The King is dead; long live the King…Badlands Journal editorial board
The shore lines of Tulare Lake changed and shifted a great deal. If a strong wind came from the north, as it often did, the water would move several miles south, and would move again when the wind changed. Then, when the water level in the lake change, both the lea and windward shore lines shifted long distances. At some point it was possible to wade out into the lake as far as a mile and find the water below our knees. This made it impossible for the Indians to stay in one place permanently and they could roll up their light houses and load them on tule rafts and move in a few hours.
While we were at the lake I noticed one or two houses that have ever since been more or less of a puzzle to me. They were built in the standing tules, and seemed to be woven from the living tules as they stood in place. They were dome-shaped and about ten feet in diameter. I never saw any more of them and I have never since met anyone who had seen one of them. As I remember then, the tules appeared to have been cut away inside the house, but no excavation had been made as was made for the willow houses upstream...Thomas Jefferson Mayfield, Indian Summer: Traditional Life among the Choinumne Indians of California's San Joaquin Valley, Heyday Books, 1993 (Mayfield describing Tulare Lake in the late 1850s.)
...the 20,000 acres in Arizona that he sold in the late 1950s to the Del Webb Development Company. Those 20,000 acres were transformed, with Mr. Boswell as a development partner, into Sun City, one of the nation’s first retirement communities.
“It speaks to his incredible business sense that when his Arizona land was no longer good for growing cotton he was savvy enough to grow houses,” Rick Wartzman, the director of the Drucker Institute at Claremont Graduate University in Claremont, Calif., said Tuesday in an interview. Mr. Wartzman, a former business editor at The Los Angeles Times, is the author, with Mark Arax, of “The King of California: J. G. Boswell and the Making of a Secret American Empire” (PublicAffairs, 2003)...New York Times, 4-9-09
Some in Phoenix have wondered about the water quality beneath Sun City, but it has a fine hospital named for J. G. Boswell --ed.
Badlands Journal editorial board
New York Times
James G. Boswell II, 86, Owner of Cotton Empire, Dies at 86
James G. Boswell II, who inherited a huge expanse of farmland in the San Joaquin Valley of California, then quadrupled its acreage to create a cotton-growing empire, died last Friday at his home in Indian Wells, Calif. He was 86.
He died of natural causes, according to a statement from his family.
It was the boll weevil’s decimation of the cotton fields of Georgia that sent Mr. Boswell’s uncle James Griffin Boswell, for whom he was named, across the country in 1921. Outside Corcoran, a rural town in Central California, Colonel Boswell (as the uncle preferred to be called) bought the first of what gradually became 50,000 acres. In 1952 he bequeathed his cotton fields to his nephew.
James Boswell II eventually expanded the family’s holdings to approximately 200,000 acres, including 60,000 in the Australian outback but not including the 20,000 acres in Arizona that he sold in the late 1950s to the Del Webb Development Company. Those 20,000 acres were transformed, with Mr. Boswell as a development partner, into Sun City, one of the nation’s first retirement communities.
“It speaks to his incredible business sense that when his Arizona land was no longer good for growing cotton he was savvy enough to grow houses,” Rick Wartzman, the director of the Drucker Institute at Claremont Graduate University in Claremont, Calif., said Tuesday in an interview. Mr. Wartzman, a former business editor at The Los Angeles Times, is the author, with Mark Arax, of “The King of California: J. G. Boswell and the Making of a Secret American Empire” (PublicAffairs, 2003).
The J. G. Boswell Company currently owns about 150,000 acres in California and, according to Hoover’s Inc., a business analysis company, is the largest producer of cotton in the United States. It supplies textile mills worldwide and has annual sales of more than $150 million.
The company’s expansion has not been without controversy. Its vast, well-tended lands and network of irrigation canals stretch across the bed of Tulare Lake, which was once the largest freshwater lake west of the Mississippi, four times the size of Lake Tahoe. Early pioneers encroached on the lake to irrigate their farms, a process that Mr. Boswell’s uncle accelerated as he bought more property.
Four rivers feed Tulare Lake. The Boswells forcefully and successfully lobbied for the construction of dams that largely diminished the lake, draining its bed for more farmland.
“He re-engineered the landscape, much to the consternation of environmentalists,” Mr. Wartzman said of the younger James Boswell. “He was a titan with a lot of power in Sacramento and Washington. He genuinely loved the land, and yet he left an environmental record that was very mixed at best.”
Mr. Boswell also introduced techniques that became a model for large-scale farming: lasers that ensured level fields for even water distribution; bioengineering of new and pest-resistant seeds; computerized cotton gins with a capacity to produce 400 bales a day — enough to produce 840,000 pairs of boxer shorts, according to a 2003 article in The Los Angeles Times.
“There was an antiseptic cleanliness to the whole operation,” Mr. Wartzman said. “He pushed the industry in terms of modernizing, from seed to field to gin.”
Born on March 10, 1923, in Greensboro, Ga., Mr. Boswell was the son of William Boswell Sr. and Kate Hall Boswell. When he was a child, the family moved to California to join in his uncle’s enterprise.
After serving in the Army in the Pacific during World War II, Mr. Boswell returned to Stanford University in 1946 to complete his bachelor’s degree in economics. There he met Rosalind Murray; they married and had three children. She died in 2000. Mr. Boswell is survived by his second wife, the former Barbara Wallace; his son, James, who now runs the business; two daughters, Jody Hall and Lorraine Wilcox; and five grandchildren.
Mr. Boswell was a complicated, reticent man. He saw himself as a cowboy and was proud that he had lost two fingers in a cattle-roping accident. He golfed with Arnold Palmer. He sat on the boards of General Electric, the Security Pacific Bank and the Safeway supermarket chain. He was chairman, president and chief executive of his company from 1952 until he retired in 1984.
Mr. Boswell did not like to talk about himself or his business.
