The Silence Of The Bees  

I've been following the travails of the world's bee population for quite a while now, and am somewhat surprised at how little attention it gets from the doomer community. While global warming and peak oil are the more obvious examples of the limits to growth being reached, bees are actually kind of important (likely much more so than the lack of petrochemical fertilisers that doomer mythology believes will cause starvation when we are past the peak).

Albert Einstein once said "If bees were to disappear, man would only have a few years to live.". The causes of bee dieoff (known as colony collapse disorder) seem to be hard to pin down (and not entirely without precedent), with mites, pesticides (fipronil), gm crops, viruses, fungus, lack of wild flowers to forage on and the hives used by commercial bee-keepers amongst a number of factors blamed for what is going on. Rudolf Steiner (an odd person to pair with Einstein, but there you go) apparently predicted back in 1923 that commercial beekeeping would wipe out bees within 100 years - hopefully he wasn't right...

Anyway - this is all a long-winded intro to the latest article on bees - this one from the New York Times (and for the obligatory tinfoil decoration, you could check these out - search for "bees").

In 24 states throughout the country, beekeepers have gone through similar shocks as their bees have been disappearing inexplicably at an alarming rate, threatening not only their livelihoods but also the production of numerous crops, including California almonds, one of the nation’s most profitable.

“I have never seen anything like it,” Mr. Bradshaw, 50, said from an almond orchard here beginning to bloom. “Box after box after box are just empty. There’s nobody home.”

The sudden mysterious losses are highlighting the critical link that honeybees play in the long chain that gets fruit and vegetables to supermarkets and dinner tables across the country.

Beekeepers have fought regional bee crises before, but this is the first national affliction.

Now, in a mystery worthy of Agatha Christie, bees are flying off in search of pollen and nectar and simply never returning to their colonies. And nobody knows why. Researchers say the bees are presumably dying in the fields, perhaps becoming exhausted or simply disoriented and eventually falling victim to the cold.

As researchers scramble to find answers to the syndrome they have decided to call “colony collapse disorder,” growers are becoming openly nervous about the capability of the commercial bee industry to meet the growing demand for bees to pollinate dozens of crops, from almonds to avocados to kiwis.

Along with recent stresses on the bees themselves, as well as on an industry increasingly under consolidation, some fear this disorder may force a breaking point for even large beekeepers.

A Cornell University study has estimated that honeybees annually pollinate more than $14 billion worth of seeds and crops in the United States, mostly fruits, vegetables and nuts. “Every third bite we consume in our diet is dependent on a honeybee to pollinate that food,” said Zac Browning, vice president of the American Beekeeping Federation.

The bee losses are ranging from 30 to 60 percent on the West Coast, with some beekeepers on the East Coast and in Texas reporting losses of more than 70 percent; beekeepers consider a loss of up to 20 percent in the offseason to be normal.

Beekeepers are the nomads of the agriculture world, working in obscurity in their white protective suits and frequently trekking around the country with their insects packed into 18-wheelers, looking for pollination work.

Once the domain of hobbyists with a handful of backyard hives, beekeeping has become increasingly commercial and consolidated. Over the last two decades, the number of beehives, now estimated by the Agriculture Department to be 2.4 million, has dropped by a quarter and the number of beekeepers by half.

Pressure has been building on the bee industry. The costs to maintain hives, also known as colonies, are rising along with the strain on bees of being bred to pollinate rather than just make honey. And beekeepers are losing out to suburban sprawl in their quest for spots where bees can forage for nectar to stay healthy and strong during the pollination season.

“There are less beekeepers, less bees, yet more crops to pollinate,” Mr. Browning said. “While this sounds sweet for the bee business, with so much added loss and expense due to disease, pests and higher equipment costs, profitability is actually falling.”

Some 15 worried beekeepers convened in Florida this month to brainstorm with researchers how to cope with the extensive bee losses. Investigators are exploring a range of theories, including viruses, a fungus and poor bee nutrition.

They are also studying a group of pesticides that were banned in some European countries to see if they are somehow affecting bees’ innate ability to find their way back home.

It could just be that the bees are stressed out. Bees are being raised to survive a shorter offseason, to be ready to pollinate once the almond bloom begins in February. That has most likely lowered their immunity to viruses. ...

Stewart Brand and his "4 environmental heresies" also featured in the NYT this week.

Stewart Brand has become a heretic to environmentalism, a movement he helped found, but he doesn’t plan to be isolated for long. He expects that environmentalists will soon share his affection for nuclear power. They’ll lose their fear of population growth and start appreciating sprawling megacities. They’ll stop worrying about “frankenfoods” and embrace genetic engineering.

He predicts that all this will happen in the next decade, which sounds rather improbable — or at least it would if anyone else had made the prediction. But when it comes to anticipating the zeitgeist, never underestimate Stewart Brand.

He divides environmentalists into romantics and scientists, the two cultures he’s been straddling and blending since the 1960s. He was with the Merry Pranksters and the Grateful Dead at their famous Trips Festival in San Francisco, directing a multimedia show called “America Needs Indians.” That’s somewhere in the neighborhood of romantic.

