Obama’s ‘green jobs’ fizzle

One of the most disastrous policy areas for the Obama Administration has been its propensity toward “leveling the playing field” by picking winners (good guys) and losers (villains), and then rewarding the winners with government largess.  Unfortunately, many of the winning ideas chosen by the Obama Administration are concepts that have consistently proven to be inefficient, very costly, and incapable of living up to their promises.  The most prominent of these failed ideas is ‘green energy’.

Today, Evergreen Solar, a Massachusetts-based company that received millions in government grants for green energy development and production, officially filed for Chapter 11 bankruptcy protection.  This action follows a large-scale downsizing earlier this year in which a significant portion of the company’s manufacturing capabilities were relocated overseas, to China.

This comes just a few days after President Obama visited another ‘green energy’ company, Johnson Controls, Inc. of Holland, Michigan, which received $300 million in Stimulus funds to aid in the development of a solar cell battery manufacturing facility.  That facility now employs 150 people — a “success” at $2 million in Federal money per job created.

And it looks like ‘green energy’ companies are about to face an even tougher road ahead: Venture Capitalists Back Away From Clean Energy:

Venture capitalists have traditionally focused on companies with low capital requirements that can quickly get bought up or go public. Many Internet startups fall into this category. But in recent years, many venture capitalists have been enticed to risk longer-term, high-capital energy investments in clean energy, thanks to generous government subsidies in renewable energy markets. In particular, they spent hundreds of millions of dollars on solar-cell startups that need to build expensive equipment and factories to prove their technologies, and can take many years to generate a return on investment.

Now many venture-capital firms are going back to their roots. Dozens recently stopped making initial investments in clean technology companies, according to Dow Jones Venture Source. Many that continue to invest in clean technology are shifting to areas such as energy efficiency, which includes low-capital projects such as software for monitoring and reducing energy consumption, according to an analysis by the Cleantech Group.

The money that still goes to the solar industry is now directed to companies with small capital requirements. Rooftop solar panel installers are one example. (In June, Solar City got $280 million from Google to fund solar installations.) There’s still some funding for solar-cell companies, such as for 1366 Technologies and Alta Devices, that are developing technology that the companies say can compete with fossil fuels. But “it’s a harder place to raise funds for new ventures,” says Sheeraz Haji, CEO of Cleantech Group.

This really shouldn’t be surprising, given that 1) venture capital companies are very picky and generally limit their funding only to startups with abnormally high potential for very aggressive growth; and 2) green energy products and services have a very poor track record of producing the ratio of high profits vs. short time frame that venture capital investors usually demand.  And in reality, green energy has a very poor track record of producing any kind of profit at all.  In most cases, green energy programs have to be continuously subsidized, because they cannot generate enough cashflow to pay for themselves.

This is not to say that we should stop research into wind or solar energy technologies.  But such research should be limited to private organizations willing to invest their own resources in green energy development. However, in order to do this, private energy companies need to be permitted to earn healthy profits from the production of traditional energy sources like fossil fuels, which will result in more cash at hand to spend on research and development.  Private companies funding their own research is a far more efficient and cost-effective way to accomplish green energy development, when compared to government taking money away from traditional energy companies through taxation, then burning a significant amount of that money on bureaucratic and administrative costs, then finally awarding subsidies to companies that otherwise would not be able to stay in business for themselves.

Of course such a policy shift would require common sense, something that seems to be an increasingly scarce commodity in Washington DC these days.

Oh, For God's Sake, Not This Again...
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  • retired.military

    “Obama’s ‘green jobs’ fizzle”

    In other news the sun rose in the east today.

  • You have to understand the difference between cost and value. Rather,
    the average consumer does. I think it’s perfectly acceptable,
    commendable in fact that the president and his administration is putting
    so much emphasis on green technology and it’s application across the
    country. If we wait until the average consumer clamors for it, it’ll be
    too late. Let’s think about this practically for a second.

    Does
    the “global warming” phenomenon effect the average citizen in his or
    her daily comings and goings? No. It doesn’t. That’s why scientists and
    “those in the know” find it necessary to implore people to change their
    daily habits to help with the cause. Keep in mind that they always
    emphasize the fact that “it may not seem significant but together we can
    make a big difference” or some other such message. Why is this? It’s
    because if we “don’t start to change soon it’ll be too late.”

