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Monday, November 2, 2009

The energy tax credit scandal

This story has got the right wing up in arms, and it ought to have the left wing pretty riled up, too. One of the reasons that the State of Oregon is broke is that its wonderful Energy Department deliberately low-balled -- and by a hilarious margin -- the cost of the state's reckless energy tax credit program when it was going through the legislature.

Everyone in Salem is denying that there was any willful fraud, except for one guy in the department who has owned up to the truth (a brave soul) and another one who quit the department a long time ago. One of those in the loudest denial is Governor Ted, who's shocked -- shocked! -- at the whole thing. This is the same guy who was stunned at the disgusting revelations about Neil Goldschmidt, to whom he owes his career and to whom he gave all sorts of official powers. There's always something terrible going on right under Ted's nose, and he never seems to notice until it's in the papers. Amazing.

The guv also vetoed a bill that would have fixed the problem. He won't be able to deny that.

A couple of decades ago, I saw a little bit of the state Energy Department from the inside. I was appointed by then-Gov. Barbara Roberts to a Hanford advisory committee. I concluded after a year or so that the whole thing was a charade. My name and time were being used to foster an image of public involvement that was far from the truth. The number 1 priority of the bureaucrats in Salem seemed to be keeping their own jobs, and number 2 was not making too many waves about Hanford, in case they might be looking for a job there themselves some day. There was a grand total of one guy in the place, a geologist, who was a straight shooter. The rest never looked you straight in the eye. I quit.

Salem's an odd burg, and Energy is one of the weirder corners. On this one, even Len Bergstein, another Goldschmidt pal, pops up -- flacking for one of the companies that's milking the taxpayers for all they're worth. This one ought to be a movie, with a scary soundtrack.

Comments (24)

This is the kind of news we need, and the kind that will be lost in the shuffle when our local papers finally go under.

Hey, this is govt, come up with an idea, jigger the numbers around to make it look like it just might work (even though they know it won't) to get it passed and then pray.

PGE Park, tram, OHSU expansion, etc. and, unfortunately, national health care.

Do you suppose the Guv ignored the problem because it stood in the way of his legacy building. I mean, this dude wants to be the Guv who started the Green Revolution in Oregon, isn't he?

First, will Kulongoski at last step out from behind his flacks and lawyers and answer tough questions from reporters in a public forum?

Second, did the companies that benefited from the tax credits contribute to Kulongoski's 2006 campaign fund, and/or the slush fund he established right after the election?

Third, what will Kroger do?

Pick a number, any number - oh wait, we don't like that number, screw with it, make it smaller. There ya go, that number will fly.

Yes, it has no connection with reality, but so, we do this all the time. Yes, that's the number we like, we'll go with that one.

The state is also not telling the truth about how much revenue will come from the higher personal and corporate taxes. They assume people will not change their actions when faced with higher rates. They called that being "conservative" when it is actually unrealistic.

Give the Oregonian credit on this one. We wouldn't be having this conversation if it weren't for some good reporting from Portland's daily.

Don't forget the most scandalous thing of all: BETC deductions can (and are) sold in an aftermarket, at a very steep discount.

So, say some ethanol or biodiesel scammer gets a big pile of BETC --- what good does it do them, they're losing money hand over fist. So they SELL the credits (at a big discount) to a more profitable business, which has made no improvements at all. Biofuels scammer pockets the cash (typically 1/3 of the credits nominal value) and big buyer deducts the whole value of the credits, thus sinking the state budget even further into the red.

Thus, we have the spectacle of energy tax credits given to industries that are WORSE for the environment than petroleum in the first place, with those credits then being essentially turned into securitized investments to help companies avoid taxes.

For the soundtrack:

Dirty Back Road
(Ricky Wilson & Robert Waldrop)

Wreckless drivin', like a sportscar
God I want you, like a fuel engine!
Energized line, like a road
You-oo-oo-oo--oo ride me-ee-ee-ee-ee
Like a road
You-oo-oo-oo--oo ride me-ee-ee-ee-ee

Foot on the peddle
Feet in the air
Sand in my hair
Oh, don't look back
Don't look behind you
Wreckless drivin' on
Dirty Back Road



"Party Out of Bounds"?

Seldes, your post solidifies why I am against the national Cap&Trade legislation now before congress. Oregon's BETC deal is the same as the national.

What also perplexes me, is the Oregonians inability to connect Sunday's article to earlier articles on solar credits that were recently given to 30 homeowners in one neighborhood here in Portland.

The O lauded the "sustainability", "green" of it all. They wrote that each homeowner was paying only $3000 to $4000 for their electrical generating solar panels. They didn't play up the fact that over 80% of the real cost ($35,000 to $40,000) was being subsidized by Fed, State, City and EcoTrust grants and tax subsidies.

Plus there's the BETC element to this neighborhood giveaway. All the rest of us are essentially paying for this neighborhood's "greenness".

Why can't the Oregonian really tell the whole story and connect the dots in all of their sustainable articles? Same goes for the Tribune and Willamette Week and Channel 2 and 8 that ran the same story and many other sustainable features.

aka Cap & Charade.

Lee, while I'm also opposed to the cap and trade concept, I don't think it's correct to say that it's the same as the BETC, which is theoretically unlimited (whereas the number of carbon credits that could theoretically be created is set by the total of emissions).

