The windfall for the industry over the last three years raises questions of whether the Obama administration and state governments went too far in their support of solar and wind power projects, some of which would have been built anyway, according to the companies involved....Read the whole thing.
November 12, 2011
"When the Obama administration and Congress expanded the clean-energy incentives in 2009, a gold-rush mentality took over."
Write Eric Lipton and Clifford Krauss in the NYT:
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41 comments:
"Gold rush of subsidies" places an innocent spin on these boondoggles. IOW, they meant well.
Pennsylvania spent almost $1 Billion on its own program called Growing Greener. No worry though since it was funded by a bond issue and politicians know that most voters don't really understand bond issues and think they are free money.
My Favorite quote: Mr. Katell said G.E. and other companies were simply “playing ball” under the rules set by Congress and the Obama administration to promote the industry. “It is good for the country, and good for our company,” he said.
yeah right. GE lobbies for these giveaways, then cashes in going and coming.
What these giveaways effectively do is leverage private investors funds, so that instead of a 7% return, the 3/4 leverage from government loans gives them four times that or 28%. Combined with the government mandate that utilities buy this overpriced juice, it is just a license to steal...
all and all, an obscene business case...
Aside from land concessions and mining rights, at least with the gold-rush there were no direct government subsidies.
From "gold-rush" to "windfall."
Or will it be "windfail"?
Remember when Jimmy Carter imposed the "windfall profits" tax on deregulated domestic oil?
For all the talk about the "contribution by the rest of us" from Elizabeth Warren et al., why not a subsidized "wind farm profits" tax?
Conservatives put off by the size of Obama's package.
President Obama on 9/13/11:
“Do we keep tax loopholes for oil companies, or do we put teachers back to work?”
So it is a loophole if it's for an oil company and it's just a gold rush if it's for so-called green energy.
Once over.
WV:dogerbo
once over
Well, back when we had our "dot-com" bust ... investors had rushed into fiber optic cables. Years before there was a technological need for them.
We've now met the need for fiber optic cables. Even though there were investors who got burned out, along the way.
It's one reason there are risks to money, when making investments.
Yes, energy needs are a subject worth researching. It's very short-sighted to say that "clean energy has no future."
However, like all investing, even when the government makes it "cozy" for big companies to "dip into a research field" ... means that it's not a cure-all.
Did our government help this field? SURE. Did Algore's ridiculous global warming schemes lead anywhere? NO. Not at all.
All politicians, ALL owe somebody for the money they receive to run.
Heck, we went into Iraq and Afghanistan, BECAUSE the Saud's already bought all of our politicians.
Will any good come of it?
We're not going to change the culture of "what money can buy."
And, the GOP? They haven't fielded a candidate, yet, that can "take out" Obama.
First, you have to come up with an alternative.
"Clean-energy" isn't going to provide one.
America would have more energy if they had put this money into subsidizing Starbucks.
This would all work fine if the supporters of these technologies used them. I would doubt there is one lefty on this blog who uses alternative power to do more than supplement their watch batteries.
This is not a conservative issue. It's an economic and political and logistical issue (energy companies would've done it anyway at their own risk). Maybe even a moral issue taking it all together.
A die-hard liberal with a lick of sense should be outraged.
"m stone said...
A die-hard liberal with a lick of sense should be outraged."
This doesn't exist because this can't exist.
When Uncle Sugar goes to shoveling out money, the vultures gather.
And no, these large windmill and solar panel projects would not have been built without heavy pressure from the Government (sticks) and grant money (carrots), since there is no way any of this can be competitive at this time.
I think there are business opportunities in smaller "alternative power" technologies, but these large government projects are strictly faith based.
And usually poorly understood and executed. F. ex., A windfarm is nice when the wind blows, but the power company still needs to keep a conventional plant running at 1/3 to 1/2 capacity alongside it and ready to kick in when the wind fails. This is usually totally ignored when the prophets of AGW sell these schemes to the politicians.
This is not a conservative issue. It's an economic and political and logistical issue (energy companies would've done it anyway at their own risk). Maybe even a moral issue taking it all together.
Actually, the problem is that energy companies wouldn't have done it anyway, because for the most part, it makes no economic sense. The only way that "green" energy makes economic sense in most instances is when you include in government subsidies and mandates. Absent such, it would mostly just be uneconomic.
