On 04/13/15, Peabody Energy followed other major coal companies into bankruptcy, and days later lost a battle in a landmark legal war on Minnesota’s Social Cost of Carbon (SCC). The “best” gang1 of climate denial outliers they could hire tried to confuse the court with absurd claims in both science and economics. The Judge was not fooled, and ruled unambiguously, as reported by Bloomberg BNA, University of Minnesota Consortium on Law and Values and MPRNEWS:
Updated climate change costs make coal-fired power less attractive:
“State law already requires Minnesota account for climate change costs when deciding how to generate electricity. But an administrative law judge says the price range Minnesota uses is way too low – by a factor of more than 10 – because it’s outdated and doesn’t fully account for health problems and other societal costs tied to climate change. If the Minnesota Public Utilities Commission agrees with the judge’s view, it could mean wind and solar will look a lot cheaper than burning coal…. On Friday, Administrative Law Judge LauraSue Schlatter mostly agreed the federal government’s social cost of carbon figures were the way to go and suggested the state PUC adopt a new price range — from about $11 to $57 per ton of carbon emitted. The previous range was about 50 cents to less than $5.”
Scientist and witness John P. Abraham explained Peabody coal’s contrarian scientist witnesses lose their court case.
Dana Nuccitelli followed with more detail in Coal made its best case against climate change, and lost.
These just scratch the surface of a major case with 19 witnesses and ~550 documents. The volume of recorded nonsense is too large to cover in a post, so key testimonies are annotated for any who want to assess witness credibility.
Often citing dubious or mis-used sources in both science and economics, Peabody’s fossil gang couldn’t shoot straight.
Opposing witness could and did, and the judge saw that. ALJ Schlatter’s crisp 150p FINDINGS OF FACT, CONCLUSIONS, AND RECOMMENDATIONS: CARBON DIOXIDE VALUES is annotated in Findings.2 As with Minnesota’s tobacco lawsuit or Pennsylvania’s Kitzmiller v Dover, this may create a landmark referenceable by inevitable later cases.
It reveals instructive patterns of Peabody’s claims and tactics, strongly rebuffed by the ALJ. It started:
p.10 “On October 9, 2013, … the environmental organizations recommended that the Commission adopt the federal government’s Social Cost of Carbon as the cost value for CO2.”
The Federal SCC (FSCC) is developed and updated by the Inter-agencies Working Group (IWG), but the MN PUC wanted a contested case to build a record of evidence and arguments.
Involved parties, sponsored witnesses, Findings p.1, pp.9-10, pp.140-144. Direct witnesses Bold, science-focused Italic.
Although supposedly about economics, Peabody started by attacking mainstream science, even claiming fossil:CO2 in doubt.
Peabody: Peabody Energy: Will Happer, Richard Lindzen, Roy Spencer, Robert Mendelsohn, Roger Bezdek.
Richard S.J. Tol was added to buttress economics and William Wecker to rebut Martin, but neither had much impact.
Peabody’s scientists3 threw poorly-sourced, outlier and even absurd arguments against mainstream science, yet another example of attacking science to avoid unwanted policy. They needed to help their economists claim that Minnesota’s SCC should be zero, negative or lower than current Minnesota values, all outliers in mainstream economics.
None of Peabody’s witnesses were based in Minnesota, but they denigrated the expertise of Martin, Polasky and Hanemann, and repeatedly tried to exclude witnesses and testimony, with little success.
The blue groups started with 2 National Academy economists, who assumed mainstream science, then argued that the FSCC was a reasonable methology, with no better available, and would improve, while acknowledging imperfections.
Peabody’s witnesses attacked science, so the blue side added scientists to rebut them.
CEOs: Clean Energy Organizations: Stephen Polasky, John Abraham, Andrew Dessler. Peter Reich for (sur)rebuttals.
Agencies: MN Dept of Commerce, Div of Energy Resources (DOC DER) and MPCA: Michael Hanneman, Kevin Gurney
DHE: Doctors for a Healthy Environment: Rom
CEBC: Clean Energy Business Coalition: Rumery, Kunkle
Finally, Minnesota groups employed economists who argued against the FSCC, generally without attacking science:
Utilities: Great River Energy (GRE), Minnesota Power Company, Otter Tail Power: Anne Smith
MLIG: Minnesota Large Industrial Group: Anne Smith and Ted Gayer
Xcel: Northern States Power Company, d/b/a Xcel Energy: Nick Martin, who disagreed with some parts of the FSCC methodology, but his proposal overlapped with it. He got criticized by many, but the ALJ singled him out for credible work.
