New York City, November 11, 2005

The idea is — let the oil companies’ executives have it all.
They want to control supplies in order to increase profits — let them
do it
officially. Let them form officially a cartel like you allowed OPEC.
After all you do business with OPEC as if there were no anti-cartel
law on
US books. Oil company executives will not mind our efforts to decrease
the
use of oil as long as their profits remain super-high from the oil that
we
will still be using. As we do not have a policy versus the oil
companies, or
a rational energy policy anyway, this full retreat is indeed in our
interest
as well.

——————————

Above ideas came to me last night after having witnessed the following
event:
While at one end of a corridor, former rebel, turned part of the
establishment, Member of the European Parliament, Mr. Daniel
Bendit-Cohn,
was explaining the present workings of Europe, at the other end of the
corridor a specialist of the workings of utilities was explaining how
we
could save energy. He addressed the gap between what the public thinks
it
knows about energy versus the underlying reality; the crucial role of
pricing in our consumption of energy and other resources; electricity’s
role
in environmental degradation; how simple investments all of us can make
could return hundreds of percentage per annum in saved energy; then
further
steps we can all take to use energy, particularly electricity, more
efficiently. The gentleman brought along a lot of gadgets, some costing
as
little as 99 cents, that could translate to savings in tens of
thousands of dollars — that is provided the cost of energy stays as
depicted by the speaker.
His presentation boiled down to the conclusion that the facts of how we
could save on energy were not presented well to us by the utility - in
its
billing forms and in its publicity. He believes that if we only knew
the
facts we would have the better understanding to save.

The presentation was very nice, logical and educative. He even showed
data, from a June 2004 National Geographic Magazine article, where
externalities to the cost of oil were internalized to show the
horrendous
real cost of oil.

Nevertheless, my problem, as I mentioned in the form of a question is
as
follows:

Several years ago, a utility in the metropolitan area of New York,
volunteered to send its employees to private homes and physically
unscrew
incandescent bulbs and replaced them with long lasting fluorescent
bulbs,
like those shown to us by the speaker, — supposedly at no cost to the
consumer. Later, though using less electricity, the customers
discovered
that their electric bills remained the same. Obviously there was a
change of
electricity rates and those that told me the story felt they “were
had”. The
speaker answered me that Con Edison did not explain well the rates. I
did
not like the answer, but learned from it a new bit of information - Con
Edison owned that other utility. What I also understood was that we can
indeed work with the energy company to attain our main goal as
environmentalists - an energy less intensive existence, the decreased
use of
oil, and eventually decreased emissions of CO2, provided we incorporate
in
our plans a way to make the energy company not just more efficient but
rather more profitable.

Another person asked what about supplying energy from photovoltaics or
wind?
The answer was long and enlightening. Wind and sun are unreliable and
there
must still be a capacity to supply electricity for peak time - so the
utility must still invest in building that capacity. Further, the
utility
can only pay a fraction of the cost it charges for electricity to those
that
supply it in reverse. also, when someone builds all those new supplies
into
his home, he is still connected to the utility that is obligated to
have the
capacity to supply him when he decides not to use his alternate sources
of
electricity or they are incapacitated for some reason. I liked this
answer
even less.

When the seminar broke, I went over to the speaker and asked him in
private
_ What about decentralization? Actually I did see in Morocco how a
French
NGO supplied electricity to a region without connecting the area to the
national grid. They saved on wires and avoided the litany of headaches
we
just heard. The speaker seemed impatient with my idea that we could
actually
be better of with less grid.

When I left the hall, a young graduate student asked me how I liked the
presentation and I answered yes and no. The no was because I saw in it
a
normal and conventional defense of the industry with a veneer of good
ideas
being placed on the utility, making it look better. The utility still
does
not think of us but rather only of itself. Is this bad?

A further anecdote: when I got home I found in my e-mail an
announcement
about a $599, 100 pages work, on “Voluntary Greenhouse Gas reduction in
the
US Electric Power Industry” - “a 1st Impression business study of the
Industry”. It can be ordered on line from 1st Impression Communications
in
Anthem, Arizona. I guess this is a good moneymaker for somebody who
understands the needs of utility executives.