When Mr. Wartzman and Mr. Arax were doing research for “The King of California,” Mr. Boswell spurned many requests for an interview.
“We finally decided to appeal to his mortality,” they wrote in the book, “a sales pitch he cut short like this: ‘You don’t seem to understand. It won’t bother me in the least if I die and this story is never told.’ ”
The King of California...Mark Arax. Mark Arax, a staff member of the California Senate majority, is a co-author of "The King of California: J.G. Boswell and the Making of a Secret American Empire." He is the author of a new book, "West of the West: Dreamers, Believers, Builders and Killers in the Golden State."
He was the biggest farmer in America and the last of California's great land barons, a man who had drained an inland sea and made the rivers run backward as he carved out the richest cotton patch in the world.
How his family had brought their Southern plantation to a corner of the West in the 1920s was a story of astonishing vision and will and the flouting of nature, not to mention a parade of hubris. Yet J.G. Boswell was quite determined to die without ever telling it.
"You don't get it, do you?" he snarled at me during a phone call in 1999 to discuss the idea of a book about him. "I don't give a damn about my legacy."
He died April 3 at the age of 86, still clutching the notion that he could take a $10 million cotton subsidy check from Uncle Sam and remain a rugged individualist, that he could amass a 200,000-acre farm in the middle of California and "own" 15 percent of the Kings River, and still righteously bristle at the suggestion that he had built an "empire."
"What are you, a tax collector? I abhor the word 'empire.' It's a word for nations, for civilizations. Why do you have to get into this whole damn 'big' thing anyway?"
Boswell had built the most highly industrialized cotton operation in the world and grew more irrigated wheat, safflower and seed alfalfa than any single farmer in the country. Now he was aiming to do the same with onions and tomatoes. Though he would deny it, he dictated California water politics in Sacramento and Washington, D.C. I was drawn to his story for the simple reason that he had created the quintessential "factory in the field," from laser-leveled earth to gleaming gins to labs that minted new varieties of seeds – all of it rising out of the bottom of what was once the largest body of fresh water west of the Mississippi.
I was born in Fresno and spent years as a journalist poking into the crannies of the San Joaquin Valley, but I had never glimpsed Tulare Lake, at least not with water in it. Dams thwarted the four rivers that fed into the basin. The rivers were no longer rivers but rather precise bands of irrigation water. Along their straitjacketed banks, Boswell had planted massive pumps to make sure that no water flowed where he didn't want it to flow. Even so, once every decade, and sometimes more often, when a heavy winter gave way to a hot spring, the snowmelt would shoot down from the Sierra and push past the contrivances of even Boswell. Near his hometown of Corcoran, a remnant of the old Yokut lake would come back to life.
In the flood years of 1997 and 1998, I drove for miles and miles across a flat expanse of Kings County, past vineyards and almond orchards, past dairies and alfalfa fields, until the road suddenly quit at the base of a huge earthen wall. It was a dike not unlike the dikes of Holland. The air filled with the faint smell and sound of ocean. Climbing atop the muddy embankment, gaping at the lake's big belly, I felt lost for a moment, dizzy with vertigo. Was this the heart of California cotton country or the New Jersey shore? The lake was brown in parts and pure blue in others, and the speed with which nature had found its old self was a wonder to behold. The sun glinted off flocks of mud hens, pintail and mallard ducks, giant blue and white herons and pelicans scooping up catfish.
On the drive home, I wondered what kind of dreamer would pick such a spot after watching the boll weevil devour his family's cotton fields back in Georgia. Was God's 100-year-flood, which arrived each decade, a lesser wrath than pest?
The dreamer in question was a wildcatter named J.G. Boswell, one more Southerner who had landed West wearing the title "Colonel." He was the uncle who founded the company in 1921 and insisted on a culture of stealth: "As long as the whale never surfaces," the family motto went, "it is never harpooned."
The colonel married Ruth Chandler, the disobedient daughter of California's most powerful clan, but they had no children. So when it came time to turn over the Corcoran fields and gins – and all the water rights he had collected with them – he handed over the keys to his nephew and namesake, J.G. Boswell II ("Call me Jim"), fresh from Stanford University. To prove his mettle, the kid promptly got into a cattle roping accident on the family spread in Arizona and lost the two middle fingers on his right hand.
For the rest of his life, Jim Boswell enjoyed "flipping the bird" by implication, making his enemies (tree huggers, union pinkos, journalists) guess what gesture he was intending with the upward thrust of his hand.
He was 76 years old but still running the show when I first appealed to his sense of history, and then vanity, in the hope that he might talk to me and my co-author Rick Wartzman. Boswell was living in Ketchum, Idaho, but flying into Corcoran on a regular basis to oversee an operation that punched out 146,000 bales of the finest cotton a year – enough fiber to make 840,000 pairs of boxer shorts every day. For two years, he wanted no part of our book. Then during one phone conversation, I let it slip that the old-timers of Corcoran were portraying his father as the town drunk.
"My dad had a problem, that's true, but you'd be wrong to reduce him to some stumbling drunk."
So as a way to keep us straight with certain facts, he invited us out for a tour of the land where he hunted Yokut arrowheads as a kid. We piled into a beat-up Chevy truck and barreled into an immense engineered landscape where the earth hardly rose or fell an inch as it rolled out – the secret heart of California.
At some point, it occurred to us that we had traveled half a day, a distance of some 150 miles, and never left his farm. Nearly every road, field and irrigation canal belonged to Boswell and every worker we passed and he waved to was a Boswell worker, and every truck, tractor and leveler for which he politely moved to the side of the road bore the same diamond-B logo.
To hear him tell it, he had more than doubled the size of his uncle's company through a series of chance encounters with desperate sellers. He went looking for none of it.
"I'm the bad guy in agriculture because I'm big," he explained. "And I'm not going to try and fight it. I can't change an image and say, 'Well, I'm righteous and good and all that.' But I'm telling you, I'm proud of what we've built."
