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128-641: Enron Corporation was an American energy , commodities , and services company based in Houston, Texas . It was founded by Kenneth Lay in 1985 as a merger between Lay's Houston Natural Gas and InterNorth , both relatively small regional companies. Before its bankruptcy on December 2, 2001, Enron employed approximately 20,600 staff and was a major electricity , natural gas , communications, and pulp and paper company, with claimed revenues of nearly $ 101 billion during 2000. Fortune named Enron "America's Most Innovative Company" for six consecutive years. At

256-493: A biomass conversion (biomass refers to recently living organisms, most often referring to plants or plant-derived materials). This biomass can be converted to convenient energy containing substances in three different ways: thermal conversion, chemical conversion, and biochemical conversion. This biomass conversion can result in fuel in solid , liquid , or gas form. This new biomass can be used for biofuels. Biofuels have increased in popularity because of rising oil prices and

384-508: A diesel additive to reduce levels of particulates, carbon monoxide , and hydrocarbons from diesel-powered vehicles. Biodiesel is produced from oils or fats using transesterification and is the most common biofuel in Europe. However, research is underway on producing renewable fuels from decarboxylation In 2010, worldwide biofuel production reached 105 billion liters (28 billion gallons US), up 17% from 2009, and biofuels provided 2.7% of

512-514: A gasoline additive to increase octane and improve vehicle emissions. Bioethanol is widely used in the USA and in Brazil . Current plant design does not provide for converting the lignin portion of plant raw materials to fuel components by fermentation. Biodiesel is made from vegetable oils and animal fats . Biodiesel can be used as a fuel for vehicles in its pure form, but it is usually used as

640-417: A holding company , InterNorth, a diversified energy and energy-related products firm. Although most of the acquisitions conducted were successful, some ended poorly. InterNorth competed with Cooper Industries unsuccessfully over a hostile takeover of Crouse-Hinds Company , an electrical products manufacturer. Cooper and InterNorth feuded in numerous suits during the takeover that were eventually settled after

768-462: A $ 45 million penalty (later reduced). Fastow was sentenced to six years of jail time, and Lou Pai settled out of court for $ 31.5 million. In October 2000, Daniel Scotto , the most renowned utility analyst on Wall Street, suspended his ratings on all energy companies conducting business in California because of the possibility that the companies would not receive full and adequate compensation for

896-401: A 1,380 miles (2,220 km) fiber optic network between Portland and Las Vegas. In 1998, Enron constructed a building in a rundown area of Las Vegas near E Sahara, right over the "backbone" of fiber optic cables providing service to technology companies nationwide. The location had the ability to send "the entire Library of Congress anywhere in the world within minutes" and could stream "video to

1024-706: A commodity. Enron adopted the idea and called it the "Gas Bank". The division's success prompted Skilling to join Enron as the head of the Gas Bank in 1991. Another major development inside Enron was a pivot to overseas operations with a $ 56 million loan in 1989 from the Overseas Private Investment Corporation (OPIC) for a power plant in Argentina. Throughout the 1990s, Enron made a few changes to its business plan that greatly improved

1152-573: A common business practice in the energy industry. However, it also allowed Enron to transfer some of its liabilities off its books, allowing it to maintain a robust and generally increasing stock price and thus keep its critical investment-grade credit ratings. Enron was originally involved in transmitting and distributing electricity and natural gas throughout the US. The company developed, built, and operated power plants and pipelines while dealing with rules of law and other infrastructures worldwide. Enron owned

1280-547: A court-approved plan of reorganization. A new board of directors changed its name to Enron Creditors Recovery Corp. , and emphasized reorganizing and liquidating certain operations and assets of the pre-bankruptcy Enron. On September 7, 2006, Enron sold its last remaining subsidiary, Prisma Energy International , to Ashmore Energy International Ltd. (now AEI). It is the largest bankruptcy due specifically to fraud in United States history. One of Enron's primary predecessors

1408-444: A dangerous spiral in which, each quarter, corporate officers would have to perform more and more financial deception to create the illusion of billions of dollars in profit while the company was actually losing money. This practice increased their stock price to new levels, at which point the executives began to work on insider information and trade millions of dollars worth of Enron stock. The executives and insiders at Enron knew about

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1536-464: A financial "pyramid" or " Ponzi scheme "). Attempting to maintain the illusion, Skilling verbally attacked Wall Street analyst Richard Grubman , who questioned Enron's unusual accounting practice during a recorded conference telephone call. When Grubman complained that Enron was the only company that could not release a balance sheet along with its earnings statements, Skilling replied, "Well, thank you very much, we appreciate that ... asshole." Though

1664-409: A hydro plant larger than 10 megawatts is 3 to 5 U.S. cents per kilowatt-hour. Hydro is also a flexible source of electricity since plants can be ramped up and down very quickly to adapt to changing energy demands. However, damming interrupts the flow of rivers and can harm local ecosystems, and building large dams and reservoirs often involves displacing people and wildlife. Once a hydroelectric complex

1792-556: A large network of natural gas pipelines, which stretched coast to coast and border to border including Northern Natural Gas, Florida Gas Transmission , Transwestern Pipeline Company, and a partnership in Northern Border Pipeline from Canada. The states of California, New Hampshire, and Rhode Island had already passed power deregulation laws by July 1996, the time of Enron's proposal to acquire Portland General Electric corporation. During 1998, Enron began operations in

1920-554: A large variety of risks. In Eastern Europe, a number of long-established projects are struggling to find finance, notably Belene in Bulgaria and the additional reactors at Cernavoda in Romania, and some potential backers have pulled out. Where cheap gas is available and its future supply relatively secure, this also poses a major problem for nuclear projects. Analysis of the economics of nuclear power must take into account who bears

2048-416: A plunge following its earnings report, Mark resigned from Azurix and Enron. Azurix assets, including Wessex, were eventually sold by Enron. In 1990, Enron's chief operating officer Jeffrey Skilling hired Andrew Fastow, who was well acquainted with the burgeoning deregulated energy market that Skilling wanted to exploit. In 1993, Fastow began establishing numerous limited liability special-purpose entities ,

