George Rebane

Yesterday afternoon the Northern Sierra Air Quality Management District held its scheduled Board of Directors meeting at the Helling Library.  I attended as the only representative of ‘the public’.  Actually, I went there to witness our local AQMD’s deliberation on CARB’s AB32 new diesel regulations that threaten to and probably will drive out of business droves of small enterprises that operate diesel powered equipments at the onesy and twosey levels.  They will not be able to afford the modifications to bring their engines up to CARB’s controversial codes.

This agenda item got short shrift because these regulations are a statewide mandate and there is not much that local AQMD’s can do about them.  But I was there for the full two-hour plus discussion of the public nuisance issue that has come out of Sierra Pacific Industries’ operation of its electricity co-generation plant in Loyalton.  SPI was represented by two of its operating executives.

The biomass co-generation plant is another one of those green projects that has had a hard time getting off the ground.  In fact, SPI wants to cut its losses, stop the grief, and sell the plant.  The problem is that the Sierra County facility employs twenty people and is an important source of tax revenues for the county.  On the surface, burning locally available biomass from the forests to reduce fire danger and generate about 20 megawatts of electricity when operating at capacity seemed like a good idea.  But then government stepped in and soon the plant was forced to import a good fraction of its biomass fuel from Sacramento area landfills on the other side of the Sierra.

This was celebrated by local greenie outfits like the Sierra Business Council (here).  SBC hailed some small clean tech consultant and even gave him an award for something to do with showing the sustainability of this unsustainable co-generation plant.  It was all a part of a public relations blitz to toot the horn of the North Sierra Biomass Utilization Task Force.  But it seems that no one on the task force could or would put together a simple cashflow model showing there would be a co-generation business in Loyalton only if the cost of bringing in its biomass fuel was below a certain value.

Hauling the stuff in diesel burning trucks across one of the country’s two biggest mountain ranges would only make sense (and then only to a socialist) if the government mandates, tax credits, pollution regulations, public utility contracts, etc all lined up just so.  Well, of course, they didn’t, and we are where we are with SPI pounding a ‘for sale’ sign in front of the plant.  And all this kind of unsustainable nonsense is happening in a thousand places across the country, but this is really not what I want to cover here.  Nevertheless, you had to know it as background.

Back to the meeting.  It seems that the good people of Loyalton have noticed a “black sticky matter” coating their window sills, cars, and other surfaces around town.  Even though some of this stuff has been coming down in various forms for years from other community activities like burning tires and garbage, the co-generation plant was a natural target for the complaints.  It was subsequently determined by the NSAQMD to be a contributor, and a notice of violation was issued stating that the plant was out of compliance.  This now presents a problem from several aspects.

Around the table discussing the matter was the Board whose directors comprised of selected supervisors from the AQMD’s counties – Nevada, Sierra, and Plumas.  Nevada County’s directors were Supervisors John Spencer and Ted Owens, who chaired the board.  Also in attendance were Executive Director Gretchen Bennitt and Deputy Air Pollution Control Officer Joe Fish, both of the NSAQMD.  Additionally, Sierra County Planning Director Tim Beals was there to discuss the county’s economic perspective.

Ms Bennitt presented the staff report on the matter which was then augmented by SPI’s Environmental Affairs & Compliance Manager David Brown, P.E.  The report was given in a most professional manner.  The directors each had questions and clarifications which were properly addressed by staff and SPI.  Appropriate attention was given to making sure that the people of Loyalton were to be kept informed, and not out of the loop as the public nuisance issue would go through its ordained process.  The atmosphere was cordial, co-operative, and most facile.  It was a pleasure to see how elected officials from several jurisdictions interacted with an appointed government agency, with both showing a proper and balanced concern to the interests of their constituencies and to SPI as a for-profit business.  The people’s business was handled in a most proper, expeditious, and harmonious manner.

I was particularly impressed by the support that SPI’s David Brown and his team had given the AQMD in its research.  This was graciously acknowledged by Ms Bennitt and members of the Board.  Also impressive in its clarity and brevity was the statement made by Planning Director Beals who summarized the interests of Sierra County (pop a little over 3,000) in the co-generation plant’s continuing operation.  These people were all pros and deported themselves as such.  I, as the attending public, was heartened to see in action such a well-oiled process that was at the same time sensitive to multiple conflicting needs and interests.

Over my years observing and dealing with government, I have witnessed the spectrum of such meetings ranging from acrimony to sweetness and light.  In my mind the notion that received early illumination was how the electeds, unelected bureaucrats, and for-profit corporations would work so well together.  It didn’t take rocket science to figure out that all had interests which would best be met if they all played ball.  And that ‘rule’ was doubly true the bigger the involved corporation(s).

The electeds want to show care, prudence, and progress under their leadership.  The bureaucrats want to demonstrate their continued relevance and effectiveness in enforcing laws and regulations in a manner that does not embarrass them and allows their budgets to remain intact.  The corporations want to minimize operational and financial risks, and for that will therefore support governments at all levels to achieve such risk reductions.

And here is where it all ties together.  Corporations – especially the bigger ones – are willing to play whatever game the government requires as long as they are assured an appropriately tilted playing field.  The tilt has to include factors such as mandated/favored markets for their goods/services and barriers to entering competitors.  Just concentrating on these two fully explains why established corporations (oligopolies?) side with governments in fashioning and then accepting new laws, regulations, and even taxes that govern their operations.

As a corporation grows from nimble to lumbering leviathan, its ability to survive, let alone continue growing, will need the kind of outside help only governments can provide.  As a manager (and even a shareholder) in this environment, you will always take a sure nickel over an iffy dime any day.  And as an established player, you love the new regulations that drive out the small guys and keep the nimble start-ups at bay.  With this in mind, it isn’t hard to see why SPI, northern California’s big kahuna in forest products, is all for AB32 coming on strong (i.e. that Prop23 fails).  Whatever rules CARB comes up with, they will remain standing while others fold and new enterprises seek greener pastures.  And SPI is already about as green and sustainable as you could want.

In a bizarre way it was reassuring to peek into a small corner of that cozy nest, and again confirm that all was running hot, true, and normal.