From: Rachel's Democracy & Health News #911, Jun. 12, 2007
THE BURGEONING GLOBAL MOVEMENT: A RESPONSE TO KATE DAVIES
By Paul Hawken
I so appreciate Kate Davies' thoughtfulness and enthusiasm [in Rachel's #909, responding to my article from Orion.] Her writing demonstrates a deep knowledge of the inner and outer workings of social change organizations in the United States. I want to respond to her points, however, because I believe she simplifies a book (and a social movement) that is diverse and complex and then draws conclusions that may not be applicable to the breadth of it.
In fairness to us both, Davies is responding to an excerpt from Blessed Unrest that was compiled and published in the magazine Orion. I was concerned when my I saw the draft of the excerpt because it skims the book, taking paragraphs and sections from different parts of my writing and stringing them together as if it were one coherent piece. The book is far more granular, not so generalizing, and more intricate than what was excerpted.
I would not state, as does Davies, that a "new social movement" has been quietly gaining strength since the 1999 WTO protests. One of the reasons I wrote the book was to provide expanse, depth, and history to a movement that has a longer narrative than what is often reported.
Davies states that I shy away from giving it a name. I do because when someone names it, they limit and constrain it. She proposes that it is the "new progressive movement," an homage to the U.S. Progressive Movement of yore. While that is true in some quarters, this unnamed movement also pays homage to many other prior movements in the world. The movement in South America has very different roots than does the movement in India, as does the movement in South Africa, Germany, Italy, China, etc., and none of these have origins in the U.S. Progressive Movement. One of my goals in writing the book was to help readers, especially Americans, see this movement as global, not Euro- or North American-centric. We have to be careful not to place old frameworks on it and assume that this is the Progressive Movement redux.
I did not say that it lacks leaders: I said that it did not have a leader. This is a pluralistic movement, no one can speak for it all, not me, not Davies, or anyone else, and that is its saving grace. We both agree that this movement demands a very different style and process of leadership; we are seeing it, and such true leadership couldn't come any too soon. What we see in politics and business is an ersatz leadership that serves concentrations of power, not people.
We are in fierce agreement when it comes to the idea that this is a bottom-up movement that is reimagining and remaking the world. To call that an ideology, as she proposes, is not accurate. Ideologies are beliefs that frame economic and political activities, and this movement is collectively about ideas. Davies refers to the many different ideas to make her point, and that is precisely my point. I distinguish between an idea driven movement and an ideologically driven movement. Right wing fundamentalism, whether it be religious, economic, or political is ideological. When you try to impose your view of the world on others, it is no longer an idea but an ideology. All ideologies, right, left or center, dictate and constrain where as ideas expand possibility and liberate.
To say that the ideas that inform this movement are the same that gave birth to this country is a hopeful statement, but not borne out in fact. This country was founded by privilege and was dominated from the outset by the privileged. I believe we are moving from a world created by privilege to one created by community. This is a fundamental and global shift, one much resisted.
Davies list four goals or aspirations that are common to the movement:
- Creating an open, participatory and fully accountable democracy;
- Social and economic justice;
- Sustainability for people and the planet; and
- Health and wellbeing for all.
I agree, except these are not ideologies. These are values, and they are becoming universal, and are being expressed from the bottom-up. This is a critical point because every ideological movement in the world has caused suffering, violence, and loss. The world has paid a tremendous price for such ideologies and this movement has gone another direction. This is not a quibble, but a fundamental distinction.
To say that the movement needs some "internal organization," as Davies proposes, assumes that there is an internal. This is an old paradigm; there is a movement, let's get in front of it and organize it. Like Gideon Rosenblatt, author of "Movement as Network," I believe that the organizations that comprise it need to work more assiduously on cooperation and linkages. However, internal organization requires a hierarchy and that is different than cooperation. What is needed is happening: more coordination and collaboration, and of course increased attention on collaboration is needed to become more effective. It is time to link and connect up in more powerful ways. The movement is atomized because that is how it came into being. It now has the communication and technological tools to work far more closely and effectively. However, when Davies writes, "How can we build the new movement?" I get a little uncomfortable. I think the right question is how can we better serve this movement. What is new is that the largest movement in human history has built itself without being master minded from above. This is why I use the metaphor of this movement being humanity's immune response to political corruption, economic disease, and ecological degradation. The movement is not merely a network; it is a complex and self-organizing system.
