SMOGTOWN

In 2005, the U.S. Department of Justice announced in this press release that Anne Sholtz, a then-high-flying entrepreneuer instrumental in creation of the planet’s first smog cap-and-trade, had admitted to defrauding an obscure New York-based energy trader called AG Clean Air. Sholtz’s little-noticed plea and corporate bankrutpcies ignited a mess that still has many smarting and confused, while giving global warming skeptics such as Texas Rep. Joe Barton ammunition to question the prudence of Pres. Obama’s hope for a greenhouse gas market. Oh yeah, there’s also this issue of whether Sholtz, a former Caltech economist and owner of a resplendent mansion, perpetrated an earlier fraud –with the supposed help of ex-CIA and military operatives — that never went investigated or flagged by authorities. See my story about her and “Operation Bald Headed Eagle” for the particulars.

Now, lookie here. The apparent parent company of AG Clean Air,  is one of the creditors of the Tribune Corp. bankruptcy. For those who don’t know, Tribune owns the Los Angeles Times, our hometown paper, the Chicago Tribune and other media assets. As this story shows, former Disney chief executive Michael Eisner is bidding to become Tribune’s post-bankruptcy chairman.

Here’s a crucial passage: “… Tribune and its creditors are still struggling to negotiate a settlement around charges that (Sam) Zell’s 2007 leveraged buyout was a case of “fraudulent conveyance,” meaning the transaction rendered the company insolvent from Day One. That settlement would serve as the basis for a plan of reorganization, but depending on how negotiations go, it could be months in coming or the case could easily devolve into litigation.

Nobody in the case doubts that senior creditors led by money center bank JPMorgan Chase and two hedge funds, Angelo, Gordon & Co. and Oaktree Capital Management, will end up owning Tribune by virtue of their $8.6 billion in claims …”

In a earlier article, the L.A. Times depicted Angelo, Gordon & Co. as a “distressed-debt hedge fund.” Here’s the company’s website, so judge for yourself.

When I contacted the company for comment about my last story on Shotz last summer, the PR flack initially denied there was a connection between AG Clean Air (which apparently stood for Angelo, Gordon Clear Air) and Angelo, Gordon & Co. until I disputed otherwise and said the court documents show the exact same New York address for both entities: 245 Park Ave., 26th floor, New York, NY 10167.

Coincidene? I think not.

Whether AG Clean Air still exists is not clear. That the parent is the same one entangled in the debacle that Sam Zell created with his highly leveraged Tribune purchase some years back seems undeniable.

How Sholtz and AG fit into the L.A. air-pollution saga is detailed and contexualized in our book, Smogtown: the Lung-Burning History of Pollution in Los Angeles.

Here’s my little Op-Ed on the lessons of former emissions broker Anne Sholtz, who defrauded the very smog cap-and-trade she helped concoct. We write about her spectacular and alarming escapades at length, as well as about L.A.’s air pollution market, in Smogtown: the Lung Burning History of Pollution in Los Angeles.

“In the toxic air of Los Angeles is a primer on human nature as we debate a national cap-and-trade for greenhouse gases.

During the 1990’s, Southern California manufacturers, weary of decades of stern regulation, wanted a new way to shrink their emissions of sky-smudging, health-damaging oxides of nitrogen and sulfur. Their answer was the planet’s first smog cap-and-trade system. Its name was awkward — the Regional Clean Air Incentives Market, or Reclaim — but its implications seismic. Industry finally had flexibility in achieving its cuts, and a motive to reduce more than their yearly pollution cap. They could sell unneeded “credits” for profit!

Though environmentalists caterwauled about corporate sellout, the anti-smog officials were on board. For years, they’d been sandwiched between federal clean air mandates and industry accusations that they had crippled the region’s manufacturing muscle with overzealous rulemaking. Why not allow the market to be the magic?

Leading this vanguard environmentalism was Anne Masters Sholtz, a 30-something Caltech economics professor and aspiring emissions-broker. Her brokerage, which used the Web and advanced software to match trades, lined up heavyweight clients and enlisted marquee financial institutions as trade clearinghouses. Sholtz bought a spectacular hillside estate, won niche celebrity, and had a seemingly blue-sky future in the mecca of whiskey-brown air.