The 89p Issues Matrix organized pro- and con- arguments under each of 31 separate issues, easier to digest than thousands of pages of testimony, An annotated copy is attached here as Issues, cross-referenced wtih Findings.
Science Arguments – Peabody Rejected by ALJ – see below for the essence of flawed arguments
In Findings pp.18-31, the ALJ covered science arguments, simple by comparison with the economics.
She summarized Peabody’s positions, and then ruled strongly following the blue groups’ defense of science:
p.18 “Peabody asserted that significant climate change is not occurring or, to the extent climate change is occurring, it is not due to anthropogenic causes. Furthermore, Peabody insisted that any current warming and increased CO2 in the Earth’s atmosphere are beneficial. Based on its position on climate change, Peabody maintained that the externality value of CO2 would most accurately be set at or below zero.…”
p.31 “The Administrative Law Judge concludes that Peabody Energy has failed to demonstrate, by a preponderance of the evidence, that climate change is not occurring or, to the extent climate change is occurring, the warming and increased CO2 in the Earth’s atmosphere are beneficial.”
Economics Arguments – much longer and more difficult, but ALJ (mostly) accepted the FSCC, not Peabody or others.
The Agencies, CEOs and DHE supported use of the Federal SCC, but thought it was understated, thus conservative.
Peabody rejected it, as did Minnesota parties, but their proposals often conflicted. Long discussion led to clear rulings:
p.124 “The Administrative Law Judge concludes that, based on unreported and underreported health and environmental impacts, along with the IWG’s acknowledgement that the FSCC is not based on the most current research, the preponderance of the evidence demonstrates that the FSCC understates the full environmental cost of CO2.”
p.131 “…concludes that the Agencies and the CEOs demonstrated by a preponderance of the evidence that the Federal Social Cost of Carbon is reasonable and the best available measure to determine the environmental cost of CO2, with the exceptions described in these findings regarding the 95th percentile and the time modeling horizon.”
There is rough overlap of Xcel, FSCC, major oil companies’and Climate Casino(2013), by WIlliam Nordhaus, orginator of DICE. Mendelsohn cited that book and used DICE, but got radically different results by choosing rather unusual parameters.
MLIG and Utilities proposed low outliers, and Peabody’s numbers were even further outliers, and inconsistent besides.3
Sheet SCC explains the derivation of more-or-less commensurate numbers, not always obvious.
Peabody’s gang that couldn’t shoot straight, outlier claims explicitly rejected, tactics deprecated by the ALJ
The ALJ‘s Findings are strong evidence of the gang’s credibility problems.4 After summarizing Peabody’s claims, she condensed 19p of S.Gurney (Surrebuttal), a fine exposition of familiar patterns of bad arguments, further excerpted here:
pp.101-104 Gurney gave many examples of the myriads in the testimonies, a few more are shown later.
‘Agencies claimed Peabody’s witnesses used a pattern of arguments that relied on four patterns of biased or flawed reasoning.
The first pattern is the use of selective citation or “cherry-picking” information to support a predisposed conclusion. The selective citation process has two variations: non-peer-reviewed literature and narrow citation….
The second of four patterns of arguing and reasoning … was to misunderstand the science or cited literature….
The Agencies provided examples of the third misleading pattern …, which they called “straw man argument.” …
The fourth pattern used by Peabody’s witnesses is known as “attacking the messenger‘ … 4
The CEOs alleged, and provided examples to establish, that Peabody’s witnesses relied on non-peer-reviewed information. „,
The CEOs addressed a number of Peabody’s claims in which the CEOs stated Peabody misrepresented or misinterpreted climate science. …
CEOs discussed the claim that 97 percent of the world’s climate scientists agree that humans are causing climate change and many independent studies have provided compelling evidence that there is a “very strong consensus among scientists” on this point. The CEOs maintained that Peabody’s views on climate change are far outside the mainstream scientific understanding and ignore the bulk of the evidence. …
DHE criticized Peabody for relying on information almost entirely based on industry-funded reports that are not peer-reviewed by the medical or public health community. DHE specifically criticized a bibliography of articles attached to the testimony of Peabody’s witness, Dr. Bezdek, used to support the claim that “humans would flourish in a warmer climate.”’
