Halliburton Could Win Big with New Energy Bill
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This week, members of the Senate and House will begin their conference to resolve the differences in the energy bill. The 800-page Senate version of the bill comes at a price of $18 billion in annual tax incentives plus $40 billion or so in authorized expenditures over the next decade (the House version totals are in the $90 billion range). The bill includes everything from unprecedented subsidies for nuclear power to buried treasure for New Deal-hating financiers, like the repeal of PUHCA, the Public Utilities Holding Company Act.
PUHCA repeal, as discussed in my earlier article, Exponential Enrons Ahead, would radically change the structure of the US utility industry and open the regulatory doors to massive consolidation. With PUHCA gone, for the first time since 1935, there would be no restrictions on utility holding companies. Among other things, holding companies would be free to raid the assets of utilities to feed speculative investments in completely unrelated businesses -- just the kind of behavior that Enron engaged in with such disastrous results. Another change would be opening up US utility ownership to foreign investors. For more on this, read Lynn Hargis' perspective on Truthout, When China Owns Our Utilities.
One of the strangest things about the PUHCA repeal story is how completely it has been blacked out of the mainstream media. Until recently, the only stories to be found on the issue were in the business press.
Since my June 23 article, a few (a very few) mainstream newspapers have picked up the story.
Most papers around the country ran a summary of the energy bill during the week it that it passed the Senate, but amazingly, only one paper even mentioned the PUHCA repeal provision. The Daily Herald (Provo,UT) ran an article titled Lawmakers Praise Energy Bill, with the following information:
The energy bill would repeal the Public Utilities Holding Company Act of 1935 -- PUHCA for short.
Supporters of the repeal say it would improve competition and allow new money and innovation to improve efficiency and reliability.
But repeal also would allow companies like Enron or Halliburton to buy up utilities with little state or federal oversight, critics say. Partial repeal of the act a few years ago, led to the Enron debacle and the energy crisis in California.
The repeal would make mergers easier, but it also would make it more difficult for state agencies to protect consumers, regulators say.
A few days later the Citizen Times (Asheville, NC ) published a fairly in-depth article titled: "Let's slow down and really examine energy bill -- especially utility deregulation."
And that's it. The sum total of American newspaper reporting on the dismantling of one of the last keystone provisions of FDR's New Deal. It's a puzzler. As Lynn Hargis, the attorney with Public Citizen who is most closely following this issue says, "It doesn't matter if you think PUHCA repeal is a good thing or a bad thing, but you can't say it's not a BIG thing!"
A trillion dollars worth of utility assets are about to be deregulated and no one knows about it. Hargis said that she and other lobbyists at Public Citizen have talked at length with the New York Times, the Los Angeles Times, the Wall Street Journal, and the Washington Post about doing a story, but nothing has yet appeared. The Washington Post held on to Hargis's Op Ed piece for ten days and then rejected it, "after it was too late to have an impact," she said.
Those who follow corporate conspiracies might note that billionaire Warren Buffet, who has made PUHCA repeal a personal priority and thrown millions into lobbying efforts, owns a 20 percent share of the Washington Post and sits on the company's board.
PUHCA repeal is in both the House and Senate versions of the bill, so it might seem like it's too late to stop this train, but passage of a final energy bill is far from certain. Several things could still derail the bill -- the biggest item would be the liability shield for manufacturers of MTBE, a gasoline additive that pollutes groundwater. It's in the House version but not the Senate, and Tom DeLay won't snuff it for anything because, after all, he IS the government. And with a real ethics investigation hanging over his head, he probably can't afford to let it go because he will need endless cash from MTBE manufacturers to keep himself out of jail.
But if DeLay is somehow neutralized, PUHCA repeal could become the issue that kills the energy bill. The Senate version couples repeal with some additional oversight authority on utility mergers granted to FERC, the Federal Energy Regulatory Commission. A number of senators supported PUHCA repeal only because of the addition of FERC oversight. If the House Republicans succeed in pulling that provision out of the final version, it may prompt Senators like Maria Cantwell and Barbara Boxer to vote against the bill in the end. But that's not likely to happen if the general public remains in ignorance and senators hear nothing but silence from their constituents.
Fortunately, mainstream media is no longer the only alternative. The blogosphere has taken up the issue, most notably at Daily Kos where several hundred people have weighed in with concerns and comments.
One concerned citizen has started an online petition at PetitionOnline.com.
Navin Nayak, an environmental advocate with PIRG, says that people who are concerned about PUHCA should contact their senators immediately. In seems a shame that the only way to stop PUHCA repeal at this point is to kill the energy bill, but Nayak maintains that despite a few positive provisions in the Senate version benefiting renewable energy, the bill is "essentially the same old thing, resulting in more pollution and more dependence on oil." It's not worth saving.
And, if you contact your senator and he or she tells you that PUHCA isn't needed because increased FERC oversight will give consumers all the protection they need, ask if they know who President Bush just appointed as director of FERC. The answer is Joseph Kelliher. Kelliher was Dick Cheney's point man in organizing the secret energy task force that drafted much of the energy bill.
When Sierra Club and Judicial Watch sued Cheney over the conduct of that task force, several emails came to light that showed just how solicitous Kelliher was toward industry desires. In a March 10, 2001, email, Kelliher asked an energy lobbyist if he were "King" or "Il Duce," what would he include in a national energy policy?
Whose interests do you think Mr. Kelliher will look out for? Yours? Or "Il Duce's?"