2176-435: A potential for widespread exploitation. Geothermal wells release greenhouse gases trapped deep within the earth, but these emissions are much lower per energy unit than those of fossil fuels. As a result, geothermal power has the potential to help mitigate global warming if widely deployed in place of fossil fuels. The Earth's geothermal resources are theoretically more than adequate to supply humanity's energy needs, but only

2304-497: A reactor design from the 1960s , prompted a rethink of nuclear safety and nuclear energy policy in many countries. Germany decided to close all its reactors by 2022, and Italy has banned nuclear power. Following Fukushima, in 2011 the International Energy Agency halved its estimate of additional nuclear generating capacity to be built by 2035. Following the 2011 Fukushima Daiichi nuclear disaster –

2432-413: A result of a poorly designed market system that was manipulated by traders and marketers, as well as from poor state management and regulatory oversight. Subsequently, Enron traders were revealed as intentionally encouraging the removal of power from the market during California's energy crisis by encouraging suppliers to shut down plants to perform unnecessary maintenance, as documented in recordings made at

2560-403: A result of government assisted research and industry experience, the cost of generating geothermal power has decreased by 25% over the past two decades. In 2001, geothermal energy cost between two and ten US cents per kWh. Marine Renewable Energy (MRE) or marine power (also sometimes referred to as ocean energy, ocean power, or marine and hydrokinetic energy) refers to the energy carried by

2688-538: A risk for higher prices for consumers as well as inhibiting production for the existing vast old gas reservoirs. The wellhead price controls found in the act had a direct effect on natural gas industry commerce. The following are the sections of the NGPA Title 1, Wellhead Price Controls: Stripper wells are wells that are marginally productive. In recent history, stripper well production makes up about 8.2% of United States natural gas production. The NGPA defined

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2816-404: A scene of an Enron-themed amusement park ride. The 2007 film Bee Movie also featured a joke reference to a parody company of Enron called "Honron" (a play on the words honey and Enron). The 2003 documentary The Corporation made frequent references to Enron post-bankruptcy, calling the company a "bad apple". In August 2000, Enron's stock price attained its greatest value, closing at $ 90 on

2944-573: A share. She sold that stock for $ 49.77 a share in July 2001, a week before the public was told what she already knew about the $ 102 million loss. In 2002, after the tumultuous fall of Enron's external auditor, and management consultant, Andersen LLP, former Andersen Director, John M. Cunningham coined the phrase, "We have all been Enroned." The fallout resulted in both Lay and Skilling being convicted of conspiracy, fraud, and insider trading. Lay died before sentencing, Skilling got 24 years and 4 months and

3072-524: A significantly different evaluation of the economics of new nuclear power plants. Costs are likely to go up for currently operating and new nuclear power plants, due to increased requirements for on-site spent fuel management and elevated design basis threats. While first of their kind designs, such as the EPRs under construction are behind schedule and over-budget, of the seven South Korean APR-1400s presently under construction worldwide, two are in S.Korea at

3200-536: A stripper well as essentially a well that produces less than 60 Mcf (60,000 cubic feet) per day during any 90-day interval. However, there was an exclusion or exemption for wells that had the application of what is defined as enhanced recovery in the NPGA. Nonassociated natural gas (gas from different geological zones) which is produced from a stripper well that actually exceeds 60 Mcf during any 90-day production period may continue to qualify as stripper well natural gas if

3328-483: A substance that selectively absorbs uranium from seawater. This process could make the considerable volume of uranium dissolved in seawater exploitable for energy production. Since ongoing geologic processes carry uranium to the sea in amounts comparable to the amount that would be extracted by this process, in a sense the sea-borne uranium becomes a sustainable resource. Nuclear power is a low carbon power generation method of producing electricity, with an analysis of

3456-610: A target of corporate takeovers, the most prominent originating with Irwin Jacobs. InterNorth CEO Sam Segnar sought a friendly merger with HNG. In May 1985, Internorth acquired HNG for $ 2.3 billion, 40% higher than the current market price, and on July 16, 1985, the two entities voted to merge. The combined assets of the two companies created the second largest gas pipeline system in the US at that time. Internorth's north–south pipelines that served Iowa and Minnesota complemented HNG's Florida and California east-west pipelines well. The company

3584-400: A time significant by human needs. Examples are hydroelectric power or wind power, when the natural phenomena that are the primary source of energy are ongoing and not depleted by human demands. Non-renewable resources are those that are significantly depleted by human usage and that will not recover their potential significantly during human lifetimes. An example of a non-renewable energy source

3712-494: A very small fraction may be profitably exploited. Drilling and exploration for deep resources is very expensive. Forecasts for the future of geothermal power depend on assumptions about technology, energy prices, subsidies , and interest rates. Pilot programs like EWEB's customer opt in Green Power Program show that customers would be willing to pay a little more for a renewable energy source like geothermal. But as

3840-491: Is a controversial subject, since there are diverging views on this topic, and multibillion-dollar investments ride on the choice of an energy source. Nuclear power plants typically have high capital costs for building the plant, but low direct fuel costs. In recent years there has been a slowdown of electricity demand growth and financing has become more difficult, which affects large projects such as nuclear reactors, with very large upfront costs and long project cycles which carry

3968-546: Is accounted for by renewable resources. Wind powered energy production is being turned to as a prominent renewable energy source, increasing global wind power capacity by 12% in 2021. While not the case for all countries, 58% of sample countries linked renewable energy consumption to have a positive impact on economic growth. At the national level, at least 30 nations around the world already have renewable energy contributing more than 20% of energy supply. National renewable energy markets are projected to continue to grow strongly in

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4096-416: Is also significant. Comparing Nuclear's latent cancer deaths, such as cancer with other energy sources immediate deaths per unit of energy generated(GWeyr). This study does not include fossil fuel related cancer and other indirect deaths created by the use of fossil fuel consumption in its "severe accident" classification, which would be an accident with more than 5 fatalities. As of 2012, according to

4224-399: Is coal, which does not form naturally at a rate that would support human use. Fossil fuel ( primary non-renewable fossil ) sources burn coal or hydrocarbon fuels, which are the remains of the decomposition of plants and animals. There are three main types of fossil fuels: coal, petroleum , and natural gas . Another fossil fuel, liquefied petroleum gas (LPG), is principally derived from

