Category: Energy Sources, Policy and Issues

Sons of Wichita

The Book of the Week is “Sons of Wichita, How the Koch Brothers Became America’s Most Powerful and Private Dynasty” by Daniel Schulman, published in 2014.

Born in Texas in 1900, Fred Koch was of Dutch ancestry. He pronounced his name “coke” instead of the way the late former mayor of New York City (Ed “cotch”) did. He and his wife Mary bore four sons– Fred Jr., Charles, and David and Bill (fraternal twins), starting in 1933.

Fred was a chemical engineer who moved to Wichita, Kansas and became wealthy in the oil-refining industry. In the early 1930’s, he did business with the U.S.S.R. At the dawn of the 1940’s, he switched to ranching due to legal action over patents that Universal Oil launched against Fred’s company, Winkler-Koch, and also Root Refining. His oil company broke up in 1944.

In 1958, Koch joined the new John Birch Society, a rabidly anti-Communist group who saw Communists everywhere it looked, including those in unions, in charge of government financial programs, and in the United Nations. And the Boy Scouts. It aggressively spread hysteria about these people who were a threat to the American way. Fred had seen the political system in the Soviet Union when he was there, and realized it oppressed people.

Fred, Jr. took after his mother and upon reaching adulthood, moved to New York City and ran with the theater crowd. Charles, his father’s favorite, was groomed to take over the family business, which became Koch Industries. He did so in late 1967, when Fred passed away. The business made acquisitions in the oil industry and its sole goal was growth.

Charles had previously acquired extensive education in chemical and nuclear engineering. In the early 1970’s, he became interested in acquiring knowledge on the political ideology of libertarianism. He became a convert to it in its most extreme form. It espouses the belief that a purely capitalist society is the best economic system. This means total deregulation, no entitlements such as government-administered retirement or medical plans, no unions, no socialism of any kind, no income tax, and a government whose role is only to protect citizens and property from each other and outsiders, and from fraud.

In 1980, David Koch ran for American president on the Libertarian ticket. He knew he couldn’t possibly win but the goal was to plant seeds for future acceptance of his political ideology.

In early 1997, Charles co-founded the Cato Institute, a libertarian think tank. He and his brother David poured money into front groups that aggressively lobbied to reduce the size of government and expand the public’s freedoms. In 2008, the brothers opposed the taxpayer bailouts of companies bankrupted by the subprime mortgage crisis, and opposed deficit spending. They also denied allying with the Tea Party politicians but were secretly supporting them. About a year later, Charles and his henchmen launched fierce opposition to President Barack Obama’s national health care plan.

During his 2012 reelection campaign, Obama viewed the Koch brothers as a bigger threat than his Republican opponent, Mitt Romney. Obama copied the Kochs’ above actions (forming propagandizing front groups) to counteract the libertarians. Successfully.

As a result of their political mentality, Charles and David could have cared less about the environmental destruction and wrongful deaths their company caused due to poorly maintained oil and gas pipelines. Perhaps to salve his conscience, David made huge donations to cultural institutions, especially in New York City. The liberals (hypocritically) gratefully accepted the money, notwithstanding David’s political activities that led to rack and ruin. He also heavily funded medical research on prostate cancer, presumably to enhance the chances of his own physical survival.

Read the book to learn of the lawsuits that started in 1982 that Bill launched against Charles on various causes of action; the details of the Koch Industries’ legal troubles; the brothers’ sibling rivalry; the corporate culture of market-based management that Charles instituted in the family business; and what the siblings did for fun and profit; etc., etc., etc.

The Age of Heretics

The Book of the Week is “The Age of Heretics, Heroes, Outlaws, and the Forerunners of Corporate Change” by Art Kleiner, published in 1996. This is a description of the consciousness-raising theories, thinkers, psychological researchers and organizations that spurred different ways of thinking, and futurism, in some American workplaces starting in the 1940’s.

A study of group dynamics of eleven-year old boys conducted by Kurt Lewin in the 1940’s tested three different scenarios. They examined democratic, autocratic and socialistic models of leadership. The most mature group was found in the first model. The second spawned a form of Nazism. The third model’s group members displayed resentment of lazy and non-cooperative individuals. In the 1960’s, a similar study done by Michael Maccoby among CEO’s yielded similar results.

