Electric Crisis Shocks California
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By John Elvin
elvin@insightmag.com
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The Sierra Club environmentalists told the leaders tasked with assuring that California would have plenty of electric power that their objective was to shut down the state.
As the lights go out in California, thanks to the Democratically controlled Legislature’s flawed deregulation scheme, the search for solutions is under way.
Although other states, such as Pennsylvania and Texas, have deregulated without incident by providing incentives to increase production facilities, the California plan concentrates on guaranteeing retail rates while freeing wholesale prices to increase with demand. And while the industry was eager to sign up when it looked like wholesale prices would be low, the unexpected upward zoom in demand has raised the wholesale price of spot electricity, set by bidding in the daily market, to levels that are threatening to bankrupt some companies.
Yet instead of taking steps to encourage the building of private power plants, the California Legislature has been discussing solutions such as “socializing the peak” — building government plants that would come online when demand is greatest. But it is quite possible that an educated public might not want to foot the enormous bills for government power plants, particularly since they already are paying the nation’s highest electricity prices. And there is talk of socializing the industry’s debts also, by approving bond issues to bail them out. But the real problem, say conservative critics, is that California has a built-in aversion to new private plants as a result of many years of ecological proselytizing by environmental groups. The crisis is the result of California ecological dreaming.
Industry sources say modest reductions in environmental constraints would encourage private industry to build its own new production facilities, but California has been unwilling to make accommodations so no new plants have been built in years. Apparently, “modest” means one thing to industry and quite another to regulators and activists. That attitude goes back a long way in California. Looking into it, Insight made a surprising discovery.
As it turns out, the stage for California’s current crisis was set many years ago in a confrontation between a captain of the power industry and a handful of leaders of the environmental-activist group, the Sierra Club. It was a meeting rife with possibilities for the future; instead, it ended on a sour note that echoes in the adversarial relationship between environmentalists and the power industry that exists today.
The captain of industry was William R. Gould. His name may not bring a roar from the grandstands on today’s playing field but, in his time, he was a world-class mover and shaker in the energy field, a Kipling-quoting visionary and innovator, a pioneer in the use of new technologies. He retired as chief executive officer of Southern California Edison in 1984 with a huge bouquet of laurels upon which to rest. There are university lectures named after him and medals given in his name.
The industry as Gould knew it in the early days is difficult to imagine, given the complexity of today’s power market. In those days, a consumer had to be in some proximity to a generating plant in order to obtain electricity. Today, a mighty web of transmission lines can shoot power border to border, or from Canada to Mexico, for that matter. In the early days, Gould looked at the huge hydroelectric plants producing excess power in the Northwest during the spring runoff, and at the plants far to the south that had the capacity to generate extra power overnight, and he had a grand idea: He envisioned what became the Pacific power grid.
Gould would assert that the effort was a team endeavor, a “we” thing, but his leadership is well-documented. The result — so accepted today that disruptions in its functioning cause panic — was that power could be shipped from distant points to accommodate peak demands as needed. This was a remarkable accomplishment. Gould’s work served as the model for the nation. He changed an industry that had advanced little since the days of Thomas Edison. Having been, as a power-company executive, the target of a press sympathetic to the emerging environmentalist propaganda machine, he was delighted to find himself hailed for once as a “courageous maverick.”
The 1960s and 1970s were a tumultuous era in many ways, prominent among them being the emergence of a powerful environmental movement. This movement claimed to be interested in alternatives to generating plants fired by coal and oil. Gould, the courageous maverick, had at the same time directed his company’s efforts toward development of renewable energy sources. He asked his engineers and scientists to “carefully examine every emerging technology for producing, transmitting and distributing power, including those of nontraditional methods.” In 1982, Southern California Edison was awarded the John and Alice Tyler Ecology-Energy Prize for its commitment to developing alternative energy sources. One might think it was a match made in heaven: Gould and the environmental movement.
Well, think again. The elite brigade of the movement, the Sierra Club, was already throwing up roadblocks in the path of power companies. “They had opposed him on many, many things,” a source familiar with the situation recalled. “So he arranged a meeting with the top brass to ask what it would take for them to make an accommodation.” Exactly when the meeting took place could not be determined. It was held at a major hotel in what was then an emerging battleground on the environmental front: Utah.
Think about the implications of that event. A giant of the power industry, arguably the father of the power-delivery system that serves the West Coast today, reaches out to the giants of the environmental movement, a group destined practically to dominate the future of energy policy in this country. Let’s work together, he was saying. And the offer was rejected most emphatically. What might have been a partnership became the adversarial battle of today.
