Enervia.com's Weekly World Energy Newsletter
Week 25 - June 24th - 2002

 
Table of Contents
Commentary
*Doubts Emerge on Business of Trading Electricity (New York Times)
*Paper Trail Points to Roots of Energy Crisis (Los Angeles Times)
*Dark heart of the American dream (Observer)
*Corporate secrecy oils the wheels of poverty (International Herald Tribune)
*The Conservation Bomb (MIT - Technology Review)
*Iran Looking To Re-Establish Bosnian Presence (Stratfor)
*Behind 'Plot' on Hussein, a Secret Agenda (Los Angeles Times)
David Seaton's Energy Links® Commentary There has been much talk of "soft power" lately. The idea  that a great part of America's non-military strength consists of the irresistible attraction of its pop icons and fast foodstuffs for everyone from Eskimos to Hottentots is fashionable at this moment. The Pulitzer prize winning, New York Times columnist Thomas Friedman recently went so far as to ask the Mullah of an ultra fundamentalist Madrassa in Pakistan why he continued to drink to Coca Cola if he didn't like American foreign policy. "Because", the fanatic sage replied, "Coca Cola is sweet, but America's policies are poisonous". Many American and even European commentators seem to take for granted that a kind of mystical transubstantiation of "Americanism" takes place when someone in a far off land drinks a Coke or eats a "Big Mac" or just enjoys watching the bikini clad cuties of "Bay Watch". We could reflect that despite our having practically identical Chinese restaurants on nearly every street corner of the world few of us have been moved to sympathy with The Republic of China's policies toward Tibet, for example. Just as when eating sunflower seeds people nibble what they want and spit out the rest. It stands to reason that if the Americans can learn to play the world game of football at a decent level without in anyway losing their "Americaness", that other people can also learn to handle concepts and technologies that are considered American patrimony without becoming "American". Al Qaida's mastery of Internet and Jet aircraft comes instantly to mind. David Seaton

David Seaton's Energy Links®

Doubts Emerge on Business of Trading Electricity (New York Times)
Investors in power-trading companies are angry. Since last year, the value of their portfolios has dwindled by billions of dollars as the stocks of companies like the Dynegy Corporation, the Williams Companies and Reliant Resources Inc. have plummeted. Investors, and the companies themselves, maintain that the power business, particularly the buying and selling of electricity, has been unjustly tainted by the Enron scandal. They bridle at how quickly credit rating agencies have lowered the debt ratings of companies, leaving many hovering at levels that are barely investment grade. To survive, companies are paring their electricity trading units, once the engine of their earnings growth, and selling assets.
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Contents

Paper Trail Points to Roots of Energy Crisis (Los Angeles Times)
One fall day in 2000, in the midst of the California energy crisis, S. David Freeman found himself debating by telephone with Enron's Kenneth Lay, chief executive of the then highflying Texas energy firm. Freeman, head of the Los Angeles Department of Water and Power at the time, had joined other California officials in pushing the federal government for price controls as a means to rein in a runaway wholesale market. Government intervention, Lay warned Freeman by telephone, would not work. Extended price caps would keep the market from correcting itself, and frighten away future investment in power plants. Lay, as Freeman recalls it, ended the conversation with this parting shot: "Well, Dave, in the final analysis, it doesn't matter what you crazy people in California do, because I got smart guys out there who can always figure out how to make money." Looking back on it now, amid revelations about "Death Star" and "Get Shorty" and other colorfully named tactics concocted by Enron traders, Freeman figures he should have paid more attention: "What he was telling me, in a sophisticated way, was that they were going to game the system."
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Contents
Dark heart of the American dream (Observer)
There is a perverse beauty to the landscape arraigned below the iron bridge where Highway 255 strides the Houston Ship Channel: great towers of light and fire as far as the eye can behold; sinewy steel piping, plumes of smoke and flame twinkling into a Texas twilight coloured by a shroud of pollution hanging from the sky. The awesome prepotency of this smokescape is no illusion, for this is an epicentre of power, oil capital of the Western world and the most industrialised corner of the United States. It is also the capital of a power machine perfected in Texas, elevated to rule the nation and now unchallenged across the planet. A machine that operates in perpetual motion - an equilibrium of interests - between industry and politics. LaNell Anderson, former Republican voter, businesswoman and real-estate broker who lived many years in this land of smokestacks and smog, calls it 'vending-machine politics: you puts your money in and you gets your product out'. 'We don't see ourselves as a dynasty,' said George Bush Sr as his son launched the election campaign that won him the current presidency, raiding father's Rolodex to do so. 'We don't feel entitled to anything.' And yet at no point in the past 50 years - the half-century since 1952 which defines the modern age - has there not been a Bush in a governor's mansion (in Texas or Florida), on Capitol Hill or in the White House - and usually more than one of those at a time. The 'vending machine' is a single family whose tango with the powers which illuminate this endless horizon of light and flame is a dance around every corner in the labyrinth of Texan and now national - indeed global - politics. 'Everything they learned when they started out in west Texas,' says Dr Neil Carman, once a regulator of pollution in the state, 'they applied to the governor's mansion, the nation and the world... Power in America is not so much about George W Bush, it's about the people from Texas who put him there.'
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Contents