But he created the shows drawing on the cybernetic theories of Norbert Wiener, the M.I.T. mathematician who applied principles of machines and electrical networks to social institutions. Mr. Brand imagined replacing the old technocratic hierarchies with horizontal information networks — a scientific vision that seemed quaintly abstract until the Internet came along.

Mr. Brand, who is now 68 and lives on a tugboat in Sausalito, Calif., has stayed ahead of the curve for so long — as a publisher, writer, techno-guru, enviro-philosopher, supreme networker — that he’s become a cottage industry in academia.

Last year, Fred Turner of Stanford published “From Counterculture to Cyberculture: Stewart Brand, the Whole Earth Network, and the Rise of Digital Utopianism.” This fall Andy Kirk of the University of Nevada, Las Vegas, is putting out “Counterculture Green: The Environmentalism of Stewart Brand and the Whole Earth Catalog.” By next year we should be due for a revisionist historian’s discovery of a modern social movement that Mr. Brand did not orchestrate.

In addition to publishing the Whole Earth Catalog, he organized the first Hackers Conference, in 1984, and helped found The WELL, the early electronic community that was a sort of prototype of the Web. In Professor Turner’s history, he was the impresario who knew everyone and brought the counterculture and the cyberculture together, from the Homebrew Computer Club in the 1970s to Wired magazine in the 1990s.

He is now promoting environmental heresies, as he called them in Technology Review. He sees genetic engineering as a tool for environmental protection: crops designed to grow on less land with less pesticide; new microbes that protect ecosystems against invasive species, produce new fuels and maybe sequester carbon.

He thinks the fears of genetically engineered bugs causing disaster are as overstated as the counterculture’s fears of computers turning into Big Brother. “Starting in the 1960s, hackers turned computers from organizational control machines into individual freedom machines,” he told Conservation magazine last year. “Where are the green biotech hackers?” ...

Mr. Brand predicts that his heresies will become accepted in the next decade as the scientific minority in the environmental movement persuades the romantic majority. He still considers himself a member of both factions, just as in the days of the Merry Pranksters, but he’s been shifting toward the minority.

“My trend has been toward more rational and less romantic as the decades go by,” he says. “I keep seeing the harm done by religious romanticism, the terrible conservatism of romanticism, the ingrained pessimism of romanticism. It builds in a certain immunity to the scientific frame of mind.”

Mr. Brand got his first look at the big picture one afternoon in 1966 while sitting on a roof in San Francisco at what he calls an “altitude of three stories and 100 mikes,” meaning micrograms of LSD. He contemplated the skyline and decided the buildings weren’t parallel because he was seeing the curvature of the Earth.

This reminded him of Buckminster Fuller’s theory that people abused the environment because they thought of the Earth as flat and infinite, not as a finite globe. The next day the Earth looked flat again, but the 28-year-old Mr. Brand had a new cause. He printed up buttons asking, “Why haven’t we seen a photograph of the whole Earth yet?” ...

Professor Ehrlich dismissed Professor Simon’s victory as a fluke, but Mr. Brand saw something his mentor didn’t. He considered the bet a useful lesson about the adaptability of humans — and the dangers of apocalyptic thinking.

“It is one of the great revelatory bets,” he now says. “Any time that people are forced to acknowledge publicly that they’re wrong, it’s really good for the commonweal. I love to be busted for apocalyptic proclamations that turned out to be 180 degrees wrong. In 1973 I thought the energy crisis was so intolerable that we’d have police on the streets by Christmas. The times I’ve been wrong is when I assume there’s a brittleness in a complex system that turns out to be way more resilient than I thought.”

He now looks at the rapidly growing megacities of the third world not as a crisis but as good news: as villagers move to town, they find new opportunities and leave behind farms that can revert to forests and nature preserves. Instead of worrying about population growth, he’s afraid birth rates are declining too quickly, leaving future societies with a shortage of young people.

Old-fashioned rural simplicity still has great appeal for romantic environmentalists. But when the romantics who disdain frankenfoods choose locally grown heirloom plants and livestock, they’re benefiting from technological advances made by past plant and animal breeders. Are the risks of genetically engineered breeds of wheat or cloned animals so great, or do they just ruin the romance?

Mr. Brand would rather take a few risks.

“I get bored easily — on purpose,” he said, recalling advice from the co-discoverer of DNA’s double helix. “Jim Watson said he looks for young scientists with low thresholds of boredom, because otherwise you get researchers who just keep on gilding their own lilies. You have to keep on trying new things.”

That’s a good strategy, whether you’re trying to build a sustainable career or a sustainable civilization. Ultimately, there’s no safety in clinging to a romanticized past or trying to plan a risk-free future. You have to keep looking for better tools and learning from mistakes. You have to keep on hacking.

While I'm always hesitant to disagree with Stewart (as I don't much like being wrong about things), I disagree with the heresy about nuclear power and still firmly believe doing the switch to 100% renewable energy is a more practical and cost effective long term approach to meeting our energy needs without unpleasant side effects.

