Llewellyn King: More allies than you'd think in decarbonization fight

WEST WARWICK, R.I.

The Democrats, supporting in whole or in part the goals of the Green New Deal, have, one suspects, a vision of themselves facing off against an implacable opposition of energy companies and financiers committed to business as usual.

The fact is, if the Democrats win the White House in November, they may find the enemy isn’t fighting. Indeed, they may find energy producers — both oil and natural gas — and the electric utilities are no longer opponents but devout, if questioning, allies in the struggle for carbon neutrality.

And Wall Street, often identified as the evil force behind the polluters, is striving to be green, and to assess and direct the effect of their lending with a view to reducing carbon emissions and remediating them.

A remarkable organization, the Partnership for Carbon Accounting Financials (PCAF), has enlisted top global banks and lenders in the decarbonation of the future. In the United States its partners include Amalgamated Bank, Bank of America, Citigroup, BlackRock and Morgan Stanley.

A slew of banks spread across Western Europe has joined PCAF, including Britain’s NatWest and Denmark’s Danske Bank. Its first task will be to develop organization-wide standards and methodology to assess the carbon impact of their lending.

Oil and gas entrepreneurs and electric utilities have long been entwined with their bankers. They need each other. It takes a lot of capital to explore for and exploit oil and gas deposits, and the electric utilities have traditionally been the most capital-intensive American industry.

So complete has been the relationship between banking and energy that American Electric Power, once the nation’s biggest electric power company, had its headquarters on Wall Street for decades before moving it to Columbus, Ohio, where its customer base is.

The Edison Electric Institute, now a fixture among the power players in Washington, was based in New York City when I began writing about the utility industry in 1970. Likewise, the Atomic Industrial Forum, a forerunner of the Nuclear Energy Institute, moved to the Washington, D.C., area.

When the price of oil went down suddenly in the 1980s, a bunch of Southwest banks failed. The banking-energy linkage is absolute and at heart unshakable. And it can be dynamic and progressive.

PCAF is the singular and extraordinary creation of Guidehouse, a globe-spanning environmental consulting firm. It began modestly in The Netherlands — one of the most eco-friendly countries in the world — in 2015 and spread to banks across Europe. But its big expansion came in the last two years with the addition of the big American financial institutions and NatWest.

It won’t just be large energy investments that will be subject to scrutiny and assessment by PCAF members. “It will extend all the way down to mortgages,” Jan-Willem Bode, a Guidehouse partner based in London, told me in a guest appearance on White House Chronicle, the weekly news and public affairs program on PBS.

Bode said the banks want to harmonize how they measure their carbon impact and work toward investments in everything from alternative energy projects, like wind farms, to solar homes that reduce the carbon load.

Bode insisted that the commitment of the partners is real. They want a decarbonized future and will favor investments that bring that about.

Of course, there will be critics aplenty. They’ll bandy about the pejorative “greenwashing” and will suggest that the companies that financed carbon production in the past are still at it.

I think they haven’t got the message: America will be greened a lot faster when big money says “green.”

Take what Citigroup CEO Michael Corbat said: “If there’s one lesson to be learned from the COVID-19 pandemic, it is that economic and physical health and  resilience, our environment and our social stability are inextricably linked.”

The greenback is getting greener.

On Twitter: @llewellynking2
Llewellyn King is executive producer and host of White House Chronicle, on PBS. He’s based in Rhode Island and Washington, D.C.

White House Chronicle
Inside Sources

Llewellyn King: The lure of the linemen

From across America an army of men, and a few women, has been on the move. They are deployed with tools and gauges, maps and their own know-how in a critical battle. They are shock troops fighting the flooding in North and South Carolina.

They are electricity linemen.

When disaster strikes, the nation’s electric utilities spring into action, sending equipment — which can range from temporary lighting to the familiar bucket trucks — hundreds and thousands of miles to the battle.

When these first responders reach the site of disaster, they go to work down manholes and up poles, struggle with knotted wires and fallen trees.

The work is hard and the conditions are dangerous, but there is a camaraderie that binds linemen from different localities in a common purpose and danger. Those who more usually might rely on a bucket truck, in fine conditions, take out their climbing gear and up the pole they go.

The constant danger is electricity itself: the threat of electrocution. Up the pole, there are many other dangers. The pole may be weakened and critters seeking safety may be up there, from raccoons to venomous snakes.

When the lights go off, life as most of us know stops. It does not grind to a slow halt, it stops. Elevators, air conditioners, heating systems, ovens, refrigerators, televisions and computers are stranded. Even the pumps for removing water from a flooded basement need electricity.

Everyone knows that in an emergency, it is vital to restore the juice. The linemen, often several sleeping in a single motel room or in their trucks, are the heroes who work as many as 19 hours straight to do that.

It is rewarding, exacting and well-paid work. A spokesman for the American Public Power Association explains that pay varies, depending on the part of the country, but $100,00 a year is common and earnings shoot up with overtime, as in emergencies. The association represents more than 2,000 publicly owned utilities, serving about 14 percent of the nation’s electricity consumers.

So it is astounding that for a number of years both the publicly owned and the large, investor-owned utilities, which the Edison Electric Institute represents and account for 80 percent of the power supply, have been having a devil of a time finding workers prepared for a generally very secure life that has its moments of high drama — as is the case right now with the crews restoring power to areas devastated by Hurricane Matthew.

The problem is that even the most enthusiastic young person cannot just go up a pole without a lot of training: four years of training.

In the world of labor, electric utilities are not the only ones gasping for help. There is an artisan labor shortage and it is worsening. One truck operator reckons there are vacancies for at least 50,000 truck drivers. Similar shortages exist for electricians, pipe-fitters, sheet metal workers, stone masons, welders and many other skilled artisans.

If all the manufacturing jobs that politicians say that they would like to bring back to the United States were to arrive next year, there would be no workers to build the factories, nor a trained workforce to make the goods. The unemployment crisis — so emphasized in this election year — is with the unskilled.

Part of the artisan problem may be that too many young men and women are being herded into colleges without any knowledge of alternatives for which they might have more aptitude and interest. More college is always seen as a virtue. But who needs four years of college to become an Uber driver?

When the APPA tried recruiting in high schools with a video, they found that teachers trashed the video. Schools are rated on how many graduates go on to college, not on to training in trades offering job security and satisfaction.

There is a future up the pole.

Llewellyn King (llewellynking1@gmail.com) is host and executive producer of White House Chronicle, on PBS, and a long-time publisher, columnist and international business consultant. This piece first ran in Inside Sources.