No one paid farmworkers a better wage, and several of his top men, experts in agronomy and hydrology, had become millionaires. Like the boss, they weren't showy. But because Boswell had swallowed up all but a handful of competitors, Corcoran had the feel of a stunted company town. He tried to right things with his considerable philanthropy, but it wasn't enough to close the gap between rich and poor. A community of big farms simply didn't spread the wealth like a community of smaller ones.
He understood where our book was headed, the contradictions that defined him as well as his empire. Yet once he agreed to cooperate, he never broke his word to meet us again and again on the land. One afternoon, to our surprise, he even landed us an interview with Fred Salyer, his main rival in the lake bottom for more than half a century, whose family was even more contemptuous of the press than the Boswells.
I'll never forget the encounter. It took place in a small office next to Salyer's airplane hangar, all that was left of the Salyer empire after Boswell had bought him out. Fred Salyer sat silent for several minutes and then began to narrate a tale of how his father, Clarence "Cockeye" Salyer, had been the gunman in one of the most infamous unsolved murders in California history, the shooting death of a cotton striker in Pixley in fall 1933. Cockeye had asked his son to light up the coal forge and melt the gun so no cop could ever trace it. The son followed orders, and Cockeye got away with murder. But the son had kept the forge all these years so he might one day donate it to the local museum.
Boswell did extract one promise from us – that we would show him the manuscript before turning it in to our publisher. This way, he might correct any wrong dates and other missed facts. I remember arriving at his Corcoran cabana after he had read the manuscript – not once but twice. I walked in and there sat the pages on the breakfast table, full of yellow Post-its. We went through them one by one. He didn't like the way we had portrayed his power when it came to defeating the peripheral canal in the early 1980s and other water issues; he didn't like that we had documented a feud between him and his son, who had told us his father would never hand over the reins until the day he died; he didn't like it that we had given so much attention to the plight of the black Okies, who had come West to follow the cotton trail. In each instance, I told him these weren't changes we could make.
"Well then," he said. "This title. 'The King of California.' It's a deal breaker. If it sticks, I'll never talk to you again."
"It's a helluva title, Jim," I replied. "What would you suggest to replace it?"
"How about 'A King of California?' "
"A king? Who in the heck is going to read that?"
"Well then," he said, pondering. "How about 'The King of Kings?' "
"Jim," I said, trying not to chuckle. "I think that one's been taken."
Los Angeles Times
James G. Boswell II dies at 86; cotton magnate built family farm into agribusiness giant
Heralded as 'The King of California,' Boswell at one point oversaw an empire spanning 200,000 acres in the San Joaquin Valley, transforming the industry and influencing pivotal state water policies...Jerry Hirsch
James G. Boswell II, the intensely private businessman who transformed his family's cotton holdings into California's first giant agribusiness and one of the nation's great farming empires, has died. He was 86.
Boswell died of natural causes Friday at his home in Indian Wells, Calif., according to a statement from the family.
As head of the family-owned J.G. Boswell Co., Boswell ran a company that has dominated California cotton growing for generations and has used its clout to influence land- and water-resource policy throughout much of the state.
He was just 29 when he inherited the company following the death of his uncle J.G. Boswell, the family patriarch. Over the next half-century, he transformed the business and more than tripled the size of the family farm, which peaked about 200,000 acres and now spans 150,000 in the San Joaquin Valley town of Corcoran. Boswell's labs created new, more productive seeds. Technological improvements to his gins boosted their capacity to 400 bales of cotton a day -- enough to produce 840,000 pairs of boxer shorts, according to a 2003 Times article.
Historians and agriculture economists credit Boswell with creating the template for large agribusiness concerns.
The Boswell business remains one of the world's top sellers of "the extra-long staple cotton that goes into fabric blends and both soft and high-end apparel," said Don Villarejo, director emeritus of the California Institute for Rural Studies in Davis.
"His legacy is quite impressive," said Villarejo. "He was a brilliant business leader beloved by many of his employees. At the same time, his company was able to be ahead of and often acquire his chief farming competitors."
Boswell also was legendary for using a combination of political clout and legal strategy "to outwit many of the environmental groups that have tried to restrict water deliveries to California agriculture," Villarejo said.
He was an innovative water user, one of the first to employ lasers to level fields so that water flowed evenly and efficiently, said Richard Howitt, an agriculture economist at UC Davis.
Careful water management, including employing agronomists to determine when and how to water, allowed Boswell's farms to produce more cotton with less water than competitors, Howitt said. Many of his techniques were later adopted by other farms.
But even during this period of growth and success for the enterprise, which included diversification into tomatoes and other crops, real estate development and farming in distant Australia, Boswell remained an intensely private man at the head of an intensely private family business.
A rare 1999 interview with two now-former Los Angeles Times writers gave outsiders a sense of Boswell's character.
For years staff writer Mark Arax and business editor Rick Wartzman had attempted to meet the cotton patriarch. But each letter and call was rejected. The two were writing "The King of California: J.G. Boswell and the Making of a Secret American Empire," a book about the family's cotton business, and they needed to talk to him. Finally he agreed.
J.G., as Boswell liked to be called, wanted to meet them on his land rather than in some sterile office. His intent was to show them that the business was only as good as its earth.
Boswell, the pair wrote, "wore a Cal Poly Ag hat tucked low, frayed khaki pants, a flannel shirt and Rockport shoes."
"It was all part of an image that Boswell loved to play up. He had earned an economics degree at Stanford and sat on the board of General Electric and other big corporations, but he fancied himself a cowboy," they wrote in a 2003 Times article.
Boswell attended the Thacher School, an exclusive private boarding school in Ojai, graduating in 1941.
He served in the Army during World War II in the South Pacific before graduating from Stanford in 1946. That's where he met his first wife, Rosalind Murray. They raised their three children in Pasadena, far from the farm. She died in 2000.