Monkeygrinder isn't a big fan of nukes either:

US Nuclear Plants' Power Output 2nd Highest Ever
The industry group said 103 nuclear plants nationwide generated 787.6 billion kilowatt hours of electricity last year, just off the 788.5 billion kwh record set in 2004.
At the same time, production costs sank to a record 1.66 cents per kilowatt hour in 2006, despite three years of price increases for uranium, the fuel used in nuclear generation. These are preliminary figures, the institute said, and final numbers are expected in two months.

Unprecedented efficiencies in power generation. Well, of course, plant operations can be expected to streamline over time. Even as their internals relentlessly corrode. Still, one can only marvel at how these outputs are achieved.

Maybe we should check some recent headlines.

* Safety Lapse Feeds Debate on New Jersey A-Plant
* Water Level Drops at Indian Point Nuclear Plant in Upstate New York
* Safety Alarms Raised at Nuclear Weapons Plant
* Unit 2 to be back in operation by Friday after outage

So, by and by, in addition to replacing oil and gas, we will need to replace every reactor running today. It doesn't matter if their operating leases get extended. These things wear out.

The Oil Drum, on the other hand, has a bullish piece on nuclear power (which gave me a powerful feeling of deja vu - haven't you run this before PG ?) which got a big run on reddit and digg today. The commenters aren't quite as enthusiastic - here's one from Laurence Aurbach.

I appreciate Mr. Sevior's technical review and especially the update on uranium exploration and discoveries. On a technical level, the arguments for nuclear energy are indeed persuasive.

But let's remember that the industry's arguments have always been persuasive, from day one. From the beginning, nuclear power was going to be too cheap to meter; it was perfectly safe; the risk of catastrophic accidents was nil for all practical purposes; waste disposal and decommissioning posed no major hurdles. Those early assertions have, by and large, not proven to be true. Remember that just a few years before Three Mile Island, the US Atomic Energy Commission claimed a core meltdown could be expected only once in every million years of reactor operation. Now when we hear similar assertions we must decide: Should we trust the spokespeople and advocates again?

The industry argues that new plant designs are safe, and in theory I agree. The problem now is, as it has always been, those perfect engineering proposals are carried out by imperfect humans like you and me. There can be corruption and corner-cutting during the construction phase, incompetence during the operation phase, bribery and mishandling of waste during the disposal phase, and sabotage and terrorist strikes during all phases. What's more, "perfect" engineering can and does turn out to be flawed, and politics can meddle with the entire process. This historical account is very instructive: Searching for Safety, an excerpt from Beyond Engineering: How Society Shapes Technology.

Sevior notes that the Chernobyl power station suffered from a "complete lack of safety culture." If nuclear power becomes a global substitute for oil, what assurances do we have that nations around the world will establish and enforce an adequate safety culture?

What's more, no commercial nuclear plant has been fully and properly decommissioned. The projected costs of doing so (in money and energy) are so high that they represent a significant hit in net profit. It could well be that is why the Yucca Mountain disposal facility has not opened yet. Otherwise, the safety concerns for civilizations 10,000 years in the future would have been swatted aside like an insect.

Now some politicians are arguing for increased subsidies and tax cuts for nuclear. Why should nuclear get public subsidies when we are seeing promising breakthroughs every month in wind, solar, biofuels and other technologies that are far cheaper and safer? Wind farms can be up and running, from design to generation, in 6 months. It's tough for any conventional power source to compete with that, especially nuclear. Why choose one horse when there's a whole field of promising contenders? Better they should all compete without subsidies, and that includes the billions in subsidies going to the fossil fuel industry.

Government R&D, however, is a different matter and that should continue for all energy sources. The R&D budget for renewables should be greatly increased.

The Economist seems to have adapted quite well to its new habit of backing the Democrats (one more "first" for George Bush, as this had never happened before the 2004 election), with them now pushing for an Al Gore presidency.

...there is a huge opportunity for somebody to arrive late [in the race for U.S. President] and steal the show. ...

Step forward Al Gore. Gore has enough of a national profile to command instant credibility. He has rich friends to finance him. He will also command plenty of attention in his own right over the next few months: His film "An Inconvenient Truth" won an Oscar for best documentary on Sunday, and he may be up for the Nobel Peace Prize in the autumn.

Gore is the ideal candidate for the Democratic stalwarts who turn out to vote in the primaries. He came out strongly against invading Iraq. He has spent the past six years warning the world about global warming. And he was robbed of victory in 2000 by the man whom the Democrats loathe above all others.

What better way of wiping out the Bush era than replacing him with the man who should have been president?

I'm surprised George himself hasn't broken out the jump suit again for another round of "Mission Accomplished" - after all, US oil companies finally got what they wanted in Iraq (for the time being anyway) - a big slice of the greatest prize of all.