Another e-mail informed me that a named US utility has already achieved
zero
emissions by employing Kyoto Protocol mechanisms - it uses only
hydropower
and bought CO2 credits. So it can actually work, and mind you, as they
were
not yet required to do so, they did it voluntarily. This reminded me of
an
additional aside from our speaker. When he was asked after he voiced
the
litany of difficulties - “Yet how can we do the right thing?” his
answer was
that when you buy a car you can spend $15,000 or $65,000 and both cars
have
four wheels, a steering rod and take you from place to place - so you
spend
more money for a different reason, not plain utility. In other words
someone
may decide to spend more in order to avoid the GHG emissions like
people
agree to pay more for a plane ticket if the airline is involved in some
emissions trading scheme.

———————————

Above coincidentally happened on the day after the US Senate Hearings
on the
possibility of taxing the windfall profits the oil companies made from
the
human caused nature disasters of the KatRita Hurricanes. I scoured the
papers for reporting, saw some on TV, even Fox Channel was enraged, but
saw
no direct reporting from main newspaper journalists. Sure Reuters and
AP
were there, and Bloomberg had a very good article - but that was it -
others
just quoted these sources.

The CEOs of the five present majors - ExxonMobil Corp., Chevron,
ConocoPhillips, BPAmerica, and Shell Oil USA, were lined up at the
hearing’s
witness desk.
They did not have to come or answer but came nevertheless to defend
shamelessly their treasuries.
The fellows lined up there made hundreds of millions of dollars a man
from
salaries, royalties, bonuses, etc., and their companies profits jumped
52%
in the third quarter to a combined whooping $33.4 billion — or you can
say
they profited roughly $25 billion from the hullabaloo that surrounded
Katrina and Rita. Was this disgusting behavior — you bet!
Actually, it is so obscene that even Republican Senators feel obliged
to
wonder.

Senator Pete Domenici puts it neetly: “There is growing suspicion that
oil
companies are taking advantage…. The oil companies owe the American
people
an explanation” he declared.
No Joke - Dr. Frist, Senate Majority Leader, in an e-mailed statement
read
by Bloomberg concludes: “The oil executives failed to adequately answer
the
question of whether the sky-high gas prices we saw earlier this fall
were
entirely justified and whether their companies’ profit margins are
appropriate given the hardships consumers are facing”.
This seems to me a bit of populist double talk hogwash coming from the
leader of the party that believes that less government is the best
government and that taxes collected from the taxable should be returned
for
safekeeping to the rich.

Some members of Congress had the terrible idea to institute a windfall
profits tax as President Carter did 25 years ago. Mr. Lee Raymond, CEO
of
ExxonMobil, the biggest and thus the leader of the group of 5 oil
companies,
said this was a bad idea - said oil profits “go up and down” - my God -
when
did Exxon honestly loose money? “There are no quick fixes” he said -
what
did he mean? “Punitive” policies that interfere with oil-industry
profits
would discourage investments in exploration and refining and he warned
the
Senators from his bench: “History teaches us that punitive measures,
hastily
crafted in reaction to short-term market fluctuations, will likely have
unintended negative consequences”. The obscene size of the numbers he
explained by “our numbers are huge because the scale of our industry is
huge”, AHA! Maybe this is the reason for an already lack of competition
and
the push for bloated profits? But then did I ever think the price of
oil is
low? No and definitely no! - the price of oil should indeed be much
higher
but the difference should not go to the pockets of the oil folks - not
even
the oil industry shareholders; it should rather go to the introduction
of a
less oil intensive life style!That is something that is very hard to
grasp
in Washington - now and in previous years it was difficult as well. No
danger to Big Oil, the White House will defend them and will not even
allow
the gallant stand that President Carter tried of taxing these profits.

Senator Barbara Boxer points out that the oil companies have hundreds
of
billions of dollars in available cash that they could have used for
exploration and building refineries, the problem is not money but their
interest to control supplies. Shell even fought to close a refinery
that
supplies California because it wanted to have shortages. They had to be
pushed to sell off that refinery which is doing very well now. That is
why I
suggest the let the oil executives have-it-all strategy provided we
make a
deal with them to use less oil.

They will control supplies as they always do; the dwindling supplies
will
convince them that there is money in alternatives, and they will
eventually
come up with the energy policy that Washington does not want to
formulate.
Te oil industry coffers will grow - so what? There is nobody in
Washington
to stand in their way anyway.

Please have a nice day.