Crony Capitalism and Obama's Anti-Coal Crusade
Barack Obama has long sought to bankrupt the coal industry. But, Cook County politician that he is and always will be, the relevant question is: who benefits from his plans wreck a major portion of our economy while also boosting electricity prices across America?
A clue: he and his pals from Chicago have incestuous ties to the one company whose prospects will be boosted by Obama's policies.
While Barack Obama has broken many promises he made along the campaign trail to the Oval Office, one promise seems close to whatever heart he may have: to bankrupt the coal industry.
He told the editorial board of the San Francisco Chronicle on January 17, 2008 of his plans:
So if somebody wants to build a coal-powered plant, they can; it's just that it will bankrupt them because they're going to be charged a huge sum for all that greenhouse gas that's being emitted.
That will also generate billions of dollars that we can invest in solar, wind, biodiesel and other alternative energy approaches.
The only thing I've said with respect to coal, I haven't been some coal booster. What I have said is that for us to take coal off the table as a (sic) ideological matter as opposed to saying if technology allows us to use coal in a clean way, we should pursue it.
So if somebody wants to build a coal-powered plant, they can.
It's just that it will bankrupt them.
He also promised that under his plans to transform the energy industry "electricity prices would necessarily skyrocket."
While he failed in Congress to pass the cap-and-trade bill that would have been a direct assault on the coal industry (Democrats from coal-mining states, such as Senator Jay Rockefeller from West Virginia joined with Republicans to derail these efforts) and that would have ineluctably led to his goal of sending utility bills soaring, Obama (as is his wont) has used indirect means at his disposal to circumvent Congress and kill off coal. This is his modus operandi: take steps behind the scenes that the media will not disclose to bully his programs to fruition.
He has used his executive power to seal off vast areas of federal land from coal mining.
But it is primarily through the use of his regulatory empire (the number of federal regulations has skyrocketed under his administration) that he has put a chokehold not only on the coal mining industry but also on utilities that burn coal to generate electricity. And, incidentally, this will put a chokehold on Americans trying to balance their budgets (of course, Obama doesn't care about balancing budgets -- such a concept is foreign to him; were it so for us).
Lisa Jackson, the head of the EPA, has been her point person in driving this agenda.
Her most recent and dramatic step has been to pass environmental regulations to make coal-fired generating plants that produce about half the nations' electricity, much more expensive to operate. The Chicago Tribune reports:
Consumers could see their electricity bills jump an estimated 40 to 60 percent in the next few years.
The reason: Pending environmental regulations will make coal-fired generating plants, which produce about half the nation's electricity, more expensive to operate. Many are expected to be shuttered.
The increases are expected to begin to appear in 2014, and policymakers already are scrambling to find cheap and reliable alternative power sources. If they are unsuccessful, consumers can expect further increases as more expensive forms of generation take on a greater share of the electricity load.
Already, prices for electricity are jumping at a time our economy and consumers can least afford more blows.
But there are also those who would benefit from such plans and they include people and companies quite close to President Obama.
From the Tribune article:
One company that expects to benefit from the changes is Chicago-based Exelon Corp., which has a large fleet of nuclear power plants that have low emissions and are cheap to run compared with coal plants.
"The upside to Exelon is unmistakable," CEO John Rowe said last year. "Every $50 per megawatt-day as a change in capacity prices, translates to almost $350 million of additional capacity revenue for Exelon in 2014 and subsequent years."
Rowe said energy prices are also expected to rise if coal plants are retired and replaced with other energy sources, like natural gas. "These changes add up quickly," he said. "A $5 per megawatt-hour increase in energy prices would be $700 million to $800 million of incremental annual revenue to Exelon on an open basis. We expect that at least some of that upside will be realized in the next two to four years."
Sadly, the paper -- an early promoter of Barack Obama's career -- does not delve further into who else may reap the rewards at the American people's expense. What political figures close to Barack Obama have long ties to Exelon?
David Axlerod, Obama's campaign strategist and chief domestic policy adviser (who had the office closest to the Oval one before he left the White House to return to the 2012 campaign trail), has reaped quite a few rewards from doing business with Commonwealth Edison, which became part of the Exelon octopus through corporate mergers (this corporate history is linked to Rahm Emanuel, see below).
Axelrod's firm, ASK Public Strategies, is the "gold standard in Astroturf organizing" (Astroturf organizations are fake grassroots groups that are actually funded and promoted by corporate interests).
