The Solyndra Scandal
From the Department of Energy (DOE) itself we get its loan programs purpose: “The Department of Energy’s Loan Programs enable DOE to work with private companies and lenders to mitigate the financing risks associated with building out commercial-scale clean energy projects, thereby encouraging the broader and more rapid growth of the sector.”
Will someone please tell me just what business DOE, or the government, for that matter, has “mitigating financial risk?” I thought that it was the jobs of private sector managers to mitigate financial risk through study, evaluation, and, if no market for the proposed product and/or service existed, turn down the proposal. Was not this country founded on the principle of free enterprise, where people are free to succeed or fail on their own, without government?
DOE’s Record So Far – Projects That Have Received DOE Loans
- Vogtle Nuclear Power Plant, the nation’s first nuclear power plant in the last three decades, but produces electricity at triple the cost of current rates. And all it cost us taxpayers was $8.33 billion.
- Shepherds Flat Wind Farm, the world’s largest wind farm. It produces electricity, but not at a cost-effective price.
- POET’s Project Liberty, a cellulosic ethanol power plant. Yet a cost comparison study between corn based and cellulosic ethanol has found that corn is still the cheapest way to make ethanol. Further, there are still problemswith ethanol.
- Project Amp is a large rooftop solar project. While solar generated power is falling, it is still higherthan coal or natural gas generated electricity.
- Agua Calentia, a 290 MW photovoltaic generation facility in Arizona, received a $967 million loan guaranteefrom DOE, despite the fact that solar generated power costs more than coal or natural gas generated power.
- DOE has given loans for several concentrating solar power (CSP) generation facilities, such as the $1.2 billion loan to SunPower, currently building the California Valley Solar Ranch.
- DOE is supporting solar manufacturing plants that will help reduce the cost of solar power, such as Solopower and 1366 Technologies that got $150 million from DOE the day after Solyndra was raided by the FBI. And though not mentioned by name, let’s not forget the most famous solar manufacturer, Solyndra. (BTW, Solopower uses the same technology as Solyndra)
Boy, DOE sure can pick ‘em!
Whether He Likes It Or Not, This Is Obama’s DOE and Green Jobs Situation
- The Obama administration said a $38.6 billion DOE loan guarantee programwould create or save 65,000 jobs. The program has created 3,545 new, permanent jobs after giving out almost half the allocated amount of loan money. As of September, 2011, DOE had dispensed $18.1 billion. Just so you know, that’s $5,105,782 per job.
- President Obama pledged in 2008, while a presidential candidate, to create five million green jobs over 10 years. That pledge was overly optimistic. A study by the Brookings Institute found clean-technology jobs accounted for just 2 percent of employment nationwide, while the nationwide unemployment rate is currently over 9 percent, about 13.9 million people.
- The green jobs and new jobs record is even more depressing when you consider that almost any job can be considered a new green job. For example, anything that helps put America on the path to a cleaner and more efficient future can be considered a green job. That means jobs in the public transit sector (drive an electric motor bus), jobs in green building (janitor in a green building), or jobs in energy efficiency (making light weight, high strength steel) can be considered new green jobs. (Building an SUV? Blue-collar. Building a hybrid? Green-collar) The category can get imprecise. There can be temptation towards green-jobs inflation, because the idea is that environmentalism can actually add green jobs is key to this argument. Obama has said that he wants to create 5 million new green jobs, but it’s impossible to sayhow many of those jobs will be new, and how many will be shifted over from less green industries.
- Money to help support the renewable energy industry from the 2009 stimulus bill continues to go overseas. In fact, more than 80 percent of the first $1 billion in grants to wind energy companies went to foreign firms. The largest grant made under the DOE program so far, a $178 million payment, went to Babcock & Brown, a bankrupt Australian company that built a Texas wind farm using turbines made by a Japanese company. All this from a president who chastises companies for out-sourcing.
When government steps in to pick winners and losers based on politics it promotes crony capitalism. A restrained federal government is essential to stopping the crony capitalism that’s ruining our markets.
But that’s just my opinion.