The problem is the system was vulnerable. During California’s electricity brownouts in 2000 and 2001, speculators made a killing off the boutique, $90-million-a-year market by hoarding credits the utilities needed to run full time. By then, Sholtz had twice fleeced the system.

In 1996, she misappropriated roughly $2 million in credits belonging to Chevron, then Mobil Corporation and another client and sold them to Southern California Edison. A few years later Sholtz lulled another client, a New York-based trading outfit called A.G. Clean Air, into believing she owned credits the company needed to complete a lucrative trade with Mobil. In truth the credits weren’t available.

Predictably, local regulators were in the dark about both episodes until industry complained to them. As her case illustrates, and Europe’s cap-and-trade scandals corroborates, even the best-intentioned oversight is laps behind sophisticated schemers, be they full timers or just desperate like Sholtz. Concoct a market anywhere, whether for beads or subprime mortgages, and they’ll show up.

Two House Republicans today are moving to unseal court records of Sholtz’s federal prosecution in a ham-fisted effort to hurt President Obama’s chances for a carbon market. If there’s chicanery with smog, imagine a trillion-dollar greenhouse market, they say. But the Sholtz case is too important for politicization, because global warming is a global threat now.

I’m against Obama’s plans because a more straightforward carbon levy seems more cost-effective and less contrived. Yet cap-and-trades can work, as they generally have in L.A., as long as we remember that to make a commodity out of something is to arouse temptation.”

To read the entire New York Times “Room for Debate” online forum, click here.

Here’s the link to my last story about Sholtz and L.A.’s cap-and-trade. It’s a tale of environmental fraud and foreign intrigue unlike any others.

From the L.A. Times story

“Metropolitan Los Angeles, extending to Riverside and Long Beach, remains the smoggiest city in the United States, with an average of more than 140 days a year of dangerous ozone levels, the American Lung Assn. reported Wednesday in its annual assessment.

All of the nation’s 10 smoggiest counties are in California, with San Bernardino, Riverside, Kern, Tulare and Los Angeles leading the pack. And the state’s cities and counties, with their ports, refineries, power plants and crowded freeways, rank near the top for particle pollution.

“This is not just a nuisance or a bother,” said Bonnie Holmes-Gen, the lung association’s California policy director. “Thousands of people are being rushed to emergency rooms. Thousands of people are dying early as a result of air pollution…. It is a crisis.”

The report comes at a time of conflict over the state’s efforts to slash emissions. Citing the recession-battered economy, trucking and construction firms are seeking to delay California’s rules to limit diesel pollution from operating big-rigs, forklifts and other equipment …”

Let Freddie Mercury reinforce the point: We are the champions … of smog … mostly by our own making!

Class: pay attention!

* Excellent perspective on the phoniness and promise of Earth Day from the Washington Post. Link.

* California Solar Initiative: billions on the line, millions of lives potentially at stake, and yet most are in the dark. For your enlightenment, link up. California: meet Spain. Link to New York Times story on their solar-lifestyle.

*Boeing scientists use organic remedies to remove toxins at Santa Susana Field Laboratory site. Enough said with the L.A. Daily News headline. Link.

*When it comes to long distance running, L.A.’s toxically perfumed air give local athletes that competitive edge. Coughing will knock you off that medal stand. See the L.A. Marathon. Link to L.A. Times blog.

* An EPA man of substance: where was this guy when I was reporting on chromium, et al? Link from the Patt Morrison radio show on KPCC.

* Now this is a real-mini, but will the Third World embrace it in the name of post-climate change and unglamorous function. At least GM is trying, which is better than wallowing in bankruptcy blues. Link to MSNBC story.

* A couple of morsels on California’s climate law, which right now is anything but orderly. L.A. Times story on opponents pouring in money for initiative to delay the climate-change-fighting legislation. Link. On the same subject of global warming, here’s what the California Air Resources Board projects will be the economic benefits of the bill. Link to L.A. Times piece.

Here’s a look at three technologies that California residents are using to cut their energy bills and turn their homes into clean, mini-power plants.

February 7, 2010

By CHIP JACOBS

Note to readers: the following story is a longer, slightly different version of the article that appeared in the Los Angeles Times and other outlets on February 5, 2010. To see that version, click here.