I agree with Davies when she says that organizations need to deepen their "understanding of what it takes to achieve systemic social change. This will require a greater understanding of the culture it wants to transform and a more strategic approach to advance progressive change." My caution here is about speaking of the movement in general or even monolithic terms. That is the point I try to make herein and in Blessed Unrest: you can't fit it into a box, description, or silo. Americans love to do that, but it just won't work. To say the movement should do this, or should pay more attention to that, presumes that the writer knows what this movement is, and contains an underlying assumption that the movement Davies knows is the same one as the movement in Kenya, Kerala, and Kobe.
What I came to believe in researching Blessed Unrest is that we can only see our own network. We tend to think of the movement through the lens of our initial experience. This is similar to the famous Steinberg cartoon showing America as seen by New Yorkers, with New Jersey forming a large landmass to the west and the rest of the country receding until there is a tiny sliver called California. That is the network affect, a kind of illusion that our brains mimic constantly. We are vastly mis-educated as children into thinking that problems are linear and can be solved by linear thinking. If ecology teaches us anything, it is that we live within and are permeated by, right down to each cell, non-linear systems that cannot be predicted or "strategically addressed." The awe I have about this movement is that it appears to me to be the first social movement that collectively expresses this non-linear understanding without ever stating it or necessarily realizing it.
Davies prescriptions are based on her experience with a fraction of the movement. It is not that her recommendations are incorrect, it is just that we have to be careful, especially as Americans, to presume we know what is right for other cultures, traditions, or peoples, or in this case, the whole of the movement. We Americans, especially we white Americans, invariably get it wrong in our earnestness to "help" others. That is why I said, "no book can explain it, no one person can represent it, no words can encompass it." Davies faults this statement as amorphous and dualistic, but in response she makes generalizations and proposals that might well be looked askance by organizations in other parts of the world.
Finally, when Davies calls this a new movement, we have to be careful that we don't fall into a kind of narcissism. This movement goes back centuries, even millennia to the teachings of Buddha, Mencius, Lao- Tse, Rabbi Hillel, Jeremiah, and others. These teachers long ago started social movements by re-examining the very notion of what it means to be a human being. They were not starting religions but ways to address the suffering of others. We are progressive, yes, but we are also ancient. This movement is helped by the thousands of generations that preceded it, and serves the thousands that will follow. This is why I say it is comprised of social justice, environmental, and indigenous organizations, and has become the most complex association of human beings ever assembled in history. I believe this association defies typologies and names, but is hungry always for the intelligence, kindness, and generosity exhibited by Davies' concerns and writing. I am deeply appreciative of the core of Davies' message, which is, as I read it, that we have to come together in a more pro-active and vigorous way. The problems we face are like nothing humanity has ever confronted, and we must rise to this challenge in a way we have never done. That is what I hear from Kate Davies, and I am grateful for her insight.
UNFAIR TREATMENT CAN HARM THE HEART
May 15 (HealthDay News) -- A nagging sense of being unfairly treated at work or at home can raise a person's risk of heart attack, British researchers report.
Researchers at University College London analyzed responses from a few thousand senior civil servants working for the British government in London. On a scale of 1 to 6 (1 equals "strongly disagree" and 6 equals "strongly agree"), the workers were asked to rate their response to the statement: "I often have the feeling that I am being treated unfairly."
Scores of 1 or 2 were rated as low, scores of 3 or 4 were moderate, and those of 5 or 6 were high.
The workers were tracked for an average of 11 years. During that time, 64 of the 966 people in the low category had either a heart attack or experienced angina, compared with 98 of 1,368 in the moderate category and 51 of 567 in the high category.
People with the strongest feelings of being treated unfairly were 55 percent more likely than those in the moderate category and twice as likely as those in the low category to have serious heart disease, the study found.
Women and people with lower incomes and status were much more likely than others to feel they were being treated unfairly, the researchers added. Feelings of unfair treatment were also associated with higher levels of poor physical and mental health.
Fairness is an important factor in promoting a healthier society, the U.K. team concluded. They published their findings in the Journal of Epidemiology and Community Health.
Copyright 2007 HealthDay.
TROJAN HORSE: COAL-TO-LIQUIDS
By Sunita Dubey
[Read a PDF version of this story, with graphics, here.]