"By 2010 we will need [a further] 50 million barrels a day. The Middle East, with two-thirds of the oil and the lowest cost, is still where the prize lies." - US Vice President Dick Cheney, then Halliburton chief executive officer, London, autumn 1999

US President George W Bush and Vice President Dick Cheney might as well declare the Iraq war over and out. As far as they - and the humongous energy interests they defend - are concerned, only now is the mission really accomplished. More than half a trillion dollars spent and perhaps half a million Iraqis killed have come down to this.

On Monday, Prime Minister Nuri al-Maliki's cabinet in Baghdad approved the draft of the new Iraqi oil law. The government regards it as "a major national project". The key point of the law is that Iraq's immense oil wealth (115 billion barrels of proven reserves, third in the world after Saudi Arabia and Iran) will be under the iron rule of a fuzzy "Federal Oil and Gas Council" boasting "a panel of oil experts from inside and outside Iraq". That is, nothing less than predominantly US Big Oil executives.

The law represents no less than institutionalized raping and pillaging of Iraq's oil wealth. It represents the death knell of nationalized (from 1972 to 1975) Iraqi resources, now replaced by production sharing agreements (PSAs) ...

Of course, if those nuke boosters out there get their way (and nuclear power viability is as insensitive to the price of uranium that they claim) then Olympic Dam might be the world's greatest resource prize instead of Iraqi oil - hopefully people won't start talking about "the curse of uranium" in the future...

I noticed Condi announced the US wants to open talks with Iran and Syria this week (a complete about face on their earlier position and an adoption of the Iraq Study Group's recommendations) - that may well be related to the item above - time to consolidate control...

Moving on, I occasionally wonder about my local paper, the Herald - I usually assume (with some justification) that they run op-ed columns from far right fringe dwellers like Gerard Henderson and Miranda Device as a way of providing "balance" to their relatively liberal party line, and also to spark some controversy and provoke lots of angry letters to the editor. This hit piece on Clint Eastwood from some griefer at Newsday didn't seem to serve any purpose other than simply echoing the conservative party line and demonstrating, once again, that conservatives simply don't get it (or are being deliberately obtuse). According to this fool, Clint has become a liberal as he's aged. Personally I'd say Clint's politics haven't changed much at all - I liked Clint in the 1970's and I like him just as much now - to me most of his tales are libertarian fables - the Dirty Harry movies being stories about political correctness, justice and bureaucracy, "Unforgiven" (one of my favourite movies) about injustice and the abuse of power, and his two new movies about not trusting governments and the propaganda they produce.

I suspect Mr Cranky Conservative's ire is mainly due to Clint's pointing out that the famous flag raising exercise on Iwo Jima was a propaganda stunt (and the obvious modern day echo through to the same ceremony at the world trade centre site and the toppling of Saddam's statue) - which to me is just another example of Clint telling it like it is - just like he always has...

Clint Eastwood is "growing" as a movie director. We know what that means - he is going to the politically correct left. And that has led him to some strange conclusions, which are worth addressing.

The onetime archetypal tough guy - his Dirty Harry cop character took wrathful justice into his own hands decades before Jack 24 Bauer - has been sliding over to liberalism for the past 15 years. Equally predictably, he has been showered with Academy Awards ever since.

His "growth" was notable in 1992 when Unforgiven, his nihilistic deconstruction of the western, won a bunch of Oscars, including best picture and best director. In 2003 his Mystic River gave audiences a curiously sympathetic portrait of a child-murderer, gaining Oscars for the liberal lions Sean Penn and Tim Robbins. And in 2004 Eastwood's tribute to euthanasia, Million Dollar Baby, swept the top awards offered by the Motion Picture Academy.

So it's not surprising that Eastwood now has his revisionist take on a famous World War II battle in Letters From Iwo Jima, told from the Japanese point of view. Last year he released an English-language movie about Iwo Jima, Flags of Our Fathers, but it's the Japanese-language effort that has grabbed Hollywood's attention.

Letters was nominated for four Academy Awards - for best picture, director, screenplay and sound editing. It won the best sound editing award. By contrast, Flags was shunted aside, nominated for only two awards - sound editing and sound mixing - and won neither.

For his part, Eastwood has been eager to document the "evolution" of his thinking. As he told Agence-France Presse, "I grew up in the war pictures in the 1940s where everything was propagandised. In all the movies, we were the good guys and everybody else were bad guys." So Eastwood is determined to counteract such "propaganda" by creating propaganda of a different kind. ... As he told the French press agency: "Every war has a certain parallel in the futility of it, and that's one of the reasons for telling these stories - they are not pro-war stories." ...

But today many people, thinking about Afghanistan and Iraq, are prone to see war as futile. But the better conclusion is this: wars fought incompetently are futile. Indeed, for a war not to be futile, it must be fought competently - which, in this case, means being supported by top-to-bottom economic and industrial mobilisation. That's how wars are won.

We might pause to reflect on the iconic flag-raising at Mount Suribachi. Nearly 7000 US Marines died on Iwo Jima, and they gave, through their sacrifice, an object lesson in accomplishing a mission. No amount of retroactive Hollywood political correctness can detract from what was achieved there.