Not long ago, most Californians harvesting green energy at home had pretty much one way to turn: toward their eaves. Rooftop solar panels might’ve resembled giant aviator-sunglasses, with a typical setup costing as much as a luxury car, but they at least delivered power-bill savings without anxiety. Trying to capture rustling winds or subterranean heat or even streamside hydro-electricity sounded as farfetched as it did impractical, and never found consumer traction.

Well, chalk another one up for the green revolution.

Today, with more user-friendly technology on the market and meaty taxpayer-subsidies available to begin popularizing the concept, the era of limited choices is fading. Homeowners out to shrink their reliance on the local utility grid and live greener without opting for standard solar-cells can now do so, depending on where they reside and their tenacity to stick with it.

Experts believe converging trends makes it an idea worth bouncing around. As energy demands continue to tick upwards and governments crack down further on greenhouse gases, everyone – including consumers who previously shrugged off home-generation as a quixotic extravagance — will likely pay more for their electricity and natural gas.

New power plants are just prohibitively expensive to build. And no one knows when the next energy crisis will strike.

“Renewable energy produced at home shouldn’t just be for the granola-eating, Birkenstock-wearing people,” said Angelina Galiteva, chairwoman of the non-profit World Council for Renewable Energy. “It should be for everyone.”

But will more than a hardy band of believers really commit to churning out kilowatts in their own backyards and communal grounds, when just one of 154 California single-family homeowners right now even run solar cells? Will the temptation to lock down energy costs, or the desire for more self sufficiency, catch on in the forward-looking West Coast as it has throughout Europe?

Check back in 2030 for concrete answers. For now, take a look what at some are already doing.

SMALL WIND

People driving along gusty interstates near such places as Palm Springs are accustomed to seeing commercial wind farms, where turbines as high as buildings spin lazily against a blue sky. These days, a modest but growing number of individuals are trying that technology inside their own fence-lines.

Roughly 10,500 small turbines were sold to homes, farms and businesses nationwide in 2008, according to the American Wind Energy Assoc. While the numbers aren’t in yet for 2009, demand remained strong in spite of the Great Recession, said Elizabeth Salerno, the association’s director of data and analysis. A survey of small-turbine manufacturers has projected a 30-fold increase in the U.S. market by 2013.

Locally, some of the growth is emanating from companies eager to contain their electricity tabs. In Palmdale, for instance, city officials have cleared the way for businesses to install wind turbines up to 60-fee-high to crank out their own clean power. Among them is Wal-Mart, which has a 17-turbine project planned for its Sam’s Club outlet in Palmdale.

Potential wise, though, the largest new pool of converts may be individuals such as Ernest Ramirez. He and his wife live in Oak Hills, an unincorporated, blustery section of western San Bernardino County dotted with spacious homes on multi-acre lots. They inherited their wind turbine when they bought their 3,250-square-foot property equipped with a pool and hot tub in 2003.

Ernest Ramirez can’t imagine life without out it now.

Perched on a slender tower about 80-feet high, the turbine has three, 10-foot-long blades that whip often enough to keep his power bills from Southern California Edison at about $100 a month, or roughly a quarter of what he calculates he’d fork out otherwise.

Gusts are so fierce in this part of the Cajon Pass that they have been known to snap trees and jackknife semi-trucks. But Ramirez welcomes a bad hair day. His 10-kilowatt device, which initially struck him as a hovering insect, not only is a money saver. It salves his environmental conscience.

“When I get out of my car and it’s blowing 35-mph and I have to stay inside the house, at least I know I’m saving money,” said Ramirez, a 46-year-old grant writer. “Wind is such a precious resource.”

Ramirez said he can count seven neighbors with their own wind turbines. When the blades on his turn fiercely, they produce a droan that Ramirez compares to a helicopter takeoff. All things considered, it’s a racket he’s happy to have.

Still, what works in windblown San Bernardino County won’t necessarily fit everywhere.

To make economic sense, a homeowner considering a turbine should live in an area where 10-mph winds are frequent, and be paying at least 10-cents a kilowatt hour for electricity, according to the wind association. Permitting is also a challenge in many communities; some neighbors consider the spinning contraptions as noisy and eyesores and even a threat to birds.

The technology certainly isn’t cheap, running about $3,000 to $6,000 per kilowatt installed or roughly $30,000 for an average system, experts say.