4352-599: Is constructed, the project produces no direct waste, and has a considerably lower output level of the greenhouse gas carbon dioxide than fossil fuel powered energy plants. Wind power harnesses the power of the wind to propel the blades of wind turbines . These turbines cause the rotation of magnets , which creates electricity. Wind towers are usually built together on wind farms . There are offshore and onshore wind farms. Global wind power capacity has expanded rapidly to 336 GW in June 2014, and wind energy production

4480-460: Is electric power generated by hydropower ; the force of falling or flowing water. In 2015 hydropower generated 16.6% of the world's total electricity and 70% of all renewable electricity and was expected to increase about 3.1% each year for the following 25 years. Hydropower is produced in 150 countries, with the Asia-Pacific region generating 32 percent of global hydropower in 2010. China

4608-577: Is federal legislation that had been enacted as a response to US natural gas shortages of 1976–77. It was enacted for the following motivations: The NGPA: The Natural Gas Policy Act (NGPA) was the first building block in a plan from the Carter Administration to increase energy supply while reducing domestic consumption of energy. It preceded the Energy Security Act that President Carter would sign into law in 1980. In

4736-442: Is generally defined as energy that comes from resources which are naturally replenished on a human timescale such as sunlight , wind , rain , tides , waves and geothermal heat . Renewable energy replaces conventional fuels in four distinct areas: electricity generation , hot water / space heating , motor fuels , and rural (off-grid) energy services. Including traditional biomass usage, about 19% of global energy consumption

4864-426: Is heated in the crust, sometimes up to 370 °C (700 °F). From hot springs , geothermal energy has been used for bathing since Paleolithic times and for space heating since ancient Roman times, but it is now better known for electricity generation . Worldwide, 11,400 megawatts (MW) of geothermal power is online in 24 countries in 2012. An additional 28 gigawatts of direct geothermal heating capacity

4992-454: Is installed for district heating, space heating, spas, industrial processes, desalination and agricultural applications in 2010. Geothermal power is cost effective, reliable, sustainable, and environmentally friendly, but has historically been limited to areas near tectonic plate boundaries . Recent technological advances have dramatically expanded the range and size of viable resources, especially for applications such as home heating, opening

5120-691: Is involved in several litigations against the government of Argentina claiming compensation relating to the negligence and corruption of the local governance during its management of the Buenos Aires water concession in 1999, which resulted in substantial amounts of debt (approx. $ 620 million) and the eventual collapse of the branch. Soon after emerging from bankruptcy in November 2004, Enron's new board of directors sued 11 financial institutions for helping Lay, Fastow, Skilling, and others hide Enron's true financial condition. The proceedings were dubbed

5248-706: Is the largest hydroelectricity producer, with 721 terawatt-hours of production in 2010, representing around 17 percent of domestic electricity use. There are now three hydroelectricity plants larger than 10 GW: the Three Gorges Dam in China, Itaipu Dam across the Brazil/Paraguay border, and Guri Dam in Venezuela. The cost of hydroelectricity is relatively low, making it a competitive source of renewable electricity. The average cost of electricity from

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5376-418: Is the use of nuclear fission to generate useful heat and electricity . Fission of uranium produces nearly all economically significant nuclear power. Radioisotope thermoelectric generators form a very small component of energy generation, mostly in specialized applications such as deep space vehicles. Nuclear power plants , excluding naval reactors , provided about 5.7% of the world's energy and 13% of

5504-476: Is thermal energy generated from radioactive decay and continual heat loss from Earth's formation. Temperatures at the core-mantle boundary may reach over 4000 °C (7,200 °F). The high temperature and pressure in Earth's interior cause some rock to melt and solid mantle to behave plastically, resulting in portions of mantle convecting upward since it is lighter than the surrounding rock. Rock and water

5632-650: The Hanul Nuclear Power Plant and four are at the largest nuclear station construction project in the world as of 2016, in the United Arab Emirates at the planned Barakah nuclear power plant . The first reactor, Barakah-1 is 85% completed and on schedule for grid-connection during 2017. Two of the four EPRs under construction (in Finland and France) are significantly behind schedule and substantially over cost. Renewable energy

5760-943: The IAEA , worldwide there were 68 civil nuclear power reactors under construction in 15 countries, approximately 28 of which in the People's Republic of China (PRC), with the most recent nuclear power reactor, as of May 2013, to be connected to the electrical grid , occurring on February 17, 2013, in Hongyanhe Nuclear Power Plant in the PRC. In the United States, two new Generation III reactors are under construction at Vogtle . U.S. nuclear industry officials expect five new reactors to enter service by 2020, all at existing plants. In 2013, four aging, uncompetitive, reactors were permanently closed. Recent experiments in extraction of uranium use polymer ropes that are coated with

5888-930: The Industrial Revolution . Fossil fuels make up the bulk of the world's current primary energy sources. In 2005, 81% of the world's energy needs was met from fossil sources. The technology and infrastructure for the use of fossil fuels already exist. Liquid fuels derived from petroleum deliver much usable energy per unit of weight or volume, which is advantageous when compared with lower energy density sources such as batteries . Fossil fuels are currently economical for decentralized energy use. Energy dependence on imported fossil fuels creates energy security risks for dependent countries. Oil dependence in particular has led to war, funding of radicals, monopolization, and socio-political instability. Fossil fuels are non-renewable resources, which will eventually decline in production and become exhausted. While

6016-509: The Sun 's light and heat , which can be harnessed using a range of technologies such as solar electricity , solar thermal energy (including solar water heating ) and solar architecture . It is an essential source of renewable energy , and its technologies are broadly characterized as either passive solar or active solar depending on how they capture and distribute solar energy or convert it into solar power. Active solar techniques include

6144-614: The Sun , remains an ongoing area of international physics and engineering research . More than 60 years after the first attempts, commercial fusion power production remains unlikely before 2050. There is an ongoing debate about nuclear power . Proponents, such as the World Nuclear Association , the IAEA and Environmentalists for Nuclear Energy contend that nuclear power is a safe, sustainable energy source that reduces carbon emissions . Opponents contend that nuclear power poses many threats to people and