In the mid 1940’s, management consultant Eric Trist found that people work well when their workplace culture consists of a bunch of small communities– each group sees how they fit into the system as a whole, working toward a common goal. He transferred the application of his theory to small groups of some of Procter and Gamble’s employees. They worked well together too, reaping handsome rewards for their employer and themselves. However, the author failed to mention whether they were unionized.

The program was kept top secret, lest the company’s competition copy them. In the early 1970’s, a similarly successful corporate culture was duplicated in Topeka, Kansas at a dog-food plant of General Foods. But upper management was still resistant to adoption of the democratic method of work.

In the mid-1960’s, Saul Alinsky was another heretic  (or arguably, hero or outlaw) who effected change. He pioneered shareholder activism to help underprivileged communities fight back against socially irresponsible corporations. He had local residents adversely affected (for instance, by pollution) by a major employer in a community, purchase stock of the employer in order to give those residents a voice at the company’s annual meeting.

The author wrote that the birth year of Amory Lovins, patent applicant for magnetic resonance imaging, was 1951 (which might not be accurate). Nevertheless, in the mid-1970’s, the brilliant scientist raised the alarm on environmental destruction of earth, suggesting that people harness solar energy, build wind farms, and heavily insulate their buildings. He proclaimed that nuclear power was horribly inefficient because it generated excessive heat.

It might be recalled that in the mid-1970’s, Ralph Nader confronted numerous hegemonic groups of individuals who lacked a moral compass. He “seized the day” during which the Watergate investigation revealed that “… a blustering, vicious, foulmouthed spirit lurked behind the presidential image.”

In the early 1970’s, Royal Dutch/Shell’s management structure and intellectual capacity to think ahead was anomalous compared with other major American oil companies.

Read the book to learn of how Shell formulated an accurate prediction of the oil industry a few years hence, and how it weathered the international storm (hint– the storm involved crisis-fabrication, a tool used by manipulative, power-hungry, greedy leaders everywhere); learn of the fate of a management consulting organization that spread its gospel to lots of workplaces; and much more.

Sleeping With the Devil

The Book of the Week is “Sleeping With the Devil” by Robert Baer, published in 2003. This was a warning of a former CIA agent that America’s relationship with Saudi Arabia was high-risk for various reasons. The author briefly described how the latter’s royal family came to be a controversial ally of the United States government, and why the delicate situation would not last forever.

At the book’s writing, the large oil fields in eastern Saudi Arabia were vulnerable to terrorist attacks, as was the refinery at Abqaiq. Refineries are important because they make oil usable. The country’s borders are hard to defend, and all sorts of weapons can be obtained on the black market.

The author wrote that fifteen citizens of Saudi Arabia, plus four other terrorists took control of the planes that crashed on 9/11.  Osama Bin Laden, the supposed mastermind behind the attacks, was of Saudi origin. More TERRORISTS from SAUDI ARABIA than from Afghanistan and Iraq were responsible for the attacks. Dubai stored the required funds for them. As is well known, then-U.S. President George W. Bush was determined to remove Iraqi leader Saddam Hussein from power to keep the price of oil low for Americans, and enrich his former business cronies. So he made the false claims that Iraq had nuclear weapons and was harboring terrorists.

Even during the Clinton years and especially during the Bush, Sr. years, the United States secretly kissed up to Saudi Arabia; for it got a discount on its oil, money to line the pockets of its politicians, consultants, diplomats and defense contractors, and in exchange, it built refineries, telecommunications networks and schools in its oil ally. The activities of the Carlyle Group, Dick Cheney and Halliburton, among many others, were fraught with conflicts of interest. To sum it up, “At the corporate level, almost every Washington figure worth mentioning has served on the board of at least one company that did a deal with Saudi Arabia.” Terrorist funding was also supplied through “charitable” organizations. The Saudis had megabucks on deposit in bank accounts and invested in the securities markets in the United States.

After 2001, several groups continued to seek to strike fear through violence; the best known included certain individuals in the country of Qatar, the Wahhabis, the Muslim Brotherhood and al Qaeda.