That meeting has become somewhat legendary in conservative circles for what it revealed about the San Francisco-based Sierra Club. The group is billed as the oldest and largest environmentalist organization in the nation and is recognized in an Aspen Institute survey as “the most influential environmental organization in matters of federal policy” in the eyes of members of Congress and key federal officials. The organization also is known for its ferocity in the political arena, committing millions of dollars to defeat its foes and elect Democrats with records that meet its approval.
Gould, relieved to have put years between himself and the days when he was “a whipping boy in the editorial pages of the national press,” was not thrilled when tracked down by Insight in Long Beach, Calif., a feat accomplished with the aid of his friends, family and a former FBI agent. He was gruff and wary. Reminded of the Sierra Club incident, he expressed reluctance to comment directly but referred to speeches, past news reports, papers in the keeping of the universities of Utah and Southern California and friends and associates who were familiar with the event.
Friends and associates came through. Two sources with knowledge of the meeting tell Insight that a Sierra Club leader told Gould the group was “not interested in accommodation.” They were not even interested in what is perceived to be conventional conservationist concerns, the welfare of wildlife and so on. It was at this point that the Sierra Club leader perhaps went further than he intended, going beyond disdainful rejection to reveal an agenda far beyond the club’s public image as a purveyor of pretty books and calendars. As one source put it: “They said that what they were interested in was creating a society restructured along the lines recommended by the Club of Rome.”
Is that a fact? Gould did not dispute the details. He was asked if the comment might have come from the legendary David Brower, longtime neo-Luddite guiding light of the Sierra Club, also known by critics as the “Arch-Druid.” Was it Brower or his disciples who spelled out the organization’s radical agenda for Gould? He doesn’t recall. “It’s been many years now and I can’t tell you who (among those at the meeting) said it,” Gould responded. “I had many strange encounters in those years. I would want any quote to be accurate so I just won’t speculate.”
Regardless, a look at Brower tells us much about whoever delivered the message to Gould. Brower was a firebrand whose controversial radicalism divides the Sierra Club to this day. Ousted at one point from his leadership position, perhaps about the time the confrontation with Gould would have taken place, he more recently returned to the board of directors. He had nearly triumphed in a takeover attempt last year when ill health caused his withdrawal. A fighter all the way, he denounced Al Gore’s timidity regarding the environmentalist agenda and endorsed Ralph Nader in the presidential election.
Berkeley, Calif.-born Brower spent much of his early career in the conservation movement, as it was then called, battling the old Bureau of Reclamation, a federal agency staffed mostly by Westerners who envisioned the wild rivers dammed into pools to generate needed power, for flood control, to supply water for livestock and agriculture and for recreational use by average Americans.
“I hate dams” was Brower’s literal motto from the start, a centerpiece of his speeches. He told author John McPhee: “The Bureau of Reclamation engineers are like beavers. They can’t stand the sight of running water.” He fought them with rhetoric, films, books and advertisements; he was in his day the leading environmentalist in America.
McPhee records a conversation between Brower and Floyd Dominy, then-commissioner of the Bureau of Reclamation. Dominy: “Come on now, Dave, be honest. From a conservationist’s point of view, what is the best source of electric power?” Brower: “Flashlight batteries.”
Brower served as a role model for many of today’s “no-compromise” activists. His adherents include David Foreman, a founder of the ecoterrorist EarthFirst group. Foreman at one time was charged with felony conspiracy and later given a suspended sentence for his part in an attempt to blow up electric-transmission towers. He currently heads the Wildlands Project, devoted to turning the Midwestern states back to their “natural” grassland and woodland state, sans human beings, as it might have been prior to European arrival.
“Our vision is simple,” according to a statement by Foreman and company. “We live for the day when grizzlies in Chihuahua have an unbroken connection to grizzlies in Alaska; when gray-wolf populations are continuous from New Mexico to Greenland; when vast unbroken forests and flowing plains again thrive and support pre-Columbian populations of plants and animals; when humans dwell with respect, harmony and affection for the land; when we come to live no longer as strangers and aliens to this continent.”
And Californians think rolling blackouts are a bother. Wait until the gray wolf is at the door. EarthFirst, by the way, served as a model for the even more radical Earth Liberation Front (ELF) now much in the news for numerous acts of arson, sabotage and vandalism. Those unfamiliar with ELF may get a sense of its mission by the following, from one of the group’s manifestos: “Economic sabotage is the only thing the Earth-raping, animal-abusing scum will respond to.”
