Notes: 1998 Enron Meeting on Climate Change

By Robert Bradley Jr. -- August 9, 2023

“… why doesn’t a congressional subcommittee call these companies and a few more to tell us exactly what they are up to and what is going to happen to energy prices where parties have to buy credits for something that is not a pollutant?  After the meeting the company that has done the most to sell Kyoto should be awarded naming rights.”

I had a front row seat to many things energy and climate during my 16 years at Enron (1985–2001). At Political Capitalism, I described my Enron experience debating climate science and renewable policy (here).

Enron, in the words of a Greenpeace ex, was “the company most responsible for sparking off the greenhouse civil war in the hydrocarbon business.” [Jeremy Leggett, The Carbon War (London: Penguin Books, 1999, p. 204)]. And Enron did much to bolster, even save, the U.S. solar and wind industries.

I recently located a set of notes that I made of an Enron climate change meeting help June 24, 1998. I reproduce it for posterity.

Science

• It is sad to note that Enron folks started learning about the science on June 24, 1998, several years after pursuing global warming policies
• We had a two-hour meeting with Dr. Gerald North of Texas A&M University and myself
• People now know that there are many scientific uncertainties and some good points in favor of the skeptics
• At the close of the meeting, I made the point that the skeptics case is not “tobacco science.” No one demurred.

Policy

• John Palmisano under the wing of Terry Thorn presides
• Dick Forrester of the White House has asked Enron to submit an early crediting plan
• Whole key is to get businesses to start investing in credits so that once they have built up an inventory, they will be “bought off” to support Kyoto
• American Electric Power (AEP) is currently in the lead with over $5 million in the bank, and Enron and British Petroleum are in the hunt as well
• Big problem: voluntary CO₂ reduction programs are losing favor since companies are not sure about being able to generate credits if a program later starts
• Al Gore has a crazy plan to solve Russia’s “hot air” problem by having the U.S. government buy their credits to then allocate to U.S. businesses who want to ‘pollute’. That is controversial, however, because the traders like Enron would be bypassed—no margins there
• Enron—they have been arguing for years for mandated access to other people’s grids on the premise that lower rates would ensue—then in the dark of night they push Kyoto that will knock rates back up and more.
• What about the bad credit problem?
• Oregon has launched the nation’s first CO₂ credit program with a rumored value up to $1 per ton.
• Lots of interest in NOx trading to set up prototype for CO₂ trading
• Worries about certification and verification
• Goal to have CO₂ trading program up by 1999
• British Petroleum has a staff of 11 working on international credit trading
• Government programs where credits can be donated for a tax credit
• Clandestine meetings with the White House and EPA to devise credit program.  Enron, already the world’s largest air permit trader with SO2, is going after CO₂ damn the science

Final Comment

While Democrats and Republicans alike are saying a resounding NO to the Kyoto Protocol, Big Energy is paving the way for a backdoor implementation.  British Petroleum is the first out of the gate with a cadre of traders working on international CO₂ buy/sell opportunities. 

Of course, BP CEO John Browne has studied the science and is acting in society’s best interest (sarcasm).  American Electric Power has accumulated a hoard of CO₂ credits and is itching for the Kyoto gun to go off.  Enron is meeting with the EPA and the White House to set up the air permit rules. 

Here’s an idea: why doesn’t a congressional subcommittee call these companies and a few more to tell us exactly what they are up to and what is going to happen to energy prices where parties have to buy credits for something that is not a pollutant? After the meeting the company that has done the most to sell Kyoto should be awarded naming rights.