by Diane Castle
“All right,” Nash said. “But the NYMEX is regulated by the government. Eventually they’ll find the source of the computer program, you’ll go to jail, and the market would correct itself. You’re not worried about that at all?”
“Well, if the program were released on the NYMEX, that’s probably true,” Cameron said. “But remember, I said that oil futures contracts have historically been traded on the NYMEX. These days, fewer and fewer of them are actually traded there.”
“What?” I asked. “Where else would they be traded? Not on the stock market.”
“Cop,” Nash said, pointing out a red and blue on the horizon.
“I’m slowing down,” Cameron said. “Anyway, Chloe, you’re right. They wouldn’t be traded on the stock market, because that’s regulated too. Think about this for a minute. Let’s say you’re one of the richest corporations in the world, and you feel like trading futures contracts on the NYMEX is good for your industry. But let’s say you wanted a little more control over the trades without having to worry about a whole lot of regulation and government oversight. What would you do?”
“Establish a private market that isn’t government-regulated,” I said. “But that would require an act of Congress. It would be virtually impossible to pull off.”
“Maybe for most people,” Cameron said. “But not for Big Oil. Big Oil has deep pockets. George W. Bush has received more money in campaign contributions than any other political candidate in history. It got him the presidency, and some people have argued that in exchange, he went to war on Big Oil’s behalf. According to certain other sources, the number two and three recipients of the most money paid in campaign contributions by Big Oil are Texas’s very own senator Kay Bailey Hutchison and Senator Phil Graham.”
“So you’re saying Hutchison and Graham were bought?” I asked.
“Absolutely not. I’m just saying that it’s naïve to think campaign contributions don’t in some way inform the decisions politicians make—either directly or indirectly. Politicians naturally want to represent the interests of their constituents, especially if those constituents are in a position to help put them and keep them in office.”
Behind me, Nash swore.
I caught a glimpse of red and blue flashing lights in Cameron’s rear-view mirror. “I thought you slowed down!”
“I did!” Cameron said. “I’m not speeding!”
“What are we going to do?” I bit my lip. I didn’t see how Nash could orchestrate some major getaway this time—not on a heavily populated freeway in broad daylight.
“Wait a minute,” Nash said. “Don’t panic.”
Cameron’s knuckles were white from gripping the wheel.
“Keep your speed steady,” Nash said.
Cameron did.
Behind us, the cop car edged closer, then peeled around us and went after somebody else.
We all let out a collective exhale.
“I hate that!” Miles said.
He wasn’t the only one.
“Yeah, that was close.” Cameron relaxed his grip on the steering wheel a little. “Where were we? Oh yeah, senators and campaign funds. With that in mind, consider that in the year 2000, Phil Graham introduced a little law now referred to as “the Enron Loophole” into the Commodity Futures Modernization Act, which was signed into law by President Clinton.”
“What’s Enron got to do with the commodities exchange?” Nash wanted to know. “Or with oil, for that matter? Enron was not even an oil company.”
“Hold your horses,” Cameron said. “I’m about to tell you. The Enron Loophole is what made it possible for large corporations to establish private commodities exchanges.”
“And trade any way they want without interference from government regulators!” Miles said triumphantly.
“Yep,” Cameron said. “So today, thanks to the Enron Loophole, we have the Intercontinental Exchange, also known as the ICE—a private commodities trading market. Today, more oil futures contracts are traded on the ICE than are traded on the NYMEX.”
“I’ve never even heard of the ICE,” Nash said.
“And don’t you think that’s the way Big Oil wants it?” Cameron asked.
Wow. The enormity of what PetroPlex was involved in and able to pull off overwhelmed even me. I knew all about oil’s toxicity and how many people it killed on a yearly basis. I knew about increased cancer rates and the rise of asthma. I knew about birth defects and minor spills, and major ones. But this? The creation and manipulation of completely private, totally unregulated energy markets? This was bigger than I’d ever even imagined.
Of course in a post Gulf-Oil Disaster environment, the whole world knew that oil was capable of ruining whole sections of the planet and killing not just wildlife, but people too. Even though I made a living railing against Big Oil, I had always kind of viewed oil as a necessary evil.
But in light of what I’d just learned, now Big Oil struck me as an evil more black than oil itself. The sheer size and money involved made them not only too big to fail, but too big to control. Instead, they were controlling us. They weren’t just driving our economy and trying to influence government policy. They were controlling it. They were blatantly throwing money at political candidates who favored the policies they wanted and then sitting back and hoping for favors in return, thus corrupting—and potentially destroying—our whole system of democracy.
In light of those facts, all of a sudden it made sense to me why certain Texas political leaders were so strongly against government regulation. The party line was all about not letting government control invade private lives—but it was nothing but fear manipulation, all designed to distract the public and cause them to be blind to the real threat—the corporations whose vast amounts of money allowed them to pull the government’s strings with the finesse of the most experienced puppeteers. Small government is one thing. But a government that’s too small to control big business and protect its citizens is another. The implications for the future seemed ominous.