Findings pp.141-142 list Peabody’s expert witnesses, all but Wecker involved in various ways with one or more of:
CO2 Coalition (tax-exempt 501(c)(3) “charity” rebranded part of the George Marshall Institute), Heartland Institute or
Global Warming Policy Foundation (GWPF) in UK, but well connected, as per FOIA Facts 5 – Finds Friends Of GWPF.
As shown later, many have given talks at Heartland conferences, or have formal Affiliations with these groups.
Although Peabody witnesses provided long Curricula Vitae (CVs), these important associations seemed to be omitted.
For example, although far more relevant than his research in atomic physicis, Happer’s CO2 Coalition is unmentioned, but he asked that his fee be “donated” to it, as he did in the “sting” operation where he was willing to write more.
Bezdek and Wecker run consultancies and plausibly got paid, but by comparison, a “charity” has advantages for Happer:
– Peabody gets a tax break on “donation” to a “public charity” which seems to provide experts for hire
– Happer can correctlly say he did not get paid by a coal company, and of course would not report it as personal income
– He still controls the funds, can use it for expenses, for example, for visiting Washington to testify for Senator Cruz.
– Had he not admitted it, we would likely never be sure, since such think tanks rarely disclose “donors”
Case has ~550 documents, probably ~9,000 pages, of which ~2,600 are annotated and attached here
Sheet 14-463 is an annotated extract from the MN case database, re-sorted by Date and then Document ID.
The ALJ‘s phase of this case is complete, so it goes to the PUC. The sequence was:
Witnesses: Direct testimony => Rebuttals => Surrebuttals (eplies to Rebuttals) => Hearings.
Parties: consolidated Issues Matrix, then each filed Initial Briefs, Reply Briefs and (annotated here) Proposed Findings.
ALJ: wrote her Findings, but the parties got several chances to respond. The blue groups were relatively happy.
Parties: filed EXceptions, and then Replies to Exceptions, except Peabody, which filed nothing after the Findings.
Did Peabody realize the best gang of hired guns they could find had shot blanks in all directions?
Did they just want to save money, since after all, Peabody had just entered bankruptcy?
Or did they just expect to wait for the PUC and file appeals? There is no way to know until we see what happens.
|All documents at Minnesota eDockets for 14-463. Warning: if get session timeout message, just click again on URL.|
|OAH rulings on motions to exclude testimony||09/15||20159||113992-01||Strike Polasky, Haneman and part of Martin testimony DENIED|
|09/15||20159||113998-01||Exclude Rumery & Kunkle DENIED||113998-01||vs Happer partial4|
|09/21||20159||114135-01||Exclude some Abraham, Dessler and Gurney: DENIED. vs Reich (with MLIG) small partial|
|Issues Matrix||11/12||201511||115671-01 89p All parties, Issues is annotated copy attached here|
|IB Initial Briefs||11/24||201511||115936-01||115929-01||115937-01||115933-01||115935-01||115999-01||115928-02|
|RB Reply Brief||12/15||201512||116631-02||116522-02||116526-02||116504-01||116527-02||116502-01||116495-02||116528-01|
|PF Proposd Findings||12/15||201512||116525-02||116522-03||116526-03||116504-01||116529-01||116500-1, -03|
|Annotated, key documents->IM–>Findings||PF.Peabody||PF.Utilities||PF.MLIG||PF.Xcel||PF.CEOs||PF.Agencies, Att|
|IM Comment||12/18||201512||116525-03||116522-04||Peabody objected to “phantom” evidence. ALJ obviously disagreed.|
|ALJ Findings, etc||04/15/16||20164||120145-01||150p Findings is annotated copy attached here|
|Exception Replies||05/15/16||20165||None||121392-01||121396-01||121395-01||121398-01||121400-01||<- See CEOs pp.18-20|
Table 2 shows witnesses and testimonies, either at MN eDockets. Uppercase codes link to annotated copies here.
