The Coming Climate-Related Business Failures

Recently, Der Trumpenführer set about trying to challenge the findings of the government's own environmental experts rather than admit that climate change is real and that significant policy changes are needed.  Most Republicans in elected positions are little better and continue to bury their heads in the sand.  A piece in the New Yorker argues that it will be private industry which will ultimately force policy changes as the costs of climate change damage the corporate bottom line or force some businesses to file bankruptcy and/or go out of business. The industry that may force the most rapid change is the insurance industry which will either cease insuring certain properties or types of business operations entirely or drastically increase premiums.  Coastal real estate coverage may be one of the first areas where rising insurance costs and increasing storm damage take a toll on property values and savage municipal tax bases.  Here are article excerpts:

On January 15th, the World Economic Forum issued its annual Global Risks Report, which presents the results of a survey of what policymakers and experts perceive to be the world’s greatest challenges and threats. The report categorizes concerns by color: blue for economic risks, orange for geopolitical risks, purple for technological risks, red for societal risks. This year, green, which denotes environmental hazards, was dominant: the top three risks, listed by the “likelihood” that they would occur, were extreme weather events, failure of climate-change mitigation and adaptation, and natural disasters. . . . “Is the world sleepwalking into a crisis?” the report’s authors wrote. “Global risks are intensifying but the collective will to tackle them appears to be lacking.”

The same week, as if to illustrate the point, the California-based utility company Pacific Gas and Electric (P.G. & E.) announced that it would be filing for bankruptcy protection as a result of costs related to recent wildfires in the state. Between June, 2014, and December, 2017, P.G. & E.’s equipment helped start some fifteen hundred fires, according to an analysis by the Wall Street Journal. Many were caused by falling trees that toppled power lines, which then threw sparks onto the surrounding grass and forest.

In 2017, seventeen major wildfires in California were connected to P.G. & E.; the fires destroyed 193,743 acres in eight counties and led to the deaths of twenty-two people. The fire season of 2018 was worse; the California Department of Forestry and Fire Protection reported it as the deadliest and most destructive season on record. P.G. & E. said that it was facing approximately thirty billion dollars in liabilities as a result of its role in the 2017 and 2018 fires.                     P.G. & E. may be the most high-profile company to date to face collapse for reasons linked to climate change, but it won’t be the last. Coastal real estate is likely to be one of the first sectors of the economy to see values plummet due to rising seas and damage from storms. This hasn’t happened yet, because insurance companies are still willing to insure coastal properties, which means that property owners won’t have to bear the cost of the damage. But this is likely to change in the not-too-distant future. The National Centers for Environmental Information, which tracks U.S. weather and climate events, cited 2017 as “a historic year of weather and climate disasters,” which together cost more than three hundred billion dollars and included three tropical cyclones, eight severe storms, two inland floods, a crop freeze, drought, and wildfires. At some point, insurance and reinsurance companies will decide that writing policies in high-risk areas no longer makes financial sense, which could trigger a sharp decline in real-estate prices. Bruce Usher, a professor at Columbia Business School who studies climate change and investing, told me that he foresees three kinds of climate-related risks that may cause companies to fail in the future: physical risks, policy-related risks, and technological risks. The changing environment may cause damage to property or facilities owned by companies, or it could fuel lawsuits and liability payments related to damage caused by companies to others’ property, as was the case with P.G. & E.

[C]limate change itself will make certain products—most obviously cars using internal combustion engines, which are likely to be replaced by electric vehicles—obsolete. The insurance industry has been aware of these risks for some time and has been conducting studies to try to quantify them. The rest of the business world is increasingly focussing on them as well.

If the coming climate-related business crises will have one positive side effect, it’s that acute financial losses are likely to force policy changes in a way that environmental damage on its own has not. As one commenter on a recent Wall Street Journal article about P.G. & E. put it: “When capitalists decide the scientists are right, then the free market will adjust accordingly.”

What is lacking now, he said, is focus by policymakers in Washington on making changes that could actually turn things around. “People in this field say, ‘We know what the problem is, and we know how to solve the problem,’ ” Usher said. Our politicians, however, “don’t have the willingness to do something. That’s where we are.”