Sweeteners are being dangled to cushion some of that sticker shock. Homeowners can get a hefty rebate from the state of California – as much as $12,500 for a typical 5-kilowatt setup. They’re also eligible for a 30-percent Investment Tax Credit from the federal government.

GEOTHERMAL

Everybody knows that solar panels and wind turbines are rock stars of today’s renewable energy world. Fewer might suspect that one of the more intriguing contenders to reduce high utility bills cooks right under our feet.

Geothermal heat pumps, which have been around since World War II, consume 25-perent to 50-percent less electricity than conventional systems, according to the U.S. Department of Energy. Their magic comes from the physics of heat-exchange and vapor compression.

First, pipes are buried, sometimes hundreds of feet down, and formed into a loop. During winter, a refrigerant-type fluid circulating through the loop grabs the heat and transfers it into a structure’s air-handler. When air conditioning is needed in the summer, the process operates much like your refrigerator: the pump draws heat from the home’s interior and dumps it back into the Earth.

Geothermal heat pumps are cousins of regular heat pumps, which draw in hot air from outside. The difference is that geothermal is more efficient because soil temperatures, even just a few feet underground, remain fairly stable year round. Geothermal systems also have few moving parts, so they’re quiet and durable. They can be adapted to provide a home’s hot water.

Dennis Bushnell, a NASA scientist who studies renewable fuels, said that geothermal heat pumps are relied on by a fair number of homeowners and others from Virginia to the Northeastern states. People who reside in warmer Sunbelt states could especially benefit from them, he said, because the loop works best when the temperature stays above 30-degrees.

The equipment is “not exotic at all,” said Langley. “You can go on the web and buy one today.”

Now for the bad news: upfront costs are painful, sometimes twice as much as conventional heating and cooling units.

If your wallet can withstand that initial blast, one satisfied customer says the quick payback time and minimal maintenance expenses make it worthwhile.

California’s electricity crisis motivated John Sergneri to install a geothermal heat pump on his 1,280-foot tract-style home in Petaluma. It cost $40,000, approximately $15,000 more than a traditional grid-dependent system. Still, it has slashed his utility bills dramatically.

Sergneri, an information technologist, is currently renting the house while he works in Switzerland. When he returns stateside, he said he plans to install solar panels to further trim his power costs, because the ground pump and associated machinery, like many renewable systems, requires some electricity to operate.

It’s all part of what he terms a low-cost, eco-friendly “retirement plan.” Sergneri, 58, jokes it will yield a better return than his tattered 401-K.

“My goal is to be as independent as possible,” he said. “I’ve always dreamed of getting as far from the grid as possible.”

Though California isn’t offering rebates for ground heat pumps, a 30-percent federal tax credit is available.

SOLAR HOT WATER

California leads the nation in rooftop solar panels despite the fact that only about 50,000 single-family homes out of an estimated 7.7-million statewide have deployed them. (In the city of Los Angeles, a measly 1,627 homes have solar hookups with the Department of Water and Power.)

A simpler, less expensive path to convert sunrays to electricity is just beginning to catch on with solar water heaters. Officials hope two sets of incentives will pluck them out of obscurity.

Last month, the California Public Utilities Commission approved a $350-million rebate program to coax homeowners to replace their old energy-sucking units with more efficient solar-fired systems. Residential utility customers can get as much as $1,875 for swapping out their natural gas systems and $1,250 for ditching their electrically-heated tanks. The rebates phase out at the end of 2017 — or when the ratepayer-subsidized funds dry up.

Buyers can also qualify for a 30-percent renewable energy tax credit for a new solar water heater from Uncle Sam.

All told, that could amount to as much as a 55-percent subsidy for equipment that normally costs between $6,000 and $8,000, contingent on a home’s size and energy usage.

Here’s the downside: to qualify for a state rebate, homeowners have to be customers of Southern California Edison, the Southern California Gas Co., Pacific Gas & Electric or San Diego Gas & Electric.

Heating water represents the third-largest energy expense for most households, according the Department of Energy. If California’s solar water heater initiative succeeds, 585-million therms of natural gas– the equivalent of 200,000 solar units – and 150-megawatts of electricity will have been replaced with clean power, the utilities commission says.

These systems are already popular in Israel, China, Spain and other countries. Beginning this year, Hawaii is mandating that all new homes be equipped with solar hot water heaters.

