When Wall Street attacks – environmental edition

Seth Kaplan

A very smart man once told me to never spread criticism and attacks accidentally in the name of rebutting them.  But sometimes you just have to do it.

An odd item popped up in the tubes of the interwebs recently – an anonymous essay attributed only to the financial website called “TheStreet.com” that (apparently) was never actually distributed on TheStreet.com but rather was posted and distributed through the MSN Money personal finance and investing website.

The essay, titled “Consequences of Our Fragmented Energy Policy” makes the argument that the “New Federalism” which it defines as being “Ronald Regan’s vision for returning powers to the state governments” (to be fair they only misspell President Reagan’s name once, getting it right in later references) has led to chaos in our energy system.

The anonymous author believes that state efforts to reduce pollution from power plants are an example of how states are inexplicably raising energy costs and undermining efforts to build a coherent energy system.  But yet the author seems displeased that the FEDERAL Environmental Protection Agency is setting national standards to reduce dangerous pollution from power plants.  This last twist suggests that the author is fundamentally dishonest – they just don’t like the idea that coal fired power plants will be unable to continue to poison and kill with impunity as they done for generations and the whining about federalism and inconsistent state policies is a charade.

At the end of the day the fundamental error is to think that these coal-fired power plants will not retire as our power system makes the inevitable transition to cleaner and more efficient resources.  Of course they will – they are obsolete, dirty and inefficient.  The trick is going to be figuring out how to manage the transition.  Salem Harbor offers us a great example of how to do this – should ratepayers fork over special “reliability” payments to a polluting power plant in the range of $15 – $30 Million A YEAR or should their money be invested in a one time payment in transmission infrastructure, costing $50 to $75 Million, that will allow power from existing natural gas plants and wind to flow into Greater Boston.   And that doesn’t even take into account the very real health and environmental costs the plant inflicts – it doesn’t take wall street wizard to understand that keeping that power plant limping along is truly the bad deal for the people of Massachusetts.

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