The straightforward alternative to the cap and trade foolishness is a green tax shift, reducing taxes on the things we want our economy to produce (jobs, investments, wages, earnings) and increasing taxes on the things we don't want (pollution, toxic wastes). Then there's no need for cap and trade jacking around and you don't have to create a market for funny business with selling phony offsets and all the other crap that makes the banksters salivate.

Matt Taibi in Rolling Stone called cap and trade the next great money making boondoggle for Goldman Sachs.

Maybe - just maybe - this article will wake some of the voters in Portland up when it comes to more BS from City Hall about any projects they deem to be "Green", "Sustainable", or "Eco-Friendly". All code for getting your pockets picked by a few well connected "friends" of the politicians. Isn't about time someone called out Randy Leonard on his bio-diesel and ethanol boondogles?

Goldman Sachs is a little late the party - Al Gore has been working with carbon emissions traders for several years now. Guess who benefits from the "global warming" I mean "climate change" debate there?

As for Kroger - this guy didn't have the political will to take on Samadumbs, but you really expect he will go after Klug during his lame duck year? And yes, he has been lame far more than just a year.

Nice to see the Governor at the Sanyo ceremony today, busting open that sake keg. Don't worry, your ceremonial robes will protect you from the splash.

Let's see, $40M of tax credits over five years, for an estimated 200 jobs. That's $200,000 per job, or more if they don't reach that goal.

Do you suppose that the state will see more than a small fraction of that come back before the venture fails, or they move on to the next sucker state?

What's more, photovoltaics aren't green to produce -- it takes a lot of energy, water, and harsh toxic substances to make those. That's why you need a factory to begin with. And there's waste.

Not so green after all.

That's what slays me about this whole green tech thing - making photovoltaics is a very un-green industrial process. Can you say "gallium-arsenide"?? Fits right in with Oregon's long-standing tradition of raping the environment for fun and profit.

Let's not get too technical and research too deep. Sam, Dan and Randy's staff, the Sustainable Planning Bureau staff, EcoTrust, and all the other generally young staff who may have graduated in Polysc, English Lit. or sociology and never held a job outside of government (or even a job) won't be able to follow your thinking on "sustainability".

It's a religion, just have Faith. Don't critique it.

I hate to defend these guys on anything, but this

What's more, photovoltaics aren't green to produce -- it takes a lot of energy, water, and harsh toxic substances to make those. That's why you need a factory to begin with. And there's waste.

Not so green after all.

Posted by eat them up yum | November 2, 2009 6:31 PM

That's what slays me about this whole green tech thing - making photovoltaics is a very un-green industrial process. Can you say "gallium-arsenide"?? Fits right in with Oregon's long-standing tradition of raping the environment for fun and profit.

is losing the forest for the trees. Good current PV designs are averaging 15% efficiency, with payback on the invested energy within two years -- it's a serious chunk of energy embedded in them yes, but if installed and maintained properly, PV panels will be producing power for 30 years, with 100% of the pollution generated and contained in an industrial facility where it can be addressed.

This is in a state where the plurality of our electricity comes from coal, the dirtiest form of power there is. Annually Boardman alone produces 5 million tons of CO2, on top of about a half ton of mercury, tons of NOx, SOx, a surprising amount of radionuclides (I lost the exact number), and particulates (haze) -- all pumped directly into the atmosphere.

The only problem with PV in Oregon is that the bozos in DOT are insisting on creating the "Solar Highway" on the rainy side of the state where the insolation is far less than on the east side.

Complaining about wastes from making PV in a state where coal is the biggest fuel source for electricity is like complaining that the fire department left mud all over your driveway when they put out your housefire.

There's an old New Yorker cartoon which shows a bunch of choppers and old paunchy white guys in leathers with fancy colors on the back that say, "Hell's Accountants". One of them says, "Let's run downtown and gang audit someone!" I'd like to nominate The Energy Trust of Oregon for this week's zero-notice gang audit.

Of course nothing will come of any of it. The good old boys will make sure nobody looks under those rocks. Just like all the creative uses of TIF, in Oregon, it's not a racket if the politicians meant it to fund things that don't bear scrutiny.

Auditors, frauditors:

Madoff's longtime auditor pleads guilty to fraud

Someone mentioned the ODOE thing over in the Vicki Walker thread, and I responded there, but it probably belongs here:

We have definitely set things up to fail in terms of expecting any legislative oversight. Nobody wants to think about the downside of the very part-time Legislature that we have, but this debacle should definitely count towards that tally.

When the Leg meets it's absolute bedlam, with hearings stacked upon hearings stacked upon hearings, with lobbyists being the only ones who've had any time to prepare. The schedule is so compressed that there's little or no attempt by the Leg to do any form of oversight, of to simply have any time to learn about how the last set of laws are working out.

Basically we run a very large, round-the-clock diversified business with a very part-time absentee board of directors made up of amateurs, none of whom got the seat on the board because of any particular competence in program evaluation.

George Seldes, you state that "the plurality of our electricity comes from coal". From this and your later paragraph I'm thinking that you are using "plurality" to mean the "majority". An obscure interpretation of the word.

If my take on your use of the word is correct, then coal doesn't provide over 50% of Oregon's electrical energy.

Coal provides 41% of Oregon's electricity (more than hydro) and 50% of the _region's_.

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