Powering Down

Everyone is aware of Obama’s suppression of the Keystone XL pipeline project.  But the legal, regulatory, and PR assault against critical infrastructure construction goes far beyond this. WSJ reports that:

Many major fossil-fuel projects across the U.S., from pipelines to export terminals, have been shelved or significantly delayed because of a confluence of new regulations, grass-roots opposition and a drop in energy prices.  Overall, more than a dozen projects, worth about $33 billion, have been either rejected by regulators or withdrawn by developers since 2012, with billions more tied up in projects still in regulatory limbo.

Among the projects that the WSJ article identified as ‘cancelled’ were the $875MM ‘Constitution’ gas pipelines for the Northeastern US and the $3 billion “Northeast Direct” for the same region.

Natural gas is, of course, a major source for generating electricity, and the only practical way of getting the gas to the power plants is via pipeline.

(The CEO of New England’s power grid operator), said pipeline) projects are badly needed. Residential consumers in New York and New England paid between 5% and 41% more than the national average for natural gas in March, the latest month for which data were available. They also paid more for electricity, which itself is increasingly made with natural gas. 


When I was in Georgia recently, I saw a very professionally done brochure calling for the suppression of a pipeline project–I believe this was the Kinder Morgan Palmetto pipeline. This was not your typical political or ‘activist’ direct-mail piece; it was of high printing and photography quality and I’d be surprised if these pieces cost less than a dollar each to produce.  Considerable money is being devoted to ‘stop the infrastructure construction’ movements across the country.

Here’s the great French scientist Sadi Carnot, writing in 1824:

To take away England’s steam engines to-day would amount to robbing her of her iron and coal, to drying up her sources of wealth, to ruining her means of prosperity and destroying her great power. The destruction of her shipping, commonly regarded as her source of strength, would perhaps be less disastrous for her.

For England in 1824, substitute the United States in 2016. And for “steam engines,” substitute those power sources which use carbon-based fuels: whether generating stations burning natural gas, blast furnaces burning coke, or trucks/trains/planes/automobiles using oil derivatives–and, especially, the pipelines and railroads that transport these energy sources.

(I’ve written several earlier posts on the ‘Powering Down’ theme; summaries and links here.)

Disclosure:  I’m an investor in gas, oil, and other pipelines.

9 thoughts on “Powering Down”

  1. I think you are missing the Carnot quote.

    This is a disturbing trend. Trend may not be the right word. It must be something deeply ingrained in our DNA. This anti progress tendency.


  2. One thing to consider: a Democratic presidency, by Clinton or any other likely Dem candidate, surely means a continuation and acceleration of this kind of thing.

    And the crippling economic consequences thereof would surely drive even more toxicity in American politics.

  3. As with the Nuclear Freeze movement and other left-wing Cold War initiatives, we may learn eventually that today’s activism against domestic energy development is funded by the Saudis, Russians, and perhaps others of our foreign competitors.

    This is all part of a general problem of hidden influence-buying in open societies by foreigners. For example, in Israel the Right and Center-Right have been trying, with some success, to expose foreign funding of Israeli left-wing NGOs that oppose the policies of elected govts. In the USA there is evidence of attempts to influence our politics by the Chinese and others using laundered political donations and more-direct forms of subversion.

  4. This is all part of a general problem of hidden influence-buying in open societies by foreigners

    This is going on but there is a more troubling practice taking place, the Justice Dept. sues a corporation, the corporation settles and a condition of settlement is that instead of all of the settlement payment going to the government, a good portion of it is directed to Lefty non-profit groups.

    Foreign corruption is a pretty straightforward issue dealing with foreign corrupters and domestic, private sector, corruptees, but this settlement practice means that government itself is the shake-down artist, the corrupter and accomplice to the corruptee. It’s gangster government.

    Now, understanding that we have gangster government, why would any rational people expect the gangsters to do the right thing and go after foreign corruption when the corruptees are aligned with the gangsters in government?

    What we really need is a massive housecleaning, hopefully led by Trump, which puts non-profit execs in jail, along with Dept. of Justice attorneys, gets settlements given to non-profits returned to the corporations or to the Treasury.

  5. “instead of all of the settlement payment going to the government, a good portion of it is directed to Lefty non-profit groups.”

    This is pretty common even at state and local level. In California, even ten years ago when we had more honest government, the public interest law firms, the Legislature and the developers had a deal where they would sue the small cities claiming inadequate “affordable housing.” The Legislature would then pass new laws raising the requirement for “affordable housing” and the developers built the Section 8 housing. Then the developers would fund the “public interest law firms” and probably contribute big bucks to the Legislature.

    It was an iron triangle.

  6. The paying of settlements to the “non-profits” is a means of evading the Constitutional requirement that funds be allocated by Congress (or, in states, by the Legislature).

    If there is an identified class of victims, the money should be divided among them.

    If it is infeasible to identify individual victims, then the money should be paid to the US Treasury.

  7. Note also that the WSJ today, 6/6/16, has an article on the difficulty of improving rail access to various American ports. Resistance from the same groups.

  8. Thanks, Stan. From the article:

    “Union Pacific has been locked in what it calls ‘environmental review purgatory’ at the ports (Los Angeles and Long Beach) for nearly a decade as it tries to double capacity to handle 1.5 million containers annually.”

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