6272-869: The Supreme Court , the damage to the Andersen name has prevented it from recovering or reviving itself as a viable business even on a limited scale. Enron also withdrew a naming-rights deal with the Houston Astros Major League Baseball club for its new stadium, which was known formerly as Enron Field (now Minute Maid Park ). Enron used a variety of deceptive and fraudulent tactics and accounting practices to cover its fraud in reporting Enron's financial information. Special-purpose entities were created to mask significant liabilities from Enron's financial statements. These entities made Enron seem more profitable than it was, and created

6400-420: The petroleum industry , the natural gas industry, the electrical power industry , and the nuclear industry . New energy industries include the renewable energy industry , comprising alternative and sustainable manufacture, distribution, and sale of alternative fuels . Energy resources may be classified as primary resources, suitable for end use without conversion to another form, or secondary resources, where

6528-690: The water sector , creating the Azurix Corporation, which it part-floated on the New York Stock Exchange during June 1999. Azurix failed to become successful in the water utility market, and one of its major concessions, in Buenos Aires , was a large-scale money-loser. Enron grew wealthy due largely to marketing, promoting power, and having a high stock price. Enron was named "America's Most Innovative Company" by Fortune for six consecutive years, from 1996 to 2001. It

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6656-697: The "megaclaims litigation". Among the defendants were Royal Bank of Scotland , Deutsche Bank and Citigroup. As of 2008, Enron has settled with all of the institutions, ending with Citigroup. Enron was able to obtain nearly $ 7.2 billion to distribute to its creditors as a result of the megaclaims litigation. As of December 2009, some claim and process payments were still being distributed. Enron has been featured since its bankruptcy in popular culture, including in The Simpsons episodes That '90s Show (Homer buys Enron stock while Marge chooses to keep her own Microsoft shares) and Special Edna , which features

6784-566: The 1970s, natural gas was persistently in short supply throughout the 1970s, largely because of following: Based on this type of energy setting in the 1970s, Congress enacted the NGPA. The act was intended to raise natural gas rates to market clearing levels. The NGPA set prices based on where natural gas was old, new, or of high cost. New gas paid a higher price than older gas, which in turn encouraged oil and gas producers to produce from new sources of natural gas. However, this pricing system created

6912-407: The 23rd. At this time, Enron executives, who possessed inside information on the hidden losses, began to sell their stock. At the same time, the general public and Enron's investors were told to buy the stock. Executives told the investors that the stock would continue to increase until it attained possibly the $ 130 to $ 140 range, while secretly unloading their shares. As executives sold their shares,

7040-542: The Earth's crust originates from the original formation of the planet (20%) and from radioactive decay of minerals (80%). The geothermal gradient , which is the difference in temperature between the core of the planet and its surface, drives a continuous conduction of thermal energy in the form of heat from the core to the surface. The adjective geothermal originates from the Greek roots γη (ge) , meaning earth, and θερμος (thermos) , meaning hot. Earth's internal heat

7168-548: The Enron Finance Corp. and headed by Skilling. With the success of the Gas Bank trading natural gas, Skilling looked to expand the horizons of his division, Enron Capital & Trade. Skilling hired Andrew Fastow in 1990 to help. Starting in 1994 under the Energy Policy Act of 1992 , Congress allowed states to deregulate their electricity utilities, allowing them to be opened for competition. California

7296-473: The InterNorth identity five years prior, suggested "Enteron". During a meeting with employees on February 14, 1986, Lay announced his interest in this name change, which would be held to a stockholder vote on April 10. Less than a month from this meeting, on March 7, 1986, a spokesman for HNG/InterNorth rescinded the planned Enteron proposal, as since its announcement the name had come under scrutiny for being

7424-544: The Room: The Amazing Rise and Scandalous Fall of Enron . Additionally, British water regulators required Wessex to cut its rates by 12% starting in April 2000, and an upgrade was required of the utility's aging infrastructure, estimated at costing over a billion dollars. By the end of 2000 Azurix had an operating profit of less than $ 100 million and was $ 2 billion in debt. In August 2000, after Azurix stock took

7552-658: The announcement "as they did with most things Internet-related at the time", with stock prices rising from $ 40 per share in January 2000 to $ 70 per share in March, peaking at $ 90 in the summer of 2000. Enron executives obtained windfall gains from the rising stock prices, with a total of $ 924 million of stocks sold by high-level Enron employees between 2000 and 2001. The head of Enron Broadband Services, Kenneth Rice, sold 1 million shares himself, earning about $ 70 million in returns. As prices of existing fiber optic cables plummeted due to

7680-406: The bankruptcy of Enron, telecommunications holdings were sold for "pennies on the dollar". In 2002, Rob Roy of Switch Communications purchased Enron's Nevada facility in an auction attended only by Roy. Enron's "fiber plans were so secretive that few people even knew about the auction." The facility was sold for only $ 930,000. Following the sale, Switch expanded to control "the biggest data center in

7808-486: The coming decade and beyond.[76] Unlike other energy sources, renewable energy sources are not as restricted by geography. Additionally deployment of renewable energy is resulting in economic benefits as well as combating climate change. Rural electrification has been researched on multiple sites and positive effects on commercial spending, appliance use, and general activities requiring electricity as energy. Renewable energy growth in at least 38 countries has been driven by

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7936-642: The comment was met with dismay and astonishment by press, Wall Street analysts and public, it became an inside joke among many Enron employees, mocking Grubman for his perceived meddling rather than Skilling's offensiveness. Enron initially planned to retain its three domestic pipeline companies as well as most of its overseas assets. However, before emerging from bankruptcy, Enron sold its domestic pipeline companies as CrossCountry Energy for $ 2.45 billion and later sold other assets to Vulcan Capital Management . Enron sold its last business, Prisma Energy , during 2006, leaving Enron asset-less. During early 2007, its name

8064-451: The company ended its retail endeavor in 1999 as it was revealed it was costing upwards of $ 100 million a year. As fiber optic technology progressed in the 1990s, multiple companies, including Enron, attempted to make money by "keeping the continuing network costs low", which was done by owning their own network. In 1997, FTV Communications LLC, a limited liability company formed by Enron subsidiary FirstPoint Communications, Inc., constructed

8192-455: The company made money and questioning whether Enron stock was overvalued. By August 15, 2001, Enron's stock price had decreased to $ 42. Many of the investors still trusted Lay and believed that Enron would rule the market. They continued to buy or retain their stock as the equity value decreased. As October ended, the stock had decreased to $ 15. Many considered this a great opportunity to buy Enron stock because of what Lay had been telling them in

