Energy Windfall

Energy Windfall

At the same time as hurricane tragedies unfold before Americans' eyes, profits in the oil and gas business are far exceeding previous records, and the party in power in Washington wants nothing but more of the same. The scientific consensus is that another "elephant-size" fossil fuel find isn't in the cards, so company after company reports bulging coffers. (As a securities analyst following oil and gas companies, I track their balance sheets, quarter by quarter.) Funneling these windfalls back to the shareholders who have borne the risk all these years is not unreasonable -- but only to a point, when so many have been made homeless. Plenty of companies have policies to share their profits for charitable purposes, but oil company leaders wouldn't show up when the Democratic Policy Committee asked to meet with them. They need to be encouraged to take more responsibility, and we all need to take responsibility for reducing energy dependence by supporting conservation measures and investment in renewable energy sources.

Katrina, Homeland Security, and more incompetence

I resisted posting anything about Hurricane Katrina out of respect for the people who have suffered such incomprehensible loss, who should not be used as political footballs. But since Rick raises the subject in a comment to my August 22 post about Homeland Security, I decided to go ahead.

The incompetence and lack of candor displayed over the past week should make every one of us ill. This disaster long ago was identified as one of the three most significant risks to the country, along with a terrorist attack in New York and a major earthquake in California. I think I’d better stock two weeks’ of provisions in my house because, given our government’s performance in New Orleans, when the earthquake hits on the Hayward Fault—one mile from my house—the feds will he worse than useless.

The statements by the heads of Homeland Security and FEMA that what happened was unforeseeable are either bald-faced lies or utter, astonishing stupidity on their part. Every single thing that has happened was predicted by those who modeled the potential impact of a category 4 or 5 hurricane on New Orleans. Need proof? Read this article from the October, 2004 National Geographic:

Gone With the Water

On Wednesday, I watched CNN interview a professor from LSU who was part of a team that studied the likely outcome of a hurricane of Katrina’s magnitude striking New Orleans. Here’s my from-memory paraphrase of the interview:

“Did you anticipate levee breaches as well as overflows?
“Oh yes. Those were clearly the two likely risks.”
“Did you anticipate having 20% of the population fail to evacuate?”
“Yes. A large part of the population is always unable to evacuate, especially on short notice. The post-hurricane evacuation issues were clear to us.”
“Did you anticipate the lawlessness?”
“Of course. Whenever you place people in a position this extreme, where their lives are at risk, resort to looting and worse is predictable.”

Hey, want more? Remember that idiot Chertoff’s press conference—just yesterday—where he continued to insist nobody could have predicted this result? Where he insulted the intelligence of every viewer by arguing that to expect FEMA to have foreseen the flooding and the need to evacuate would be like asking them to draw up a plan for a hurricane followed by an atomic bomb? (Am I the only one who wanted to punch him in the nose at that moment?). This guy had six days to prepare himself for a press conference and he still could not avoid sounding like Homer Simpson? Anyway, read this:

Chertoff: Katrina scenario did not exist

and this:

Washing Away

Unforeseeable, Mr. Chertoff?

Then we have the head of FEMA stating that he didn’t know about the crowds at the New Orleans convention center needing evacuation (and food and water) until THURSDAY, three days after the hurricane. Maybe the guy ought to turn on his TV and tune to CNN. Apparently he’d learn more from watching a cable news network than from his own organization. Or maybe he should have called the mayor?

If this is the best that we can do in the case of a disaster for which we have several days’ advance warning, I don’t want to see what happens in the event of either of the other two already-identified ultra-disasters, which of course will occur without any advance notice. All those billions of dollars we have spent to plan and prepare, and this is the result?

I don't see evidence of criminal intent, as Rick's comment implies. But you can be darn sure that a failure of this scope in any private corporation would cause heads to roll among the top officers. Bush finally said that the federal government’s efforts were "unacceptable," but I give you dollars to donuts, at the end of the day Bush and Michael Chertoff and Michael Brown will be high-fiving each other on what a great job they did.