The company remains headquartered in Pasadena.
Fancying himself a cowboy and living like a city boy, J.G. proved to be a complex figure. When he reached out to shake the writers' hands, they noticed the missing fingers on his right hand, the result of a cattle-roping accident.
They jumped into an aged Chevy truck for a tour of his holdings. The writers said they traveled half a day and 150 miles but never left the farm. When they asked Boswell how much land he really owned, he responded, "What are you, a tax collector?"
"I'm the bad guy in agriculture because I'm big," he said later. "I'm not going to try to fight it. I can't change an image and say, 'Well, I'm righteous and good and all that.' But I'm telling you . . . I'm not going to apologize for our size."
Wartzman, now director of the Drucker Institute at Claremont Graduate University, said he was sad to learn of Boswell's death.
"He was an immensely complicated guy, someone who knew every inch of his land but whose company did some pretty awful things to the land," Wartzman said. "It is just hard to farm in an environmentally sound manner at that scale."
The company used its political clout to encourage the building of the Pine Flat Dam to shut the flow of water to Tulare Lake, which at one point was the largest freshwater lake west of the Mississippi River. The drained lake bed is now farmland, located at the heart of Boswell's sprawling enterprise.
Boswell was born March 10, 1923, in Greensboro, Ga., the son of William Whittier Boswell Sr. and Kate Hall Boswell, and moved west with his parents and his uncles.
He was named after his uncle J.G. Boswell, who married Ruth Chandler, the daughter of Los Angeles Times Publisher and real estate baron Harry Chandler.
With no children of his own, J.G. Boswell picked his nephew to take control of the company he had founded in 1921 with the help of his brothers.
In the early 1980s, Boswell and the company would spend $1 million to defeat the Peripheral Canal, a system proposed to move water to Southern California. He thought it would hurt farming interests.
During the same period, Boswell helped farmers outflank state and game regulators and pump water from excessive snowmelt into the north fork of the Kings River. The move prevented farmland from flooding but also introduced the nonnative predatory white bass into the Sacramento-San Joaquin River Delta.
At times profane, Boswell liked to be in control. For many years his company extended its influence throughout the San Joaquin Valley by lending money to other growers.
He served as chairman, president and chief executive of the company from 1952 until his retirement in 1984. He remained on the company's board of directors until his death. His son James W. Boswell now runs the business.
In addition to his son, he is survived by his wife, Barbara Wallace Boswell; daughters Jody Hall and Lorraine Wilcox; and five grandchildren.
A memorial service is planned for April 22 at 1 p.m. at the Corcoran High School Memorial Stadium.
UC Merced gets ready for first lady...Danielle Gaines, Merced Sun-Star
Preparations for the University of California at Merced's 2009 graduation are in overdrive, with about a month before first lady Michelle Obama delivers the keynote address to the university's inaugural class.
"We're working on programs, we're working on location, finding enough chairs, events before the graduation, after the graduation, all the details," said Jane Lawrence, vice chancellor for student affairs.
Interest in the ceremony has grown so staggeringly that a phone number listed on the UC Merced Web site for student tickets had to be rerouted from the chancellor's office to the main switchboard.
For the first time, UC Mer- ced is printing tickets for the event, 9,000 of them.
Campus organizers originally were expecting about 2,000 spectators this year.
"Four years ago, we graduated three people," Lawrence said. "This year we are graduating 500. Then, as you probably have heard, we have a keynote speaker that has attracted a little bit of attention."
All that attention has caused a bit of a headache for some of the graduating students.
Nick Nakamura led a letter-writing campaign in his fraternity, Sigma Chi, for the "Dear Michelle" campaign.
Now the 21-year-old senior and his family are waiting to see if they will get any tickets beyond the eight promised to each graduating student. Nakamura had planned to invite 15 members of his family from San Diego, Los Angeles and Colorado.
Even though his family has reserved more hotel rooms than they may be able to deal with, "I'm more or less just disappointed that previous UC Merced graduations
were open, and this one will have to be ticketed," Nakamura said.
UC Merced will graduate its first full senior class May 16 at 1:30 p.m.; the ceremony originally was scheduled for 7:30 p.m.
Other families said the change in time for the ceremony has caused financial strain. Obama requested an earlier ceremony when she accepted the invitation so she will be home with her daughters before the president leaves on a trip the next morning, UC officials said.
"I actually felt that I was waiting sort of dangerously long because I didn't start looking for a flight out there until mid-March," said Murray Miles, whose daughter is graduating.
Miles originally planned to fly into San Francisco from Sarasota, Fla., on the morning of the ceremony.
Now his daughter won't be able to pick him up from the airport at 11 a.m. and make it to the ceremony in time, so Miles must fly in Friday, the day before the ceremony.
"I am going to have to eat it," Miles said of the cost of the plane ticket.
"It would have been one thing to move it up just an hour. Pretty much everyone can deal with that. But to move it up six hours?" Miles asked.
His daughter, MaryCharlotte, said she finds the sudden change in plans distressing.
"To me, the important people are my family," she said. "I just hope everything goes smoothly and that everybody realizes this is a really big deal for us. We are the inaugural class, and we've been working really hard."
Campus officials and some student leaders acknowledge that luring a speaker with as spectacular a profile as the first lady required some changes in their plans. But they strongly believe the positive publicity stemming from Michelle Obama's visit will benefit the university in untold ways for a long time.
The class that pulled it off
"I am starting to just question a little bit how much of an emphasis is on the graduating class (now)," said sen-ior Matt Siordia. "After a few years, it will reach a balance where we are known as the class that brought this big speaker here."
Outgoing student body president Yaasha Sabba is on the campus graduation steering committee. He's trying to make sure that events and programs unfold as smoothly as they can.
"Students have been coming up to us. All of the student concerns will be addressed," he said. "We want to make sure that the commencement is a great moment for the whole university."