U.S. interest in the coal-to-liquids (CTL) technology was sparked when German scientists and technical documents were captured in the latter stages of WWII. One of the reasons for this were the massive quantities of coal available in the U.S. and the federal government began investigating possible coal-based synthetic alternatives in response to the scenario of a decline in America's natural oil supplies. Passage of the Synthetic Liquid Fuels Act of 1944 began the first concentrated effort to study future ways to use the nation's abundant coal supplies. In fact, the United States experimented with CTL in 1979 by creating a Synthetic Fuels corporation (SFC), assuming high oil prices in the 1980s. Although SFC invested in six CTL projects, all its products became unviable due to a sustained drop in oil prices in the 80s, and SFC was terminated in 1985. Although companies like Rentech and Syntroleum have been doing technology research, no large-scale commercial plant has been built in the US.
In the recent times, however, the coal-to-liquids lobby and its proponents have found fresh vigour to promote and push this technology at Capitol Hill. At least nine coal-to-liquids facilities are now in the planning stages, including one each in Illinois, Pennsylvania, and Wyoming that already have significant funding lined up and are slated to begin production by 2009, according to the National Energy Technology Laboratory. There are currently a number of projects undergoing feasibility studies, including the Medicine Bow Project in Wyoming, the Waste Management and Processors Inc. (WMPI) project in Pennsylvania and the Rentech project in Illinois. There are also projects proposed in Arizona, Montana and North Dakota.
DKRW Energy's CTL project in Medicine Bow, Wyoming, is being designed to produce 11,000 barrels per day (bbl/d) of various fuels -- primarily diesel. DKRW Energy has long-term plans to further expand the capacity of the facility to produce as much as 40,000 bbl/d of fuels. The Medicine Bow project will also include the construction of an integrated gasification combined cycle (IGCC) unit to produce electricity on the site using the syngas and steam produced in the CTL process. During the first phase, an estimated 45MW [megawatts] of power will be generated. As reported by the National Coal Council to the Department of Energy, if federal tax incentives and state subsidies are provided to kick-start the industry, coal-based fuel production could soar to 40 billion gallons a year by 2025 -- or about 10 percent of forecast oil demand that year.
The Energy Policy Act of 2005 also encourages the development of these technologies in a number of ways, including a new loan guarantee program for innovative technologies that does not require the appropriation of any taxpayer funds. On March 30, 2006, DOE awarded funding of about $4.3 million for a $5.4 million project that would further develop Syntroleum technology to produce either hydrogen or high hydrogen-content fuel. The funding was part of a broader award of $62.4 million for 32 U.S. clean coal research projects. The USA's proposed Foreign Oil Displacement Act seeks to provide financial tax incentives for CTL projects. Specifically, the bill would provide a 28% Investment Tax Credit and exemption from the Fuels Excise Tax for CTL fuels.
The Energy Information Agency projects that the U.S. will get 1.7 million barrels of transportation fuel per day from coal by 2030. This is nearly half of the expected worldwide coal-to-liquids (CTL) production. A new report prepared by the National Coal Council suggests CTL technologies could produce 2.6 million barrels per day, including gasoline, diesel and jet fuel.
However, such a promise is called into question in a DOE environmental impact filing in December 2006, which reported that a leading CTL development had no near-term plan to capture any of the 2.3 million tons of CO2 it would produce annually. According to Wall Street Analysts, the $800 million project, which would make 5,000 barrels of CTL fuel a day in Gilberton, Pa., is part of an industry push where CO2 capture costs are not factored into the bottom line of the business plan.
Ongoing Lobbying Efforts
The National Mining Association has ramped up Capitol Hill lobbying by creating a new coalition and a website, "futurecoalfuels.org". Many in Washington are warming to the idea of CTL. The bills promoting CTL in the House of Representatives and the Senate have received strong bipartisan backing and supporters of the bill range from
Plants Under Consideration in the United States
According to the U.S. Department of Energy, companies, local governments and American Indian tribes have announced plans to build the nation's first 16 coal-to-oil plants. Map courtesy of DOE.
Sen. Barack Obama (D) of Illinois to President Bush.
In his State of the Union speech on January 23, 2007, President Bush called for the United States to produce 35 billion gallons of "alternative fuel" by 2017.
The "Coal to Liquids Coalition" is a network of companies and organizations trying to promote CTL in the US, which includes companies like Sasol, Rentech, Syntroleum, and National Mining Association, etc. This coalition was launched on March 28, 2007, and several U.S. Congress members from coal-producing states attended the launch. Sasol North America, a division of the company that produces CTL fuel in South Africa, paid the Livingston Group $320,000 last year to lobby Congress to support building CTL plants in the United States. With congressional members and the White House promising to promote alternative fuels, a number of other alternative-fuel companies have joined Sasol in hiring firms to lobby for tax breaks and other incentives to ease their entrance into a market dominated by oil companies. Sasol wants to build coal-to-liquid (CTL) plants in three U.S. states as part of its global expansion program. The three states -- Montana, Illinois and Wyoming -- hold about 56 percent of total U.S. coal reserves, or 267.3 billion tons combined.