“Solar water heaters are the low hanging fruit,” said Katrina Phruksukarn, solar water heating program manager with the California Center for Sustainable Energy. “They may not be as cheap as putting in a high-efficiency light bulb, but they’re about as cost effective as you’re going to get.”

Technologies vary by manufacturer. One common arrangement involves linking a storage tank to a rooftop solar array. Heat collected by those panels is used to warm up copper tubes filled with water contained just beneath dark, heat absorbing collectors. Those collectors raise the temperature of the water, which from there is pumped down and stored in a well-insulated storage tank. Back-up gas or electrical heating kicks in if the temperature falls below a certain threshold.

Steve Glenn, whose company LivingHomes, designs eco-friendly modular dwellings, has a system in his home that employs solar tubes filled with special, low-boiling point oil. When sunrays strike the tubes, they produce steam that rises and transfers some of its heat to water, which is warmed and stored in an ordinary-looking 60-gallon tank. The water is then delivered to showers and sinks. Heat radiating from the system’s piping also keeps the floors toasty.

Glenn said the solar hot water heater, photovoltaic panels and other energy-miserly features in his Santa Montica home have reduced is electric bill to the cost of a nice lunch: about $15 to $20 a month.

“I don’t have to even think about it” Glenn, 45, said. “The hot water feels like hot water. I’m not aware its sun baked, and not natural gas baked.”

BIOMASS

Another home-based renewable is an update to 19th-century prairie life. Furnaces and stoves that burn wood pellets made from sawdust, bark and other industrial byproducts, as well as corn, dried cherry pits and other organic materials are now on the market. Unlike traditional cord wood, these fuels cough out relatively little ash, soot and other harmful emissions.

Depending on the house, the biomass burners can supplement or replace a structure’s conventional heating system.

Like many renewable energy concepts, though, they are not for fence sitters. A stove or furnace, which resembles a stand-alone, glass-enclosed fireplace, can run $5,000 or more with installation. The fuels themselves also aren’t necessarily cheaper than natural gas or oil heat. A typical system eats up to three tons of them yearly.

At Floyd S. Lee Fireplace & BBQ in Pasadena, they’re just starting to sell a small fireplace for $900 that burns a clear-liquid biofuel requiring no venting. Since the unit doesn’t generate bounds of heat, it’s mainly decorative, said salesman Tom Broderick. Actual pellet-burning fireplaces have promise, he added, once retail stores can more easily secure pellets from suppliers.

“But they’re trying new things all the time,” he said. “Nobody is sticking with the old.”

As with ground heat pumps, there is no state rebate available for biofuels burners. There is a $1,500 Energy Star rebate that expires Dec. 31.

Coming down the pike is a household “bio-reactor” just being introduced in England, said NASA scientist Bushnell. It converts kitchen scraps, yard waste and sewage into electrical juice.

“All these (ideas) were possible ten years ago and are now more possible because of the pace of technologies,” said Bushnell, who works out of NASA’s Langley, VA. research-center. “Once people learn about the realities of the energy-price situation, they’ll know they have to consider adjusting how they live, including considering renewables.”

SIDEBAR STORY AND LINKS

Three years ago, the state rolled out its Go Solar California! program to dramatically boost adoption of solar power and fortify an industry devoted to it. The $3.3-billion, ratepayer-financed effort has a goal of adding 3,000 megawatts of grid-connected solar by 2016.

If that objective is met, it could spare California from having to build six new gas-fired power plants, which generate about 500-megawatts per year. The average home consumes about 10,000-kilowatts annually.

The Public Utilities Commission as part of this effort has earmarked $2.2-billlion program in rebates to encourage homeowners, businesses and non-profit agencies to install solar-photovoltaic roof panels and solar water heaters. They’re only available for customers of Southern California Edison, Pacific Gas and Electric and San Diego Gas and Electric.

So far, about 257 megawatts of new solar have come on line, the bulk of that in industry. If that doesn’t sound impressive, especially compared to Europe, it represents more than three times what was installed in the 1980s and 1990s combined. And despite the low-consumer usage, California accounts for about two-thirds of the nation’s entire installed-solar.