Of course, the Obama people have tried to level the economic playing field a bit beyond this, by trying to make other sources of energy ever harder to produce and more expensive. And, thus, you get Yucca Flats being shut down, the EPA declaring on no credible evidence and contrary to common sense, that CO2 was a pollutant and therefore could be regulated by that agency. At a time when it appears that we may have more hydrocarbons under this country than Saudi Arabia does, any production of such from sands or shale is being actively shut down by the Administration, and the Canadians are looking at shipping their new found oil and gas from these sources to the Chinese, since we refuse to allow a pipeline to be built.
and the same applies to a solar farm when the sun does not shine, etc.
There are problems with integrating these variable sources into an electrical grid.
One problem with the gold rush analogy is that in the real gold (and silver) rush, ordinary people had a chance to get rich. In this green energy gold rush, the key to getting rich is, instead, political connections. So, while Kaiser's company only got a half a billion dollar loan guarantee, Nancy Pelosi's brother's company got a $3/4 billion dollar loan guarantee.
And, keep in mind that the reason that these companies "needed" these loan guarantees was that they couldn't raise money in the private sector, and that was because they didn't have plausible business plans, even with government subsidized "green" energy prices and subsidies. In other words, the type of people who invest money in order to make money (and not to spread out graft and corruption to friends, like the Obama DoE does) looked at the proposed investment and associated business plan, and figured that it could not realistically be expected to make back their investments.
This is what crony capitalism looks like.
This is what faux outrage looks like.
This is what crony capitalism looks like.
We are still hearing about Haliburton, et al., 3 years after Bush (43) left office, and such is being used to justify the level of crony capitalism/socialism practiced by Obama and the Democrats.
Not defending Bush, et al., but what is different here is the magnitude of the corruption. Maybe a billion or two here and there under Bush to companies that arguably were the only ones who could do the job, and trillions to every political constituent, friend, ally, or family member, under the Dems and Obama.
What is a bit deceptive about the Dems here is that a lot of the corruption is hidden, esp. when it comes to unionized government employees. What must be remembered is that money is fungible, which means that the extra "Medicaid", etc. money going to the states under this and that stimulus plan, or for other ostensibly honorable reasons, were, in fact, going to prop up the pensions, benefits, wages, and most importantly, union dues, of the unionized government workers at the state and local levels.
Some of this has been made more obvious with the President putting money for police, fire, and teachers at the top of his "Jobs" bill. Who could oppose this? Well - anyone who realizes that in a lot of jurisdictions around the country, pensions for these unionized government workers cost more every year than do the actual wages. And, anyone who realizes that the people who ultimately have to pay for these gold plated pensions and benefits don't, themselves, have anything remotely comparable.
No, this is crony socialism.
It starts with the government agencies wanting something from private industry.
Crony capitalism starts with private individuals wanting something from the government.
Otherwise, it is hard to tell the difference.
Well, duh.
You give away easy money rather than making people actually earn it in the market, of course they come running!
These projects, in almost all cases, benefit from legislation that has been passed in about 30 states that pushes local utility companies to buy a significant share of their power from renewable sources, like solar or wind power. These mandates often have resulted in contracts with above-market rates for the project developers, and a guarantee of a steady revenue stream.
Face palm.
Hey, it's free money!
Isn't it?
garage mahal said...
Conservatives put off by the size of Obama's package.
No, it's the taxpayers' package - and part of comes out of garage's hide.
And he's so glad to pay.
Carol_Herman said...
And, the GOP? They haven't fielded a candidate, yet, that can "take out" Obama.
That comes this summer, dear. Primaries and convention comes first.
He loves to imitate Europe. This is Spain all over again.
So now the economy gets soaked by paying above market rates for energy.
Subsidies generally are, and always have been, slush funds for the politically well connected. Legal stealing. This clean-energy business is a perfect example.
Obama campaigned on redistributive and retributive change. Apparently, there are a progressive number of Americans who are unfamiliar with those concepts.
As for so-called "clean energy", the operative principle is "out-of-sight and out-of-mind".
Dreams of instant gratification through the democratic process (i.e., authoritarian) and appeals to emotion have overwhelmed better judgment.
I work in the healthcare space, and I can assure you that the gold rush mentality is at least as strong in healthcare as it is in clean energy, too.