Glitches in the CTL
The price estimates cited by CTL industry proponents assume facilities are going to be uncontrolled for CO2 emissions. However, the judgment by the U.S. Supreme Court on April 2, 2007, on global warming, categorised CO2 as an air pollutant under the Clean Air Act and well within the jurisdiction of EPA. Given the current debate in the Congress, and public concern on global warming, investors should be careful of the increasing likelihood that the US could establish emissions controls, so that any large investment in CTL would need significant subsidies to offset environmental costs. High capital costs -- $1 billion to $6 billion for a single facility -- and the unknown cost of carbon sequestration could make such projects unappetising for investors to swallow without federal incentives. A key question is whether CTL plants will have carbon sequestration as an integral part of their operations. If they do not, then these plants will emit millions of tons of CO2 into the atmosphere annually. Even if gases were pumped underground, CTL fuel, when burned in an engine, would still emit about 8 percent more CO2 than a gallon of gasoline, according to a Princeton University study in 2003.
It is only because such health and environmental problems are ignored that Sasol's fuels are relatively cheap. CTL plants require enormous investments -- about $1 billion dollars for a 10,000 bbl/d, and up to $6.5 billion or more for a large-scale 80,000 bbl/d plant with a five to seven year lead-time. Furthermore, with the looming challenge of mitigating global warming, it is important for Nations not to invest in high carbon emission technologies. According to a recent MIT study, the conversion of coal to synthetic fuels and chemicals requires large energy inputs, which in turn result in greater production of carbon dioxide (CO2). Thus, synthetic fuels derived from coal produce a total of 2.5 to 3.5 times the amount of CO2 produced by burning conventional hydrocarbons. The groundWork U.S. office has been following the recent development on CTL in the U.S. and has come up with a comprehensive background paper on the status of CTL globally. We are trying to forge a network with like-minded groups, who are opposed to fossil fuel based technology and are working towards curbing green house gas emissions. Lessons are also being drawn from our work on Sasol's CTL plants in South Africa.
 DOE and its History
 Syngas (from synthesis gas) is the name given to a gas mixture that contains varying amounts of carbon monoxide and hydrogen generated by the gasification of a carbon containing fuel to a gaseous product with a heating value.
 http://energy.senate.gov/public/index.cfm?FuseAction= PressReleases.Detail&PressRelease_id=234935&Month=4&Year=2006
 http://www.fossil.energy.gov/news/techlines/2006/06035- Syntroleum_Projects_Show_Progress.html
 http://thehill.com/leading-the-news/its-coal-vs.-oil-as-lobb ying-heats-up-hill-2007-03-26.html
 Furthermore, even if the CO2 emissions from the manufacturing process can be captured and sequestered, combustion of the resulting fuel would still put more CO2 into the atmosphere than conventional fuel would. See: Future of Coal-Options for a Carbon Constrained World, An interdisciplinary MIT Study [7 Mbytes PDF], pp 152-154 March 2007.
From: The New York Times (pg. A1)
LAWMAKERS PUSH FOR BIG SUBSIDIES FOR COAL-TO-LIQUIDS
By Edmund L. Andrews
WASHINGTON, May 28 -- Even as Congressional leaders draft legislation to reduce greenhouse gases linked to global warming, a powerful roster of Democrats and Republicans is pushing to subsidize coal as the king of alternative fuels.
Prodded by intense lobbying from the coal industry, lawmakers from coal states are proposing that taxpayers guarantee billions of dollars in construction loans for coal-to-liquid production plants, guarantee minimum prices for the new fuel, and guarantee big government purchases for the next 25 years.
With both House and Senate Democrats hoping to pass "energy independence" bills by mid-July, coal supporters argue that coal- based fuels are more American than gasoline and potentially greener than ethanol.
"For so many, filthy coal is a dirty four-letter word," said Representative Nick V. Rahall, Democrat of West Virginia and chairman of the House Natural Resources Committee. "These individuals, I tell you, have their heads buried in the sand."
Environmental groups are adamantly opposed, warning that coal-based diesel fuels would at best do little to slow global warming and at worst would produce almost twice as much of the greenhouse gases tied to global warming as petroleum.
Coal companies are hardly alone in asking taxpayers to underwrite alternative fuels in the name of energy independence and reduced global warming. But the scale of proposed subsidies for coal could exceed those for any alternative fuel, including corn-based ethanol.
