September 29 2011
Solyndra: Lesson Unlearned
We all agree that the Solyndra scandal was a terrible waste of taxpayer money. But thank heavens we found out about it in time to prevent the federal government from wasting more of our money in the future on such shaky ventures! Oh, wait:
If you thought the $535 million Solyndra scandal had chastened the fearless venture capitalists of the Obama Administration, think again. The Department of Energy shovelled out $1.1 billion in new loan guarantees to solar projects in Nevada and Arizona Wednesday, and more deals are pending before the $18 billion program funded by the 2009 stimulus expires Friday.
We'll go out on a limb and say the rush raises questions about how carefully these outlays are being vetted, especially in light of solar-panel-maker Solyndra's August bankruptcy. The FBI, Treasury Department and Congress are all investigating who approved the politically connected California company's loan guarantee and why. The case is an embarrassment for the White House, which touted Solyndra as a model for its green jobs agenda.
Yet the Department of Energy seems oddly removed from the uproar. In a statement yesterday, Secretary Steven Chu said: "If we want to be a player in the global clean energy race, we must continue to invest in innovative technologies that enable commercial-scale deployment of clean, renewable power like solar." Translation: China is throwing taxpayer money into solar, so Americans should, too.
Because China isn't a free society, we don't really know what they are investing in green energy or how well it is working out for them. But we do know that green energy in the U.S. is disastrously expensive.
As the piece I just quoted in the Wall Street Journal points out, the Energy Information Administration puts the cost of energy from natural gas-fired plants at $63.10 per megawatt hour; by contrast the green projects so beloved of the administration, including the one just funded yesterday, $243.20 and $311.80.
Yesterday's $737 million loan guarantee to Tonopah Solar Energy is supposed to create "600 construction jobs and 45 permanent jobs," according to the company. Another $337 million loan guarantee to Sempra Energy is expected to "fund up to 300 construction jobs." The Journal points out that this is $1.1 billion for 45 permanent jobs!
But thank heavens Congress hasn't approved that awful Keystone pipeline:
By comparison, the proposed Keystone XL pipeline to carry crude oil from Western Canada to refineries on the U.S. Gulf Coast would create some 13,000 union jobs and around 118,000 "spin-off" jobs-if the U.S. State Department ever gets around to approving it. And taxpayers wouldn't have to risk a dime.
Oh, wait-that's a pretty good deal. And did you notice that you and I aren't on the hook for any involuntary investments at all?
I have nothing against green energy. I hope it works and, if it shows promise, investors will come. But here is how the administration's policy works: if it's a dog that is never going to fly with real investors, let's just throw hundreds of millions of taxpayer dollars at it. Talk about an addiction!