It was unclear how much the changes to the ceremony will cost the university.
As industry struggles, Pacific Ethanol is running on fumes...Dale Kasler
After laboring a quarter-century in the ethanol business, Neil Koehler insists the industry will become healthy again, maybe in as little as two years. Others agree with him.
But Koehler's company, Pacific Ethanol Inc. of Sacramento, might not make it to the promised land.
The unprofitable ethanol maker has warned investors it could run out of cash at the end of April and might have to file for bankruptcy protection – a stunning downfall for a company that once set out to conquer the West and counted Bill Gates as an investor.
Adding insult to injury for Koehler and other ethanol pioneers: As their industry struggles, their old nemesis, the oil industry, is prepared to gobble up the remains. Oil refiner Valero Corp. just agreed to buy seven bankrupt ethanol plants in the Midwest for 30 cents on the dollar.
"The industry has a very bright future," said Koehler, Pacific Ethanol's president and chief executive, in an interview last week. "It's a question of who the players are going to be."
Koehler (pronounced "curler") has been something of an ethanol prophet, a fervent believer in the idea of turning corn into a gasoline additive that would clean the air and reduce America's oil dependency. He's also championed ethanol as an agent of rural economic development, arguing that California should make its own ethanol and not import everything from the corn-rich Midwest.
But Pacific Ethanol has been caught up in an industrywide downturn. Ethanol makers expanded too quickly and took on too much debt. They got hurt by rising corn costs. When oil became cheap, petroleum refiners cut their ethanol use to the bare, government-mandated minimums. Prices plunged.
"We had a perfect storm," Koehler said.
Market dynamics will change, in time. Demand for ethanol in California, the nation's largest market, will grow a whopping 66 percent next year, said Dean Simeroth of the California Air Resources Board. That's because of new state and federal regulations. Gasoline sold in California will contain 10 percent ethanol starting Jan. 1, up from the current 5.7 percent blend.
"This oversupply will dry up," said Gordon Schremp, fuel specialist at the California Energy Commission. "The market will go back into balance."
Five California plants idled
But in the meantime, the industry is bleeding. Two Midwest producers, VeraSun Energy and Aventine Renewable Energy, have filed for Chapter 11 bankruptcy protection.
Some 15 percent to 20 percent of the nation's production capacity has been idled. All five major plants in California, none of which existed before 2005, have stopped producing. That includes Pacific Ethanol's two California plants, in Stockton and Madera, which produced 7 percent of the state's supply.
The Sacramento company has terminated 50 employees, or one-third of its work force. It laid off its chief financial officer. Having defaulted on $250 million in debt, it has just $8.7 million in cash and credit and probably can't keep going beyond April 30, according to a March 31 filing with the Securities and Exchange Commission. Koehler and Chairman Bill Jones just loaned the company $2 million.
In the interview, Koehler refused to predict if Pacific Ethanol would make it, saying he was constrained by securities regulations. The SEC filing says there's "substantial doubt" Pacific Ethanol can continue unless it finds new cash or renegotiates its debts.
Industry expanded too fast
The industry's problems are striking in light of its built-in advantages, including a 45 cents-a-gallon federal tax subsidy and government mandates requiring ethanol usage. But the industry grew too quickly. It also did a poor job of using hedging and other strategies to control price and cost fluctuations, said economist Robert Wisner of Iowa State University.
"This is the first dance for the renewable fuel industry, and they didn't realize what was coming," said Clayton McMartin of the Clean Fuels Clearinghouse, which tracks the market. "They didn't understand how to play the game."
Now savvier players, some of whom have been ethanol's biggest opponents, are exploiting the industry's weaknesses. Just a year ago, Valero's CEO was blasting laws that require ethanol use. Now Valero is paying $477 million to buy plants from VeraSun.
McMartin said the Valero deal is the first of many. Referring to the dozens of shuttered plants across the country, he said, "Those assets will be operated. But it won't be by the ethanol companies. It will be by refiners."
By federal law, nationwide use of ethanol is supposed to grow 14 percent next year and keep growing every year through 2015. But Dan Sperling, a fuels expert at the University of California, Davis, believes the government is likely to back off that requirement. Meeting those stringent mandates could drive up gasoline prices, he said.
Koehler, though, said the government can't back away from its support for ethanol. He believes the industry deserves more support from the Air Resources Board, which regulates gas-blending formulas, and says ethanol deserves to get some of the economic stimulus dollars set aside for supporting green energy.
"Talk about green jobs – we had 'em," Koehler said. "Now everyone is laying off people."
Ethanol prices plummeted
A Green Party member from Davis, the 51-year-old Koehler started in 1984 at a tiny plant in Rancho Cucamonga that made ethanol from beer and soft-drink syrup. He later teamed up with Jones, the former California secretary of state, who founded Pacific Ethanol in 2003.
Their first plant, in Madera, opened in 2006. Three more plants followed in less than two years, and Pacific Ethanol became a $700 million-a-year company
Gates invested $84 million from his Microsoft fortune, and Pacific Ethanol shares briefly topped $40 on the Nasdaq market.
But the industry's building boom got out of hand, and "we were a part of that," Koehler said.
Then the bust came. Ethanol prices fell from nearly $3 a gallon last summer to the $1.60 to $1.70 range. The company in late 2007 halted construction on a plant in the Imperial Valley and has been scrambling ever since to deal with debt and cash woes. It lost $146 million last year. The stock is below 50 cents and Gates has dumped most of his shares.
But Koehler remains "a firm believer" in ethanol, even as he struggles to keep Pacific Ethanol afloat.
"I'm a lifer," he said.
My View: Solar development and deserts can – and must – coexist...Shannon Eddy
The Mojave Desert is a vital resource to California and the nation. Its 25 million acres embrace important desert ecosystems, historic, scenic vistas and diverse recreation areas.
