Power Plays: Congress Says Burn Forests for Fuel; Toshiba Lied to Make Nukes Look Profitable
July 23, 2015
Lukas Ross / Friends of the Earth & Jonathan Soble / The New York Times
Some 46 US senators have called for chopping down trees and feeding them to power plants for electricity. This is a genuinely awful idea. It hurts biodiversity, belches toxic chemicals and contributes more to climate change than coal-all while masquerading as a source of clean "renewable" energy. Meanwhile, the Japanese industrial giant, Toshiba, has be charged with overstated its earnings by more than $1.2 billion over the last seven years, to make atomic power look profitable.
Why Would 46 Senators Support Burning Trees for Electricity When It Contributes More to Climate Change Than Coal?
Lukas Ross / Friends of the Earth
(July 9, 2015) -- Chopping down trees and feeding them to power plants for electricity is a genuinely awful idea. It hurts biodiversity, belches toxic chemicals and contributes more to climate change than coal-all while masquerading as a source of clean "renewable" energy.
Unfortunately, none of this stopped 46 senators from publicly endorsing the idea last week. Led by Sen. Susan Collins (R-ME) and Sen. Jeff Merkley (D-OR), the group wrote a letter to the US Environmental Protection Agency, US Department of Agriculture and Department of Energy demanding that the agencies accept something that is clearly, demonstrably false: that biomass power is carbon neutral.
While the letter was chock full of anti-science Senators like David Vitter (R-LA), others like Diane Feinstein (D-CA) and Jeanne Shaheen (D-NH) fancy themselves climate leaders and should know better.
The science is clear. Sending whole trees through the smokestacks of power plants is a terrible way to generate electricity. Even using rosy accounting assumptions, it could take at least 50 years to work-off the carbon debt and break even with coal, meaning that burning wood now puts extra emissions into the atmosphere at precisely the time when reductions are most important.
At the end of the day. it is simply an inefficient source of electricity, emitting 50 percent more carbon than coal generating the same amount of energy. Leaving trees alone and allowing them to function as natural carbon sinks is a much more effective way to mitigate climate change.
The troubling part is that the timing of this letter wasn't an accident. Any day, the US EPA is expected to release the final version of its Clean Power Plan, the rule designed to lower carbon emissions from power plants, and one of the biggest questions is how favorably the rule is going to treat biomass. This means that the senators are angling to make sure that as states implement the rule, wood biomass is guaranteed as an option.
You know to worry when supposed climate champions are willing to line up with outright deniers in order to promulgate an industry myth. The letter contains loads of lawmakers who hate the EPA and want to sabotage the Clean Power Plan, including avowed climate deniers like Bill Cassidy (R-LA) and Shelley Moore Capito (R-WV). Also on the list are senators like Cory Gardner (R-CO) who sometimes admit that climate change is real, but who avidly supports doing nothing about it.
On the other side of the spectrum, these deniers have some strange company. Sen. Jeff Merkley led the charge for the democrats, and he has lifetime score from the League of Conservation Voters of 98 percent. He was joined by other high profile environmental champions like Dianne Feinstein (D-CA) and Al Franken (D-MN), who boast lifetime scores of 89 and 93 percent respectively.
Really, the only thing these lawmakers have in common is a commitment to taking money from timber. Last November the industry poured more than $1.5 million into contested senate races, and unsurprisingly Merkley and Collins both did rather well with $40,399 and $35,250 each.
The senate isn't the only place timber has been investing. Over in the House the industry spent more than $2.9 million on the last election, so it's not particularly surprising that a funding bill that was debated this week includes a massive industry giveaway.
Ostensibly, the bill is meant to provide money for the EPA and the Department of the Interior, but snuck into the text is a provision that would require the EPA to ignore all of its previous research and pretend that burning wood biomass is categorically carbon neutral.
Fudging the math to create the illusion of progress doesn't actually keep carbon out of the atmosphere, and while these anti-science attacks are a familiar song from deniers, our climate champions should know better than to play along.