The Great Unmasking: the Falsity of Today's "Conservatives"

I left the Republican Party and the so-called conservative moment nearly two decades ago as it became increasingly homophobic, racist, and dishonest - a trend that, in my view, directly correlates with the rise of evangelicals within the Party. Over the intervening years, things have only gotten worse with Donald Trump exemplifying the conservative movements descent into indecency and moral bankruptcy.  Since Trump occupied the White House, pretty much everything conservatives have claimed to stand for over the years has been shown to be a lie as deficits have ballooned, free trade is under attack, and we witness a meddling in the market to benefit specific industries, and the environment is trashed. Meanwhile, white Christian religious extremists and white supremacists are ascendant.  A column in the New York Times looks at this unmasking of today's false conservatives.  Here are column excerpts:

If there is any lasting benefit from the Trump era — which is by no means a sure thing, since democracy may not survive the experience — it will lie in the Great Unmasking: the revelation of just how much bad faith pervades modern conservatism.

Some of us, of course, knew this all along, and are not surprised. Conversely, many centrists and much of the news media simply refuse to face up to the asymmetry of our politics and will persist with bothsidesism even as one side drives us into the abyss. But one can at least hope that the constant revelations of past hypocrisy will have some impact.

These revelations come on many fronts. Flag-waving super-patriots who called Democrats unpatriotic are perfectly OK when Republicans actively collude with foreign dictators. Pious invokers of fiscal responsibility and hysterical debt alarmists are perfectly OK with tax cuts that explode the deficit. Professors who denounce campus political correctness as the greatest threat we face to free speech collude with right-wing activists to conduct opposition research on left-wing students.

Rather oddly, some of the few people on the right who really seem to believe what they were saying are foreign policy neoconservatives. They misled us into a disastrous war; but they appear to have been sincere about their national security concerns, and are among the few Republicans who remain steadfast in their Never Trumpism.

Over the past 40 years or so conservatives have become ever more strident in their attacks on environmental protection. They questioned the science; they insisted that any attempt to limit emissions would greatly damage economic growth; they denounced government intervention and declared the sanctity of free markets.

But none of it was sincere. Climate skeptics have repeatedly given the game away, for example by touting new studies that they insisted would refute global warming, then rejecting those studies when they confirmed it. Economists who tout the limitless ability of markets to cope with change suddenly proclaim them utterly incapable of adapting to a carbon tax.

And now all that talk about free markets is revealed as the sham it always was.

Ten years ago the big debate was whether we should adopt a comprehensive strategy to limit greenhouse gas emissions. For a while it seemed possible that we’d adopt a cap-and-trade system that would in effect place a price on carbon. That effort failed . . . however, technology has been coming to our rescue. The single biggest source of greenhouse emissions, the thing we really need to stop, is coal-fired electricity generation (which has lots of other public health costs too.) And a funny thing happened: coal-fired power became uneconomical. Instead of building new plants, we’re retiring old ones.

Partly this was the result of cheap natural gas thanks to fracking. Increasingly, however, we’re looking at the effects of the technological revolution in renewables, which has produced spectacular declines in the cost of wind and solar power.

So is the Trump administration accepting this market verdict? Of course not: as with trade, it’s abusing powers granted to defend national security on behalf of destructive policies that have nothing to do with security. In this case, it’s planning to force clean energy to subsidize dirty energy.

Why? Probably the main reason is sheer corruption: coal moguls are key Trump backers, and he’s trying to reward them. But there’s also, I suspect, the sheer mean spiritedness that characterizes modern conservatism: “Liberals want clean energy? Hah! We’ll show them!”

[I]t’s yet another demonstration of the pervasive bad faith of the conservative movement. Nothing they said about their reasons for opposing climate policy were sincere, and now they’re perfectly willing to ditch all their supposed principles to keep the coal fires burning.