This vast area also contains one of the world's premier solar energy resources. Combined with proximity to large and growing urban centers, and relatively easy access to scarce existing transmission lines, this resource is a unique California asset.
To put this energy potential in perspective, developing only 2 percent of the land area in the Mojave Desert to produce solar energy would generate enough power to meet peak electricity load for the entire state.
California has long been the nation's leader in renewable and solar energy, until very recently producing almost 100 percent of the solar energy consumed in the United States. The first commercial-scale solar generating station was built in California in the 1980s.
The facility continues to generate clean energy today, demonstrating both the commercial reliability of solar energy and the unsurpassed quality of California's solar resource. In 2003, California continued its environmental leadership by enacting the nation's most aggressive renewable portfolio standard. It requires utilities to meet 20 percent of their portfolios with renewable energy by 2010, a goal likely to be extended this year to 33 percent by 2020.
Maintaining this leadership will not be easy. Much of the prime land for solar development is already protected by national parks and monuments, and over 16 million acres of the state's agricultural land is encumbered under the Williamson Act, making solar development more difficult to site. Access to transmission is also an issue, as new transmission can take up to 10 years to plan, permit and build.
Nearby Nevada and Arizona, which also boast excellent solar potential, are luring investment dollars, green jobs and the local environmental benefits of clean solar energy away from California.
Given the limited availability of prime solar land and the competition for solar investment dollars from neighboring states, California must take steps to preserve the full economic and environmental value of its solar resource. Currently planned and contracted solar projects in California's deserts will produce up to 50,000 green construction jobs, an estimated $30 billion in direct capital investment in California, and decades of clean energy produced for California in California.
Recent arguments that utility-scale solar projects will harm pristine desert habitat tend to overstate the extent of development and land use needed to meet the state's goals. Of course, there are large pristine areas of desert that should and can be protected from development. But there are also areas in the desert that have endured decades of human encroachment, and many planned solar projects target these areas.
The future of California's deserts and our nation depend on addressing these issues in a thoughtful and balanced manner. Climate change represents the single greatest threat to sensitive desert habitat, to humankind and to our economy. We have the technology and the mandate to address this challenge today. If managed wisely, development of environmentally responsible solar projects in California's deserts can both serve as a model for sustainable growth, and provide future generations with clean energy, jobs and a protected wilderness environment.
San Francisco Chronicle
Who's Stranded Now...Carl Pope...Dispatches from the Sierra Club's Executive Director...4/10/2009 3:48 PM PDT
San Francisco -- It's remarkable how much of America's economic and political dialogue -- and results -- can be understood by asking: "Who's inside? Who's not?"
More than ideology, more than party, more even than profit, insiderness trumps all. In particular, if you are an insider, and events make your factories, power plants, equipment, or other capital assets less valuable, government will bail you out. And if you are an outsider, your stranded assets are, well, just stranded, and you're out of luck, another victim of Joseph Schumpeter's capitalist "engine of creative destruction."
Look at the conversation about a new energy economy. In the world of energy policy, carbon is on the inside. Oil is the real inner circle; coal clusters around and can make life miserable for anyone but oil; but natural gas is the Rodney Dangerfield of fossil fuels -- it gets no respect. Energy productivity, and anything that doesn't use carbon, is a wallflower. Tax credits for wind and solar are routinely allowed to expire or are only extended for a year or two -- treatment that would cause oil and coal to go ballistic.
In the world of food and fiber, row crops are king -- and the less nutritious they are, the higher their status. Sugar and tobacco rule the roost; cotton is next; with corn, wheat, and soybeans clustered behind. Rice has its niche. Fruits and vegetables get a hearing but rarely much real help. And fisheries, which represent the traditional blue-collar, hard-work, family-enterprise segment of the world of food, are the first to get thrown under the bus.
This hierarchy was on spectacular display this month. We learned that however important Americans say it is that the U.S. kick its addiction to oil, the oil companies are having none of it. Big Oil is abandoning its head fake toward renewables. BP (Remember "Beyond Petroleum"?) has been dumping its renewable lines of business. Shell has frozen its research into wind and solar. ExxonMobil's Rex Tillerson summed it up by saying, "In my view, nothing has really changed." And they clearly don't fear that the government will take away the rich flow of subsidies and other special breaks that make their business so lucrative -- after all, they can still muster 40 votes in the U.S. Senate to stop most anything they fear.
In Missouri, utilities claimed to be stunned at the idea that the cheap rates for electricity that come with burning dirty coal in old power plants might be phased out. Coal-reliant public utility executives in other states, like AEP's Mike Morris and Duke's Jim Rogers, vigorously assert that their customers are entitled to have their old investments protected, but that no one else is. No one is going to strand their assets by stopping them from dumping their mercury, coal ash, and carbon dioxide into their neighbors' yards, waters, and airsheds!
Barack Obama's efforts to cut subsidy payments to the biggest row-crop farmers were chopped down in the U.S. Senate. These annual payments to row-crop agribusiness have, in effect, become an entitlement.
But when, as a result of climate change and the mismanagement (largely at Big Agriculture's behest) of California's rivers, federal officials had to cancel the salmon season for the second year in a row, no one suggested that the struggling commercial fishermen should somehow be bailed out. After two years without a season, the boats, nets, and other assets of these fishermen are, effectively, valueless -- stranded assets.
What distinguishes salmon boats from coal-fired power plants, when changed environmental circumstances challenge their historic economics? It's certainly not the market that decides -- and it's not the work ethic or public benefit. Otherwise, fisheries would trump power plants. No, the hard fact is that some industries are on the inside, and others are not.
This may help to explain one of the most stunning poll results of recent years. Asked to choose between capitalism and socialism, Americans did come down for capitalism -- but by a stunningly narrow 53 percent to 47 percent margin. Now I wouldn't take this finding too literally. Many respondents probably meant the kind of "socialism" that the reactionary right is claiming the Obama administration represents -- not even European social democracy. But when only 53 percent of Americans have anything good to say about capitalism, it's pretty clear that cronyism and insider favors have created a new political reality in this country. Americans will forgive the markets for a lot -- if they think those markets are fair. But the fact they are rigged is being shoved in our faces every day. And we don't like it.
