Tuesday, January 4, 2011

A Bit of Regulatory Capture by the Koch Brothers?

In December, the EPA told dozens of Texas refiners and chemical and plastic makers to begin taking steps to fix flaws in their air pollution permits or else, reports the Houston Chronicle.  A deal was reached.

Ilan Levin, an attorney with the Environmental Integrity Project, which has filed legal challenges to some of the flexible permits says of the deal, "The devil is in the details,"

Those details, in part, were negotiated with the EPA by Flint Hills Resources, and this would appear to be some sort of regulatory capture by Flint. Flint is a very powerful firm and the EPA shouldn't even be in business, so when two of them agree on something extremely technical, it is indeed something that is likely to be, in the details, advantageous to Flint.

In situations like this, the regulatory body is usually spun around and has very little clue as to what the capturing firm is up to. It's always very technical and near impossible for a layman to understand, but in the end what it generally means is that the regs are good for the capturing company and hardly anyone else. Think Goldman Sach's relationship with the Treasury and the Fed.

Anyway, the spinning of the EPA must have been done in a very smooth fashion. Not only is the EPA satisfied with the negotiations with Flint, but they are telling  other companies to follow the lead of Flint and, another firm, INEOS. Says the Chronicle (my emphasus):
The EPA has encouraged companies to follow the leads of Flint Hills Resources and INEOS Olefins & Polymers USA - both of which agreed to apply for new state-issued permits after negotiating some terms and conditions with the federal agency.
Now, all but 3 of more than 40 firms in this sector will march in step and have agreed to whatever Flint and INEOS have negotiated. So who has this oligarchic type power to get the deal done, with the result that most others fall in line?

Flint Hills Resources is the refining arm of the billionaire Koch Brothers.

1 comment:

  1. "Regulatory capture"? What does this mean, "regulatory capture"? Sounds like good old-fashioned TReason-Catoite dynamism to me.

    So Flint wields political capital. What's wrong with that? Don't you want free exchange backed by guns backed by badges? What are you, some sort of anarchist?

    Without political capital, Flint execs would be lurking in alleys, wielding guns without badges, waiting to mug us. In a free society, the EPA does it for them.

    Grow up. Order is just another word for centralized chaos.