I've heard prominent people in healthcare who are proudly on the left say things like, "there is so much money to be had that we'll get rich from the table scraps." I've watched faculty members get subsidies to create the latest Center for Whatever-Is-Fashionable to do the kind of work that has been done traditionally by industry, smugly assuming that they will be more successful at discovering drugs or developing new techniques than their (eww!) profit-driven colleagues. I've watched private businesses eschew private investments, because the terms on government grants and "investments" classically socialize risk while privatizing profits. On bad days, I get so disgusted by it all that I seriously consider leaving the field entirely.
As an aside, GE Healthcare has not been shy about lobbying for and participating in the healthcare gold rush...I don't want to demonize GE, as I know a lot of good people there, but the firm is an 800 pound gorilla in the space, and, for better or worse, it is a very active participant in the legislative process.
Note that the article did not mention any particular energy achieved at present by this gold rush.
Meanwhile CA is busy revising all the building codes to accommodate the new eco law starting January 1. If you want to install new lighting or air conditioner, do it now.
BTW, if we cover the desert in solar panels, doesn't that destroy the ecosystem there?
Phil 3:14 said...
He loves to imitate Europe. This is Spain all over again.
Not to mention Greece and Italy. Before we get rid of him, GodZero will have us in worse shape that all the PIIGS combined.
PatCA,
Sssshh!
And they look kind of cute viewed from 9th Ave., NYc, NY.
I could not find this quote just now, but about a week ago, the CEO of Duke energy was asked why Duke was going heavily into wind and solar projects in the Southeast. [Duke is a major coal-powered utility]. he told the reporter it was obvious, Duke earned about 4 or 5% on its coal plants, but 25 to 28% on wind and solar.
Now you greenies get it? can you say "crony capitalism"?
Conservatives put off by the size of Obama's package.
That's a pretty good one.
Obama offered to pay their mortgages and fill their gas tanks.
Ooops. I mean, charge their Volts.
Ooops.
Well -- Whatever -- it was with someone else's money, so who cares?
Oh. NOW the NYT is caring.
Too little. Too late. When your Dream Lover has no accountability, and you don't care, you get burned too.
(Read the latest -- in the LA Times no less!) about the $433+++ million for the untested smallpox emergency vaccine which most likely is totally not necessary -- and it went to a company that the Administration kept changing the rules for -- whose major stockholder gave BHO $50,000 towards his inauguration alone and involves Andy Ubiquitous Stern on the board? Take a read. While I take a breath.)
So many chances to $uck it out. So little time! Among all his wealthy and union supporters a hit-the-jackpot mentality took over.
And the US taxpayer and economy took the hit.
re Duke Duke wants to raise its rates more than 17%. All at once. Ka-bam!
Funny.
Their request to merge with Progress Energy (the other biggy in the SE) was turned down -- or is in thwe process of being truned down) and so this is what we get.
They would have laid off 2000 people with the merger. And raise the rates to pay for the merger (what were they thinking)?
So it sure looks like payback by Duke.
wv afflop
Honest to goodness.
Lipton is God! No, wait, that's Clapton.
@Jal,
That HHS story is truly obscene. A story like that from someplace like the LAT says to me that it's worse than stated.
I know a lot about government contracting
a Cost reminbursable contract where the government had already kicked in $100 mil in development costs would be limited to a fee of under 10%. Most likely 6-8%. rather than 180% as requested.
When Democrats screw up it's "Congress".
When Republicans screw up it's "Republicans".
How do you know a Democrat is lying? Their lips move.
'Went to far"?
If Bush had of done what Obama did the press and liberals would be screaming for impeachment.
All we are seeing is the Chicago way that Obama is well versed at.
Most of these 'green' companies are owned by Obama donors and supporters. Crooked as Al Capone's operations. And remember, Capone as Chicago to!
They give Obama a million and he steers 500 Million dollar loans their way. It's just that simple.
Next Garage is going to tell us just how big Obama's "package" is.
Oh and on the smallpox thing -- the vaccine we do have works for 4 days after exposure.
In an emergency I could drive just about every place in the US in 4 days. How many millions do they think there could be who could be infected and go 4 days without having access?
I know we screw up lots of things, but something inside me says an attack like this would be like Flight 93. We would do what it tookl and get the stuff out in less than 4 days by dogsled if we had too.
With every passing guy this guy Makes. Me. More. Sick.
He is worse than I imagined.
(So how come #Occupy isn't #Occupying Siga? Or Perelman's front lawn?)
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