Renewable Energy: Bubble, Scam, or Both, Part 2

The spreading eddies of the Solyndra scandal are “changing the narrative,” as the meme-sters like to say.   (And yes, I’ve refrained from commenting on the White House Solyndra-related email that said Joe Biden’s office was “orgasmic” about Solyndra.  I’m tempted to say Biden and his people need to get out more, but doesn’t he get out enough?  Besides, some stories are best left to Jon Stewart.  More interesting is the email where a White House staffer made the case for firing Stephen Chu as secretary of energy.  But doesn’t he have a Nobel Prize?  Maybe someone has figured out we’d be better served if he had an MBA instead.)

The media is increasingly turning skeptical of the green energy bandwagon.  On top of the stories noted here the other day, yesterday’s Washington Post has a story from one of their energy and environment beat reporters, Steven Mufson, entitled “Before Solyndra, a long history of failed government energy projects.”

Solyndra, the solar-panel maker that received more than half a billion dollars in federal loans from the Obama administration only to go bankrupt this fall, isn’t the first dud for U.S. government officials trying to play venture capitalist in the energy industry.

The Clinch River Breeder Reactor. The Synthetic Fuels Corporation. The hydrogen car. Clean coal. These are but a few examples spanning several decades — a graveyard of costly and failed projects.

Not a single one of these much-ballyhooed initiatives is producing or saving a drop or a watt or a whiff of energy, but they have managed to burn through far more more taxpayer money than the ill-fated Solyndra. An Energy Department report in 2008 estimated that the federal government had spent $172 billion since 1961 on basic research and the development of advanced energy technologies.

What does Washington have to show for these investments? And should the government even be in the business of promoting particular energy technologies?

Finally, we’re asking the right question.  I noted in the discussion thread in the previous post, and implicit in other posts such as the one on fusion energy a while ago, that the single greatest blunder of the Obama Administration is muffing the distinction between advanced energy research and deployment of existing technology.  In this they are only following Al Gore’s mindless insistence that “we have all we need right now” to replace fossil fuels.  (We’ll leave aside for the moment whether this is necessary for the usual reasons; eventually it is a moot point as we and the rest of the world will need a whole lot more energy from any and all sources over the next 30 years.)  Any serious person who looks at the subject knows this is idiotically false.

Here’s a quick indicator of how things have gone so badly wrong.  Last year the CEO of Nissan, Carlos Ghosn, who in describing his company’s ambitions for their new small all-electric car, the Leaf, said the following: “We are negotiating with the U.S. government to make sure we have a reasonable return on our investments and continue to develop the technology.”

Wrap your head around that sentence for a moment— “negotiating with the U.S. government to make sure we have a reasonable return on our investments.”  Silly me—I still cling to the old-fashioned, simple-minded view that a reasonable return on investment was determined at the end of the day by the marketplace.  Simple rule: When private industry starts looking to Washington as their primary area to make profits, we’ve made a mess of things.  And the obvious guideline flows from this: research yes—subsidies, no.

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