Among the proposed inducements winding through House and Senate committees: loan guarantees for six to 10 major coal-to-liquid plants, each likely to cost at least $3 billion; a tax credit of 51 cents for every gallon of coal-based fuel sold through 2020; automatic subsidies if oil prices drop below $40 a barrel; and permission for the Air Force to sign 25-year contracts for almost a billion gallons a year of coal-based jet fuel.
Coal companies have spent millions of dollars lobbying on the issue, and have marshaled allies in organized labor, the Air Force and fuel- burning industries like the airlines. Peabody Energy, the world's biggest coal company, urged in a recent advertising campaign that people "imagine a world where our country runs on energy from Middle America instead of the Middle East."
Representative Rick Boucher, a Virginia Democrat whose district is dominated by coal mining, is writing key sections of the House energy bill. In the Senate, champions of coal-to-liquid fuels include Barack Obama, the Illinois Democrat, Jim Bunning of Kentucky and Larry Craig of Idaho, both Republicans.
President Bush has not weighed in on specific incentives, but he has often stressed the importance of coal as an alternative to foreign oil. In calling for a 20 percent cut in projected gasoline consumption by 2017, he has carefully referred to the need for "alternative" fuels rather than "renewable" fuels. Administration officials say that was specifically to make room for coal.
The political momentum to subsidize coal fuels is in odd juxtaposition to simultaneous efforts by Democrats to draft global-warming bills that would place new restrictions on coal-fired electric power plants.
The move reflects a tension, which many lawmakers gloss over, between slowing global warming and reducing dependence on foreign oil.
Many analysts say the huge coal reserves of the United States could indeed provide a substitute for foreign oil.
The technology to convert coal into liquid fuel is well-established, and the fuel can be used in conventional diesel cars and trucks, as well as jet engines, boats and ships. Industry executives contend that the fuels can compete against gasoline if oil prices are about $50 a barrel or higher.
But coal-to-liquid fuels produce almost twice the volume of greenhouse gases as ordinary diesel. In addition to the carbon dioxide emitted while using the fuel, the production process creates almost a ton of carbon dioxide for every barrel of liquid fuel.
Coal industry executives insist their fuel can actually be cleaner than oil, because they would capture the gas produced as the liquid fuel is being made and store it underground. Some could be injected into oil fields to push oil to the surface.
Several aspiring coal-to-liquid companies say that they would reduce greenhouse emissions even further by using renewable fuels for part of the process. But none of that has been done at commercial volumes, and many analysts say the economic issues are far from settled.
"There are many uncertainties," said James T. Bartis, a senior policy researcher at the RAND Corporation, who testified last week before the Senate Energy Committee. "We don't even know what the costs are yet."
The clash between "energy independence" and global warming will break into the open next month. The Senate energy bill, being drafted by Senator Jeff Bingaman, Democrat of New Mexico, would promote renewable fuels -- but not coal-to-liquid fuels -- and would require electric utilities to produce 15 percent of their power with renewable fuels by 2020.
But coal-state Republicans have vowed to resume their push for coal incentives when the bill reaches the Senate floor, and many Democrats are likely to support them. In the House, Democrats like Mr. Boucher and Mr. Rahall will be pushing in the same direction.
But some energy experts, as well as some lawmakers, worry that the scale of the coal-to-liquid incentives could lead to a repeat of a disastrous effort 30 years ago to underwrite a synthetic fuels industry from scratch.
When oil prices plunged in the 1980s, the government-owned Synthetic Fuels Corporation became a giant government albatross that lost billions and remains a symbol of misguided industrial policy more than 25 years later.
"This is the snake oil of energy alternatives," said Peter Altman, a policy analyst at the National Environmental Trust, an environmental advocacy group. "The promises are just as lofty and the substance is just as absent as the first snake oil salesmen who plied their trade in the 1800s."
Coal executives contend that the technology for converting coal to "ultraclean" diesel fuel for use in cars and trucks has been around for decades. Known as the Fischer-Tropsch process, the technology dates to the 1920s. It was used by Germany during World War II and by South Africa during the apartheid era, in both cases because the countries were blocked by international embargoes from buying oil.
SASOL, a South African chemical conglomerate, is the world's largest producer of coal-based liquids and operates a plant that produces 150,000 barrels a day.
"Greener and cleaner -- we can do it, and we will do it," said John Baardson, president of Baard Energy, a firm in Vancouver, Wash., that is trying to build a $4 billion coal-to-liquid plant in Ohio.