Lowering emissions means honestly accounting for where our emissions come from -- whether it be agriculture, transportation or electricity -- and acting from there to make reductions. Pretending that one of these sources doesn't exist at all is just another species of denial.
Toshiba Inflated Earnings by $1.2 Billion, a Panel of Experts Says
Jonathan Soble / The New York Times
(July 20, 2015) -- As top executives pushed subordinates to meet unachievable financial targets, Toshiba, the Japanese industrial giant, overstated its earnings by more than $1.2 billion over the last seven years, in what is emerging as one of the country's largest corporate accounting scandals.
The discrepancies, detailed on Monday in a report by a committee of independent experts hired by the company to examine its accounting practices, point to a systematic problem that reached the upper echelons of Toshiba. Hisao Tanaka, Toshiba's chief executive, and his predecessor, Norio Sasaki, who is now the company's vice chairman, plan to announce their resignations on Tuesday, Japanese media reported.
The problems, the report found, date back to the deep economic slump set off by the global financial crisis in 2008. Managers across Toshiba's many divisions then began taking accounting shortcuts to meet increasingly difficult profit goals imposed by superiors.
The committee said the implicit pressure was enough to prompt managers to misreport earnings from their divisions. It accused Toshiba of breeding "a corporate culture where it is impossible to go against one's bosses' wishes."
In some cases, the pressure was more direct.
The committee said it discovered "systematic involvement, including by top management, with the goal of intentionally inflating the appearance of net profits." The company's most senior leaders were aware of some of the allegedly misleading accounting, it said, and its accounting department "deliberately provided insufficient explanations to auditors, with the intention of carrying out a systematic cover-up."
Toshiba did not dispute the findings, but said it would not address them directly until Tuesday.
Questions about financial reporting by Toshiba, one of Japan's largest manufacturing groups with products ranging from refrigerators to nuclear power plants, have been brewing since the company said in April that it was examining possible improprieties in past earnings statements. Since then, its share price has tumbled by more than 20 percent.
The four-member investigating committee, headed by a former prosecutor, found overstated profits totaling 151 billion yen since 2008, an amount equal to $1.21 billion at current exchange rates. An additional 4.4 billion yen of overstated profit had previously been discovered by the company itself, the report said.
The scale of the misreporting that the company is being accused of is on a par with Japan's most recent accounting scandal, at the camera maker Olympus, which came to light in 2011. Olympus admitted that it manipulated accounts to cover up investment losses incurred years and sometimes decades earlier. Several former executives have since been convicted of securities violations.
Japanese securities regulators are examining Toshiba, according to local media reports.
The investigating committee hired by the company interviewed 210 people, including executives and auditors, according to the report. It found problems in all six of Toshiba's primary divisions -- businesses like semiconductors, consumer electronics and power plants.
Managers used a variety of techniques to improperly increase earnings, the committed said. These included underreporting the cost of raw materials and components; reporting uncertain future income -- some of which would never materialize -- as though it were cash in the bank; and delaying write-offs related to canceled contracts and other business setbacks.
Problems were particularly widespread in the company's infrastructure division, which produces equipment for the electric power industry, including conventional coal and gas power plants as well as nuclear reactors. The committee flagged 15 separate instances in which it said Toshiba failed to set aside adequate reserves against the risk of cost overruns, construction delays and other problems
While the committee did not identify specific projects, some involved Westinghouse Electric, the nuclear subsidiary, which analysts have long seen as a particularly heavy financial millstone for the company.
Toshiba's acquisition of Westinghouse in 2006 for $5.4 billion is widely seen as having been expensive and ill timed. Then the nuclear meltdowns in Fukushima in 2011 crippled the atomic power industry in Japan. The revolution in shale oil and gas extraction, combined with new safety concerns after Fukushima, have slowed demand for the technology.
The biggest single year for profit overstatement was after the Fukushima disaster, fiscal 2012, the committee said. That year, the committee said, Toshiba overstated its profit by 85.8 billion yen, an amount equal to more than half the total, the committee said.
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