It appears so. CBS News’ Sharyl Attkisson (yes the same Ms. Attkisson who has been the only reporter following up on Fast and Furious) has checked and it seems Solyndra was just one of many “green companies” which the Obama administration attempted to pick as “winners” by “investing” your money via loan guarantees:
Take Beacon Power — a green energy storage company. We were surprised to learn exactly what the Energy Department knew before committing $43 million of your tax dollars.
Documents obtained by CBS News show Standard and Poor’s had confidentially given the project a dismal outlook of "CCC-plus."
Asked whether he’d put his personal money into Beacon, economist Peter Morici replied, "Not on purpose."
"It’s, it is a junk bond," Morici said. "But it’s not even a good junk bond. It’s well below investment grade."
Was the Energy Department investing tax dollars in something that’s not even a good junk bond? Morici says yes.
"This level of bond has about a 70 percent chance of failing in the long term," he said.
In fact, Beacon did go bankrupt two months ago and it’s unclear whether taxpayers will get all their money back. And the feds made other loans when public documents indicate they should have known they could be throwing good money after bad.
That’s one. But there are more:
Others are also struggling with potential problems. Nevada Geothermal — a home state project personally endorsed by Senate Majority Leader Harry Reid – warns of multiple potential defaults in new SEC filings reviewed by CBS News. It was already having trouble paying the bills when it received $98.5 million in Energy Department loan guarantees.
SunPower landed a deal linked to a $1.2 billion loan guarantee last fall, after a French oil company took it over. On its last financial statement, SunPower owed more than it was worth. On its last financial statement, SunPower owed more than it was worth. SunPower’s role is to design, build and initially operate and maintain the California Valley Solar Ranch Project that’s the subject of the loan guarantee.
First Solar was the biggest S&P 500 loser in 2011 and its CEO was cut loose – even as taxpayers were forced to back a whopping $3 billion in company loans.
Anyone – does the Constitution have a “venture capitalist” clause in it that we somehow missed? Is it the job of our government to pick winners and losers in a market using taxpayer dollars?
Well according to the brilliant Steven Chu, Secretary of Energy, no politics were involved in any of this. But:
Nobody from the Energy Department would agree to an interview. Last November at a hearing on Solyndra, Energy Secretary Steven Chu strongly defended the government’s attempts to bolster America’s clean energy prospects. "In the coming decades, the clean energy sector is expected to grow by hundreds of billions of dollars," Chu said. "We are in a fierce global race to capture this market."
The government is blowing it big time. Why? Because, despite Chu’s claim, it is all about politics. And ideology.
In fact this administration has no trust in markets to develop the technology they desire so they’re sold on the idea that the central government should be used to facilitate their ideology. And that is precisely what this is all about. Solyndra, Beacon Power, Nevada Geothermal, SunPower and First Solar are just failed indicators of the bankruptcy of their approach. Given a treasury and the ability to spend money almost unchecked, they’ve committed to implementing their ideology on the back of taxpayers. And, unsurprisingly, they’re failing miserably.
But we’re assumed to be so dumb we can’t see through their political scheme.
Unfortunately, as it has been for quite some time, no one will be held accountable for this fiasco that has cost us billions in money we simply don’t have. If anyone ever wanted a case study of how out-of-control and outside the Constitutional box government has become, the failed “green energy” sector loan program provides the perfect scenario.
Meanwhile, in Canada:
Canada is now looking to Asian countries to market its abundance of oil, natural gas and minerals as plans to build the proposed Keystone XL pipeline have stalled with the U.S. administration.
Prime Minister Stephen Harper will travel to China next month to discuss selling Canada’s bounty to the rapidly growing nation.
The preferred initial plan was to build the $7 billion Keystone pipeline to deliver Alberta’s oilsands crude to refineries in Texas on the Gulf of Mexico.
Harper reasoned that the U.S. government would prefer to deal with a friendly neighbor to help meet its energy needs while creating thousands of jobs.
With widespread opposition by U.S. environmentalists, the Obama administration has delayed its decision on whether to approve the project proposed by energy giant TransCanada Pipelines.
The new plan would market to China and Asian countries through the proposed Northern Gateway pipeline that would transport Alberta’s oil and natural gas to British Columbia for shipment by tankers.
Yup, no politics at all.
I don’t think I have to remind regular readers here that I’m not a fan of subsidies – any kind of subsidies. That being said, and the fact that despite my desires, we seem bound and determined – or at least our politicians are – to subsidize “green energy”.
Gates lays it out for our big government greenies in a way that at least would send subsidies to the right place vs. how they’re being planned as we speak.