But no company has built a commercial-scale plant that also captures carbon, and experts caution that many obstacles lie ahead.
"At best, you're going to tread water on the carbon issue, and you're probably going to do worse," said Howard Herzog, a principal research engineer at the Massachusetts Institute of Technology and a co-author of "The Future of Coal," [7 Mbytes PDF] a voluminous study published in March by M.I.T. "It goes against the whole grain of reducing carbon."
The M.I.T. team expressed even more skepticism about the economic risks. It estimated that it would cost $70 billion to build enough plants to replace 10 percent of American gasoline consumption.
The study estimates that the construction costs for coal-to-liquid plants are almost four times higher than the costs for comparable petroleum refineries, and it argues that cost estimates for synthetic fuel plants in the past turned out to be "wildly optimistic."
In a new report last week, the Energy Department estimated that a plant capable of making 50,000 barrels of liquefied coal a day -- a tiny fraction of the nearly 9 million barrels in gasoline burned daily in the United States -- would cost $4.5 billion.
But the Energy Department also estimated that such a plant could produce a 20 percent annual return if oil prices remain about $60 a barrel.
Coal executives say that they need government help primarily because oil prices are so volatile and the upfront construction costs are so high. "We're not asking for everything. All we're asking for is something," said Hunt Ramsbottom, chief executive of Rentech Inc., which is trying to build two plants at mines owned by Peabody Energy.
But coal executives anticipate potentially huge profits. Gregory H. Boyce, chief executive of Peabody Energy, based in St. Louis, which has $5.3 billion in sales, told an industry conference nearly two years ago that the value of Peabody's coal reserves would skyrocket almost tenfold, to $3.6 trillion, if it sold all its coal in the form of liquid fuels.
Coal industry lobbying has reached a fever pitch. The industry spent $6 million on federal lobbying in 2005 and 2006, three times what it spent each year from 2000 through 2004, according to calculations by Politicalmoneyline.com.
Peabody, which has quadrupled its annual lobbying budget to about $2 million since 2004, recently hired Richard A. Gephardt, the Missouri Democrat who was House majority leader from 1989 to 1995 and a candidate for the Democratic presidential nomination in 1988 and 2004, to help make its case in Congress.
One of the most vociferous champions of coal-to-liquid fuels is the Southern States Energy Board, a group organized by governors from 16 states. Last year, the group published a study, which cost $500,000, that concluded that coal-to-liquid fuel could and should replace almost one-third of imported oil by 2030.
As it happens, the coal industry supplied much of the financing for the study and subsequent marketing. Peabody Energy contributed about $150,000 and the National Mining Association added $50,000, officials at the Southern States Energy Board said.
The inducements under discussion would not only subsidize up to 10 coal-to-liquid plants, but also guarantee a minimum market through long-term contracts with the Air Force and minimum prices for at least some producers.
"There is financial uncertainty, which is inhibiting the flow of private capital into the construction of coal-to-liquid facilities," said Mr. Boucher, who supports most of the proposals and is drafting portions of the energy bill.
In addition to construction loan guarantees, Mr. Boucher would protect the first six liquid plants from drops in energy prices. If oil prices fell below about $40 a barrel, the government would automatically grant loans to the first six plants that make coal-based fuels. If oil prices climbed to $80 a barrel, companies would have to pay a surcharge to the government.
But the most important guarantee, many coal producers said, is the prospect of signing 25-year purchase contracts with the Air Force.
The Air Force consumes about 2.6 billion gallons a year of jet fuel, and Air Force officials would like to switch as much as 780 million gallons a year to coal-based fuels. Air Force officials strongly support the idea of extremely long contracts, but others at the Defense Department worry that the military could be left holding the bag for years if oil prices dropped significantly.
For Mr. Boyce, chief executive of Peabody Energy, there is no reason to be timid.
"If America has the will to be one of the great energy centers of the world," he told an industry conference last year, "we have the resources right under our feet."
LINKING EXPOSURES IN THE WOMB TO ADULT DISEASES
When it comes to the effects of prenatal chemical exposures, timing is everything. That is the consensus of a series of reviews and new research articles published in the April/May issue of Reproductive Toxicology. The special issue highlights exposures of developing fetuses to various chemicals and the possible impacts on adult diseases such as Parkinson's, obesity, heart disease, and cancer.