The author claimed that U.S. taxpayers were footing the excessive bill for the Saudi royal family’s security detail. The family consisted of numerous princes, who had Filippino or Indonesian servants. The princes received oil-funded, extremely lavish allowances, which they squandered on residences, vehicles and prostitutes. To make additional money, they dealt in black-market weaponry, visas, liquor and drugs, and abusing what industrialized countries would call “eminent domain.”

Read the book to learn of the author’s account of yet additional outrages in connection with the willful ignorance and greed of the United States government when it came to cozying up to the terrorist state of Saudi Arabia.

The Law of the Jungle – Bonus Post

This blogger skimmed the ebook, “The Law of the Jungle” by Paul M. Barrett, published in 2014.  This is the story of a decades-long court case involving oil contamination in the Amazonian rain forest of northeastern Ecuador, to which a number of cliches apply:

Pox on the houses of both the plaintiff and the defendant;

A man is known by the company he keeps; and

When you lie down with dogs, you get fleas.

Starting in 1993, the plaintiff, represented by a greedy, egotistical, loudmouthed, yet shrewd attorney– Steven Donziger– claimed that defendant, Texaco, and then successor Chevron oil company, had caused illness, deaths, and damage to the quality of life of thousands of farmers and tribesmen in Ecuador. The Amazonians were allegedly poisoned by the oil-contaminated streams where they fished, bathed and gathered drinking water. The oil company had established a presence in their villages since 1964, when it forged an agreement with the Ecuadorian government to drill on 3.5 million and later, 4 million acres in the Oriente region.

The author tells a suspenseful, controversial story that reveals valid arguments on both sides. There was evidence of serious disruption of villagers’ lives. This included cancer clusters and other health issues that plagued the Ecuadorians, pollution of the place where they lived, the unintended consequence of violent fighting for jobs and over income inequality between Indians and homesteaders, etc. directly attributable to the activities of, and inept cleanup of, oil that allowed spreading of toxic chemicals by, the petroleum companies. On the other hand, over the years, the economy of the country of Ecuador made great strides due to the companies’ building of, and heavy investment in, transportation infrastructure and the side effects of job creation and good political relations that would not have occurred but for the corporate presence in Ecuador.

According to the author, the plaintiff’s attorney went after “big oil” rather than “… a struggling national government responsible for letting down its people” because big oil had more sex appeal. It could also be that big oil had deeper pockets.

In sum, “The oil pollution suit was not unique. Ecuador’s judiciary had a well-earned reputation for corruption and chaos.”

Read the book to learn of the various sleazy tactics employed by both sides in the dispute, and to get a concise, eloquent summary of the whole story– read the “Conclusions” section of this ebook.

A Sea In Flames

The Book of the Week is “A Sea In Flames, The Deepwater Horizon Oil Blowout” by Carl Safina, published in 2011. This is a description of the disaster that spewed millions of gallons of oil into the Gulf of Mexico starting in late April 2010.

British Petroleum (BP)– the oil company– was the major party responsible for killing eleven workers and causing ongoing long-term emotional trauma and major financial hardships for thousands of people. BP’s poor safety record, and favoring money over human beings made it more of a scapegoat than the other parties involved– Halliburton, Transocean and other subcontractors that were providing equipment and services for deep exploratory drilling.

The accident’s aftermath was a cluster screw-up. Both plugging the oil leak and cleaning up the oil were uncharted territory, literally and figuratively. Previously, greedy politicians had been loath to regulate the oil industry because they needed the industry’s campaign contributions to win elections.

A month after the disaster, President Obama prohibited deep sea drilling for six more months. Even so, in June 2010, a federal judge nixed such legislation for economic reasons. It was clear that the government continued to woo the oil companies, at the expense of the victims. That judge cared more about the nation’s fiscal health than about people’s health and the environment.

The victims include not just humans, but civilization as a whole. This blogger contends that it does not matter that the victims are voters. They are easily psychologically manipulated. The oil mess has incalculable, ambiguous biological and environmental consequences. However, hard economic numbers win elections because money is more important to voters, too. Voters will readily believe a storm of economic misinformation, including the incorrect notion that clean fuels cost more than fossil fuels. Electoral mudslinging that asserts that the opposing candidate allowed serious health problems and scary ecological goings-on to occur, to which oil contamination might or might be attributable, do not win elections.

This is just one more depressing piece of writing that reminds us that we are all destroying our earth.