Yesterday, we gave you the background on how Poseidon Resources calculated their carbon neutrality which we think is a bunch of baloney.
Today we continue with our Burden of Proof. We have to prove that Poseidon Resources:
- gave the Commission inaccurate or erroneous information;
- they did it intentionally; and
- if the Commission had the accurate information, they would have changed the permit.
We think the 2005 subsidy contract language provides all the answers for the Commission to find these elements.
1. Inaccurate and erroneous information?
In effect, Poseidon Resources admits that they can’t guarantee the water they produce will replace Delta water imported to the region – even though that is the assumption in the GHG mitigation calculation. What they argue instead is that the MWD contract ensures that their water replaces imported water to the 9 customer agencies Poseidon will serve.
They then argue that, even though the net calculation is in fact erroneous and inaccurate, it makes sense to do it this way because the other agencies in the region that will get the excess water made available by their project should have to pay for the GHG mitigation.
There’s several problems with that argument:
a) the record of the approval of this permit refers to, “replacing water to the region,” repeatedly (even though it also refers to replacing water to the 9 agencies repeatedly too). The condition of approval (the GHG mitigation plan,) assumes a complete subtraction of the energy to move the water to southern California from the Delta. A reasonable person could only conclude that the Commission thought they were replacing that imported water (and eliminating the embedded energy in the imported water). The contract clearly shows that is wrong!
b) Poseidon then says that the agencies who receive the excess water, (remember, the contract requires that the water augment current supplies,) should be responsible for mitigating the additional GHG emissions Poseidon caused – not Poseidon. According to them, to do otherwise would be double counting the GHG emissions and the costs of mitigation. BUT – the Commission shouldn’t forget that the contract between MWD and SDCWA on Poseidon’s behalf is PAYING for the water to be produced. If there is any double counting here it is that Poseidon gets water agencies all over southern California to subsidize their production costs (including the GHG mitigation,) and then turns around and tells those agencies that already contributed to the cost of production (including the GHG mitigation costs) that they will have to pay again to mitigate the GHG emissions because Poseidon refused to do it. REALLY? Would a reasonable person believe that the member agencies of MWD agreed to pay for GHG mitigation from this project if they get the excess water the project makes available? Or did they think that their contribution ALREADY paid to make that water available to them at the price they currently pay?
Also, because the supply from the Delta is not “new” and MWD already has rights to import that water, it is not a reasonable assumption that the agencies who would receive this water would ever be required to mitigate the GHG emissions from pumping it all that way. If it’s not a new action by MWD, there would be no review of the environmental impacts.
c) We think it’s clear in the terms of the contract that the REAL net GHG emissions will never be mitigated. We also believe it is clear that the agencies contributing to the rebate contemplated in the 2005 draft contract would not have agreed to it if they thought it meant they would have to pay for GHG mitigation when they received the benefits of contributing to the subsidy. That’s just common sense – what any reasonable person would conclude.
2. Intentionally submitted?
Of course Poseidon intentionally withheld the draft MWD contract. It would have drawn much more scrutiny, if not completely undermined, their proposed GHG net mitigation assumptions and calculations. They even promised to submit a copy of it to the Commission staff at one point – and then changed their mind and promised only a letter from MWD summarizing that the water would replace current supplies.
The issue about the GHG emissions, and the proper mitigation, was rigorously debated. The 2005 draft contract would have been an important part of that debate had Poseidon made it available to the Commission and the public. They didn’t. And any reasonable person would have to conclude they withheld this relevant information because, as we know now, it undermines their argument. Or, if you think of it another way, why would Poseidon decide (after promising to give the Commission the draft subsidy contract) to withhold this information if it wasn’t to their disadvantage?
3. Change to the permit?
This one is easy. The withheld information created an erroneous and inaccurate net GHG mitigation plan. Had the Commissioners known that a majority of the net mitigation was actually just marginal replacement of occasional transfers, they surely would have required a more thorough calculation. And had they known that Poseidon’s argument was that the real mitigation would fall on unsuspecting water agencies throughout southern California (agencies that aren’t required to mitigate the harm) – they surely would have conditioned the permit with some assurances that mandatory mitigation would actually come to fruition.
There's more to come. Stay tuned for our request which we'll post on Monday....
- Update: here is the final in this series.