Gangreen Energy Agenda

The President likes to talk about green energy and green jobs. Here is a clip from Mr. Obama on the campaign trail in 2008.

Well, whatever campaign promises he might have forgotten, this isn't one of them. The President did aggressively push investment in green energy. CBS has taken a good look at how this is turning out.

It is altogether possible that there are green technologies worth investing in. It is altogether clear that the Administration is very poorly suited to pick those technologies out. Probably this would be true of any Administration. Federal agencies do not make good venture capitalists. The distance between dreams that make for good sound bites and economic reality is cavernous. The temptation to feather the nests of political supporters at the expense of real opportunities is irresistible.

This is clear in CBS's story.  The Energy Department repeatedly approved investment in projects that they knew were unsound.  They repeatedly ignored all the sober warnings.  They put the public money where no idiot would have put it.  It is scarcely any wonder that no one from the Energy Department would appear for an interview.   What could they possibly say?  Only this: that they still believe in what they were doing. 

The Green Jobs agenda is not just a waste of public money, at a time when public money is measured in negative numbers. It distorts the market, robbing any potentially viable startups of vital capital. When billions of Federal dollars become low hanging fruit, venture technology chases that fruit instead of trying to find a sustainable business model.

Comments

[larry kurtz]

During the 2005 secret Cheney energy meeting with top industry earth haters 32 coal fired plants were discussed for eastern Montana.

Ken, has Attorney General Jackley contracted you yet to get background for his lawsuit against upwind states for their roles in elevated rates of cancer in the chemical toilet?

Of course not, he's colluding with the industry.

Red state collapse.

[Donald Pay]

Half of nuclear energy plants that are proposed have gone under, yet Republicans demand increased loan guarantees to nuclear energy, by far the riskiest energy sector. The risks in the green energy sector are far less.

[Ken Blanchard]

Donald: nuclear energy actually produces power.

[Bill Fleming]

How much do you know about private equity funding KB? i.e. at what point would you be willing to invest in a new mode of alternative energy technology?

[A.I.]

KB: You might also note that "green energy" sources also "actually" produce power. What they produce little of is toxic waste like that produced at nuclear sites including both reactors and mines. And after decades of operation, there still is no agreement on where or how to dispose of this waste.

That said, the story you cite was not about nuclear. It was about supposed misuse of taxpayer funds with the hint that something nefarious is going on. But, the end of the story explains $2.4 billion was allocated with full knowledge of the fact that all of it probably would be lost investing in the kind of risky investments that are all the companies mentioned. In other words, the government is subsidizing a fledgling industry--something it also did for nuclear and tons of other industries.

[larry kurtz]

Governor Brown and Secretary Salazar expedite green power in a blue state:

http://gov.ca.gov/video.php?id=53

[Bill Fleming]

A.I. Correct. Less than 25% of private equity fund investments pan out, and even those have a high degree of blind luck attached to them. If KW waits for new technology to be risk-free going in, it will never be developed.

[Stan Gibilisco]

"It distorts the market, robbing any potentially viable startups of vital capital. When billions of Federal dollars become low hanging fruit, venture technology chases that fruit instead of trying to find a sustainable business model."

Does anyone know how I might apply for a government grant to build a "model green home" on my little sun-drenched, wind-swept, irrigated 2.25-acre plot of land just east of Cody, Wyoming? If I could get my hands on about two hundred thousand dollars' worth of that low-hanging fruit, believe me I'd put it to good use, and write a book about the whole thing to boot. To me, that'd be a pretty good sustainable business model -- and a lot of other people might benefit from it as well.

[Ken Blanchard]

A.I.: No, they don't. They consume far more power and other resources (including jobs) than they produce. That's why you have to make the "fledgling industry" argument: if we invest now, someday they will show a return. Precisely if that is true, one needs to invest wisely. It's one thing to make a risky but promising investment. It's another to make investments that are almost designed to fail. Such investments distort the market and delay rather than advance whatever potential green energy has. According to the CBS story, that is precisely what the Administration has been doing.