There’s the “right way” (again disclaimer in place) and, as Gates puts it, the cute way (aka the “wrong way”):
If you’re going for cuteness, the stuff in the home is the place to go. It’s really kind of cool to have solar panels on your roof. But if you’re really interested in the energy problem, it’s those big things in the desert….despite often-heard claims to the contrary, ethanol has nothing to do with reducing CO2; it’s just a form of farm subsidy. If you’re using first-class land for biofuels, then you’re competing with the growing of food. And so you’re actually spiking food prices by moving energy production into agriculture. For rich people, this is OK. For poor people, this is a real problem, because their food budget is an extremely high percentage of their income. As we’re pushing these things, poor people are driven from having adequate food to not having adequate food…
You could have the government throw money at the most politically favored guy in the country to go build a battery factory. And there are billions of dollars that have been assigned to that waste…. I think people deeply underestimate what a huge problem this day-night issue is if you’re trying to design an energy system involving solar technology that’s more than just a hobby. You know, the sun shines during the day, and people turn their air conditioners on during the day, so you can catch some of that peaking load, particularly if you get enough subsidies. It’s cute, you know, it’s nice. But the economics are so, so far from making sense. And yet that’s where subsidies are going now. We’re putting 90 percent of the subsidies in deployment—this is true in Europe and the United States—not in R&D. And so unfortunately you get technologies that, no matter how much of them you buy, there’s no path to being economical.
So he’s right – it’s R&D where money should be going, not picking winners and losers all while disrupting markets and punishing poor people because government is economically ignorant of markets.
The unfortunate part about the Gates statement is it accepts subsidies as a good thing even if misdirected.
Apparently how he gained his billions was because government somehow subsidized it in some ways. No markets. No venture capitalists seeing a good idea, visualizing a market for it and funding the research necessary to cash in on it.
Nope, gotta have subsidies and all the negative effects it brings to the markets I guess.
Anyway, he’s right about the meta-picture – if we want to get serious about “green energy” then R&D is where the game is now. Not “deployment” as Gates calls it – the stuff is not ready for prime time.
Oh, and government? Get out of the freakin’ way, will you? The government is so scared that someone will make billions off of a good idea in a free market that they’ve invented this myth that the job is just too big for private markets.
Get out of the way.
Well, well, well – “green energy” costs strike again. You remember the controversial off-shore wind turbine project that was proposed for an area off the coast of Cape Cod in Massachusetts? Well it finally got approved. And surprise – it’s revised costs has the project in “Big Dig” territory:
The controversial Cape Wind project will cost taxpayers and ratepayers more than $2 billion to build – three times its original estimate.
That colossal cost is the driving force behind the sky-high electric rates it plans to charge Massachusetts customers in coming years.
Cape Wind, which wants to build 130 wind turbines off the coast of Cape Cod, and National Grid announced yesterday that they’ve reached an agreement to start charging customers 20.7 cents per kilowatt hour in 2013 – more than double the current rate of electricity from conventional power plants and land-based wind farms.
Under the 15-year National Grid contract, the price of Cape Wind’s electricity would increase 3.5 percent each year, pushing the kilowatt price to about 34.7 cents by the time the contract ends.
The current price of National Grid’s non-wind electricity is now about 9 cents per kilowatt. That means the cost of fossil-fuel generated electricity would have to increase nearly four-fold just to keep pace with Cape Wind’s prices over the next 15 years.
This little doozy is now on the planning boards – another, in a long line of costly projects backed by government that will cost consumers more than it’s worth and not deliver that much in terms of increased energy – certainly not that much if you look at the price.
“I’m glad it’s your electric bills and not mine,” said Robert McCullough, president of McCullough Research, an Oregon energy consulting firm, referring to Cape Wind’s prices.
He said Massachusetts would have been better off going with less costly land-based wind farms.
“Why are you spending billions (on offshore wind) when you can pay half that with traditional wind?” he asked.
You tell me? And, by the way, how did the costs of building the system suddenly triple? This was only discovered after approval had been granted? Oh – wait a minute:
Three sources familiar with the Cape Wind-National Grid negotiations confirmed yesterday that Cape Wind’s final price tag will be above $2 billion.
Because of available federal tax credits, Cape Wind could reap about $600 million in taxpayer subsidies if the final cost is $2 billion, in addition to its higher power rates.
So the incentives are provided by government? Does this make Cape Wind a “greedy utility?”
Oh, and I love this:
Cape Wind president Jim Gordon yesterday again refused to say how much construction will cost, citing competitive talks he’s now in with construction companies.
Cape Wind and National Grid, which is planning to buy half the energy the wind farm will produce, said their rate deal will add about $1.59 a month, or about 5 cents a day, to the current ratepayer’s bill in 2013.
“The question is whether folks are prepared to pay five cents a day for a better energy future,” said Gordon.
The answer should be “no, they’re not. Either build the project at the original price, bring it on shore if that isn’t possible or forget it.”
The pricing has to be approved by Massachusetts Department of Public Utilities, but I don’t think there’s much of a question as to how that will go:
Ian Bowles, Gov.Deval Patrick’s secretary of energy and environmental affairs, said the National Grid prices are competitive if renewable energy credits are deducted.
Those who aren’t politicians interested in building a green energy legacy this say otherwise:
But energy experts said the proposed National Grid rates, especially with the annual inflation adjustments, add up to a very high price.
“This would seem to me to be a most unwelcome additional energy tax” on customers, said Peter Beutel, an energy analyst at Cameron Hanover in Connecticut.
And that’s precisely what this ends up being – a energy tax to build something that could be build cheaper on shore and which, in reality, won’t add that much energy to the national grid. A rather dubious recommendation for its continuance. I don’t know about you but if I were a citizen of Massachusetts, I’d be raising hell about this and demanding the project be shelved until it can be shown to deliver the promised “clean, green, renewable and cheaper energy” Greenies are always telling everyone these sorts of projects will deliver.
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