Taking the South's Pathologies Nationwide

I have lived in the South for more than 2/3's of my lifetime at this point although, thankfully, the Hampton Roads area of Virginia becomes a little less Southern with each passing day in part because of the constant rotation of military members and their families through the area.   Alabama and Texas where I also lived in the past and much of the rest of the region are akin to someone with a significant case of bi-polar disorder who refuses to remain on their medications.  Some days one sees sweetness and light and graciousness and others one sees racism and bigotry and the embrace of ignorance that is downright chilling.  Some southerners live in a fantasy world where they are akin to the Saxon nobles in Ivanhoe resisting the Norman ascendancy.  Others embody the worse elements of the Klan and/or religious extremism. Despite its proclaimed religiosity, the Bible Belt has the highest teen pregnancy rates, the highest Internet porn usage, and the highest divorce rate.  Education levels also are among the lowest in the nation.  Now, Donald Trump and the Republican Party want to spread this dysfunction nationwide.  A piece in the Washington Post looks at this disturbing prospect.  Here are highlights:  

Have you ever wondered what it would be like to live in Mississippi or Alabama? Well if the GOP has its way, you’ll get the chance to find out.

That’s because Donald Trump and congressional Republicans, through the executive branch leadership now being assembled and the legislative priorities they have laid out, are preparing to take the economic, political, and social arrangements of the South and spread them across the country.

The desire to southernize the entire United States is not new, and in some ways it’s been happening for a while, at least where Republicans have control of government. But now that Republicans have complete control in Washington, they’re going to try to accelerate and deepen that process. Let’s look at it piece by piece:

The Southern economic model. The first and most far-reaching component of this project is to take the Southern economic model national. The foundation of that model is the elimination of collective bargaining and the destruction of the labor unions that are able to negotiate higher wages and better benefits for workers. The Southern model replaces the North’s high-wage, unionized manufacturing with a low-wage, low-benefit version that has succeeded in drawing many factories southward. Southern states have lured companies with gigantic tax breaks and the promise of a powerless and desperate workforce. The result is often more jobs in those Southern states, but worse jobs. . . . multiple forces including the crippling of unions and the emergence of Walmart as the nation’s largest retailer have acted to pull wages and benefits across the country down toward the South’s level.

Yesterday we learned that Trump will nominate Andrew Puzder, the CEO of the fast-food company CKE Restaurant Holdings, to be Secretary of Labor. . . . . Puzder is an ardent opponent of minimum wage increases, expanded overtime pay, paid sick leave, health coverage for workers, and collective bargaining. While he’s toiling at the Labor Department for the interests of corporations, Republicans will almost certainly try to pass a federal “right to work” law — the kind now in force in states across the South — as part of their effort to destroy labor unions once and for all.

The Southern health care model. The Republicans’ first legislative priority is to repeal the Affordable Care Act, and while we don’t yet know what form that repeal (or its replacement) will take, the people most vulnerable are the estimated 12 million who would lose the coverage they gained because of the law’s expansion of Medicaid. Nineteen states refused to accept that expansion, preferring to keep their poor citizens uninsured . . . . the largest group of states was in the South: 10 of the 11 states of the Confederacy (Louisiana being the sole exception) refused the Medicaid expansion. 

The Southern education model. Trump’s nominee for Secretary of Education, Betsy DeVos, is not an educator or education administrator; using her wealth as the wife of an heir to the Amway fortune, she has devoted her efforts to essentially trying to destroy public education in her home state of Michigan and in America more generally. DeVos advocates for vouchers that can be used at private and religious schools, and for the expansion of for-profit charter schools with as little oversight as possible. . . . . it’s a system that is particularly strong in the South, where not only charter schools (which have support in many places) but private vouchers (which have far less support) are prevalent.

The Southern civil rights model. For his Attorney General, Trump picked Alabama’s Jefferson Beauregard Sessions III, named for the president of the Confederacy and a Confederate general. Sessions was rejected by the Senate in the 1980s for a judgeship because of his history of what these days we call “racially charged” comments. His most famous case as a prosecutor involved his unsuccessful prosecution of a former aide to the Rev. Martin Luther King Jr., whom Sessions went after for helping elderly African-Americans to vote absentee. While we don’t know exactly what Sessions’ agenda is, it’s a fair bet that vigorous enforcement of civil rights protections will not be high on his list.

