|  |
|
| |
By: rorschach
Date: 6/2/01 4:34:57 PM
# Replies: 12
I want to start by making it clear to any of you that may not have known or remembered that I work for a joint venture between a huge multinational oil company (Shell) and a huge multinational oil services company (Halliburton).
That being said I want to see if I'm the only one who thinks there is something fundamentally wrong with the political environment in California.
Let us review some of the issues first:
1. There has not been a single new power plant built in California in decades.
2. The California legislature has made the permitting process for any new power facility so nearly impossible to traverse that no company can afford to build one even if they WANTED to.
3. Data centers pull as much power as a steel mill does, but they can be built in under 6 months with little notice to those utilities trying to supply power to them. California is a leader in the number of Data centers being built.
4. Californian's by and large think they are very enviromentally concious but in order for them to live the good life in So Cal, an entire river has to be drained (the Colorado river dries up 20 miles away from where it used to empty into the sea.).
5. Use of so called "clean" coal,in just one plant, releases more radioactivity into the enviroment than all the nuclear plants in the US (including TMI) have done in the 40+ years they have been in service. Not to mention all the other pollution they generate, but yet the mere THOUGHT of Nuclear power makes the population of California shiver enough to set off the next big earthquake.
6. I am told that buildings there in California have little or no insulation and other energy saving features, and that Californians pay some of the lowest electric rates anywhere, but they scream because they can't afford thier $90 light bill.... Mine was $120 and my air conditioner hasn't stopped running today, but I sure as hell ain't turning it off....
California seems to suffer from the "not in my back yard" syndrome, they want all the electricity they can burn, but they don't want the pollution in thier state, let it be in some neighboring state, just not California.... well, my vote is to flip the switch and shut the valve and let them shiver in the dark for a while. maybe they will come to the more enlightened conclusion that there is no such thing as a consequence free source of energy (no not even solar!), Everything has a price, If you are not willing to pay the piper, don't ask him to play a song first....
bottom line, Gray Davis and his buddy the California Attorney general had better never come to Texas or they may just find themselves strung up by thier testicles.
Response #1
By: Roxanne
Date: 6/2/01 10:11:29 PM
Disney's California Adventure just opened last year and now this year, there's power shortages and rolling black-outs....coincidence?
I think not!
Response #2
By: Ralf
Date: 6/3/01 1:34:07 PM
Ror, I love you.
(In a non-threatening, totally platonic way.)
What you said brought a tear of joy to my eye; dead on. All except the part about "Texas" and "testicles". Kind of lost me there.
Response #3
By: The Professor
Date: 6/4/01 8:57:28 AM
I just got back from a week in California. Stayed in a 10' by 10' cottage on the beach appraised at a half a million. There were homes out there going from 4 to 6 million.
The reason that Californians can't afford higher energy prices is because they are spending all their money on housing. (even a modest home in the middle of the desert is pricey. One similar to my $70k house was listed for close to $300k)
Response #4
By: rorschach
Date: 6/4/01 10:45:07 AM
yeah, I heard that the cost of housing in Silicon Vally is so high that they have to subsidise housing costs for teachers to teach thier kids.....
Response #5
By: rorschach
Date: 6/4/01 10:52:39 AM
by the way Ralf, as to the part about Grey Davis and friend being strung up by the 'nads, They have been making some pretty inflammatory comments in the press. One of em was made by the Attorney General stating he wanted to lock the CEO of Enron up in a cell with a fellow named "spike" and he hoped that they became real close if you understand the meaning..... So I figure I'm justified in retaliating in kind, and besides, I'm not a public figure being quoted by the Associated Press....THEY ARE! (yeah I know, two wrongs don't make a right... but three rights DO make a left....). Being as how four of the major players that are being vilified in the press are based here in Houston (Enron, Duke, Reliant and El paso pipeline) and that the President and the Vice-president are both from Texas (and yes, I *DID* vote for him thankyouverymuch!), the statements are getting alot of press around here. None of it favorable.... I am personally looking foreward to the California populace realizing thier folly and storming the govornor's mansion and assasinating the bastard..... but hey, that's me.... You'll notice that although the rest of California is suffering rolling blackouts, Sacramento is not.... I wonder why.....
Response #6
By: Homer The Brave
Date: 6/4/01 12:48:09 PM
Many communities were smart enough to have created their own municipal power systems. Since they've *socialized* their energy market, like any wise community would, they don't run afoul of those greedy energy assholes, such as the one you voted for. :-)
I'm not sure if Sac is one of those communities, but LA has its own generation and distribution, as do many smaller communities within the SF bay area. No rolling blackouts there, because the not-really-deregulation-but-since-they-were-created-by-industry-we'll-call-it-that-anyway rules are largely irrelevant.