8320-474: The company's fiscal health became secondary to manipulating its stock price during the so-called Tech boom . But when a company's success is measured by undocumented financial statements, actual balance sheets are inconvenient. Indeed, Enron's unscrupulous actions were often gambles to keep the deception going and so increase the stock price. An advancing price meant a continued infusion of investor capital on which debt-ridden Enron in large part subsisted (much like

8448-493: The company's success story was Daniel Scotto , an energy market expert at BNP Paribas , who issued a note in August 2001 entitled Enron: All stressed up and no place to go which encouraged investors to sell Enron stocks, although he only changed his recommendation on the stock from "buy" to "neutral". As was later discovered, many of Enron's recorded assets and profits were inflated, wholly fraudulent, or nonexistent. One example

8576-486: The deal and dismissed their CEO, Chuck Watson. The new chairman and CEO, the late Daniel Dienstbier, had been president of NNG and an Enron executive at one time and was forced out by Ken Lay. Dienstbier was an acquaintance of Warren Buffett. NNG continues to be profitable now. In 2001, after a series of revelations involving irregular accounting procedures perpetrated throughout the 1990s involving Enron and its auditor Arthur Andersen that bordered on fraud, Enron filed for

8704-666: The deferred energy accounts used as the basis for the California Deregulation Plan enacted during the late 1990s. Five months later, Pacific Gas & Electric (PG&E) was forced into bankruptcy. Republican Senator Phil Gramm , husband of Enron Board member Wendy Gramm and also the second-largest recipient of campaign contributions from Enron, succeeded in legislating California's energy commodity trading deregulation. Despite warnings from prominent consumer groups which stated that this law would give energy traders too much influence over energy commodity prices,

8832-667: The efficiency of a process that converts chemical potential energy contained in a carrier fuel into kinetic energy or work . The fuel economy is the energy efficiency of a particular vehicle, is given as a ratio of distance travelled per unit of fuel consumed. Weight-specific efficiency (efficiency per unit weight) may be stated for freight , and passenger-specific efficiency (vehicle efficiency) per passenger. The inefficient atmospheric combustion (burning) of fossil fuels in vehicles, buildings, and power plants contributes to urban heat islands . Conventional production of oil peaked , conservatively, between 2007 and 2010. In 2010, it

8960-457: The end of 2001, it was revealed that Enron's reported financial condition was sustained by an institutionalized, systematic, and creatively planned accounting fraud , known since as the Enron scandal . Enron has become synonymous with willful corporate fraud and corruption . The scandal also brought into question the accounting practices and activities of many corporations in the United States and

9088-523: The environment . Nuclear power plant accidents include the Chernobyl disaster (1986), Fukushima Daiichi nuclear disaster (2011), and the Three Mile Island accident (1979). There have also been some nuclear submarine accidents. In terms of lives lost per unit of energy generated, analysis has determined that nuclear power has caused less fatalities per unit of energy generated than

9216-449: The foundation. Records show that Mrs. Lay made the sale order sometime between 10:00 and 10:20 am. News of Enron's problems, including the millions of dollars in losses they hid, became public about 10:30 that morning, and the stock price soon decreased to less than one dollar. Former Enron executive Paula Rieker was charged with criminal insider trading and sentenced to two years probation. Rieker obtained 18,380 Enron shares for $ 15.51

9344-404: The high electricity usage rates. International support for promoting renewable sources like solar and wind have continued grow. While many renewable energy projects are large-scale, renewable technologies are also suited to rural and remote areas and developing countries , where energy is often crucial in human development . To ensure human development continues sustainably, governments around

9472-437: The internet." Enron sought to have all US internet service providers rely on their Nevada facility to supply bandwidth, which Enron would sell in a fashion similar to other commodities. In January 2000, Kenneth Lay and Jeffrey Skilling announced to analysts that they were going to open trading for their own "high-speed fiber-optic networks that form the backbone for Internet traffic". Investors quickly bought Enron stock following

9600-498: The kinetic energy of large bodies of moving water. Offshore wind power is not a form of marine energy, as wind power is derived from the wind, even if the wind turbines are placed over water. The oceans have a tremendous amount of energy and are close to many if not most concentrated populations. Ocean energy has the potential to provide a substantial amount of new renewable energy around the world. Natural Gas Policy Act of 1978 The Natural Gas Policy Act of 1978 ( NGPA )

9728-461: The largest source of honest income, the 1930s-era Northern Natural Gas company, was eventually purchased by a group of Omaha investors who relocated its headquarters to their city; it is now a unit of Warren Buffett 's Berkshire Hathaway Energy . NNG was established as collateral for a $ 2.5 billion capital infusion by Dynegy Corporation when Dynegy was planning to buy Enron. When Dynegy examined Enron's financial records carefully, they repudiated

9856-580: The lawsuit, fought the release of the documents that the PUD had sought to make its case, but were being withheld by the Federal Energy Regulatory Commission . Energy development Societies use energy for transportation, manufacturing, illumination, heating and air conditioning, and communication, for industrial, commercial, agricultural and domestic purposes. Energy resources may be classified as primary resources, where

9984-550: The legislation was passed in December 2000. As the periodical Public Citizen reported: Because of Enron's new, unregulated power auction, the company's "Wholesale Services'' revenues quadrupled – from $ 12 billion in the first quarter of 2000 to $ 48.4 billion in the first quarter of 2001. After the passage of the deregulation law, California had a total of 38 Stage 3 rolling blackouts declared, until federal regulators intervened in June 2001. These blackouts occurred as

10112-506: The literature on its total life cycle emission intensity finding that it is similar to renewable sources in a comparison of greenhouse gas (GHG) emissions per unit of energy generated. Since the 1970s, nuclear fuel has displaced about 64 gigatonnes of carbon dioxide equivalent (GtCO2-eq) greenhouse gases , that would have otherwise resulted from the burning of oil, coal or natural gas in fossil-fuel power stations . Japan's 2011 Fukushima Daiichi nuclear accident , which occurred in

