An Interesting Look at the "Risk-Denying" White House

Tying in the Iran Deal and the President's Clean Power Plan might seem a stretch, but Bob Tippee of the Oil and Gas Journal sees a connection:


And, while this video by Nick Snow of the same publication doesn't quite plow the same field, it shows that in the seemingly never-ending quest to "fix" our environment, the need for sound cost-benefit analysis should play a major role:


How decisions can be made or validated without considering risks and costs is troubling question for this administration.

We've seen the consequences of taking action based solely on a political agenda issues without looking at all risks and costs played out in Iraq, Libya, Syria, Afghanistan, ISIS, medical coverage, race relations and other areas.

Calling people who demand such analysis "crazies" is not a sign of mature leadership.

Or any leadership, really.

Federal Stimulus Waste: Another "Green" Projecct Transferring Taxpayer "Green" into Private Pockets

From my brother, Rone Tempest, at WoFile,

Two Elk Stimulus: Big paychecks but no new jobs

Over the past two years, the federal stimulus program paid the owner of a Colorado-based energy company and the company’s Wyoming representative more than $1 million in salaries and benefits for a Department of Energy carbon storage study in Wyoming’s Powder River Basin, according to records obtained by WyoFile under the Freedom of Information Act.

Federal pay invoices show that Michael J. Ruffatto, founder and CEO of North American Power Group Ltd., based in Greenwood Village, CO, received $955,343.29, and Brad Enzi, NAPG’s Cheyenne-based representative and son of Wyoming US Sen. Mike Enzi, $128,394.73 for the Two Elk Energy Park Carbon Site Characterization project from September 2009, when the study began, through July 31, 2011, the last date for which records were available. According to the National Recovery Act Transparency and Accountability Board, Ruffatto and Enzi’s compensation is nearly 20 percent of the total spent so far on the project.

Overall, the price tag of the Two Elk carbon site characterization project is nearly $10 million — $9,949,962.00. Its purpose is to determine if the sub-surface geology of the Powder River basin is suitable for storing CO2 produced by power plants and other industrial sources.

The project was awarded two grants from the DOE National Energy Technology Laboratory. It is part of the Obama administration’s National Recovery Act stimulus package aimed at jump-starting the economy and creating new jobs.

However, in his most recent quarterly filing to the National Recovery Act Transparency and Accountability Board, Ruffatto, a millionaire lawyer and philanthropist who heads the scientific project, reported that “no new direct jobs have been created for this project.”

Rather than creating new jobs, Ruffatto reported, a percentage of his and other North American Power Group employees’ wages were paid for with stimulus funds. He estimated that, in addition, 15 “indirect jobs” and 60 “induced jobs” have been created by the federal stimulus money.

Two Elk

The timing of the stimulus grants was particularly good for North American Power Group. The company had seen a series of setbacks to its ambitious – but long delayed — $1 billion, 320-megawatt Two Elk power plant project 40 miles southeast of Gillette.

North American owns four smaller operating power plants in California, but the Two Elk plant on 880 acres in Wyoming is to be its showcase project. At one point, Ruffatto told investors of plans to build seven power plants on the Two Elk site — biomass, coal and natural gas — to provide power to Colorado and the American Southwest.

Had the dream been realized, he would have commanded a sizeable private utility.

But before the first Two Elk plant could be constructed in Campbell County, a combination of financing, transmission and regulatory problems slowed the construction process to a crawl and then to a standstill. Local residents jokingly referred to the stalled project (in the works since the late 1990s) as “No Elk.”

The latest blow to Two Elk came this spring, when an IRS audit determined that not enough progress had been made on the plant for North American to continue to qualify for tax exempt status on the $445-million in Industrial Revenue Bonds the company holds. The bonds had been sponsored by Campbell County and approved by successive Wyoming governors — Republican Jim Geringer and Democrat Dave Freudenthal.

The bonds were issued in 2007 by Campbell County under a creative interpretation of the US Tax Code that classified the coal-fired Two Elk power plant as a “solid waste disposal and recycling facility” because the promoters, North American Power Group, said they intended to burn “waste coal” from the giant nearby Arch Coal and Peabody Coal mines.