Officials are hoping that by the time the incentives are exhausted, generating power at home will be considered a cost-savings staple, not an extravagance. Until then, consumers’ bitterness from the 2000-2001 electricity crises and more recent recession may help forge a spirit of productive independence.

“You saw faith being lost,” said Ben Airth, who works with the Center for Sustainable Energy, a non-profit involved in California’s solar campaign. “America has been brought up on the idea of plugging into the grid through a utility and now people are seeing for themselves what they can do about producing their own electricity.”

Links to explore:

* To see federal and state-by-state incentives and rebates for home-based renewable energy, start with this database.

* For more about solar water heaters, visit this site.

* To get a taste of different home-based energy systems, check out this publication online.

* Lastly, if you assumed Los Angeles, with its Prius-driving, recycle-everything culture, is gobbling up solar faster than other regions, think again. Homeowners in San Diego and Santa Clara counties have installed more photovoltaic cells and solar water heaters than denizens of much-larger Los Angeles County. Here’s the proof.

The new year could well ignite fireworks anew over the Anne Sholtz caper, a story we showcase in our book Smogtown and in Chip’s freelance articles about her intriguing case. It’s a tangled, air-pollution market story involving fraud, red flags, the CIA, a secretive prosecution and much more, with sticky lessons for the carbon market Pres. Obama wants enacted nationally. So far officials at Southern California’s smog-fighting agency, the South Coast Air Quality Management District, hasn’t wanted to acknowledge that their cap-and-trade, known acronymistically as RECLAIM, has been vulnerable to white-collar troubles, and the U.S. Dept. of Justice-L.A. office still probably wishes their mixed-bag prosecution of Sholtz went the way of Compuserve. As George Bush I would say, “Not gonna happen.” Probably.

From the Wall St. Journal/Dow Jones New Service story:

WASHINGTON -(Dow Jones)- U.S. legislators have obtained a court order unsealing documents in a case involving a multi-million-dollar cap-and-trade fraud.

Republican legislators say the records–due to be opened to the public in early January–could shed light on the potential challenges of policing a new, trillion-dollar commodities market that would be created under climate legislation that Congress is considering.

In a rare filing by House lawyers, Reps. Joe Barton (R., Texas) and Greg Walden (R., Ore.), the ranking members respectively of the Energy Committee and the Oversight Subcommittee, asked a federal district court in California to unseal all the closed records regarding the successful prosecution for fraud of Anne Masters Sholtz, a former California Institute of Technology economist.

Lawmakers say Sholtz’s case could expose the weaknesses of a federal cap-and- trade system because it involved the same market mechanism meant to cut emissions …”

Be forewarned there are a lot of errors in these Republicans’ understanding of Sholtz’s case. It involved cap and trade for two smog-forming chemicals unrelated to global warming, and did NOT involve counterfeit credits. However, the federal case against Sholtz did NOT even mention an earlier action involving 500,000 in RECLAIM credits that allegedly bankrolled a CIA-associated currency repatriation effort. See here for that.

For more on this story, here is Rep. Barton’s comments about it and the judicial order lifting the veil of secrecy thrown over many of the case’s key documents.

Meanwhile, some European shenanigans … story link

“The top cops in Europe say carbon-trading has fallen prey to an organized crime scheme that has robbed the continent of $7.4 billion — a massive fraud that lawmakers and energy experts say should send a “red flag” to the U.S., where the House approved cap-and-trade legislation over the summer amid stiff opposition.

In a statement released last week, the Europol police agency said Europe’s cap-and-trade system has been the victim of organized crime during the past 18 months, resulting in losses of roughly $7.4 billion. The agency, headquartered in the Netherlands, estimated that in some countries up to 90 percent of the entire market volume was caused by fraudulent activities.

“These criminal activities endanger the credibility of the European Union Emission Trading System and lead to the loss of significant tax revenue for governments,” Rob Wainwright, Europol’s director, said in a statement …”

“In the first global assessment of the impact of ozone on climate warming, scientists at the NASA Goddard Institute for Space Studies (GISS), New York, evaluated how ozone in the lowest part of the atmosphere (the troposphere) changed temperatures over the past 100 years. Using the best available estimates of global emissions of gases that create ozone, the GISS computer model study reveals how much this single air pollutant and greenhouse gas has contributed to warming in specific regions of the world.