10240-561: The long-term future of Enron. Lay consolidated all the gas pipeline efforts under the Enron Gas Pipeline Operating Company. In addition, it ramped up its electric power and natural gas efforts. In 1988 and 1989, the company added power plants and cogeneration units to its portfolio. In 1989, Jeffrey Skilling , then a consultant at McKinsey & Company , came up with the idea to link natural gas to consumers in more ways, effectively turning natural gas into

10368-580: The mechanical energy of ocean waves , currents, and tides , shifts in salinity gradients, and ocean temperature differences . MRE has the potential to become a reliable and renewable energy source because of the cyclical nature of the oceans . The movement of water in the world's oceans creates a vast store of kinetic energy or energy in motion. This energy can be harnessed to generate electricity to power homes, transport, and industries. The term marine energy encompasses both wave power , i.e. power from surface waves, and tidal power , i.e. obtained from

10496-491: The media. Lay was accused of selling more than $ 70 million worth of stock at this time, which he used to repay cash advances on lines of credit. He sold another $ 29 million worth of stock in the open market. Also, Lay's wife, Linda, was accused of selling 500,000 shares of Enron stock totaling $ 1.2 million on November 28, 2001. The money earned from this sale did not go to the family but rather to charitable organizations, which had already received pledges of contributions from

10624-405: The national level and in 29 states or provinces. The International Energy Agency has a goal for biofuels to meet more than a quarter of world demand for transportation fuels by 2050 to reduce dependence on petroleum and coal. Geothermal energy is thermal energy generated and stored in the Earth. Thermal energy is the energy that determines the temperature of matter. The geothermal energy of

10752-415: The need for energy security . Bioethanol is an alcohol made by fermentation , mostly from carbohydrates produced in sugar or starch crops such as corn or sugarcane . Cellulosic biomass , derived from non-food sources, such as trees and grasses, is also being developed as a feedstock for ethanol production. Ethanol can be used as a fuel for vehicles in its pure form, but it is usually used as

10880-483: The offshore accounts that were hiding losses for the company; the investors, however, did not. Chief Financial Officer Andrew Fastow directed the team that created the off-books companies and manipulated the deals to provide himself, his family, and his friends with hundreds of millions of dollars in guaranteed revenue, at the expense of the corporation for which he worked and its stockholders. In 1999, Enron initiated EnronOnline, an Internet-based trading operation, which

11008-608: The one who couldn't figure out how to f**king vote on the butterfly ballot ." (Laughing from both sides.) "Yeah, now she wants her f**king money back for all the power you've charged right up, jammed right up her a** for f**king $ 250 a megawatt-hour." The traders had been discussing the efforts of the Snohomish PUD in Northwestern Washington state to recover the massive overcharges that Enron had engineered. Morgan Stanley , which had taken Enron's place in

11136-434: The other major sources of energy generation. Energy production from coal , petroleum , natural gas and hydropower has caused a greater number of fatalities per unit of energy generated due to air pollution and energy accident effects. However, the economic costs of nuclear power accidents is high, and meltdowns can take decades to clean up. The human costs of evacuations of affected populations and lost livelihoods

11264-548: The passing of the Natural Gas Policy Act of 1978 , the Texas market was less profitable and as a result, HNG's profits fell. After Herring died in 1981, M.D. Matthews briefly took over as CEO in a 3-year stint with initial success, but ultimately, a big dip in earnings led to his exit. In 1984, Kenneth Lay succeeded Matthews and inherited the troubled conglomerate. With its conservative success, InterNorth became

11392-405: The perceived profitability of the company. First, Enron invested heavily in overseas assets, specifically energy. Another major shift was the gradual transition of focus from a producer of energy to a company that acted more like an investment firm and sometimes a hedge fund , making profits off the margins of the products it traded. These products were traded through the Gas Bank concept, now called

11520-547: The price began to decrease. Investors were told to continue buying stock or hold steady if they already owned Enron because the stock price would rebound shortly. Kenneth Lay's strategy for responding to Enron's continuing problems was his demeanor. As he did many times, Lay would issue a statement or make an appearance to calm investors and assure them that Enron was doing well. In March 2001 an article by Bethany McLean appeared in Fortune magazine noting that no one understood how

11648-423: The processes that created fossil fuels are ongoing, fuels are consumed far more quickly than the natural rate of replenishment. Extracting fuels becomes increasingly costly as society consumes the most accessible fuel deposits. Extraction of fossil fuels results in environmental degradation , such as the strip mining and mountaintop removal for coal. Fuel efficiency is a form of thermal efficiency , meaning

11776-410: The production of natural gas. Heat from burning fossil fuel is used either directly for space heating and process heating, or converted to mechanical energy for vehicles, industrial processes , or electrical power generation . These fossil fuels are part of the carbon cycle and allow solar energy stored in the fuel to be released. The use of fossil fuels in the 18th and 19th century set the stage for

11904-643: The release of pollution into the atmosphere. The fossil fuels are mainly carbon compounds. During combustion , carbon dioxide is released, and also nitrogen oxides , soot and other fine particulates . The carbon dioxide is the main contributor to recent climate change . Other emissions from fossil fuel power station include sulphur dioxide , carbon monoxide (CO), hydrocarbons , volatile organic compounds (VOC), mercury , arsenic , lead , cadmium , and other heavy metals including traces of uranium . A typical coal plant generates billions of kilowatt hours of electrical power per year. Nuclear power

12032-439: The resource can be used in substantially its original form, or as secondary resources, where the energy source must be converted into a more conveniently usable form. Non-renewable resources are significantly depleted by human use, whereas renewable resources are produced by ongoing processes that can sustain indefinite human exploitation. Thousands of people are employed in the energy industry . The conventional industry comprises

12160-549: The risks of future uncertainties. To date all operating nuclear power plants were developed by state-owned or regulated utility monopolies where many of the risks associated with construction costs, operating performance, fuel price, and other factors were borne by consumers rather than suppliers. Many countries have now liberalized the electricity market where these risks, and the risk of cheaper competitors emerging before capital costs are recovered, are borne by plant suppliers and operators rather than consumers, which leads to

12288-412: The same as a medical term for the intestines . This same press release saw the introduction of the Enron name, which would be the new name voted on come April. Enron still had some lingering problems left over from its merger, however, the company had to pay Jacobs, who was still a threat, over $ 350 million and reorganize the company. Lay sold off any parts of the company that he believed didn't belong in

