So-called Energy Failures

Reminder, the Republicans stopped the smog rule from being passed as it tried to put more regulation and oversight on businesses that do not want to pay for the increased cost associated with reducing global warming (shows a lack of consideration for the people and our environment). Because of this attitude, per Wikipedia, the US is far behind everyone except Afghanistan, Andorra and South Sudan. (Yes, we are even behind Somalia when it comes to reducing dangerous gases into the atmosphere.) So, let’s talk about the so-called energy failures that have been in the news the past few months.

We have plenty of sun in the US however it’s being said that solar is unlikely to contribute much (to our clean energy efforts) without a technological break-through that makes it price competitive to wind. I need to say that not all areas of the US are conducive to wind technology. Actually, I don’t think that any area can be fully supplied by a single energy source but that’s beside the point. Solyndra (a solar panel company) that received over $535 million in loan guarantees from the government (plus money from private investors) went bankrupt and didn’t even have money for employee severance pay. Republicans are saying they were leery from the beginning as Solyndra was shelved by the Bush administration and put on the fast track just 6 days after Obama took office. They’re saying the business plan was flawed from the beginning. When I first heard this story, the company said that despite strong growth it just couldn’t compete with Chinese companies making the same product at a much lower cost. This made no sense to me until I heard that it was costing Solyndra $6 to make the solar panels they were selling for $3. I don’t know if Solyndra started small to assess its competition or not. I do know that one of Solyndra’s principal backers was George Kaiser, an Oklahoma billionaire and one of Obama’s big fundraisers. I would think a backer would be more aware than the government about the stability of a company; after all they’re in the business of making money. The only time backers wouldn’t want to make money is if they needed a write-off. Now, if the Republicans truly don’t want the taxpayers holding the bag, then they should use this as an opportunity to stop bankruptcy or at a minimum change the way we look at things. A backer could be just as accountable as the company, like co-signing a loan and cover the company’s loses. This situation is also a reason why CEOs and board members should be limited in the money paid; better yet, no profit no pay for these folks as they obviously weren’t fulfilling their job commitment. I do think we should get rid of bankruptcy laws but I don’t think people shouldn’t be paid (just not outrageously).

On October 21, 2011 it was reported that the Obama administration in 2009 loaned more than $500 million to Fisker Automotive to make electric cars in the US. However, Henrik Fisker, CEO and European auto designer, said no US manufacturer would do it so the government gave approval for the production of the vehicles, Karma, to be made overseas. So far the loan made 500 jobs in Finland. Fisker says the plan is to make a compact version of the car in the plant in Delaware which should create 1,000s of jobs next year. On October 25^th, ABC News reported that California auto company Tesla Motors, making all electric cars, also received $500 million and is in the red. Tesla’s VP, Diarmuid O’Connell says they will lose money in the foreseeable near future but they will make a profit. The Department of Energy is saying that taxpayer money has already created design and engineering jobs in the US and will ultimately create 2,500 more jobs. I am not surprised to hear that a US gas dependent auto company didn’t want to assist Fisker. All companies start in the red (land, manufacturing plants, utilities, personnel and more) because they don’t have a product as soon as the doors open. The reports on the auto companies were too soon and gave the American people a false sense of wasted money during hard times.

It’s said that all these green start-ups are risky by nature and nothing is guaranteed. True but consider the alternatives. We can do like the Chinese government and pay the people little (putting more people into poverty) or we can step up as a government. It was reported that in 2010 China invested $54.4 billion in clean energy products while the US spent $34 billion. The people just like its legislators need to think long-term. Clean energy vehicles will be necessary to reduce our share of the world’s pollutants and ultimately will reduce the cost of transportation. Additionally, clean energy will reduce the cost of our utility bills. The US is supposed to be a world leader. Many other countries are supporting green projects. We look foolish giving billions in tax credits to those that destroy the air while not supporting those that can help reduce global warming.