Independent Guestatorial: Broken promises

The woods are lovely, dark and deep,

But I have promises to keep,

And miles to go before I sleep. – Robert Frost, 1923

Taking care of your parents as they grow old, and of your children and grandchildren, are sacred promises in most cultures. People who love the woods, understand the magic of nature. They know sunlight is the primal source of energy.

Healthy businesses are good for nature and people, financially sound, and not dependent on tax incentives. The U.S. economy is based on short-term profits using nature as a resource and people as consumers. Profits rule, nature and people get the short end of the stick.

Sustainable enterprises are the exception. President Dwight D. Eisenhower, a renowned five-star Army General, was the leader of the World War II Allied forces. His two-term administration is remembered as peaceful and prosperous. Ike built the U.S. Interstate Highway system at a time when resources were limited. Ike understood the long-term benefits of critical infrastructure, and the many jobs created. More than 50 years later, we still enjoy his efforts.

Keystone XL, DAPL, Plains All-American, and Diamond Pipeline are not critical infrastructure, they are high-risk financial Ponzi schemes.

Climate Promise

The December 2015 COP21 Paris Climate Agreement was ratified by the nations of the world in November 2016. Ignoring the Environmental Protection Agency, climate change, and science is unacceptable. Scientific evidence of human-caused climate change can’t be altered by 45 or anyone else.

Photosynthesis is nature’s secret sauce, and the results are amazing. More than 30 percent of greenhouse emissions from burning fossil fuels are captured by the forests. Deforestation, on the other hand, is the cause of 25 percent of greenhouse emissions. Protecting our forests is the top priority for survival, contrary to USFS forestry practices.

Ecosystems renew themselves and provide many benefits, a natural capital. Like financial capital, we had been living from natural dividends until 1975. At this point, due to increased emissions, natural dividends were insufficient and we started eating up our capital. Unlike investment banks, nature does not do deals or bailouts to get out of a crunch.

Fracking Promises

Greg Armstrong was raised in Oklahoma and has a degree in accounting. In 1980 he was a junior member of an audit team for Plains, a small Oklahoma company with annual revenue less than $1 million, and three wells producing 100 barrels of oil per day. Greg joined Plains as controller in September 1981. Today, 36 years later, Greg is the Plains All-American (PAA) CEO. PAA has pipelines and storage tanks, worth more than $20 billion, and $10 billion debt.

PAA has no patents, unique services, or anything else explaining their growth. Their fortune is due to two unusual deals from Congress. A tax treatment and limited liabilities unique to oil and gas Master Limited Partnerships, and a change removing the 40-year oil export ban. PAA greedy investors get tax-free distributions. PAA can increase their capital as needed. On March 1, 2017, Citigroup got a call to sell 48 million shares. Total net proceeds from the offering, after deducting the underwriters’ discounts and commissions and offering expenses, were over $1.5 billion. Deutsch Bank, Goldman Sachs, Wells Fargo and the usual suspects benefit from PAA.

Fracking is a false solution to our climate, economy, and energy challenges. Case in point: without touching a single drop of crude oil, investors profit buying barrels at today’s low prices and futures at higher prices. This gimmick is called contango, one of the reasons to store oil on-shore in Cushing, Oklahoma, and off-shore on stationary oil tankers filled with crude.

Broken promises are lies

How can we trust our government when 45 pays no taxes and hides his tax returns? How can we trust the Arkansas Congressional Delegation siding with 45 to hide his tax returns when he has more than $360 million in loans from Deutsche Bank? How can we have Gov. Hutchinson leading the National Energy Infrastructure Summit when his advisor is Tom Parker? Tom has false notions on fracking and pipeline safety.

Reason will prevail. Diamond is a threat for Arkansas. It can be stopped.

Dr. Luis Contreras