPA forecast about a 32 percent to 50 percent electricity bill increase for the average household.

Such a bill - amounting to more than $300 a household -- would hit poor and moderate-income families hardest. Utility bills take up a bigger share of their income, and they can least afford purchasing or retrofitting their homes to make them more energy efficient.

So, how does Jeffords square his bill's costs with his constituents realities, yet provide for continuing energy supplies from out of compliance plants?

He sets up a cap and trade scheme of emission credits that includes a trustee who will get nearly two-thirds of the emissions allowances on behalf of households. Utilities that pollute would have to pay the trustee the allowances, who then would dole them out to households on a per capita basis.

It is a scheme more complicated than Enron's accounting, and as duplicitous as WorldCom's. The key question is: Where will utilities get the money to pay ratepayers? Where else but from ratepayers. And where will the utilities get the money to make improvements? From ratepayers again.

So, here you go ratepayers, a check from your government trustee for $100; praise be to Jeffords the beneficent. Here's your bill from your utility for $200; boo, those rapacious energy companies!

If WorldCom was guilty of accounting fraud, Jeffords' manipulation of emissions trading to meet environmental goals is an example of consumer and environmental fraud 25 times as massive - with an annual toll in excess of $100 billion.

Clean Power Act? It's as dirty as WorldCom's books.



TCS Daily Archives