Cameron was thinking the same thing. “Yeah, we’re on the run out of town now, but when you think about where this could lead and what it could mean for the country and the world, it kind of makes you want to pack up and head for the moon. Remember Enron? This loophole allowed Enron to create its own online energy futures exchange, which they did. Then from 2000-2002, their traders manipulated the energy markets and artificially inflated the price of energy on the West Coast. Since this whole exchange was unregulated, nobody knew what was going on until there were rolling blackouts, energy bills no one could afford to pay, school and business shutdowns, and deaths from heat exposure. Thousands of people lost their jobs, California’s two largest utility companies declared bankruptcy, and the state lost billions of dollars. Meanwhile, Enron got rich at everyone else’s expense.”
“We have to do something,” I said. “Can you imagine what would happen if trading on the ICE created the same situation, only this time with gasoline? People wouldn’t be able to get to work. Businesses would shut down. Food wouldn’t get delivered to grocery stores. There would be panic in the streets. Riots. Violence. Injuries.”
“Right,” Cameron said. “And no gas means no ambulances to take people to hospitals. And even if people still somehow managed to get there, it wouldn’t be a safe environment. The hospitals wouldn’t be able to get new sterile supplies, since many of those supplies are made out of plastic, which is made from crude oil. They wouldn’t have the equipment they need to treat injuries. So people would be dying in the hospitals, starving on the streets, and shooting each other for gas or food. We are talking complete and total chaos and devastation caused by the unchecked greed of a few privileged people.”
I groaned. “But what can we do to prevent this? Like you said, here we are on the run, with no resources and no plan. We are totally powerless!”
“We are not totally powerless,” Cameron said. “We can collect evidence against them and release it to the press. We can make the
public aware that there are flaws in the system that need to be corrected. We can demand campaign finance reform and push for stricter lobbyist controls. Nothing will ever change if the public doesn’t rise up and take control of these core issues. Nothing else can guarantee the integrity of the system. That’s why Schaeffer’s and my press release was so important.”
“Only now Schaeffer is dead,” Nash said.
“Yeah,” Cameron said, “which is a major problem for us because he was about to take delivery on a series of recorded conversations between PetroPlex executives that proved they were about to manipulate the markets and defraud the American people. Schaeffer had a connection with some inside guy at the Kettle refinery—a mole—I don’t know who. The problem is, the recordings were all on analog audio tape from an old handheld recorder and weren’t digital, so he couldn’t email them to me. I sent him a cassette-to-digital converter, but he didn’t know how to operate it, and neither did his inside guy, so he was going to ask you to show him how.”
“Me?” I said, surprised.
“Yeah,” Cameron said. “Apparently, he trusted you. But since you don’t seem to know anything about the tapes, I guess he didn’t get around to asking you yet.”
“He didn’t,” I said. “Do you know where the tapes are?”
“Nope,” Cameron said sheepishly. “I was kind of hoping you did, though.”
Crap. I hadn’t the first clue where the tapes were, obviously, and said so.
“Schaeffer may have gotten his hands on them before he died, or he may not have,” Cameron said. “I don’t know when the delivery was scheduled to take place. Without the tapes, I can’t really prove the plot to manipulate the markets. I’ve hacked into the system and have been monitoring executive emails, but so far, no one has been stupid enough to put anything explicit in writing. They’ve been much more careful covering up evidence about the energy market plot than they ever were about safety violations.”
That made sense. After all, the fines for safety violations were so negligible that they constituted a mere slap on the wrist. A global plot to manipulate the energy market and artificially drive up gasoline prices was a whole different ballpark, however.
I considered the implications of these missing tapes and what they meant for my case so far—or the shreds that were left of it. Apparently, it wasn’t necessarily the paper files PetroPlex had been after. They could have been after something else entirely—namely, these tapes. Maybe they were worried about a transcript of the tapes? Or maybe they thought the tapes would be in the same place as the paper files.
So at last I knew what PetroPlex had been after and why my expert was dead. The question now was, what to do about it?
CHAPTER 24
We seemed to be in the clear and had all relaxed a little bit. Cameron flipped on the radio and surfed around for a news station. “Let’s hope nothing’s happening,” he said.
“Like what?” Nash asked.
Cameron glanced back at him. “Did you not just see Miles release that virus?”
“It’s not possible that something would have happened this quickly, is it?” Nash asked.
“Oh, it’s possible,” Cameron said. “The oil market is so volatile that if even one part of one refinery goes down for just a few minutes, the price of oil jumps up immediately. I’ve seen it jump six cents in a matter of minutes just because the Kettle PetroPlex refinery had a small malfunction that didn’t take long to fix. I fixed it, in fact. It was a computer glitch.”
“Six cents doesn’t seem like a lot,” Miles said.
“We are not talking about a change of six cents right now,” Cameron said. “We are talking orders of magnitude beyond that. We are talking change in the order of magnitude similar to that computer glitch that dropped the stock market by a trillion dollars.”
Nash was fishing Lucy off of Miles’ lap so he could pet her. She seemed to be warming up to him a little. She licked his hand tentatively. “But this is good for consumers, right? For the little guy? Gas will be cheaper now, right? PetroPlex gas, anyway? And since the virus is out, your original program won’t work. Right?”