12416-526: The scandal caused the dissolution of Arthur Andersen, which at the time was one of the Big Five of the world's accounting firms. The company was found guilty of obstruction of justice in 2002 for destroying documents related to the Enron audit. Since the SEC is not allowed to accept audits from convicted felons, Andersen was forced to stop auditing public companies. Although the conviction was dismissed in 2005 by

12544-412: The second worst nuclear incident , that displaced 50,000 households after radioactive material leaked into the air, soil and sea, and with subsequent radiation checks leading to bans on some shipments of vegetables and fish – a global public support survey by Ipsos (2011) for energy sources was published and nuclear fission was found to be the least popular The economics of new nuclear power plants

12672-584: The success in England, the company developed and diversified its assets worldwide under the name of Enron International (EI), headed by former HNG executive Rebecca Mark . By 1994, EI's portfolio included assets in The Philippines, Australia, Guatemala, Germany, France, India, Argentina, the Caribbean, China, England, Colombia, Turkey, Bolivia, Brazil, Indonesia, Norway, Poland, and Japan. The division

12800-644: The then largest Chapter 11 bankruptcy in history (since surpassed by those of Worldcom during 2002 and Lehman Brothers during 2008), resulting in $ 11 billion in shareholder losses. As the scandal progressed, Enron share prices decreased from US$ 90 during the summer of 2000, to just pennies. Enron's demise occurred after the revelation that much of its profit and revenue were the result of deals with special-purpose entities ( limited partnerships which it controlled). This maneuver allowed many of Enron's debts and losses to disappear from its financial statements. Enron filed for bankruptcy on December 2, 2001. In addition,

12928-403: The time. These acts contributed to the need for rolling blackouts, which adversely affected many businesses dependent upon a reliable supply of electricity, and inconvenienced a large number of retail customers. This scattered supply increased the price, and Enron traders were thus able to sell power at premium prices, sometimes up to a factor of 20 × its normal peak value. The callousness of

13056-482: The traders' attitude toward ratepayers was documented in an evidence tape of a conversation regarding the matter, and sarcastically referencing the confusion of retiree voters in Florida's Miami-Dade County in the November 2000, presidential election. "They're f**king taking all the money back from you guys? All the money you guys stole from those poor grandmothers in California?" "Yeah, Grandma Millie man. But she's

13184-641: The transaction was completed. The subsidiary Northern Natural Gas operated the largest pipeline company in North America. By the 1980s, InterNorth became a major force for natural gas production, transmission, and marketing as well as for natural gas liquids , and was an innovator in the plastics industry . In 1983, InterNorth merged with the Belco Petroleum Company, a Fortune 500 oil exploration and development company founded by Arthur Belfer . The Houston Natural Gas (HNG) corporation

13312-415: The two companies agreed to give billions of dollars to Enron's creditors. By May 2011, $ 21.8 billion had been distributed to the creditors, totaling 53 percent of Enron's debts at the time of bankruptcy. Enron Creditors Recovery Corporation was ultimately dissolved on November 28, 2016. Azurix, the former water utility part of the company, remains under Enron ownership, although it is currently asset-less. It

13440-475: The usable form of energy required substantial conversion from a primary source. Examples of primary energy resources are wind power , solar power , wood fuel, fossil fuels such as coal, oil and natural gas, and uranium. Secondary resources are those such as electricity, hydrogen , or other synthetic fuels. Another important classification is based on the time required to regenerate an energy resource. "Renewable" resources are those that recover their capacity in

13568-557: The use of photovoltaic systems , concentrated solar power , and solar water heating to harness the energy. Passive solar techniques include designing a building for better daylighting , selecting materials with favorable thermal mass or light-dispersing properties, and organize spaces that naturally circulate air . A biofuel is a fuel that contains energy from geologically recent carbon fixation . These fuels are produced from living organisms . Examples of this carbon fixation occur in plants and microalgae . These fuels are made by

13696-595: The vast oversupply of the system, with only 5% of the 40 million miles being active wires, Enron purchased the inactive "dark fibers", expecting to buy them at low cost and then make a profit as the need for more usage by internet providers increased, with Enron expecting to lease its acquired dark fibers in 20-year contracts to providers. However, Enron's accounting would use estimates to determine how much their dark fiber would be worth when "lit" and apply those estimates to their current income, adding exaggerated revenue to their accounts since transactions were not yet made and it

13824-557: The whole state of California". The location was also more protected from natural disasters than areas such as Los Angeles or the East Coast. According to Wall Street Daily , "Enron had a secret", it "wanted to trade bandwidth like it traded oil, gas, electricity, etc. It launched a secret plan to build an enormous amount of fiber optic transmission capacity in Las Vegas ;... it was all part of Enron's plan to essentially own

13952-558: The world are beginning to research potential ways to implement renewable sources into their countries and economies. For example, the UK Government’s Department for Energy and Climate Change 2050 Pathways created a mapping technique to educate the public on land competition between energy supply technologies. This tool provides users the ability to understand what the limitations and potential their surrounding land and country has in terms of energy production. Hydroelectricity

14080-597: The world are using wind power on a commercial basis. Many of the world's largest onshore wind farms are located in the United States , China , and India . Most of the world's largest offshore wind farms are located in Denmark , Germany and the United Kingdom . The two largest offshore wind farm are currently the 630 MW London Array and Gwynt y Môr . Solar energy is the radiant energy from

14208-472: The world". Enron, seeing stability after the merger, began to look overseas for new possible energy opportunities in 1991. Enron's first such opportunity was a natural gas power plant utilizing cogeneration that the company built near Middlesbrough , UK. The power plant was so large it could produce up to 3% of the United Kingdom's electricity demand with a capacity of over 1,875 megawatts . Seeing

14336-462: The world's electricity in 2012. In 2013, the IAEA report that there are 437 operational nuclear power reactors, in 31 countries , although not every reactor is producing electricity. In addition, there are approximately 140 naval vessels using nuclear propulsion in operation, powered by some 180 reactors. As of 2013, attaining a net energy gain from sustained nuclear fusion reactions, excluding natural fusion power sources such as

