Halliburton Could Win Big with New Energy Bill

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.

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.