In addition, Republicans will almost certainly be taking their voter suppression crusade national, especially given how successful it has been in putting up voting barriers to African-Americans, Latinos, and other people who might cast ballots for Democrats. Look for federal versions of voter ID laws, limits on early voting, and bans on same-day registration.

The Southern abortion rights model. As I’ve explained, not only are Republican eager to overturn Roe v. Wade; even with that precedent intact they may try to pass federal laws that make the whole country like the South when it comes to abortion. That would mean that it’s technically legal to get one, even as a series of onerous laws targeting both abortion providers and the women who seek abortions make them extraordinarily difficult to obtain.

The Southern environmental model. Trump has named Oklahoma attorney general Scott Pruitt to be administrator of the Environmental Protection Agency, in a clear sign that he believes the first two words of the agency’s name are no longer operative. This too could represent a nationalization of what prevails in the South, where officials in Republican-dominated states see environmental protection as essentially a nuisance for corporations and the most pressing environmental question is how many wells we can drill.

During the 2016 campaign, some commentators noted that Donald Trump’s rhetoric bore a disturbing resemblance to the backlash to Reconstruction a century and a half ago. Now, as one constitutional scholar recently told this blog, it’s not unreasonable to expect “the beginning of the end of the Second Reconstruction.”

Think of what is worse for the majority of Americans and that more or less sums up the Trump/Republican agenda.  The wealthy and large corporations will thrive, but the rest of us not so much.  

Too Many Risks to Virginia Offshore Drilling?

President Obama has indicated that he wants to open areas offshore from Virginia's coast for oil and gas exploration.  The move has outraged environmentalists while thrilling Virginia Republicans who never seem to pause to worry about potential disasters that could happen.  As always, there is talk of creating new jobs, but as a former in-house attorney for a major oil company some years ago, I remain very skeptical about boasts of the number of jobs created.  From my experience, most of the technical workers would be imported in from elsewhere and send their earnings back to their home states and at best Virginia would see increases in rentals of some office space, residential housing rentals, and some small amount of business for local marine suppliers.   A column in the Virginian Pilot looks at the risks involved.  For those who don't know, the American Petroleum Institute is a lobbying arm of the major oil companies and its "studies" are about as reliable as something coming out of The Family Foundation on gays.  Here are excerpts:

IT TAKES a lot of assumptions to conclude that offshore drilling will benefit Virginia:

-- That the Navy will reverse years of analysis and decide that drilling poses no danger to its training mission offshore or its installations onshore.
-- That oil companies won't imperil Hampton Roads' tourism and commercial fishing with a spill, as has happened everywhere else.
-- That despite years of resistance, every state in America will now agree to simply hand over royalties to Virginia.
-- That Maryland and North Carolina won't care when Virginia tries to seize their territory.
-- That oil jobs - notoriously transient and temporary - will abandon places like Texas and Louisiana for Hampton Roads.
-- That a time with some of the lowest gas prices in recent history is also the time to start drilling for some of the most expensive oil and gas on the planet.

Despite all that, the White House' decision Tuesday to allow drilling off four Southeastern states was cheered by pro-petroleum politicians and their supporters. Among the parcels included was "Lease Sale 220," off Virginia's coast.

The federal decision comes less than five years after the 2010 Deepwater Horizon explosion in the Gulf of Mexico. That disaster killed 11 and fouled huge swaths of the Gulf of Mexico. The environmental damage is inestimable.

The scope of the Deepwater Horizon disaster temporarily halted efforts to open Virginia's coast, but memories are short. Politicians from Virginia Beach Mayor Will Sessoms to U.S. Sens. Mark Warner and Tim Kaine cheered this week's decision.

U.S. Rep. Scott Rigell, as he has before, claimed that offshore drilling would "create 25,000 good-paying jobs for Virginians." The source of that number - which has risen from 19,000 in recent years - is a study commissioned by the American Petroleum Institute. The same report concludes that Atlantic coast offshore drilling would produce 279,562 jobs by 2035.

It's not likely to do so without imperiling others.   The U.S. Navy uses the Atlantic Ocean off the coast of Virginia for training. In 2010, the military concluded that 72 percent of the "Lease Sale 220 area should have no oil or gas activity due to our intensive training and testing in the area and the danger this would present to oil and gas industry personnel and property."