Dan at The Daily Reckoning has a post on the TXU takeover by KKR and Texas Pacific/

We predicted 2007 would be the year private equity goes after energy assets. So what does KKR and Texas Pacific’s $US32 billion buyout of Texas electricity utility TXU Corp. forebode? Will there be new deals ahead?

Yes, but beyond those three letters it gets murky. TXU’s private equity buyers aim to shift the company’s strategy of adding coal-fired generation capacity to… something more friendly to Oscar Winner and Climate Morality Czar Al Gore. More friendly to the atmosphere than coal? What ever could that be? Fuel cells? Nuclear? The sun?

First things first. The pirates don’t do anything that isn’t good for them first. They would sell Mother Earth to the Man in the Moon if there was a profit to be made. It could be KKR is putting the kibosh on new plants because of the capital cost. When you’re loading up a balance sheet with debt just to go private, why ad more debt on top of that? .

A vaguer, greener explanation is that the pirates see the worm turning in the economics of energy production from fossil fuels and are going green because there’re more green it. That, however, is a theory with quite a few holes in it.

The truth is, we have no idea of how the new TXU will solve Texas energy problems. But we suspect it will be a portfolio of alternative energy solutions alongside more conventional Texas tea and gas. And in the meantime, we are diligently drilling down into the alternative energy sector for smaller, development firms, where a lot of the R&D in the energy business is being done.

Private equity may be looking for more big fish to land. But the little fish are doing all the development in the alternative energy space. And that’s where individual investors could see big gains this year, provided they buy the right clean-energy shares before the dread pirates equiteers.

Bruce's latest Viridian Note also looks at the TXU takeover (or "Massive Green Buyout" as Bruce labels it), seeing it as a sign that Viridian strategy is working, and thus a good thing. As usual the formatting is atrocious - Bruce's interjections are largely marked with ((( ))). Energy Bulletin also has a roundup of articles on the TXU deal.

**Breaking News**
Victory in Texas ... Environmental Agreement Tied to Sale of Electricity Giant Will Block Construction of Eight Dirty Coal-Fired Power Plants

Dear Bruce,

Thanks to the generous support of our online activists and donors, today is a truly historic day in the fight against global warming. News just broke that Texas Pacific Group and Kohlberg Kravis Roberts & Co. are seeking to acquire Texas-based energy giant TXU Corp. As part of the sale agreement, Environmental Defense helped negotiate an aggressive environmental platform that will, among other things:

* Terminate plans for the construction of 8 of 11 coal-fired power plants TXU had hoped to build; (((They were planning to nail these coal-plants up in a panic rush and grandfather 'em in before Bush leaves power.)))
* Stop TXU's plans to expand coal operations in other states;
* Endorse the U.S. Climate Action Partnership (USCAP) platform, including the call for a mandatory federal cap on carbon emissions; and
Reduce the company's carbon dioxide emissions to 1990 levels by 2020.

Here's a story in The New York Times describing how Environmental Defense helped negotiate this deal:

http://action.environmentaldefense.org/ct/Vp16sGE1JX7B/

This is a huge victory for the environmental community. It sends a clear message about the undeniable momentum in our campaign calling for federal global warming legislation. (((I'm unclear on why these guys still want to waste time in federal legislation when they got their "historic victory" by hanging out with Corporate Green merger and acquisition financiers. You'd think they'd blow off the Bush government and spend all their time with bankers, but, I dunno, old habits die hard.)))

The story behind today's announcement began last April when TXU announced alarming plans to build 11 dirty coal-fired power plants in Texas. (((Where else? The whole state stinks!)))

(((Except for the much-beleaguered CAPITAL of Texas, Austin, "the leading city in the nation in the fight against global warming"!))) http://austin.bizjournals.com/austin/stories/2007/02/05/daily26.html?surround=lfn

From the start, most business and political experts considered it a done deal. Texas Governor Rick Perry got personally involved, fast-tracking the permits and declaring "we're not going to let these bureaucrats jerk us around." (((Like most Governors of Texas including the current President, this guy is a consummate ignoramus. Let's hope and pray he never does anything requiring any more effort and skill than being Governor of Texas.)))

Even our own experts in our Texas office considered the odds of stopping the plants as remote, at best.

But the size of the proposal left us no choice but to aggressively oppose the plants. The 11 coal-fired plants would spew 78 million tons of global warming pollution per year, more than twice the expected carbon reductions from the historic California Clean Cars legislation.

So, Environmental Defense mobilized an all-out grassroots campaign targeting TXU and Texas Governor Rick Perry. Nearly 50,000 Environmental Defense members and activists took action, sending emails, attending public hearings across Texas and submitting public comments against the plants. More than 50 community and environmental groups signed on to our letter urging TXU to change its course.

We took out television, billboard and online ads. We reached out to allies in the Texas state legislature and we worked the legal and financial angles to keep the pressure on TXU.

