Thursday, June 5, 2008

Enron’s other scam: going “green”

Some may wonder why certain large U.S. corporations, bucking expectations, seem almost welcoming about the tidal wave of “greenhouse gas”-related regulations bearing down on them. But it’s not necessarily motivated by altruism, high-mindedness or some pangs of corporate guilt about leaving large carbon footprints behind. Some may simply be bowing to reality and inevitability, hoping that jumping aboard the bandwagon early (in addition to being good PR) will prompt the politicians and regulators to go easy on them. Others see an angle, and an opportunity to be exploited, in it.

One CEO who early-on saw the profit-making potential in playing the green game was Enron’s Ken Lay, as this eye-opening column in the Houston Chronicle recounts: “Under Lay, Enron championed a host of government-supported "green" energy initiatives, all designed to help its businesses, from natural gas to electricity trading to wind farms,” Loren Steffy writes, quoting a former Lay aide who says he wasn’t quite the free-marketer he seemed. Rather than fight government regulation and intervention, Lay the game-player embraced it, angling for ways to cash-in. Half-hearted energy deregulation meant huge profits for Enron, while imposing a lot of pain on energy consumers.

But the fall of Enron didn’t end the story (perhaps because this part of the Enron scam has been ignored or glossed over): on the contrary, the gaming of the political and regulatory system by supposedly “green” companies goes on -- and on an even grander scale than in Lay's day. A whole new “parasite industry” has been born, as the column suggests, thanks to the mania for "renewables" and biofuels. And it will only grow when Congress gets done with its climate change work.

Ken Lay’s Enron today stands as a symbol of political string-pulling, cynical market manipulation and unbridled greed. But most of the finger-waggers tell only part of the story. Perhaps, in the not-too-distant future, the same condemnation will be heaped on the spate of “parasitic industries” that are following in Lay’s footsteps and cashing-in by going "green."

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