Los Angeles Times
UCLA professor stands up to violent animal rights activists
J. David Jentsch organizes a campus rally April 22 of those who believe biomedical testing on animals saves human lives. His car was set on fire March 7, allegedly by opponents of testing...Larry Gordon
As soon as he heard his car alarm blare and saw the orange glow through his bedroom window, UCLA neuroscientist J. David Jentsch knew that his fears had come true.
His 2006 Volvo, parked next to his Westside house, had been set ablaze and destroyed in an early morning attack March 7. Jentsch had become the latest victim in a series of violent incidents targeting University of California scientists who use animals in biomedical research.
"Obviously, someone who does the work I do in this environment expects that it's possible, indeed likely, that it would have happened," said Jentsch, who uses vervet monkeys in his research on treatments for schizophrenia and drug addiction. Before the attack, he had received no threats and had taken only limited precautions, including keeping his photo off the Internet.
"I've been as careful as you can be without being paranoid," he said.
After similar incidents, other UCLA scientists have become almost reclusive as security and public curiosity around them grew. Three years ago, another UCLA neuroscientist, weary of harassment and threats to his family, abandoned animal research altogether, sending an e-mail to an animal rights website that read: "You win."
But Jentsch has decided to push back.
Jentsch, an associate professor of psychology and psychiatry, has founded an organization at UCLA to voice support for research that uses animals in what he calls a humane, carefully regulated way. He is organizing a pro-research campus rally April 22, a date chosen because animal rights activists, who contend that his research involves the torture and needless killing of primates, already had scheduled their own UCLA protest that day.
"People always say: 'Don't respond. If you respond, that will give [the attackers] credibility,' " Jentsch, 37, said in a recent interview in his UCLA office. "But being silent wasn't making us feel safer. And it's a moot point if they are coming to burn your car anyway, whether you give them credibility or not."
The incidents have traumatized many professors and students on the Westwood campus, well beyond the circle of those directly affected, said Jentsch, who was not injured in the car fire.
The rally, he said, "is an attempt to repair some of the trauma that people have felt, through solidarity and shared experience." Speakers are expected to include Tom Holder, a leader of Pro-Test, a British group formed in 2006 in support of animal research. Also likely to appear are patients suffering from illnesses that researchers say might one day be cured by treatments discovered in such experiments.
The new UCLA organization is named UCLA Pro-Test, in honor of the British group. Its message, Jentsch said, is that ending animal research "would be devastating, absolutely devastating, in the loss of knowledge and its practical applications to human health."
Holder, who now heads a similar U.S.-based organization called Speaking of Research, praised Jentsch's efforts. "I think it is fantastic that scientists are finally finding their voice and standing up against animal rights extremists," he said in a telephone interview from England.
In the last three years, UCLA has reported at least 10 arsons, attempted arsons and other acts of vandalism against its professors and researchers, along with many unrealized threats. In February, four animal activists were arrested on allegations that they were involved in attacking and harassing animal researchers at UC Berkeley and UC Santa Cruz, but no arrests have been made in any of the UCLA cases, according to FBI spokeswoman Laura Eimiller. She said the incidents are under investigation as acts of domestic terrorism.
The UC system has spent several million dollars in recent years to improve security around researchers' homes, classrooms and offices. Citing security concerns, Jentsch declined to have his photo taken for this article.
Two days after Jentsch's car was burned, a profanity-laced Internet message from the murky Animal Liberation Brigade took credit for the fire, as it had for past UCLA assaults.
"The things you and others like you do to feeling, sentient monkeys is so cruel and disgusting we can't believe anyone would be able to live with themselves," the message read. "David, here's a message just for you, we will come for you when you least expect it and do a lot more damage than to your property."
Jerry Vlasak, a Los Angeles-area physician and frequent spokesman for the animal rights movement, said he and fellow activists do not participate in the attacks and do not know who is behind them, although he sympathizes with the actions.
Jentsch, according to Vlasak, "is hurting and killing non-human primates every day. And if it took harming him to make him stop torturing, it is certainly morally justifiable."
Vlasak said that Jentsch's new group is a publicity stunt aimed at preserving researchers' federal funding and turning public attention from the nature of the researcher's own work, which involves addicting monkeys to methamphetamine. Vlasak and others said they want to meet Jentsch in a public debate, but the UCLA professor said he was willing to do so only with people who don't condone violence.
Elliot M. Katz, president of the San Rafael-based In Defense of Animals organization, said so much is already known about addiction treatment that further animal experimentation serves only to aid the pharmaceutical industry in developing unnecessary products.
Jentsch, who said he stopped taking any funding from the drug industry several years ago, responds that such claims are absurd because there is no FDA-approved treatment for methamphetamine addiction.
UCLA Chancellor Gene Block, a biologist who has used mice in his own research on circadian rhythms, welcomed the new Pro-Test organization.
"By refusing to be intimidated by extremists who torch cars, threaten violence and harass families, UCLA faculty, staff and students involved in the Pro-Test movement are demonstrating not only their courage but also their commitment to public service," he said in a statement.
Jentsch (pronounced "Yench") grew up in Texas, earned a bachelor's degree from Johns Hopkins University and a doctorate from Yale before arriving at UCLA in 2001. His research, supported by branches of the National Institutes of Health and subject to federal inspections and standards, concentrates on two areas: possible genetic and brain function links to schizophrenia and the effects of various drugs on the area of the brain that influences the will to abstain. The goal is to improve treatments and the chances of early diagnoses, he said.
At a North Carolina facility shared with Wake Forest University, Jentsch works with a colony of more than 450 vervet monkeys in what he described as noncoercive and painless memory tests, DNA samples and scans. He said 10 or fewer of the animals are put to death by injection each year, so that researchers can conduct postmortem exams.