Sessoms, Warner, Kaine and Rigell - indeed, every elected official in Virginia - is acutely aware that Oceana Naval Air Station was nearly gutted in 2005, after the Defense Base Closure and Realignment Commission decided houses and businesses had been allowed too close to the fence line. There was serious consideration of moving the Navy's East Coast master jet base to Florida, a prospect that would have hollowed Hampton Roads.

Navy officials aren't likely to welcome drilling in the Virginia Capes, especially after the military has warned repeatedly of the dangers, including in 2006:

"Any structures built in the water... would restrict where military air wings can fire their weapons, drive aircraft further away from the coast, increase fuel costs and wear and tear on the airframes, increase flight times en-route to training areas, and increase the risk to aircrews...."

No matter what great benefits proponents promise, the dangers are real: To Navy operations, to the environment, to the tourism industry, to commercial fishing.

None of these cautions is likely to deter drilling supporters, who've proven themselves willing to make the assumptions necessary to support the petroleum industry. Experience shows the dangers are more likely than 279,562 jobs.

The threats are greater than the promises that the Hampton Roads economy and environment won't be damaged by an industry with a long history of destruction.

Sadly, I agree with the editorial, not that this will deter the pawns in the pockets of the petroleum industry.

Natural Gas is Not America's Energy Solution

The oil and gas industry, rather than diversifying and investing heavily in solar and wind power, continues to chant a mantra of "drill, baby drill" like the cretin from Alaska so popular with brain dead Republicans.   A new part of that mantra is that natural gas is going to deliver America from foreign oil dependence and save the environment.  Like much of what comes out of the oil and gas industry the ads run by Exxon, BP, and the Petroleum Institute don't tell all of the story.  As I not in my not yet published October column in VEER Magazine, I was once an in-house lawyer for an oil company, so I understand the intricacies of oil and gas exploration and the side effects of secondary and tertiary recovery not t mention fracking.   A column in the Roanoke Times calls attention to some of the ignored costs of the natural gas obsession.  Here are highlights:

Natural gas is indisputably cleaner and cheaper than oil or coal, a factor that makes it desirable for a nation that, until now, has been fearful of being dependent on foreign energy sources. Our country has been energized by the natural gas boom, which may not peak until 2030, allowing us to sell some of this valuable fuel, whose smaller carbon footprint makes it desirable worldwide, especially to our European friends who are tied to Russian energy sources and their unpredictable reliability.

To find the true cost of natural gas, however, requires including ancillary costs that are not part of the business model: the cost that communities accrue in their doing or having done business with the power companies; the unbudgeted costs of disaster clean-up; reduced land values where pipelines cross; remediation of by-spills from leaking pipes that invade the water table.

Ryan Hankins, in his Aug. 21 commentary (“Don’t blindly oppose pipeline based on fear”), asks us not to “blindly oppose” the Mountain Valley Pipeline “based on fear.” It would be a blessing to be “blind,” to not know so much about the havoc being wrought by this industry The pipeline to which he refers is but one of many “straws” sucking from the Marcellus Shale, siphoning off the dwindling supply of natural gas.

The natural gas industry, in its hydraulic fracturing process, requires 2 billion gallons of water a day, according to the Government Accountability Office. Fear instructs me that once approved by the Federal Regulatory Commission, the proliferation of these natural gas pipelines will encourage the growth of fracking along its length, in spite of Gov. Terry McAuliffe’s assurance that he will not allow it in the George Washington National Forest. And where will the water come from? And where will the toxic wastewater go?  . . . . Gov. Christie of New Jersey recently vetoed a law passed by his legislature that would have prevented importing and disposing of wastewater from other states.

Not mentioned in the column is the increased frequency of earthquakes in areas where fracking is active.  Too many Virginians forget the dangers of increasing earthquakes in central Virginia where the North Anna nuclear power plant sits near fault lines.  And lets not forget the vulnerability of the Lake Gaston watershed that provides a huge portion of the water for south Hampton Roads. The cost of expanded natural gas production in Virginia could be huge when these elements are factored in.