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While everyone was paying attention to JPMorgan Chase & Co.’s huge losses caused by botched trading in its London office, Public Citizen was trying get the authorities to focus on its subsidiary, J.P. Morgan Ventures Energy Corp., which appeared to be immersed in a far more serious practice, potentially illegal manipulation of markets for electric power. The regulators are finally doing that.
The announcement today by the Federal Energy Regulatory Commission (FERC) that it is investigating whether the unit complied with FERC’s requests for operational information is welcome news indeed. FERC is questioning whether the subsidiary submitted misleading information or omitted material facts in its communications with the commission, the California Independent System Operator and the operator’s market monitoring department.
The last thing energy consumers need is another Enron. We’re glad to see FERC on the case.
Tyson Slocum is Public Citizen’s Energy Program director. Follow him on Twitter @TysonSlocum.
The Department of Justice reportedly is seeking a $25 billion settlement with BP that would resolve all civil and criminal damages and liabilities arising from the 2010 Gulf disaster that killed 11 workers and did untold damage to the ecosystem – even though the company’s liability is at least $51.5 billion. The settlement also reportedly would keep both parties out of the courtroom and BP senior management out of jail.
Should the parties settle prior to a trial, any settlement must allow for full recovery of the Gulf Coast region and its communities; deter other companies from putting profits before safety; and involve the disclosure of all information gathered by the government, so the public has a complete understanding of the wrongdoing that killed workers and continues to wreak havoc on the environment.
The following terms should be applied:
• The settlement should include criminal penalties for the company. The settlement should not resolve the criminal penalties for individuals, including for their roles in the Deepwater oil rig explosion that resulted in the deaths of 11 men. The prosecution of individuals should proceed separately.
• A settlement must place financial responsibility on BP for future environmental and economic costs caused by still-undiscovered damage. The costs to the environment from the release of more than 5 million barrels of oil and hundreds of thousands of gallons of chemical disbursement may not be known for decades.
• Permanent sanctions must be part of the settlement. For example, the government should restrict BP’s access to future and current government oil and gas leases, and bar it from federal contracts for good.
• BP should agree not to deduct from its taxable revenues any future costs and fines associated with the spill. The corporation wrote off nearly $13 billion in spill costs from its 2010 income, thus depriving the Treasury of much-needed money.
• All BP documents related to the disaster must be made publicly available and accessible.
• The settlement should include penalties called for by the full spectrum of laws that exist to protect our environment, wildlife and workers. Damages associated with Clean Water Act violations alone have been estimated at $21 billion. Other laws that must be accounted for include the Outer Continental Shelf Lands Act, the Endangered Species Act, the Marine Mammal Protection Act and the Migratory Bird Treaty Act.
• A proposed settlement between BP and the U.S. government must be placed before the public for review and comment before it is finalized. Settlement terms regarding a corporate crime of this magnitude and impact merits public scrutiny and input.
The Justice Department may face White House pressure to settle before the Democratic convention. And if press reports that a settlement will absolve BP and impose only light sanctions are true, BP, too, will be eager to settle. It is imperative that justice, not political expediency, be the primary consideration at the Justice Department.
Tyson Slocum is Public Citizen’s energy program director. Follow him on Twitter @TysonSlocum
After a concerted effort by Republican lawmakers to stall progress on a policy that would lead to cleaner and more fuel-efficient cars, it looks today as if the long-awaited new standard is close to becoming a reality. It is designed to reduce oil consumption by 2.2 million barrels a day and cut greenhouse-gas emissions by 6 billion metric tons by 2025, according to the White House, which hammered out the deal with automakers in July 2011. That will be accomplished by requiring the industry to double the 2011 fuel-efficiency standard of 27.3 mpg to 54.5 mpg by 2025. Automakers have until 2017 to begin turning out vehicles that meet this requirement.
The new environmentally friendly policy resulted from the administration’s ability to extract “cooperation” from an industry at its most vulnerable. After the government bailed out General Motors with taxpayer dollars, the automakers had little choice but to go along with the administration’s proposed fuel-efficiency program – a regulatory policy it has resisted for decades.
President Barack Obama may have called the deal “the single most important step we’ve ever taken as a nation to reduce our dependence on foreign oil,” but it is clear that the industry had to be cornered first before it would agree to the landmark effort to benefit both our economy and the environment.
While Public Citizen applauds the new standard, we won’t kid ourselves about the automakers’ plans for compliance. They managed to build in some wiggle room with a loophole that allows for a 2018 review of the standard, opening the door to possibly adjusting the standard in its favor just one year after it takes effect. We can be sure the industry will attempt to make a case that it is too expensive to meet the federal goal of 54.5 mpg. And you can be just as sure that we will be there, working to hold them to it.
Tyson Slocum is Public Citizen’s energy program director. You can follow him on Twitter @TysonSlocum
American families: no worries. That’s why Blythe Masters and other executives responsible for alleged price-rigging be fired if the allegations by the California Independent System Operator are true.