The Green Energy Gamble

Recent headlines scream with grim news: over $15 trillion in national debt and growing, and little to no economic growth. The really depressing topic right now is gas prices rising to near record levels with no end in sight. Oil is connected to virtually every aspect of our lives (e.g. food, transportation, clothing, medicine) and the family budget really feels the pain as the cost of just about everything rises. What is our President doing to help solve this problem? Gambling with our money.

How else could you describe the actions of this administration as company after company in the green energy industry falters or fails after BILLIONS of taxpayer dollars were poured into them?

The Department of Energy (DOE) has given federal loans and grants to alternative energy companies as part of the Recovery and Reinvestment Act of 2009.[1] CBS recently reported on the financial problems of 12 of these energy companies. At least five of them have filed for bankruptcy: Beacon Power, Evergreen Solar, SpectraWatt, AES’ subsidiary Eastern Energy, and Solyndra.[2]

All of the other companies mentioned in this CBS article, such as Nevada Geothermal, First Solar, and SunPower are facing potential financial problems as well. Even more disturbing, according to a University of Maryland economist Peter Morici, the Department of Energy’s “investment” of our money, in the now bankrupt Beacon Power company, was the equivalent of a below investment grade junk bond. Meaning, Beacon Power had a 70% risk of failing in the long term and the Department of Energy knew it. They knew it had a Standard and Poor rating of CCC+ and they still gave Beacon Power the loan![3]

Colorado based Abound Solar, another beneficiary of $400 million of our money, recently laid off 70% of its workforce, that’s almost 300 people. The company also received these loans in spite of major red flags from Fitch Ratings.[4]

The Government Accountability Office (GAO) has criticized the DOE’s procedure for handing out these loans and grants. According to Peter Schweizer’s book Throw Them All Out, of the first 18 approved loans that the GAO examined in March 2011, none had been properly documented. They lacked clear review processes, analysis and performance assessments.[5]

In fact the Department of Energy’s own inspector general, Gregory Freidman, severely reprimanded the alternative-energy loan and grant programs for their lack of transparency and accountability; even testifying that contracts were steered to “friends and family.”[6]

Ratings companies and government personnel are not the only ones to raise concerns. Spanish economist, Gabriel Calzada, has been sounding the warning bell hoping to prevent America from following in the folly of Spain’s “green” footprints. His conclusions based on his study of public aid for renewable energy sources, which his own government recently validated but our government is choosing to ignore, are extremely disturbing.[7]

For every green job “created” by the Spanish government, 2.2 jobs were lost; and most of those green jobs were only temporary. To make matters worse Spain’s electricity prices, which had been one of the lowest in Europe, skyrocketed. The taxpayers are now on the hook for billions of dollars in losses on green energy loans.[8] Does this story sound familiar?

Renewable energy sources can have a place in our nations energy supply but experience shows that artificially propping up an industry with taxpayer money ends in failure.  To have politician’s deciding which companies are the winners and the losers is insanity. In fact we’ve often heard quoted this definition of insanity, “doing the same thing over and over again and expecting different results.”

With that in mind what can we discern from this quote by President Obama at a fundraiser in February 2012?

“With or without this Congress, I’ll continue to do whatever I can to develop every source of American energy, so that our future isn’t controlled by events on the other side of the world.”[9]

Does this mean that despite the dismal results and billions in losses thus far in taxpayer-backed loans to the green energy industry, he’s going to continue pouring more of your hard earned money into it? To top it off, he’s apparently going to do it even if Congress, meaning you the people, doesn’t want it. Is this gambling, insanity or worse?

Obama has made it clear that he favors the green energy industry through his comments regarding ending the oil industry’s “subsidies” (which are actually legal tax deductions that all manufacturing industries take); his excessive regulations on the fossil fuel companies; and his refusal to drill for more oil.[10] [11] We can only conclude that we will indeed be following in the economic footsteps of Spain if this president has his way.

We CANNOT let that happen. Our national debt is crippling us. Our energy costs are crippling us. There is abundant oil and gas in the U.S. that can be safely extracted, thanks to innovation over the years.

One only has to look at the flourishing economy in North Dakota, thanks to the oil boom on private lands, to see what our national economy could look like. Low unemployment, good paying jobs, and government surpluses could be our news headlines as well IF we have the right people in office.[12]

We must get informed on this issue; find the candidates who understand our nation’s problems and how to resolve them based on facts and results, not political favors; and then tirelessly work together to get them elected.  The solutions are out there; but they’re not found at the gambling tables!

Check back soon at http://truecapitalism.org/ for the next article on this topic to find out who IS winning at the gambling tables; the rigged tables that is.