December 1, 2009

Power Politics: Enron Lives!

Robert L. Bradley, Jr.

Cap and Trade = More Corporate Welfare

Fast forward to today. Aubrey McClendon and the U.S. Natural Gas Alliance have grabbed the mantle of Ken Lay and Enron by embracing climate legislation with a pro-gas flavor. Like T. Boone Pickens, McClendon wants special government favor — differentiated tax incentives and/or mandates for natural gas as a transportation fuel (at the expense of oil) and as an electricity generator (at the expense of coal). Increasingly, it is becoming clear that climate legislation is more about corporate welfare and political capitalism than about meaningfully reversing the human influence on climate.

President Obama’s energy/climate policy is all about the two things that Enron wanted most in its lifetime — cap and trade and a federal renewable standard. (Enron did secure a renewables mandate for Texas back in 1999 — the single most important reason for the U.S. wind power boom.) This is why I have referred to the Waxman-Markey climate bill as the Enron Revitalization Act of 2009.

Historians will document the role of Ken Lay as the grandfather of Waxman-Markey. But who is the father of cap and trade, you might ask? That title goes to a former Enron executive and Ken Lay protégé who took his get-out-in-front political model to the electric utility industry and was instrumental in the U.S. Climate Alliance Coalition’s drafting of what became HR 2454. But that is a story that must wait for another time.

Enron Lives!

—Robert L. Bradley is CEO of the Institute for Energy Research and a blogger at Master-Resource.org. His new book, Capitalism at Work: Business, Government, and Energy is inspired by the rise and fall of Enron.