“Yes, but as I mentioned earlier, there are other things PetroPlex can do to combat the price drop.”
“Like what?” I wanted to know.
“Like orchestrate a refinery failure, or worse, create a catastrophic explosion. Every time there’s a refinery outage or an explosion, the price of oil goes back up and stays there until the problem is fixed. The reason it works this way is that American refineries run at 97% capacity. That means that when something goes wrong, there’s not enough supply to meet demand. So the price jumps.”
Cameron surfed past a station that was talking about PetroPlex.
“Wait!” I said. “Go back.”
Cameron did. The radio DJ was reporting a twenty percent drop in gasoline prices and a market loss of 3000 points. And according to him, the numbers were steadily continuing to fall.
And then, there was more breaking news. “Wait,” the DJ said. I’m now being told that an explosion rocked PetroPlex’s largest oil refinery in Kettle, Texas, just moments ago. There are pictures coming in from eyewitnesses on the scene, but no official news media is on site yet. Our news copters are en route as we speak, and we hope to bring you more information shortly.”
Nash, Miles, and I all exchanged stunned glances. “No,” I said. “They wouldn’t. It has to be a coincidence.”
Only Cameron didn’t seem shocked. He abruptly pulled the car over, fished out a laptop and opened it up. Then he popped in a mobile wireless card and waited for everything to come online. Miles and I watched silently while Nash nervously scanned our surroundings.
At first, all we saw was a white cursor on a black screen. Cameron began furiously typing a string of commands that looked like gibberish to me. Then before I knew it, he had pulled up a string of emails between PetroPlex executives. The word “explosion” was highlighted at various points in various messages. I inspected the dates and timestamps on all these emails. They were all real time.
“Hey, I know those names,” I said. “Gerald Fitz—that’s PetroPlex’s regional president. He works out of the Kettle office. And Frederick Lewis—that’s his VP of Quality Control. I deposed him last year.”
“Fitz,” Miles said. “Isn’t that the guy who practically shut down the Dairy Queen a few months ago because the kitchen boy didn’t put the right amount of candy in his daughter’s Blizzard?”
“Yeah, that’s him,” Cameron said. Cameron screwed up his face and glared at all of us, preparing to do his best Fitz impression. “You call that a Blizzard?” he barked in a sandpapery voice. “Get out of my way, and I’ll show you how to make a Blizzard!”
“Hey, that’s pretty good!” I said. “You totally have him down! If I didn’t know any better, I’d think you were him!”
Cameron shrugged and turned back to his computer screen. “Yeah, I used to do community theater.”
I raised my eyebrows. This guy was full of surprises. Definitely not your run of the mill nerd.
Cameron executed another series of commands that appeared to bring up a string of emails all sent between the time Miles accidentally released the virus and the time of the explosion. One email in particular caught Cameron’s eye, and he opened it full screen. It was from Gerald Fitz, and it was damning.
It was sent to Frederick Lewis and simply said, “Virus active. Light the fuse.”
Wow. Cameron really was good. Perhaps it was possible we actually could accomplish something with a computer geek on our side.
“We need a plan,” Nash said.
“We need the tapes,” Cameron said.
We all looked at each other. There was only one place to go, and that was, unfortunately, straight back to Kettle.
CHAPTER 25
Delmont felt the blast from the refinery explosion and ran to the window in his chambers. He could see flames shooting high into the sky and a plume of black smoke billowing
over the town.
He went back to his desk and furiously punched numbers into his phone.
As soon as the line connected, he started hollering. “What the hell just happened out there?
“Gilbert deployed the virus,” said the voice on the other end.
“And the virus caused the explosion?”
“Not exactly. The virus was designed to dramatically drop the price of oil. Were you watching the financial tickers? There’s no way we could have sustained that kind of a loss without suffering irreparable harm. We didn’t have a choice.”
“A choice about. . . wait a minute. Are you trying to tell me you blew up the refinery on purpose?”
“It was just a small explosion. Don’t worry about it. We’ll have it fixed in no time. In the meantime, fears about shortages will help stabilize market prices, and everyone will be okay.”
“Listen, I don’t like this,” Delmont said. “You guys are really putting a strain on the system lately. I already gotta deal with the run-of-the-mill toxic torts cases that come through here, but now I got a dead guy on my hands, and you’re also blowing yourselves up? How many injuries?”
“Minimal. I evacuated the area first.”
“Are there any injuries? How many cases will I have to shut down now?”
“We’re still waiting on preliminary reports.”
Delmont swore. “This is getting old, you know. Real old. And I can only help you out so much without making people suspicious. How do you think it looks if thirty personal injury cases land on my desk and every single one of them gets thrown out? You better be ready to pay out some damages on at least some of the cases.”
“Yeah, sure. Gotta make sure old Dick has enough money to ante up on Tuesday nights anyway.”
“There’s something about that guy that I don’t trust.”
“Don’t worry about him. We’ve got him under control.”
“You’d better,” Delmont said.
He slammed the phone down on the receiver and turned back to the window to survey the damage.