14464-553: The world's fuels for road transport, a contribution largely made up of ethanol and biodiesel. Global ethanol fuel production reached 86 billion liters (23 billion gallons US) in 2010, with the United States and Brazil as the world's top producers, accounting together for 90% of global production. The world's largest biodiesel producer is the European Union , accounting for 53% of all biodiesel production in 2010. As of 2011, mandates for blending biofuels exist in 31 countries at

14592-529: Was InterNorth , which was formed in 1930, in Omaha, Nebraska , just a few months after Black Tuesday . The low cost of natural gas and the cheap supply of labor during the Great Depression helped to fuel the company's early beginnings, doubling in size by 1932. Over the next 50 years, Northern expanded even more as it acquired many energy companies. It was reorganized in 1979 as the main subsidiary of

14720-704: Was a factor in the enactment of the Sarbanes–Oxley Act of 2002 . The scandal also affected the greater business world by causing, together with even larger fraudulent bankruptcy WorldCom , the dissolution of the Arthur Andersen accounting firm, which had been Enron and WorldCom's main auditor for years. Enron filed for bankruptcy in the Southern District of New York in late 2001 and selected Weil, Gotshal & Manges as its bankruptcy counsel. Enron emerged from bankruptcy in November 2004, under

14848-832: Was around 4% of total worldwide electricity usage, and growing rapidly. Wind power is widely used in Europe , Asia , and the United States . Several countries have achieved relatively high levels of wind power penetration, such as 21% of stationary electricity production in Denmark , 18% in Portugal , 16% in Spain , 14% in Ireland , and 9% in Germany in 2010. By 2011, at times over 50% of electricity in Germany and Spain came from wind and solar power. As of 2011, 83 countries around

14976-422: Was canceled, with Enron shares dropping from $ 80 per share in mid-February 2001 to below $ 60 the week after the deal was killed. The branch of the company that Jeffrey Skilling "said would eventually add $ 40 billion to Enron's stock value" added only about $ 408 million in revenue for Enron in 2001, with the company's broadband arm closed shortly after its meager second-quarter earnings report in July 2001. Following

15104-418: Was changed to Enron Creditors Recovery Corporation. Its goal is to repay the old Enron's remaining creditors and end Enron's affairs. In December 2008, it was announced that Enron's creditors would receive $ 7.2 billion from the company's liquidation (approximately 17 percent of the debts owed by the company). After Citigroup and JP Morgan Chase were sued for their role in abetting Enron's practices with loans,

15232-412: Was estimated that an investment of $ 8 trillion in non-renewable resources would be required to maintain current levels of production for 25 years. In 2010, governments subsidized fossil fuels by an estimated $ 500 billion a year. Fossil fuels are also a source of greenhouse gas emissions , leading to concerns about global warming if consumption is not reduced. The combustion of fossil fuels leads to

15360-435: Was in 1999 when Enron promised to repay Merrill Lynch 's investment with interest to show a profit on its books. Debts and losses were put into entities formed offshore that were not included in the company's financial statements ; other sophisticated and arcane financial transactions between Enron and related companies were used to eliminate unprofitable entities from the company's books. The company's most valuable asset and

15488-622: Was initially formed from the Houston Oil Co. in 1925 to provide gas to customers in the Houston market through the building of gas pipelines . Under the leadership of CEO Robert Herring from 1967 to 1981, the company took advantage of the unregulated Texas natural gas market and the commodity surge in the early 1970s to become a dominant force in the energy industry. Toward the end of the 1970s, HNG's luck began to run out with rising gas prices forcing clients to switch to oil. In addition, with

15616-411: Was initially named HNG/InterNorth Inc. , even though InterNorth was technically the parent. At the outset, Segnar was CEO but was soon fired by the board of directors to name Lay to the post. Lay moved its headquarters back to Houston and set out to find a new name, spending more than $ 100,000 in focus groups and consultants in the process. Lippincott & Margulies , the advertising firm responsible for

15744-485: Was not known if the cables would ever be active. Enron's trading with other energy companies within the broadband market was its attempt to lure large telecommunications companies, such as Verizon Communications , into its broadband scheme to create its own new market. By the second quarter of 2001, Enron Broadband Services was reporting losses. On March 12, 2001, a proposed 20-year deal between Enron and Blockbuster Inc. to stream movies on demand over Enron's connections

15872-469: Was on the Fortune ' s "100 Best Companies to Work for in America" list during 2000, and had offices that were stunning in their opulence. Enron was hailed by many, including labor and the workforce, as an overall great company, praised for its large long-term pensions, benefits for its workers, and extremely effective management until the exposure of its corporate fraud. The first analyst to question

16000-529: Was one of the final projects of legendary graphic designer Paul Rand before his death in 1996, and debuted almost three months after his departure. In 1998, Enron International acquired Wessex Water for $ 2.88 billion. Wessex Water became the core asset of a new company, Azurix , which expanded to other water companies. After Azurix's promising IPO in June 1999, Enron "sucked out over $ 1 billion in cash while loading it up with debt", according to Bethany McLean and Peter Elkind, authors of The Smartest Guys in

16128-639: Was one such state to do so. Enron, seeing an opportunity with rising prices, was eager to jump into the market. In 1997, Enron acquired Portland General Electric (PGE). Although an Oregon utility, it had the potential to begin serving the massive California market since PGE was a regulated utility. The new Enron division, Enron Energy, ramped up its efforts by offering discounts to potential customers in California starting in 1998. Enron Energy also began to sell natural gas to customers in Ohio and wind power in Iowa. However,

16256-434: Was producing a large share of earnings for Enron, contributing 25% of earnings in 1996. Mark and EI believed the water industry was the next market to be deregulated by authorities. Seeing the potential, they searched for ways to enter the market, similar to PGE. During this period of growth, Enron introduced a new corporate identity on January 14, 1997, and from that point adopted their distinctive tricolor E logo. This logo

16384-602: Was used by virtually every energy company in the United States. By promoting the company's aggressive investment strategy, Enron's president and chief operating officer Jeffrey Skilling helped make Enron the biggest wholesaler of gas and electricity, trading over $ 27 billion per quarter. The corporation's financial claims, however, had to be accepted at face value. Under Skilling, Enron adopted mark-to-market accounting , in which anticipated future profits from any deal were tabulated as if currently real. Thus, Enron could record gains from what over time might turn out to be losses, as

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