At a UCLA lab, he administers methamphetamine to about two dozen monkeys and then withdraws them from it; about half a dozen are killed each year for postmortems. He contended that the animals suffer no pain from the work.
"The pain in addiction is when you lose your relationships, lose your children, lose your job, when your health goes down. Animals don't suffer those things," he said. "They suffer none of the psychosocial pain that is what addiction is all about."
New York Times
Science, Mythology, Hatred, and the Fate of the Gray Wolf...VERLYN KLINKENBORG
For the past few weeks, I’ve been trying to find a way to accept the decision by Ken Salazar, the new secretary of the interior, to remove the gray wolf from the endangered species list in Idaho and Montana.
It was a relief to have a sensible conversation with newly appointed interior officials after eight years of hearing almost nothing but distortion and duplicity from the top figures in the department. It was also a relief to hear them say, in describing the way they reached this decision, that they were simply following the guidance of career scientists. And yet I still can’t accept it.
The reintroduction of wolves in the Rocky Mountain West has been an overwhelming success. It began with 65 wolves in 1995 and 1996, and the population has now reached approximately 1,600 across the region, with about a hundred breeding pairs. The numerical standards of the original recovery plan have been more than met, and there is new evidence, according to Interior Department scientists, that enough intermingling is taking place among separate populations to ensure a healthy genetic diversity.
Unfortunately, very little has been done to change the behavior of humans — who drove wolves to the brink of extinction. The way the wolf has been delisted, this time, is a reminder that what we are really doing when we protect endangered and threatened species is managing our own species.
Under the proposed delisting for Idaho and Montana (wolves in Wyoming will remain on the endangered list), the wolf will be protected by state management plans that more or less acknowledge the wolf’s right to exist.
C. L. Otter, the Republican governor of Idaho, has pledged “to continue our policy of responsibly managing wolves for a viable, sustainable population that can coexist with our ungulate herds, our livestock and our people.” The very first step in “responsibly managing” wolves will be a wolf hunt.
And Mr. Otter’s idea of coexistence between wolves and humans doesn’t bear examination. He has said he’d be the first in line for a wolf hunting license, and he has also said he favors reducing the wolf population in Idaho to 100, way below the current level of more than 800 and well below the number required by the state management plan.
When it comes to wolves, federal law has been protecting what is, fundamentally, a mythic species. And when it ceases protecting them, they will be exposed to the worst aspects of that myth — a deep, ancestral hostility to wolves based on ... nothing.
Wolves do not kill humans. They are responsible for a minuscule number of livestock deaths in the West — less than domestic dogs — and there are federal and state programs specifically designed to compensate ranchers who lose stock to wolves.
To hunters, killing wolves is both an end in itself and a way of reducing their predation on elk and deer. And it is more than that. Killing a wolf is also a way of participating in the myth of the West. That myth nearly drove the species to extinction.
I would be happy to see wolves taken off the endangered species list if they were not hunted. It is that simple. Their reintroduction has been an unequivocal boon for the ecosystem — the return of a top predator to a system that is biologically unbalanced without it. There is more than enough game for wolves and humans to share. There are adequate protections for ranchers. There is every good reason to try genuine coexistence. No one shoots a wolf to keep from going hungry.
So far the political pressure in the West is too great to allow this. And that, in the end, is the trouble with Mr. Salazar’s decision. It may indeed have been based on the science, and on the numbers called for in the recovery plan. But that plan surely needs revaluation, and in any case the administration clearly was not eager to defend it. The announcement was made on a Friday (like so many Bush-era decisions) and without much warning to environmental groups. Several of those groups have now filed suit to block that delisting.
Mr. Salazar — a Coloradan and a rancher — now faces the very difficult task of making certain that Idaho and Montana adhere to the letter of their management plans. As for the wolves, they have been brought back only to be killed again.
Unemployment: Big factor in home defaults
Report indicates unemployment is a major driver of missed mortgage payments, and raises concerns that Presidential plan to modify loans may miss the mark.
NEW YORK (Reuters) -- Unemployment is a bigger reason for missed mortgage payments than high interest rates, according to a study from the Boston Federal Reserve that raises questions about President Obama's plan to stem foreclosures by modifying loans.
Borrowers are more likely to default on their payments because they have lost their jobs or because the price of their homes has plummeted than because of tough terms on their mortgages, the study found.
Loan modifications are not necessarily a better deal for investors either, wrote Boston Fed economists Christopher Foote and Paul Willen, Atlanta Fed economist Kristopher Gerardi and Lorenz Goette, a professor at the University of Geneva.
Their research found that policies that directly help homeowners overcome setbacks such as losing their jobs may be more effective in combating foreclosures.
"Foreclosure-prevention policy should focus on the most important source of defaults," the economists wrote in a study released on the Boston Fed's Web site late last week.
The findings challenge the thinking behind a White House plan announced in February that would give up to 9 million families the chance to refinance their mortgages. President Obama's administration has made loan modifications a central plank of its efforts to tackle the housing crisis.
"One of the most influential strands of thought contends that the crisis can be attenuated by changing the terms of 'unaffordable' mortgages," the economists wrote. But policies that focus on loan modification "face important hurdles in addressing the current foreclosure crisis," they wrote.
The economists suggest that the government could instead replace part of an individual homeowner's lost income from a job loss through loans and grants and help those whose predicament is more permanent become renters.
In addition, investors do not necessarily stand to gain if foreclosure is avoided, they said, and that could help explain the relatively small number of loan modifications to date. Estimates that total gains for investors from modifying rather than foreclosing can run to $180 billion may not take into account a number of key factors.
Investors can lose money when they modify mortgages for borrowers who would have repaid anyway. Borrowers with modified loans may default again later, especially if the reason they were driven to default remains, the economists said