Our efforts were designed to achieve three goals:

1. Stop as many of the plants as possible;
2. Prevent TXU from exporting its coal plant build-out to other states; and
3. Send a national message to other utility companies that the TXU plan is one they should reject. (((Those companies are listening -- not to the activists, of course, but to guys with enough muscle to buy fossil-fuel companies after the activists wear down the stock price a little.)))

It may have been a long shot when we started this campaign, but this weekend's news meets each of these goals. (((I like it when a guy is smart enough to declare victory and actually stop the war.)))

I want to thank everyone who took action on this campaign and supported our work with generous donations or other actions. We couldn't have claimed this seemingly unattainable victory without your support.

Thanks for everything you help make possible,

Fred Krupp
President



(((Now the New York Times weighs in. Note that Krupp cites their article, so he must more or less agree with their assessment. At least, Krupp was clearly a source.)))

A Buyout Deal That Has Many Shades of Green

By ANDREW ROSS SORKIN
Published: February 26, 2007

About two weeks ago, Fred Krupp, the president of a nonprofit advocacy group called Environmental Defense, received an unusual phone call.

William K. Reilly, the former administrator for the Environmental Protection Agency under President George H. W. Bush, was on the other end. But before Mr. Reilly would explain the reason for his call, he said he needed an assurance from Mr. Krupp that he would keep the conversation confidential.

After receiving such a pledge, Mr. Reilly dropped a bombshell: the TXU Corporation, the Texas energy giant that had become the whipping boy of the nation's largest environmental groups, was in talks to be sold to a group led by Kohlberg Kravis Roberts & Company a nd Texas Pacific Group, two large private equity firms.

Mr. Reilly, who works for Texas Pacific, said he wanted to negotiate a cease-fire. If the investors succeeded in taking over TXU, Mr. Reilly said, they would commit themselves to scale back significantly on TXU's plan to build 11 new coal plants and adhere to a strict set of environmental rules. (((The guy is, after all, the former head of the EPA.)))

In return, he wanted the support of Mr. Krupp and his peers, who had spent the past several months waging a bitter and public war against TXU.

Early Monday, after several weeks of marathon negotiations that brought together both environmentalists and Wall Street bankers, TXU announced that its board of directors had approved the bid from Kohlberg Kravis and Texas Pacific for about $45 billion, which would be the largest buyout in history.

(((And the evil genius who proposed building all the coal plants REMAINS IN POWER. That's the genius of it. In fact, since TXU capo C. John Wilder owns a ton of TXU stock, he's gonna clear millions of dollars. The brilliance of this scheme? You don't actually have to buy companies. You just have to bribe the CEO elite and they'll sell out the enterprise, hook, line and sinker!)))

The deal was noteworthy not just for its size, but for the confluence of business decisions and environmental concerns that drove the ultimate transaction. (((Call it "Corporate Green.")))

Because private equity firms are unregulated and historically have valued their privacy, neither Kohlberg Kravis nor Texas Pacific were eager to become an "enemy combatant" of the environmental groups, people involved in the talks said. Reducing the coal plant initiative will also free up billions of dollars in planned spending that the firms will be able to use for other projects or to help finance the transaction. (((Corporate Green "values its privacy" because it is basically covertly doing what governments used to do back when governments actually governed. Why run the EPA when you can just buy coal plants?)))

Within TXU, the controversial plan to build a raft of coal plants had become so damaging to its stock price that its board had been privately weighing a plan to scrap part of the project, said people involved in the talks, (((note that Krupp is willing to talk publicly to the NY Times, while Corporate Green raiders stay off the record))) bringing the number of new plants to 5 or 6 from 11. Shareholders had sent the stock on a roller coaster ride from more than $67 a share to as low as about $53 (((that's not much of a roller-coaster; consider Enron))) over concerns about the risk and vast expenditure; the stock closed at $60.02 on Friday.

Indeed, it was the quick drop in TXU's stock price that got the attention of Kohlberg Kravis and Texas Pacific, which look for undervalued companies and try to turn them around.

(((Carbon companies will be henceforth subjected to organized under-valuement. Their captains of industry will be bought off and then they'll be annihilated. Watch it happen.)))

Together, both firms approached C. John Wilder, TXU's chief executive, in January with an offer for the company, these people said.

At the time, neither Kohlberg Kravis nor Texas Pacific told TXU about their ambition to scale back its controversial coal plants. But behind the scenes, both firms had been developing a new strategy for the company with the help of Goldman Sachs, their lead adviser.

Goldman Sachs has been a longtime proponent of reducing carbon emissions. Its former chief executive, Henry M. Paulson, now the secretary of the treasury, was also the chairman of the Nature Conservancy, an environmental activist group.

Texas Pacific's co-founder, David Bonderman, is member of the board of the World Wildlife Fund, and Mr. Reilly is chairman emeritus. Mr. Bonderman called Mr. Reilly to help work on the deal and create what they ultimately called The Green Group, a committee of advisers that included Mr. Reilly, Roger Ballentine of Green Strategies and Stuart E. Eizenstat, the former chief domestic policy adviser for President Jimmy Carter. ((("The Green Group." Yikes.)))

