Skip to comments.Enron: Putting things into Perspective (Global Warming)
Posted on 04/06/2007 11:12:26 AM PDT by Shermy
Enron, the once powerful energy trading corporation, is mired in financial ruin and scandal. Thousands of employees lost not only their jobs, but also their retirement accounts which were invested almost entirely in now worthless Enron stock. Others whose retirement accounts held stock in the once robust Fortune 10 company are also among those hit hard by the collapse. On Capitol Hill, it seems that just about everyone is scheduling hearings. Much of the nation and all of Washington, D.C. are agog that as much as $6 billion were lost.
All of this sounds pretty serious, but the reality is that the economic devastation could have been a lot worse. Here's how. A number of energy companies, including Enron, were strong supporters of the Kyoto Protocol (aka Global Warming Treaty) and international emissions trading. Enron and others believed that they would profit handsomely from the Clinton-Gore Administration's infatuation with the Kyoto treaty's command and control regulatory regime.
Enron envisioned itself being a key player in the new international trading system. It would make a percentage of every trade it transacted. Additionally, since the Kyoto Protocol would reduce and eventually close down coal-fired power plants and encourage the use of gas-fired plants, Enron saw another chance to profit since much of its business was in natural gas.
In 1997, the U.S. Senate unanimously voted to advise the Clinton-Gore administration that it should not enter into any agreement to ration energy or harm the US economy. It is extraordinarily rare that everyone in the Senate agrees on something. How often do Tom Daschle, Ted Kennedy, Jesse Helms and Trent Lott all agree?
That same year -- 1997 -- Enron officials met with Clinton and Gore at the White House to promote the Kyoto Protocol and emissions trading.
When the negotiations over the global warming treaty were breaking down and it appeared as if no agreement would be reached, Al Gore flew to Japan to personally accede to whatever unreasonable demands were made. The terms he agreed to were worse than most had ever imagined. However, Enron and others who hoped to benefit from this new regulatory scheme were pleased. In fact, an Enron internal memo boasted that the Kyoto Protocol would "do more to promote Enron's business than almost any other regulatory initiative...."
Unfortunately, we live in an era in which many businesses hope to succeed not by producing better products or by being more efficient, but by getting government to impose special interest regulations designed to give them an advantage in the marketplace. The problem with this approach is that someone has to pay the cost. In the case of the Kyoto Protocol, the cost was to be imposed on every American. We would have had to pay more for everything from groceries, to fuel, to clothing, to heating and cooling.
If the Kyoto Protocol were ratified and in full force, experts estimate that Americans could lose between $100 billion and $400 billion -- each year. Additionally, between 1 and 3.5 million jobs could be lost. That means that each household could lose an average of up to $6,000 each year. That is a lot to ask of Americans so that large energy companies could profit from this regulatory scheme. Moreover, a cost of $400 billion annually makes Enron's current one-time loss of $6 billion look like pocket change.
The point is not to minimize the difficulty and economic pain that Enron's failure has caused -- but to highlight that if a one-time loss of $6 billion is worth worrying about, we should be that much more concerned about a loss of $400 billion each year. For the time being, we have avoided these catastrophic costs because the Clinton-Gore Administration was not successful in shoving the global warming treaty down our throats.
We should thank President Bush for steadfastly standing up to the special interests who promoted the Kyoto Treaty. Despite the wishes of those powerful few who hoped to profit from the new regulatory mandates of Kyoto, President Bush did not cave-in. Instead, Bush sided with hardworking Americans who simply could not afford to foot the bill so that a few special interests could profit handsomely.
There are others who continue to push the Kyoto Protocol and energy rationing schemes. They would like to run roughshod over President Bush, take our jobs, and pick our pockets. Beware. If they succeed, our economic pain will be a great deal more profound than anything experienced because of Enron's current financial collapse.
And our Government officials have the audacity to tell us they are imposing new regulations as a "market based" solution.
Honolulugal and I are doing the POGW pinglist while xcamel is on vacation.
Since the 70’s this whole energy crisis thing has been all SCAM. Bet on it.
There was some radical Frenchie during the blood thirsty French Revolution that keep sayin: “Audacity, audacity, audacity!!!” (only he din’t put three Wasp Stingers (!!!) at the end)
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