From a Business Week article :
ASK's predilection for operating in the shadows shows up in its work. On behalf of ComEd and Comcast, the firm helped set up front organizations that were listed as sponsors of public-issue ads...
ASK's relationship with ComEd goes back much further: The Chicago-based utility says ASK has been an adviser since at least 2002. ASK's workload picked up in 2005, as the Exelon subsidiary was nearing the end of a 10-year rate freeze and preparing to ask state regulators for higher electricity prices. Based on ASK's advice, ComEd formed Consumers Organized for Reliable Electricity (CORE) to win support.
CORE (and Com Ed and David Axelrod's ASK) were successful in their efforts to fool people and pressure regulators and politicians into accepting rate hikes.
Now we have Barack Obama, his hand-picked appointees and his cronies pursuing policies that will again boost electricity bills and benefit Com Ed and its corporate parent. A richer Exelon is a happier client for David Axelrod. While Barack Obama has angered many in the corporate community, rest assured that dollars will flow from the corporate coffers and officers of Exelon to fund Obama's road to the White House. History repeats itself as farce.
Who else may benefit from this rape of electricity consumers? There are the legions of investors in green schemes who are Obama supporters and whose uneconomic projects can only succeed through government arm-twisting (an Obama talent).
Then there is Rahm Emanuel, Obama's longtime political ally and his former Chief of Staff who recently became Chicago's mayor. But between stints in politics he took the revolving door between politics and business and signed up for a very lucrative and brief career in investment banking. This is the very same revolving door Obama has promised to close. Who was his major client? Need one ask? The aforementioned John Rowe, Chief Executive Officer of Exelon.
In a Forbes magazine article from 2009, Rowe boasted of his decade-long planning for more expensive coal. His plans have borne luscious fruit.
Rowe, 64, the longest-serving utility executive in the industry and chief executive of Exelon, the country's most valuable utility by market value, is indeed in the catbird seat. While Exelon and the rest of the utility industry has been battered by a weak economy and suddenly low electricity demand and prices, Exelon has a lot to look forward to. Soon after Rowe created Exelon in 2000 with the merger of the Chicago utility Unicom (parent of Commonwealth Edison) and the Philadelphia utility Peco, he sold off most of the company's coal plants and focused the company on nuclear. He created a generation subsidiary that sells the power produced by 17 reactors, by far the largest nuclear fleet in the nation and the third biggest in the world.
This statement (commendable in its brute honesty) is akin to a smoking gun: Exelon is the biggest and most direct beneficiary of Obama's energy policies. Rowe knows Chicago politics as well as he knows how to run nukes (he has an admirable record in doing so). Whose bread was buttered over the years as Exelon grew ?
Exelon has very deep ties to the Obama Administration. Frank M. Clark, who runs ComEd, helped advise Obama before he ran for President and is one of Obama's largest fundraisers. Obama's chief political strategist, David Axelrod, worked as a consultant to Exelon. Obama's chief of staff, Rahm Emanuel, helped create Exelon. Emanuel was hired by Rowe to help broker the $8.2 billion deal between Unicom and Peco when Emanuel was at the investment bank Wasserstein Perella (now Dresdner Kleinwort). In his two-year career there Emanuel earned $16.2 million, according to congressional disclosures. His biggest deal was the Exelon merger.
For history buffs, Com Ed at one time was headed by Tom Ayers, a power broker par excellence in Chicago. Ayers was the father of Bill Ayers -- the former Weatherman terrorist who gave birth to Obama's political career and had close Obama ties through Chicago-based activist groups (he was not just "some guy in the neighborhood" whose kids play with Obama's daughters as Axlerod characterized Bill Ayers; Ayers' children are adults -- what kind of play did they have with Obama's prepubescent daughters? Journalists never asked that question and many others that they should have back in 2008).
Obama learned a great deal from his time spent in the muck of Cook County politics. There is a saying in Chicago that when people seek positions or contracts from Chicago politicians and their bureaucratic puppets they are asked " Who sent you?"
All too often the answer has been Exelon. But now the question should be asked not in Cook County but by journalist in Washington, D.C. when electricity prices "necessarily skyrocket" across America.
Think about that when you rush to turn off your lights: Obama and his cronies like to keep us int he dark.
Ed Lasky is news editor of American Thinker