"We didn't want to be on the wrong side of history," said a person involved in the bidding group who was not authorized to talk about the transaction before its formal announcement. ((("We also didn't want to be quoted in public.")))

(((Fascinated by weird Texas energy politics? Read your fill!))) http://www.texasobserver.org/blog/?cat=7

Under the terms of the deal, TXU shareholders will receive $69.25 in cash for each TXU share. Goldman Sachs, Morgan Stanley, Lehman Brothers and Citigroup will take small stakes in TXU as well as help finance the debt with J.P. Morgan Chase. In addition, the investor group will assume more than $12 billion of TXU's debt.

The deal represents a 20 percent premium over TXU's closing price on Thursday before word of the deal began to leak and was reported Friday on CNBC after the market closed, TXU said.

It is unclear whether shareholders will agitate for a higher price from the investor group or push for other suitors to emerge. Several recent "go private" deals have drawn opposition from shareholders who expressed concern that they were being shortchanged. (((Yeah? Then how come they pay CEOs so much? The shareholders are gluttons for punishment.)))

Monday's merger agreement allows TXU's board to solicit bids from other potential buyers through April 16, and TXU said it intends to do so. (((It'll be interesting to see if any black angel investors show up and INSIST on building coal plants.)))

The investor group has not laid out any specific plans to grow revenues through alternatives to the coal plants, but TXU is not likely to lose money, at least initially, as a result of scaling back. Three of the plants are already in the works and other eight that will be canceled would not have been built for years.

And the group will be getting more than just a utility. TXU is in the midst of an experiment to run broadband Internet over its power lines as part of a venture with Current Communications. (((Very Enron. They loved Internet pipes.)))

Both TXU, which was advised by Credit Suisse and Lazard, and the investor group spent weeks holed up in three conference rooms at the Gaylord Texan, a hotel just outside of Dallas. With armies of bankers and lawyers that frequently numbered more than 40, the group negotiated the buyout deal, including an unusual provision that will allow TXU to seek higher rival bids over the next 50 days. This clause could potentially create a bidding war, perhaps bringing other private equity firms and utilities into an auction.

Related

Deal's Broader Effect on Coal Plants Is Uncertain (February 26, 2007) (((uncertain, but they've gotta be wondering today)))

Mr. Bonderman and Henry R. Kravis, the founder of Kohlberg Kravis, pleaded their case to the Texas governor, Rick Perry, on Thursday in person at his mansion, mindful that Oregon had rejected Texas Pacific’s deal to buy Portland General and that Arizona had rejected Kohlberg Kravis' deal to buy UniSource Energy. The pair has also reached out to James A. Baker, a Texan and former Reagan cabinet member. (((James A. Baker, "the Bush Consigliere.")))

But perhaps the most difficult talks were with the environmentalists, who often seemed more like Wall Street negotiators than green activists. (((Given that government is a non-player, these self-appointed activists barging into the boardroom are the only thing standing between the citizenry and outright corporate-green feudalism. It's no wonder they've finally learned to act like businessmen when business is the only game in town.)))

Mr. Krupp of Environmental Defense used his conversation with Mr. Reilly as an opportunity to negotiate even harder for further concessions. The men agreed that Mr. Krupp's lieutenant, James D. Marston, who was leading the charge against TXU in Texas, would meet with Mr. Reilly and other representatives of the buying group. And representatives from Natural Resource Defense Council, another climate-control advocacy group, was brought into the discussion to help formulate a plan that all sides could agree on.

So last Wednesday, Mr. Marston flew to San Francisco, (((obligatory "oh look, the enviros are flying in airplanes and spewing carbon" riff inserted here))) where he found himself face to face with Mr. Reilly over breakfast at the Mandarin Oriental hotel. There, over scrambled eggs and croissants, Mr. Reilly laid out a plan that included reducing the coal plants from 11 to 3.

Then the men went to Texas Pacific's conference room overlooking Alcatraz and the San Francisco Bay for a day-long negotiation that stretched until early the next morning. The group, which included Mr. Reilly, Mr. Bonderman and Frederick Goltz of Kohlberg Kravis, worked out a "10-point plan" that included a commitment by the investors to return the carbon- dioxide emissions by TXU to 1990 levels by 2020 and support a $400 million energy efficiency program. (((Okay, this is the actual work of the world being performed here. This is the sound of icebergs not melting, seas not rising, etc. Let 'em get after it, don't get in the way.)))

When an agreement was finally struck, at 1 a.m. the next morning, Mr. Reilly grabbed a bottle of pinot noir from his colleague's office to toast the group. But he couldn't find a corkscrew. (((Need more tech geeks in the boardroom. I'm only a damn author and I've got a Swiss Army corkscrew right here.))) So he ran back to the Mandarin Oriental to borrow one. (((Let's be charitable, maybe their corkscrews were confiscated by airline security.)))