At any rate, Brower, Foreman and even the ELF gang give you an idea of the sort of folks who helped precipitate today’s energy crises through their opposition to conventional energy. And what drives them? Love of the land, they would likely say. But let’s get back to this Club of Rome for the real story. What sort of model did it provide for the Sierra Club?
The Club of Rome is an elite international group of 100 select Marxists, socialists and other leftist academics, policymakers, scientists and national leaders now headquartered in Hamburg, Germany, with regional support centers and national associations around the world. While the core group is restricted to 100, during its prime an association membership list for the United States contained about 1,500 names, many of them quite prominent.
The Club of Rome’s reputation is built on the doomsday report Limits to Growth published in 1972. The report predicted imminent global disaster due to out-of-control population growth, industrial expansion, depletion of natural resources, food shortages and environmental degradation. And here’s the kicker: These catastrophic results might be avoided through creation of a collectivist world government and through a “global society” to replace “sterile nationalism” with its evil emphasis on competition and consumption.
Most of the club’s predictions —paralleling those of guru-of-doom Paul Ehrlich, whose more radical followers favor voluntary extinction of the human race — were so far off base as to be laughable. Curiously, its prominence began to fade almost coincident with the demise of the Soviet Union. In terms of impact and influence, though, the Club of Rome still is riding high. Its predictions were incorporated into numerous textbooks that remain standard fare for environmental education. The group’s report is credited with shaping the thinking, if that is the word, of environmental evangelists such as Ted Turner and Al Gore and even of entire bureaucracies such as the Environmental Protection Agency. The club’s current interests include pushing energy credits for underdeveloped countries which could sell them to “polluting” countries, as well as some form of global taxation to assist further in the redistribution of wealth.
So when the Sierra Club says that it is following in the footsteps of the Club of Rome, it is talking about a no-growth, one-world, collectivist agenda. As many observers have pointed out, the environmental movement is the new refuge of Marxists and socialists who have found themselves homeless with the fall of the Soviet Union and communism. What is the big attraction? The meeting between Gould and the Sierra delegation would seem to make it quite clear: They are, begging the spotted owl’s pardon, birds of a feather.
“Like socialism, environmentalism combines an atheistic religion with virulent statism,” writes free-market columnist Lew Rockwell. “But it ups the ante. Marxism at least professed a concern with human beings; environmentalism harks back to a godless, manless and mindless Garden of Eden.” Rockwell continues: “And like Marx and Lenin, they are heirs to Jean-Jacques Rousseau. His paeans to statism, egalitarianism and totalitarian democracy have shaped the left for 200 years, and as a nature worshipper and exalter of the primitive, he was also the father of environmentalism.”
So it appears that rolling blackouts and the other dark-age ramifications of the energy crisis in California, particularly the grim economic implications for the state and nation, are right in keeping with an agenda announced at that meeting long ago. Gould agrees, with some reservations. “The environmentalists have made it more difficult” for the power companies and utilities, he says. He recalls that, at the time of his retirement, there were some 52 permits required to build a nuclear power plant “and the environmentalists could testify against the project at every step of the way.” His parting words of warning to his successors in the industry reflected an emerging collective or groupthink approach to the energy situation that culminated in the current debacle. “When electricity is everybody’s business, it’s nobody’s business,” he recalls saying.
In a final observation regarding deregulation, though, Gould tells Insight that it doesn’t matter who opposes new production plants if no one is going to build them. “There are some things you can’t leave to chance because they are the life support of society — water, electricity, natural gas. Somebody has to be overseeing the total picture.”
And to whom should that responsibility fall? Certainly not the deregulated “entrepreneurs eager to make larger profits” or “Ivy League M.B.A.s and lawyers who think all you have to do is read a profit-and-loss statement, that you don’t need technical competence.” That leaves? Gould pauses, thinking back.
“We used to operate as a public trust, providing a service to the public.” So it’s the corporate chief executive officer, operating under a regulated government franchise, who should be responsible and held accountable? That’s how it worked in Bill Gould’s day. Ever cautious about making a remark that might seem self-important or gratuitously critical of others, Gould hesitates again. But certainly the visionary whose dream became the Pacific power grid deserves a little credit? Certainly there’s credit due for carrying on when the environmentalists told him to his face that their goal was to put him out of business? All right: “This [California crisis] didn’t happen on my watch,” he concludes, and you can hear the quiet pride in the voice of a man who took care of business.
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