“Waste coal” is coal that mining companies judge not worth the cost of interstate rail transport to power generators. It is generally reburied at the mine site.

Under the North American plan, the Two Elk plant would “recycle” the lower quality coal by burning it. (See earlier WyoFile Story for more details)

Because interest received by tax exempt bondholders is excluded from gross income, the bonds were originally a major selling point for the power plant project.

But in an April 14, 2011, letter to Campbell County officials, the IRS manager for Tax Exempt Bonds Robert E. Henn wrote that an agency examination “determined that the Bond proceeds were not sufficiently spent to provide a solid waste disposal facility as required by the Code. The issuer (Campbell County) and borrower (North American Power Group) asserted that such a failure was the result of unanticipated impediments in proceeding with the facility.”

As a result, Henn wrote, “the parties agreed to convert the tax-exempt bonds to taxable bonds.”

Ruffatto said that North American still hoped to convert the bonds, now taxable, to “tax exempt bonds at a later date.”

In his letter, however, IRS supervisor Henn wrote that Campbell County and North American Power Group “should strongly consider the appropriateness of any future tax-exempt issuances with respect to the project unless there is an imminently implementable plan to buy them back.”

Meanwhile, North American’s website and public statements no longer mention “waste coal” in connection with the Two Elk power plant. Instead, as Ruffatto wrote in an October 26, 2010 letter to the California Energy Commission, it now plans to burn “woody waste resulting from the removal of hazardous fuels in forests throughout the western United States due to an epidemic of mountain pine beetles.”

76 Hours Per Week @ $214.38 Per Hour

Approved in 2009 and 2010, the federal stimulus grants to North American Power Group allowed Ruffatto to use federal funds to pay a significant portion of his own salary and that of several of his key employees, including Enzi, while waiting for conditions to improve for the construction of the Two Elk power plant.

A salaries and fringe benefits invoice for employees from the North American Power Group and North American Land & Livestock for the month of October. (courtesy of the Department of Energy — click to enlarge)

Ruffatto bills the government $214.38 an hour as “chief investigator” for the stimulus project.

Both he and R. Paul Detwiler, chief counsel for the National Technology Energy Laboratory that awarded the stimulus grants, defended the payments to WyoFile as being consistent with the nature of the work and qualifications of the North American Power Group employees. This includes Brad Enzi, a 1997 University of Wyoming journalism-communications graduate and former Washington, D.C., lobbyist, who is paid $80 an hour from the federal stimulus grant, DOE documents show.

Ruffatto, 65, said in a telephone interview that his hourly rates were worked out in advance with DOE and, in his case, represented a “discount” from his normal rate of pay as chief executive of a regional energy company with offices in Colorado, California and Wyoming.

In one month alone — October, 2010 — Ruffatto was paid $73,369.52 in salary and benefits from the stimulus funds, according to the invoices obtained by WyoFile. Ruffatto reported working 305 hours in that month — or 76 hours a week— for the stimulus project, while also performing his other duties as CEO of North American Power Group.

Will the last taxpayer who leaves California please turn out the lights?

Probably time to dust off Atlas Shrugged, when you read analysis like California’s Tipping Point

I think a threshold or tipping point exists in the ratio between the political power of those who pay taxes and those who consume taxes directly. After that tipping point is reached, those who pay taxes become the economic slaves of those who consume taxes.
***
In effect, government workers have hijacked democracy. Instead of state employees working for the people, the people now work for the state employees. As far as the state government is concerned, people in the private sector work merely so that they can be taxed for the benefit of the tax consumers. They’ve entered a condition not unlike like that of pre-industrial serfs.

Of course no one is being whipped, but in effect an ordinary citizen of California cannot get their desires for reduced state spending implemented due to the disproportionate power of the State’s employees and allied interest. It appears now that the government unions will not accept any solution to California’s budget crisis except increased taxes in a declining economy. Ordinary citizens have no choice but to either emigrate or just lie there and take it.

And when they emigrate, I hope they remember what drove them out of California so that they don't start the cycle again in a new state...ooops, too late...

Further, while the state workers are a problem, add in those receiving various benefits from those they vote into power . . .

My name is John Galt.