Read testimonies down to see everything t a given stage, or across to see those by any one witness.
No attempt was made to analyze the 90+ Hearings documents or get the transcripts, but everything was consolidated into the IB, RB, and especially PF stages. Despite his voluminous written testimony, Bezdek was not included in oral Hearing.
Relevant corrections are included, and Italic purple is explained in Table 3.
|Peabody-sponsored witnesses, some fees known. With bankruptcy, maybe more ? $Pay: Greenpeace|
|All but Wecker have DeSmog profiles, linked. (A|t) Involved with CO2Coalition, Heartland, GWPF >||C||H||G||D||R||S||H||$Pay|
|NJ||Dr. Will Happer: (emeritus) Prof Physics (atomic) Princeton U; Member NAS
CO2Co President; GWPF Advisor. Coal+OIL: Heartland ICCC-10;
OIL: GMI Chairman ; December 2015 sting. Coal: Peabody 2015 MN hearing. D: pp.76-105
|MA||Dr. Richard Lindzen: (emeritus) Prof Meteorology, MITNAS
CO2Co Advisor; GWPF Advisor. Coal+OIL: Heartland ICCC–2, -3, -4;
Coal : Western Fuels Association 1991 video, 1995 MN Hearing2015 MN
OIL: 1992 Vienna OPEC, also via Annapolis Center, GMI. D: pp.22-76
|AL||Dr. Roy Spencer: Principal Res Scientist U of Alabama Huntsville; CO2Co Advisor. D: pp.1-21
Coal+OIL: Heartland ICCC-1, -2, -3, -4, -6, -9, -10; Coal: Peabody MN 2015
Scientific Perspectives on the Greenhouse Problem(1990) Ch.7;
The Bad Science and Bad Policy of Obama’s Global Warming Agenda(2010)Climate Confusion:How Global Warming Hysteria Leads to Bad Science, Pandering Politicians and Misguided Policies That Hurt the Poor(2010) The Great Global Warming Blunder: How Mother Nature Fooled the World’s Top Climate Scientists (2012). Such might not help science credibility.
|CT||Dr. Robert Mendelsohn: Professor, Forestry & Environmental Studies, Economics, Yale U;
Coal+OIL: Heartland ICCC-6GWPF Advisor; Peabody 2015 MN D: pp.106-173
|VA||Dr. Roger Bezdek: Consulting economist; Pres. Management Information Services.
Has written a few articles for Heartland: Coal:~keep coal & social benefits of carbon.
OIL: World Oil (Contrib Ed), CFACTCO2 Benefits Exceed Costs by …50:1… with Paul Driessen
|UK||Dr. Richard S.J. Tol: Prof. Economics, U of Sussex; GWPF Advisor; “Climate Hustle” (CFACT). Richard Tol Dons Cloak of Climate DenialThe Tol Controversy by Frank Ackerman
A whole fleet of gremlins: Looking more carefully at Richard Tol’s twice-corrected paper, “The Economic Effects of Climate Change” by Columbia U Statisticcs ProfessorAndrew Gelman.
Richard Tol on climate policy -A critical view of an overview (07/21/14) by Frank Ackerman
It’s settled: 90–100% of climate experts agree on human-caused global warming, reply to Tol
|WY||Dr. William Wecker Pres.William E. Wecker AssociatesstatisticsGolden Holocaust(2012) p.441;
Search Truth Tobacco Industry Documents for Wecker, many hits. p.53 $395-$450/hr
|Economics witnesses sponsored by Utilities, MLIG, Xcel||D||R||S||H||Sponsor|
|DC||Dr. Anne Smith: economist and Senior Vice President at NERA Economic Consulting||d||r||s||*||UTILS|
|DC||Dr. Ted Gayer: VP & Dir Economic Studies Program, Brookings Instititution||d||s||MLIG|
|MN||Mr. Nicholas Martin: Environmental Policy Manager for Xcel Energy Services||d||r||s||*||Xcel|
|Science and economics witnesses sponsored by CEOs, DHE, Agencies.||D||R||S||H||Sponsor|
|MN||Dr. Stephen Polasky:Regents Prof Ecological/Environmental Economics,U MNMember NAS||D||R||S||*||CEOs|
|AZ||Dr. Michael Hanemann: Prof. Economics, Sustainability, Arizona State U; Member NAS||D||R||S||*||Agencies|
|MN||Dr. John Abraham: Professor of Thermal Sciences, U of St Thomas, St. Paul||R||S||*||CEOs|
|TX||Dr. Andrew Dessler: Professor of Atmospheric Sciences, Texas A&M||R||S||*||CEOs|
|AZ||Dr. Kevin Gurney: Assoc Prof, School of Life Sciences, atmospheric/ecology Arizona State U||S corr 3||R||S||*||Agencies|
|NY||Dr. William N. Rom: Physician, Professor of Medicine and Environmental Medicine, NY||R||*||DHE|
|DC||Mr, Shawn Rumery: Director of Research, Solar Energy Industries Association||r||CEBC|
|MN||Mr. Christopher Kunkle: Regional Policy Manager for Wind on the Wires||r||*||CEBC|
|MN||Dr. Peter Reich: Regents Professor, Endowed Chair in Forest Resources, U Minn||S||*||CEOs|
Table 3 follows flows of arguments. Rebuttals generally respond to one or more Directs, and Surrebuttals to Rebuttals.