Ozone was responsible for one-third to half of the observed warming trend in the Arctic during winter and spring, according to the new research. Ozone is transported from the industrialized countries in the Northern Hemisphere to the Arctic quite efficiently during these seasons. The findings will be published soon in the American Geophysical Union’s Journal of Geophysical Research-Atmospheres …”

Article link

We’ll have more about this soon.

Of course, we tease this subject in Smogtown.

On the same day that California unveiled details of its proposed West Coast cap-and-trade to attack greenhouse gases, two House Republicans vehemently opposed to President Obama’s national greenhouse-gas cap-and-trade announced they convinced the U.S. Department of Justice to unseal many of the documents in the enigmatic case of former-hotshot pollution broker Anne Sholtz. Barton and Walden had been pressing for answers about the case from the Justice Department for months now, igniting a whole bunch of behind the scenes activity and rather long-winded and vague regulatory defenses from the regional South Coast Air Quality Management District, which oversees the RECLAIM cap-and-trade for oxides of nitrogen and sulfur, and the U.S. Environmental Protection Agency, which oversees the district’s progress against smog. RECLAIM, short for the Regional Clean Air Incentives Market, began in 1993 as the planet’s first of its kind.

In those letters, which I’ll dig up later, the AQMD insists its systems are essentially scam-proof and the agency does seem to have a good regulatory track record if not for the Sholtz case and the rampant speculation that nearly detonated the market with spiking prices during California’s 2000 and 20001 electricity blackouts — the ones that exposed the likes of Enron’s. Curiously, the AQMD board is still waiting to fully hear an explanation of what occurred, so I’m told. Do the individual members even know about Sholtz’s alleged (but uncharged) misappropriation in mid-1998 of some 500,000 RECLAIM credits from Chevron, Exxon and Aera Corp. that she later sold to Southern California Edison? And how she poured the proceeds form that un-noticed transaction into a daring, alarming and apparently unsuccessful effort — code named “Operation Bald Headed Eagle” — to extract millions of dollars worth of cash, gold, and bonds of former U.S. aid to the Philippines using a cache of CIA and military Special Ops personnel, with supposed diplmomatic immunity no less?

The EPA, meantime, says it’s on top of RECLAIM and that, as of this summer, had no active investigations into any emissions markets anywhere in the country.

All in all it’s a complex, provocative story, one fraught with policy implications and headscratching human behavior, with spy-book sidelines and institutional hubris, and the charge in D.C. to get the lowdown on this now-closed criminal fraud case, in our opinion, is pretty nakedly political.

But wouldn’t it be something if Rep. Joe Barton of Texas (picture above) and Greg Walden of Oregon proved us wrong with a sincere, nonpartisan investigation into:

* how Sholtz TWICE gamed the system she helped concoct?

* why the AQMD and EPA failed to stop her sooner, and nobody at either agency seems very accountable?

* why the Justice Dept. has acted so secretly and oddly in this matter, apparently never following up on Sholtz’s explosive whistleblower tips once she was in custody?

* and how widespread the supposed-CIA and national security types Sholtz worked with in one cap-and-trade-financed “venture” have penetrated situations like this, and why there seems so little interest in probing whether we have a mini-Iran-Contra playing out while we all figured that was so 1980s of the Oliver North dimension?

I know. Click your heels three times and you’ll land in Kansas faster than the answers come here.

Here’s the link to Barton and Walden’s announcement. At the bottom are links to the motion and background documents, which I encourage the interested to read carefully. This was not some flimsy legal effort. It was surgical and well-researched.

If you want a more colorful and detailed look at the Anne Sholtz caper, please read my story, which ran in August in three different publications (before a bunch of blogs snatched ‘em). Here’s the definitive link to “Air of Deceit.”‘

The Hill, which covers the Capitol, has this brief story about the Barton-Walden initiative to get these secret records released.

“Senior Republicans on the House Energy and Commerce Committee are looking to a closed federal wire fraud conviction in California to bolster their argument against climate legislation.

Rep. Joe Barton (Texas), the senior Republican on the committee, and Rep. Greg Walden (Ore.), the top Republican on the committee’s oversight panel, have asked a federal court to unseal documents in the 2005 conviction surrounding a California pollution credit trading program. Barton calls the case a cautionary tale about setting up a massive nationwide carbon emissions trading market.