Not all of TXU's historical opponents are popping corks. Some noted that a decision by one company did not sway the others that are building plants. In Dallas, Laura Miller, the mayor and leader of a coalition of municipal officials that has spent $600,000 fighting the TXU plants, said the agreement with the environmental groups might not get TXU as much help as it wanted.

Ms. Miller pointed out that one of the three surviving projects, a plant near Waco, is still opposed by local officials and had drawn a negative recommendation from a panel of Texas judges. She said she hoped that TXU's plans would leave an opening for cleaner projects, like a proposal to build a power line to West Texas, where power producers propose to build large wind farms.

Matthew L. Wald contributed reporting.
O=c=O O=c=O O=c=O O=c=O O=c=O O=c=O
IT ACTUALLY IS A HISTORIC MOMENT,
SO IT'S WORTH PUTTING UP WITH IT.
LET THEM GET AWAY WITH IT. IN FACT,
IF YOU CAN HELP THEM, GO DO IT
O=c=O O=c=O O=c=O O=c=O O=c=O O=c=O

On the local (state) election front, I noticed Newcastle member Bryce Gaudry on TV tonight, in a segment on the battle for his normally safe seat. Apparently Labor disendorsed him last year (showing just how much attention I pay to state politics here) and the competition at the next election is now a 4 horse race between Bryce, the Labor candidate (a TV newsreader), the (Labor) mayor of Newcastle (also running as an independent) and the Greens candidate (there is also a Liberal polling less than 10% who has no chance). Anyway - I met Bryce at a peak oil function at parliament house a year or two ago and he seemed like a good guy, as he did on the TV spot. So if you live in Newcastle, vote for him (for that matter, Peak Energy generally recommends voting for local, independent members by default - party politics sucks, though exceptions can be made in some circumstances).

SURELY only a surrealist with a fascination for self-destruction could have written the script for the Seinfeld-like scuffle that has erupted over the seat of Newcastle.

Thanks to a mixture of idiocy, arrogance, greed and self-centredness, Labor has plunged a dagger into its own heart and has been forced to spend a fortune to staunch the outflow of votes in an electorate it has effortlessly owned for 91 of the past 97 years.

Labor has foolishly risked Newcastle by disendorsing its long-serving left-wing MP, Bryce Gaudry. He was sacrificed by his own side in a factional deal that should have seen the seat pass into the deathless embrace of the Right.

Instead, the man chosen by the Right, the Lord Mayor of Newcastle, John Tate, chickened out in the face of an uprising among the 13 pro-Gaudry branches in the electorate.

Displaying slightly more steel, a former television newsreader, Jodi McKay, 37, stepped up last September and was named as Labor's candidate.

Then it all sort of unravelled.

Tate, 62, announced he would stand as an independent. Not to be denied, Gaudry, also 62, resigned from Labor after 16 years in Parliament and unexpectedly threw his hat back into the ring. Now no one knows what will happen.

But two things are obvious: the omnipotence of Labor's factional politics and the labyrinthine ways powerbrokers ride roughshod over the wishes of branch members. And now the party is being forced to fork out as much as $1 million to defend Newcastle and other Hunter heartland seats. It has taken the electorates for granted for so long that many routinely refer to "the Sydney Labor government".

With the exception of McKay, other candidates agree that Labor has been so cruel to Newcastle for so long that only defeat can send a message to Sydney that the faithful dog has been hit once too much.

I'll close with a post from TreeHugger about one of my favourite animals - the Aye Aye. These little critters are a type of lemur and they have a finger that ET would be jealous of - part digit, part radar. I went to Gerald Durrell's zoo at Jersey many years ago to see some of them in action and they're great (albeit hard to get a good view of as they are nocturnal). The one in the picture below must be a baby - the real thing is about the size of a cat. Who wants to save the aye aye ? - well - I do.

One of my zoology professors used to refer to it as "The Bambi Syndrome"—us hairless bipeds tend to gravitate towards cuddly megafauna like the panda; we're ready to empty our pockets to pull them from the precipice of certain doom. But can you get people rallying for an obscure species of clam? Does anyone really get pumped about saving the tuna? What about the almost grotesque-looking aye-aye, which, according to Slate got hit so bad with the ugly stick that conservationists are going to pieces trying to figure out how to persuade people that its unique genetic heritage is worth giving a damn?

Everyone loves a cute face. For humans, something about large heads, languid eyes, and flat faces appeal to something visceral inside us, not coincidentally, much like a baby's face does.

David Stokes, a conservation biologist at the University of Washington wanted to study why we preferred one type of animal over another. In a recent paper in Human Ecology Stokes analyzed hundreds of pictures of penguins found in mainstream photography books. He discovered that out of the 17 species of penguins that exist in the world, publishers favored three species in particular, with "a warm dash of color, either yellow or orange or red, around the eyes of bill." Humans, it seems, are meticulous even in our pickiness:

Conservationists, he argued, must understand the ways that aesthetic appeal can be used to motivate the public—and then try to promote the "less attractive" creatures by highlighting their most endearing features.

Beauty is only skin deep, right? Tell that to the aye-aye.