To trace arguments, pick a column with D(R) at top, then find the R(S) in that column to identify those who responded, and use the links above to find the comments. For example, Happer’s Direct drew 4 Rebuttals, and he Rebutted (and denigrated the competence of) 3 Direct witnesses. His Rebuttal drew 3 Surrebuttals, and his Surrebuttal commented on 5 Rebuttals. The list is slightly reordered from Findings to match the order of appearance by D, R, S.
|Purple Italic Underlined==> witness at left denigrated qualifications of witnesses above; ALJ obviously did not agree.|
|19||4||3||4||3||2||2||3||4||8||4||–||4||1||3||3||2||9||5||7||6||7||6||4||4||3||<- # Responses|
This gang couldn’t shoot straight, and some testimony was simply ludicrous, but apparently Peabody could hire no better. They needed to make a whole sequence of outlier claims to create benefits from CO2 in section 6,
|1||Fossil fuels are major cause of CO2 increase||Open to question (Lindzen)|
|2||Earth is warming||Has not warmed since 1998|
|3||Surface temperature record most accurate (as Carl Mears of RSS says)||Satelites best, surface wrong, UHI (Spencer)|
|4||Climate models useful, when properly understood||Climate models all wrong|
|5||Climate Sensitivity to 2X CO2 (CS) 1.5-4.5C, best guess ~3C||.5-1.5C (Happer), .85-1.5C (Lindzen)|
|6||CO2 fertilization (greening) real, but total effects negative for farming, forests||Farming $$ from greening dwarfs all else|
|7||Other effects of warming, acidification mostly negative, some very negative||No problem|
|8||Strong consensus within science||No consensus|
|9||Economic danage already happening, more committed even at current temp||No damage until 1.5-2C (Mendelsohn)|
For a few examples, we find:
1. D.Lindzen p.29, Rebutted in R.Gurney pp.11-12 (or see CO2 lags temperature at Skeptical Science.)
“Even the connection of fossil fuel emissions to atmospheric CO2 levels is open to question. In the ice core records of the ice ages, it appears that CO2 levels may follow temperature increases, rather than vice versa.”
3. R.Happer p.7 had cited a piece by Joseph D’Aleo and Anthony Watts, at SPPI blog, but stricken:
This is a tiny sample of the outlier nonsense by Peabody’s gang. Feel free to check the legal documents, their annotations, and the responses by the impressive witnesses for the blue groups.
Peabody’s gang simply couldn’t shoot straight, and then Peabody did not even file Exceptions to the ALJ‘s Findings.
1 Gang: “a group of persons working together.” There is no implication whatsoever of criminal activity in the usage here, but multiple associations appear in Table 2.
2 Page numbers here use unambiguous PDF page #s, not printed ones. For example, Findings‘ first 8 pages are (blank), (blank), (blank), ii-vi, followed by (blank) and 2-142. The 173p Direct 20156-111054-01 has many duplicate numbers.
3 “Give me a one-handed economist! All my economists say, On the one hand on the other.” -President Harry Truman.