Response #7
By: rorschach
Date: 6/5/01 10:56:06 AM
Homey, I respect your right to think the way you do, even if I do think you are flippin nuts... :-)
But seriously, lets consider the situation in neutral language and see if we can at least agree on some definitions, if we agree on nothing else.
price controls and regulation of utility industries require that the state PUC has to set the price of energy high enough that companies can make money. companies are not charities, they have to make money to satisfy thier shareholders and they have to make money to pay thier vendors and employees. since much of the generating capacity is fueled by Natural gas, the system is predicated on the assumption that natural gas prices are stable. They are most certainly not stable. Much of that is BECAUSE more and more utilities are either converting or building new plants to run off gas, but the infrastructure to produce and ship the gas has not kept pace. until recently gas was an undesirable byproduct of oil exploration. it was actually either pumped back into the ground to help extract the oil, or it was flared off because it cost to much to build a pipeline and compressor station infrastructure to try to sell it. eventually the building (and therefore demand) curve and the supply curve intersected. when they did there was no more excess capacity to handle supply and demand fluctuations so they were amplified. the instability fed on itself. Natural gas spiked up to $10 per thousand cubic foot, so now we have companies that are required by law to continue to produce power using fuel that costs more to buy than they are allowed to sell the resulting electricity for. they are now LOOSING money instead of making money. when other countries do that to us we call it dumping. but in this instance the government is doing it to our own industries.
so, your answer is for the government to run the power plants. ok, lets follow that logic and see where it takes us. the government running the power plants doesn't change the fact that fuel costs skyrocketed, so instead of private enterprise getting screwed, the government, and therefore the taxpayers are footing the bill. end result? not only is the rate payer still stuck with the bill, but the bill is higher because government operated enterprises are rarely efficient and are usually extremely INefficient because of all the "public servants" living off the public dole.
So do you then think that the government should run the oil companies too? get ready for $20 a gallon gasoline....
do you see where this is headed? you can't have just a little socialism, you have to either go all the way or it doesn't work (I question if it can work even if you DO go all the way too)
Response #8
By: sooz
Date: 6/5/01 12:22:29 PM
You don't want the government to be in charge of oil companies, but you're perfectly willing to let them be in charge of medicating people against their will?
Oh, dear.
Response #9
By: Homer The Brave
Date: 6/5/01 7:31:30 PM
Some energy companies are losing money over the California thing, Ror, but many are not. In fact, many are posting record profits. Viewed as if in a vacuum, California energy companies are the poor pathetic victims of big bad regulation. However, *no such vacuum exists.* Suppliers get to set their prices high, and distributors in California have to pay it, while swallowing the difference between that cost and the price cap. So CA distributors lose money. Suppliers love it. And the suppliers are the ones who wrote the 'deregulation' law in California.
That slippery-slope argument ('You can't have just a little socialism') is flat-out wrong. You can have as much of a public utility as you want. My answer is *not* that the government should run the power plants; my answer is a simple fact borne out in the situation in California: Areas with their own power generation and distribution systems aren't subject to the same rolling blackouts we've seen in other areas, and typically have lower electric bills. They're better off for having built infrastructure.
Response #10
By: rorschach
Date: 6/6/01 10:04:53 AM
If you'll look a little deeper into the financial statements, most of those profits are coming from the de-regulated parts of the companies businesses, the companies are not making all that much and in many cases are loosing money in the regulated side of the business BECAUSE of the price caps. it really doesn't matter who it is loosing money on the deal, someone is loosing money. NO COMPANY CAN STAY IN BUSINESS AND NOT MAKE A PROFIT. That is a cold hard fact of life. your answer would be for the government to be the entity that looses money. but who is the government? where does that money come from? it comes from the pockets and labors of those being taxed. so no matter which way you slice it, the end user pays in the end.
Deregulation has ultimately been a success in every industry it has been done in. The airline industry is a prime example. Free market competition has driven the costs of airfare down while driving up the supply. and while some airlines are not profitable, most are. Southwest Airlines is an excellent example of how to make deregulation work. THEY HAVE NEVER SHOWN A LOSS! thier fares are among the lowest in the industry, and thier customer satisfaction is very high. in fact deregulation has been SO successful in that industry that the FAA's Air traffic control system cannot keep up with the growth. and it cannot keep up precicely because it is a lumbering behemoth of a government agency that wastes more money than any two dot.coms ever did! And most people in the industry are thinking that the only way to make the ATC system work is to privatize it.
Response #11
By: Homer The Brave
Date: 6/7/01 8:20:28 PM
Ror*, you keep putting words into my mouth. I haven't proposed a solution, much less that 'the government be the one that loses money.' I'm saying that communities who invested in making their own power generation facilities have been less effected by the mess in California than those that didn't. It's an interesting thing to note, because it gives a rather big clue about how energy markets might be stabilized.
Response #12
By: rorschach
Date: 6/8/01 10:31:56 AM
I agree homer, investment in power generation facilities (and transmission facilities) is the key. the problem is that the system that califonria set up has done everything it can to make it impossible to do so. either the enviromental impact exceeded california's limits, or there were protests concerning plant siting, or the regulatory atmosphere made it unprofitable to invest there. but stimulating investment is the only thing that will get california out of this mess and price caps are a stick not a carrot. put yourself in Duke energy's shoes. would YOU want to spend your money building a plant that costs an arm and a leg to build, you cannot run it for more than a few hours a day because of the polution output and the government says you can only charge X amount for the resulting electricity? hell no, you'll build in pheonix or las vegas or somewhere ELSE where you actually have a chance of actually making money on the deal. that is the hole that california dug. and you know what? it's pretty dark at the bottom of that hole.