Major Energy Failure

In my November 19, 2011 - So-called Energy Failures blog I addressed what I knew at the time regarding US attempts at curtailing global warming. The January 26, 2012 Washington Post said - Ener1 is the third company to seek bankruptcy protection among those the Energy Department backed as part of the president’s signature program to invest in clean energy. Solyndra, a California solar-panel maker, and Beacon Power, a Massachusetts energy-storage firm, entered bankruptcy court proceedings in the fall, after having received taxpayer-guaranteed loans of $535 million and $43 million, respectively. One of Ener1’s key struggles has been its reliance on one financially troubled customer, Think; the Norwegian carmaker filed for bankruptcy protection in June 2010. In his State of the Union address Tuesday, President Obama foreshadowed the bad news by saying that he remained proud of his administration’s $80 billion commitment to clean-energy projects and companies, despite periodic failures. “Some technologies don’t pan out; some companies fail,” Obama said. “But I will not walk away from the promise of clean energy.” House Energy and Commerce subcommittee Chairman Cliff Stearns (R-Fla.), who has led the congressional investigation into Solyndra’s loan, called Ener1 part of the “growing list of failed companies that went belly up” with taxpayer money. Ener1’s application for stimulus money had bipartisan support among Indiana lawmakers. The company received $10.5 million in grants and contracts under the George W. Bush administration. An Energy Department spokeswoman Jen Stutsman said “While it’s unfortunate that Ener1, the parent company, has entered a restructuring process, the new infusion of $80 million in private capital demonstrates that the technology has merit”.

On April 8 the Chicago Tribune said – The company tapped the country's top scientists at Argonne National Lab in Illinois, US taxpayers pledged up to $118 million in federal funds and $80 million in state and local incentives (were committed) to help Ener1 produce cutting-edge battery technology for electric cars and the US military. Vice President Joe Biden said in a January 2011 speech (at Ener1’s facility in Indiana) "This is about the future. And the question is which nation is going to seize the future. Some nation is going to grab it by the throat. One of the nations of the world is going to lead the world in green energy and technology." That nation, it turns out, is Russia. The company's technology is owned outright by Boris Zingarevich, a Russian businessman with ties to Russian President Dmitry Medvedev, a fact that concerns some technology experts in the US. Zingarevich acquired Ener1 out of bankruptcy March 30 with an agreement to infuse $81 million in financing, giving him a sophisticated line of batteries that can power electric cars, store electricity for power grids and supply portable power for soldiers. The deal for Ener1 shows how the global economy can blur the lines between private business and national interest. While there have been instances of Russian nationals accused of using illegal means to acquire US technology, US government said there is no law that bans transferring technology paid for by US taxpayers to foreigners. Wealthy Russians are major investors in the US, owning stakes in companies such as Facebook and Twitter, and Zingarevich was Ener1's largest shareholder from the beginning in 2002. Yet there is a big difference between being a shareholder and gaining control of a company. "In a company whose ownership is connected to Medvedev, you have a golden opportunity for a military technology transfer and perhaps civil transfer from the US to Russia at no cost" said Stephen Blank, an expert on Russia and a research professor of national security affairs for the Strategic Studies Institute at the United States Army War College. Russia is second only to China in trying to gain high-tech information related to military uses, energy generation and manufacturing, according to the US Office of the National Counterintelligence Executive. In the case of Ener1, neither the Department of Energy nor the Navy checked on foreign ownership before awarding the company grants and research and development contracts. The Army, which also awarded contracts, said individual employees underwent routine background checks as contractors but scrutinizing the company's ownership structure was not part of its purview. The Department of Energy, in an email, said it was only interested in whether the company could successfully produce and sell its batteries. The Navy said it didn't place restrictions on foreign access to the company's work on unmanned aerial vehicles, a highly sought-after technology, according to the intelligence community, or to battery technology that could be used to track US military personnel. Citing national security concerns, US Rep. Cliff Stearns, R-Fla., chairman of the Energy and Commerce Committee's Subcommittee on Oversight and Investigations, is seeking internal documents from the White House, Department of Energy, Ener1 and its EnerDel battery unit. "There is definitely a growing concern about a foreign-controlled or owned company attempting to gain a foothold into our supply chain in the United States," said Stearns, whose subcommittee held a hearing March 27 about such threats. "We need to make sure the federal government isn't an unwitting accomplice to the theft of our own national secrets by providing them with multimillion-dollar government grants,'' he said in a statement, referring to battery technology produced in concert with US scientists.

Green technology (causing fewer pollutants) is the future and our public and private sector didn’t step up. It’s discerning that I didn’t hear about this in the news.