Compared with the gross fetal malformations from prenatal thalidomide exposure, the footprints left behind by most toxins are more subtle. For example, methylmercury exposure from fish consumed by mothers-to- be has neurotoxic effects at high levels and can cause low birth weight and other negative effects. Philippe Grandjean of the Harvard School of Public Health and the University of Southern Denmark reviews cases of the less obvious effects at even lower levels, using data from such far-flung sites as the Faroe Islands and New Zealand. Physical coordination and brain functions are "sensitive targets of methylmercury toxicity" even at lower levels of exposure, which are possibly culpable in attention deficit disorder and brain-function disabilities, writes Grandjean.
In another review, Gail S. Prins of the University of Illinois at Chicago and colleagues argue that exposure to estradiols in utero may be contributing to prostate cancer in humans. Extrapolating from studies of rats affected during the perinatal period, the authors add to the mix gene methylation, a cellularly inherited DNA alteration that may come from exposure to bisphenol A or other endocrine disrupters. The researchers emphasize how critical the period of fetal exposure is to later development and how it may lead to many adult diseases.
Other papers in the journal's special issue include new research from Theodore Slotkin and Frederic Seidler of Duke University Medical Center on the effects of fetal and prenatal exposure of rats to chlorpyrifos, a pesticide banned for termite control in 2005. Such organophosphates affect serotonin systems as they develop in the womb, ultimately affecting gender differentiation of the rats' brains during puberty.
Despite obvious shortcomings of rodent-to-human extrapolations, the research underscores the importance of the level of exposure and its timing. During the peak period of sexual differentiation (gestational days 17-20), male fetuses showed brain changes when their mothers were injected with 1 milligram of chlorpyrifos per kilogram body weight. Female rats responded only to doses five times as high during the same period.
Copyright 2007 American Chemical Society
From: The New York Times (pg. A1)
TOP CORPORATE EXEC NOW EARNS $850,000 PER HOUR
By Jenny Anderson and Julie Creswell
James Simons, a 69-year-old publicity shy former math professor, uses complex computer-driven mathematical models to make bets on stocks, bonds and commodities, among other things.
His earnings last year were $1.7 billion.
As one of the leading hedge fund managers, Mr. Simons makes a sum that dwarfs that of the top chiefs on Wall Street. The highest paid on the Street, Lloyd C. Blankfein of Goldman Sachs, earned $54.3 million in salary, cash, restricted stock and stock options last year. (Unlike the total for Mr. Simons, Mr. Blankfein's reported compensation does not include gains on investments.)
And Mr. Simons, the founder of Renaissance Technologies, is not the only member of the billion-dollars-a-year club.
Two other hedge fund managers, Kenneth C. Griffin and Edward S. Lampert, each took home more than $1 billion last year, with George Soros missing the hurdle by a hair, give or take $50 million, according to an annual ranking of the top 25 hedge fund earners by Institutional Investor's Alpha magazine, which comes out today.
The rewards for managing hedge funds -- lightly regulated private investment pools for institutions like endowments and wealthy individuals -- have been lucrative for some time. Yet the survey also shows that for the hedge fund elite, the rich are getting much richer in a hurry.
To make Alpha's list, a manager needed to earn at least $240 million last year, nearly double the amount in 2005. That is up from a minimum of $30 million in 2001 and 2002. Combined, the top 25 hedge fund managers last year earned $14 billion -- enough to pay New York City's 80,000 public school teachers for nearly three years.
With the modern gilded age in full swing, hedge fund managers and their private equity counterparts are comfortably seated atop one of the most astounding piles of wealth in American history.
Their ascendancy has been aided by an inflow of money from pension funds and other big investors, robust markets and fee-based compensation that can produce staggering amounts of individual wealth.
Naturally, some look upon these masters of the new universe as this generation's robber barons, using wealth to create wealth, often in secretive ways, and leaving little that is tangible in their wake.
Others view them as new-economy financiers, evoking the likes of John D. Rockefeller or John Pierpont Morgan as they provide liquidity to the markets and broadly diversify risks in the banking and financial systems.
"You had railroads in the 19th century, which led to the opening up of the steel industry and huge fortunes being made," said Stephen Brown, a professor at the Stern School of Business of New York University. "Now we're seeing changes in financial technology leading to new fortunes being made and new dynasties created."
But as hedge funds and their private equity brethren begin to emerge more onto the public stage -- playing increasingly bigger roles in art and cultural circles, tiptoeing into the Washington lobbying game, and even selling shares of their own firms to the public -- all aspects of their activities, their own compensation in particular, are raising eyebrows.
"There is some question as to what the hell they are doing that is worth" that kind of money, said J. Bradford DeLong, an economist at the University of California, Berkeley. "The answer is damned mysterious."