The economists necessarily offered combinations of different assumptions and policy choices, which created long discussions and arguments. Most were able to offer succinct summaries, but Peabody’s was at least three-handed.
4 Peabody’s two Emeritus Professors were elected to the National Academy of Sciences, Happer(1996) for atomic physics and LIndzen(1977) for atmospheric physics done long ago. Happer has not published peer-reviewed papers on climate, but his Rebuttal R.Happer claimed:
“I have reviewed written testimony by
These witnesses lack adequate formal training in the physical sciences, physics, chemistry, meteorology, oceanography, biology or other areas needed to assess the scientific performance of climate models. All the witnesses uncritically accept computer model predictions of climate change from the Intergovernmental Panel on Climate Change (IPCC). They discuss economic models built on these seriously flawed science models. Accordingly, their assessments of the social cost of carbon (SCC) are invalid for reasons already discussed in my testimony.
CO2 is not a pollutant
There can only be a social cost for carbon if more atmospheric CO2 is a negative externality, that is, if the emission of CO2 into the atmosphere does more harm than good. As I outlined in my testimony of June 1, 2015 “Benefits of CO2,” under current emissions projections more CO2 in the atmosphere will be a net benefit. The myth that more CO2 is harmful comes from…”
Likewise, in their Rebuttals, Mendelsohn and Tol denigrated the qualifications of Polasky and Haneman, but the evidence is fairly clear that the ALJ gave little weight to Peabody witness’ claims. Polasky’s Surrebuttal S.Polasky wryly noted, p.10:
“Q. Is there anything else you want to say in response to Dr. Mendelsohn and Dr. Tol’s questioning of your experience and expertise? A. I would also point out that both Dr. Hanemann and I have been elected into the National Academy of Sciences, while Drs. Mendelsohn and Tol have not.’
5This case compared to previous case – 1993-1997 – Minnesota Social Cost of Carbon(SCC), Docket 93-583.
Docket 14-643 already records 500+ documents, and is not done, as Bloomberg notes:
“Currie said interested parties now have 20 days to file exceptions to the ALJ‘s recommendations. Opposing parties would then have 10 days to reply to the exceptions, she said. The PUC would then likely take up the recommendations one or two months after all the filings have been completed, she said.”
From earlier case, it will likely be 2017 before PUC rules. In 1993, the Minnesota legislature required that its Public Utility Commission (PUC) adopt an SCC, opposed by the Western Fuels Association(WFA), whose “expert witnesses” included Richard Lindzen, Frederick Seitz, Robert Balling Jr, Patrick Michaels, and Keith Idso. They provided written testimony,18319 and 13820, and verbal testimony, about which Ross Gelbspan’s The Heat Is On(1995) is a key source:
05/22/95 – Richard Lindzen (especially notable for confusion potential
05/23/95 – Richard Lindzen (cont), Pat Michaels; p.8 When asked, Lindzen explains WFA paid expenses for 1991 testimony
05/24/95 – Keith Idso and Robert C. Balling, Jr
On 03/25/96, the ALJ issued his findings, at same stage as ALJ Schlatter’s 04/15/16 findings.
The PUC ruled on 01/03/97, 188374, replied to comments, 188425, and then affirmed/modified its rulings 07/02/97, 188276. WIth much less information than now available in 2016, the ALJ had recommended, 187175:
p.33 “IPCC reports are the most authoritative sources available for information on climate change issues.”
p.38 “Other parties have proposed that no value or that a zero value be set for carbon dioxode emissions on the basis that it is not practicable at this point in time to value CO2 emissions because existing data is insufficient or unreliable. This proposal is rejected.” (Then he explains why) … ”The Administrative Law Judge has concluded that the record contains enough data to support a value for carbon dioxide, albeit a lesser value than many had sought.”
Either Peabody’ lawyers failed to study the earlier case or they just ignored it.
Update 06/14/16: Peabody Coal Bankruptcy Reveals Climate Denial Network Funding included as creditors Center for Study of Carbon Dioxide and Global Change (whose theme is greening Earth), George Marshall Institute, Roy Spencer, Richard Lindzen. It is unknown if they were owed money for witnessing or something else.
Update 07/03/16: add link for Docket 93-583, the previous case, plus links to testimony.
Blog image credit: Cowboys by Leena Saarinen via Flickr CC