I find the fledgling industries argument very unconvincing. The success stories all involve industries that showed immediate returns and clearly could have survived without subsidies. There was real gold in them there drills. Green energy investment, so far, doesn't look anything like that.

Bill: I would invest in green energy if someone could show me that there are realistic expectations for a return soon enough that I can enjoy it. How much more efficient would wind and solar power have to be to do that? Twice? Ten times? A hundred times? How much land needs to be covered by wind farms and solar arrays? I have seen such projections before, but never from proponents of these technologies.

Larry: if I was a real earth hater, I would love to see acres of desert torn up to make solar energy farms and I would love to see millions more birds ground up by wind towers.

[Bill Fleming]

Exactly, KB you are not an early adopter. You will invest when the R&D is done and the product ready for market. Hence, you would not be a good venture capitalist, inventor, or proponant of alternate energy resource development. That's okay, innovation is not for everybody. Go ahead, play it safe. You're not getting any younger, brother. But just let's not pretend you know what you're talking about when it comes to R&D and breakthrough technology, because clearly, you don't.

[Ken Blanchard]

Larry: I have some sky hooks for sale. $10,000 piece. If you refuse to buy one, it's not because you are no fool. It's because you are not an early adopter. Fine, play it safe.

[larry kurtz]

Solar panels are everywhere in Santa Fe; my host is completely off the grid in a straw bale house. No arguments on the wind towers: we are in full agreement.

Geothermal, leaving coal in the ground and just extracting the methane, controlled burning of coal while it's still in the ground...it all has to be examined.

[Bill Fleming]

I'd like to read your prospectus, KB. Gravity just might turn out to be a pretty big deal one of these days. ;^)

[Bill Fleming]

(...just remembering how hard it was for Einstein to get any of those know-it-all academics to invest in him back in the day.)

[Ken Blanchard]

I had meant my comment on sky hooks for Bill, not Larry. Larry and I seem perilously close to agreement here.

Bill: just because some good investments looked unpromising at the beginning doesn't mean that any investment that looks unpromising is good. Does that logic go past you? Ethanol was sold as the fuel of the future. It has a great future behind it. High speed rail still hypnotizes the elite, despite a history of catastrophes. Not all that glitters is gold.

However, my post was not about solar and wind power in general, but about really bad investments in the face of every indication that they were bad. Is that really how progress is made?

[Bill Fleming]

http://www.huffingtonpost.com/tom-zeller-jr/solyndra-scandal_b_973990.html

[Bill Fleming]

Excerpts from above links:
"The Solyndra loan represents just over 1 percent of the $39 billion in loans generated by the program so far, and about 3 percent of all loan guarantees aimed at the solar industry in general. The company also received as much as $1 billion in private sector banking, suggesting that it wasn't just the DOE that saw potential in the company's technology."

"Solar is still growing -- Indeed, Rhone Resch, the president and chief executive of the Solar Energy Industries Association, which represents some 5,000 companies in the United States, puts it bluntly: "The solar industry continues to be the fastest growing industry in the United States," he said. Data compiled by SEIA for the second quarter of 2011 showed a 69 percent increase in solar photovoltaic capacity over the same period last year.

"In the second quarter, compared to last year, the industry grew by nearly 70 percent," Resch reiterated. "Name another industry that's growing at a rate of 70 percent."

"Some members of the Republican leadership might do well to remember these realities -- even as they ask legitimate questions about how Solyndra failed and why it qualified for taxpayer help in the first place.

As Former Rep. Bart Stupak (D-Mich.), who once chaired the House Oversight and Investigations Subcommittee, told Politico earlier this week, "It almost looks like you're using an investigation to kill an industry."

[larry kurtz]

Following Wired's Threat Level and Danger Room has exposed a multitude of failed Defense industry Goldberg contraptions costing more billions than is even brought to public light.

Bill is right: choosing a single company as an example of crony capitalism is right out of the Gingrich earth haters handbook.

[larry kurtz]

test

[Ken Blanchard]

Bill: the private sector investments are protected. All the profit generated by these industries, when they make any profit, is provided by the federal sponsor. When these companies go into the toilet, it ain't the investors who take a bath.