Corporate secrecy oils the wheels of poverty (International Herald Tribune)
While oil, gas and minerals are by far the largest sources of state revenue for the world's poorest nations, these resources, which should help fund development and sustainable economic growth, all too often turn out to be a curse, leading to increased poverty, child malnutrition and civil conflict. At the heart of this paradox is the secrecy surrounding payments by oil and mining companies to governments - a lack of transparency that provides the perfect cover for corruption and embezzlement by ruling elites. That is why Global Witness, 30 other international organizations and the international financier and philanthropist George Soros last week initiated an international campaign calling for legislation requiring companies to disclose payments they make to governments for the resources that they use. Global Witness is devoted to exposing links between the exploitation of natural resources and the funding of conflict and corruption. The organization's work in the world's conflict zones has highlighted the double standards of the world's resource extraction industries and the dispossession that results.
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Contents

The Conservation Bomb (MIT - Technology Review)
There will be 10 billion people on Earth by 2100—and all of them can live comfortably if advances in energy-saving technology continue. I have friends who otherwise like me but consider me morally depraved for thinking that the population bomb is not going to kill us all. It is an unpopular time to be an optimist. But a recent discovery in population dynamics, and a fascinating discovery I call "Rosenfeld's Law," may eventually drive the world toward a happier conclusion. The prevailing pessimism dates back to 1798, when Thomas Rohr Malthus wrote his "Essay on the Principle of Population," one of the most influential treatises ever published. "Population, when unchecked," he said, "increases in a geometrical ratio, and subsistence for man in an arithmetical ratio." In other words, population grows exponentially, resources grow linearly. The dreadful conclusion was that disease and famine were not only inevitable, but that they served an essential function in reducing population. Some politicians argued it was immoral to intervene. This bleak outlook gave economics its famous nickname: "The Dismal Science." Some think that Malthus was overly optimistic. 
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Iran Looking To Re-Establish Bosnian Presence (Stratfor)
The Iranian energy firm Petropars plans to invest in oilfields in Bosnia in the near future, the company's managing director told the Persian daily Asia June 11. The paper reported that economic delegations from Bosnia and Herzegovina had met with Petropars officials already. But such an arrangement appears odd, considering the dearth of hydrocarbon deposits in Bosnia and the fact that partially state-owned Petropars participates in few, if any, overseas activities. Instead, the deal appears to be a cover to allow large numbers of Iranians -- possibly intelligence agents -- to re-establish operations in the Balkans. Petropars was set up in 1998 to serve as an intermediary between foreign companies and Iran's Oil Ministry in handling development work at the country's giant offshore South Pars gas field. Since 1997 it has mediated $7.5 billion in contracts between the National Iranian Oil Company and companies like Shell. But Petropars has virtually no overseas projects and doesn't have a reason to be in Bosnia anyway. The country produces no oil or gas, and its underlying geology suggests few if any untapped reserves.
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Contents

Behind 'Plot' on Hussein, a Secret Agenda (Los Angeles Times)
President Bush has reportedly authorized the CIA to use all of the means at its disposal--including U.S. military special operations forces and CIA paramilitary teams--to eliminate Iraq's Saddam Hussein. According to reports, the CIA is to view any such plan as "preparatory" for a larger military strike. Congressional leaders from both parties have greeted these reports with enthusiasm. In their rush to be seen as embracing the president's hard-line stance on Iraq, however, almost no one in Congress has questioned why a supposedly covert operation would be made public, thus undermining the very mission it was intended to accomplish. It is high time that Congress start questioning the hype and rhetoric emanating from the White House regarding Baghdad, because the leaked CIA plan is well timed to undermine the efforts underway in the United Nations to get weapons inspectors back to work in Iraq. In early July, the U.N. secretary-general will meet with Iraq's foreign minister for a third round of talks on the return of the weapons monitors. A major sticking point is Iraqi concern over the use--or abuse--of such inspections by the U.S. for intelligence collection. I recall during my time as a chief inspector in Iraq the dozens of extremely fit "missile experts" and "logistics specialists" who frequented my inspection teams and others. Drawn from U.S. units such as Delta Force or from CIA paramilitary teams such as the Special Activities Staff (both of which have an ongoing role in the conflict in Afghanistan), these specialists had a legitimate part to play in the difficult cat-and-mouse effort to disarm Iraq. So did the teams of British radio intercept operators I ran in Iraq from 1996 to 1998--which listened in on the conversations of Hussein's inner circle--and the various other intelligence specialists who were part of the inspection effort.(...)The true target of the supposed CIA plan may not be Hussein but rather the weapons inspection program itself. The real casualty is the last chance to avoid bloody conflict. 
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David Seaton's Energy Links®
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