Indeed, to some, it is difficult to see the value and the risks created by a hedge fund that bets billions of dollars on movements in everything from global currencies, stocks and bonds to real estate, reinsurance and complex credit derivatives. Recently, for instance, the House Financial Services Committee held hearings focusing on the potential risks to pensioners and the financial system caused by hedge funds.
Yet many, including past and current Federal Reserve chieftains, argue that they are greasing the wheels of capitalism.
While the debate rages, the new financiers are building up piles of money not seen since the heady days of the Internet boom. But unlike the wealth of many dot-com billionaires, who saw their fortunes collapse with the technology bubble, the gains of hedge funds are not simply returns on paper that fluctuate with the direction of the stock market. Instead the gains are huge cash payouts that most managers then reinvest in their funds, betting that they will continue to beat the markets.
Still, the performance of these managers is as varied as their strategies, ranging from complex computer models to the more old- fashioned version of betting the farm on a few stocks. None of the managers contacted for this article returned calls or would comment.
For its rankings on compensation, Alpha magazine includes the managers' share of the firm's management fees, usually 2 percent, and performance fees, or a share of the profits, which typically start at 20 percent.
That structure means that some hedge fund managers can still earn a huge income even with mediocre returns because of the huge size of the assets under management. Raymond T. Dalio, head of Bridgewater Associates, which has more than $30 billion in hedge fund assets, for example, took home $350 million last year even though his flagship Pure Alpha Strategy fund posted a net return of just 3.4 percent for the second consecutive year.
The magazine also includes gains made on hedge fund managers' own capital in their funds. Mr. Simons, for instance, has more than $1 billion of his own money invested in his funds.
Topping Alpha's list for the second consecutive year, Mr. Simons, a former code breaker for the Defense Department, uses computer-driven models to detect pricing anomalies in stocks, commodities, futures and options.
Even though he has some of the highest fees in the business -- 5 percent of assets under management and 44 percent of profits -- he trounces most of his competitors year after year. In 2006, the $6 billion Medallion fund posted gross returns of 84 percent; 44 percent after fees, explaining his $1.7 billion take.
Some investors do not blink at paying those startling fees. "If you pay peanuts, you get monkeys," said Jim Dunn, a managing director with Wilshire Associates, an investment advisory firm. "We don't concern ourselves with fees. If you can provide Alpha, I'm less concerned about what you bring home." (Alpha is producing returns that are not tied to a market benchmark like the Standard & Poor's 500-stock index.)
While Mr. Simons makes his mark using algorithms, the two other billionaires on this year's list are building distinctive institutions.
Mr. Griffin's Citadel Investment Group of Chicago is often cited as a budding Goldman Sachs, and Mr. Griffin himself is playing an increasingly public role in Chicago, with causes ranging from art to education.
Citadel employs 1,000 people, more than half of them in technology, and runs businesses serving hedge funds and another making markets. Mr. Griffin's funds, with returns of more than 30 percent, helped net him a nifty $1.4 billion.
Compare that with the elusive Mr. Lampert, who has $11 billion of his $14.6 billion ESL fund in the retailer Sears Holdings. Last year, Sears stock rose and with it, Mr. Lampert's fortune by about $1.3 billion.
And if the Internet age was defined by youth, the hedge fund age illustrates that experience indeed pays.
The average age of Alpha's top 25 was 51, with only four thirty- somethings on the list. Among them is John Arnold, the 32-year-old from Centaurus Advisors who amassed net gains of 200 percent last year.
Mr. Arnold hails from Enron's energy desk, where he received a lifetime of trading and other experiences. His $3 billion fund, among the largest energy funds in the world, racked up huge gains by taking the other side of a natural gas bet that caused Amaranth to lose more than $6 billion in a week.
But older, more familiar names dominate Alpha's list. Boone Pickens, the 78-year-old oil tycoon, made $340 million on the back of strong returns at his energy funds and Carl C. Icahn, 71, the reborn activist investor, made $600 million.
With a greater proportion of the assets in the hedge fund industry controlled by fewer managers, some investors worry that managers are at a turning point. The same young and brash managers who achieved huge successes are now controlling vast sums of assets, and the incentive may be to protect their wealth rather than take risks to increase it.
"I think one of the significant issues of this business that we are all struggling with is that there is an inverse correlation between compensation and drive," said Mark W. Yusko, president of Morgan Creek Capital Management, an investment advisory firm. "In many cases the incredible wealth that is created by this incentive compensation structure has a propensity to dull the senses and dull the drive."
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