The two Republicans, who filed a motion Monday in the United States District Court for the Central District of California, want the pleadings unsealed in the case of Anne Masters Sholtz, who pleaded guilty in 2005 to one count of wire fraud following a six-count federal indictment for trying to game a Los Angeles-area pollution abatement initiative …”

In other news:

A somewhat predictable shift in American public opinion about global warming. Washington Post story

President Obama is not going to Copenhagen empty handed. He’s vowing to push for U.S. reductions in a bid to persuade the world, particularly India and China, to get serious as well. From the L.A. Times story

Happy Thanksgiving everyone! Let’s remember what’s important when we return from the break. It’s called sincerity.

* From the L.A. Times story:

“A solar energy project proposed for development on public land in the Mojave Desert would create jobs mostly for Las Vegas and electricity for San Francisco at the expense of the relatively pristine area of east San Bernardino County where it would be built, San Bernardino County Supervisor Brad Mitzelfelt said …

‘Obviously, there is a lot of political pressure to get this project expedited and under construction,” Mitzelfelt said. “But its impacts in San Bernardino County and sensitive and scenic Mojave Desert environment are not worth the benefits.’ … ”

* Hmm, does this sound familiar – a green Ponzi scheme that slipped past the regulatory watchdogs? Not that many honest politicians want to discuss this. From the New York Times post

“Federal regulators have accused four people and two companies of using bogus claims about “green initiatives” to entice more than 300 investors into what was really a $30 million Ponzi scheme.”

* Power to … ummm, the windmills. Sorry, that’s politically incorrect green jabber. Power to the windturbines, micro or massive, whether they spin horizontally or merry-go-round style. Interesting story about this in the L.A. Times (link). Stay tuned on this subject.

* In a scene straight from our book, Smogtown: The Lung-Burning History of Pollution in Los Angeles, comes this latest effort to beat back global warming with “geo-engineering.” Anyone have an air pollution sewer blueprint ready to roll. What I find interesting isn’t the scientific bravado and ingenuity that some might otherwise tab hubris but a discussion of the unintended consequences of messing with Mother Nature.

From the L.A. Times piece:

“If there were some kind of panic button to stop global warming, what would it look like?

How about billions of tiny mirrors, launched into orbit to deflect solar rays away from Earth? Or big, fluffy clouds, artificially whitened so they reflect more sunlight back into space? Or maybe mechanical trees, ugly but effective at sucking carbon dioxide from the air along busy highways?

Outlandish as some of these proposals may seem, scientists and engineers are paying increasing attention to such ideas amid mounting evidence that human-caused climate change is wreaking havoc in some parts of the world.

The proposals belong to a field known as geo-engineering, or manipulation of the environment on a grand scale …”

* Think we’re too cynical here. Read on about what’s happened in China here.

* If that doesn’t depress you about what’s happening in Asia, you always have super-duper dirty L.A. Break out the bubbly – we’re the 7th most toxic city in America (depending on how you calculate that.) Link.

From the L.A. Daily News piece

“Jane Goodall, the champion of chimpanzees, knelt Monday over a newly planted sticky monkey flower and kissed its leaves for good luck.

She had come to Calabasas to tour a restoration project at the headwaters of the Los Angeles River. But as luck would have it, the sticky monkey flower had yet to be planted.

So the world-renowned primatologist and conservationist knelt, grabbed a handful of soil and sunk the plant into the earth.

While she travels all over the world to talk about the importance of conservation and environmental responsibility, Goodall said it all comes down to a very simple message: One flower planted on a hillside can evolve into a global movement.

“I’ve visited these types of restoration projects all over the world, and it always amazes me how Mother Nature restores herself,” Goodall said …”

Global warming:

* The latest on President Obama’s energy bill, and the politics of cap and trade. It’s about the mighty benjamin. Washington Post story.

* A still frightening Washington Post story about how fast temperatures may rise this century.

* Aspens dying off from global warming. Sounds pretty familiar to Ponderosa Pines and smog. This time we’re smarter, right? Story link from the L.A. Times.

* EPA cracking down on coal-fired power plants. Story.

Odds and ends, green-style:

* Terrifiic piece of enviro. investigative reporting. Gosh, what a connect. From a New York Times piece of late.

* Reactive air pollutants: story