    So,
    what about green technology? The purpose of encouraging green
    technology is to help us continue to operate without depleting our
    natural resources which ARE in fact finite despite suggestions to the
    contrary. But, what does that mean to the average consumer. When you
    fill up your gas tank, do you care how much oil is left in our reserves?
    Probably not. All you care about is filling your gas tank so you can
    get to work. As long as you can afford to do that, you’re OK. But if we
    wait until the supply is low enough to effect prices at the pump, it’s
    too late to start researching new technologies that take years to
    develop and even longer to bring to the marketplace. The average
    consumer doesn’t have the foresight for use to wait for them to pull the
    trigger.

    Now, do I want the country to spend endless amounts
    of money on something that is ultimately a waste of money? Of course
    not. But that’s when the difference between cost and value come in. It
    costs a significant amount of money to encourage these “green jobs” to
    be sure. Then again, anything worth doing costs. The question is, what’s
    the value? Is it valuable to be able to preserve our natural resources?
    Is it valuable to be ready for the eventuality when we HAVE to stop
    relying on fossil fuels because the supply will be so low? Is it
    valuable to give companies the ability to change with the technological
    times instead of being left behind when the rules of the game change
    (e.g., from petroleum to green energy)? I would say it is valuable. The
    president is just showing that he’s willing to pay the cost for that
    value. It just so happens that some people are too narrow-minded to do
    the same. 

    • Anonymous

      “Then again, anything worth doing costs.”

      Bullshit!  Every energy transition in the past was made because the “new” technology was cheaper then that previously used.  Burning wood, to burning coal.  Burning whale oil to burning petroleum.  Petroleum to natural gas.

      AND IT WASN’T FUNDED BY THE FREAKING GOVERNMENT!

      • Well – it should have been!  Otherwise, how would you know if you’re getting good value for the cost you’re laying out?

        I swear, I’m getting so tired of the ignorant cut&pasters who pretend reality is just this fictional construct that can be modified if they just find the right words.  

        As you point out, GarandFan, the ‘bew’ was seen as better and cheaper than the old.  Not more expensive and worse – but we’ve got to go to it because if we don’t then maybe perhaps something might or might not happen in the near or far future.  That’s not an argument that’ll sway anyone with half a brain, especially when the evidence is pointing in other directions.  

        It would have been pretty much impossible to go from wood-fired boilers powering steam motors to natural gas fired boilers powering steam turbines without intervening steps.  The technology has to be built, and developed, and improved – and it has to (as you point out) be seen as decidedly BETTER in order to get people to adopt it.  I don’t think that CFLs are better than incandescents because they use less power – I think they suck mightily on the light and life issues, not to mention mercury in them.  (Not really worried about that, but any bulb that needs to be sold with a hazmat cleanup procedure isn’t something ready for prime time.)  LEDs?  Not quite ready yet either.  

        Solar and wind?  SO not ready for prime time.  The technology/efficientcy/cost curves don’t meet up at all for them, and you can’t force them to through massive government spending.

        • Anonymous

          Here, Here!

    • jim_m

      Does the “global warming” phenomenon effect the average citizen in his or her daily comings and goings?

      You had the correct answer:  No. But you missed the reason: Because AGW isn’t real. 

      Temps have not increased for the last decade but have been stable.  Solar activity accounts for far more warming than does the fraction of CO2 produced from human activity (especially since total CO2 is something like 0.03% of the atmosphere). Sea levels haven’t risen as claimed.  The Himmalayan glacier melting was admitted to be a fraud.  The Mann Hockey stick graph has been shown to be a fraud based on selective omission of data.  Pacific Islands haven’t slipped beneath the waves as predicted and 11  of the 13 known populations of polar bears are growing in number, not shrinking.

      Every couple of years the IPCC revises its estimates down because nothing is happening.  Even their statements admit that the trillions of dollars in efforts they recommend would only decrease global temperature by an amount that would be beyond our current ability to detect.  In other words we could make all the changes the IPCC and the eco-lunatic community demand and we could never prove that they had any effect.

    • Mr Kimber

      I think it is necessary to use the natural resources we have on hand rather then use green technology that is not proven and not economical to the point that the administration is throwing away large amounts( purposeful undrestatement} of money. It is not ok to drill for natural gas and oil here but “WE” can give 2 Bil to Brazil so they can do it and “WE” can buy it. We can’t use oil shale FROM Canada but it is ok for the Canadians to sell it to the Chinese. How does that help the world fight AGW…if you believe in it. Meanwhile,  we will not be off oil for decades. Yet there now is proven reserves of oil and natural gas recently found in America much cleaner but NOOOOO we can’t use it. Does that make sense to you.? Technology has to work..becomes econimal…is put to use for the better of society creating jobs and wealth…oops there is that word liberals are jelaous of . This adminstration is continually on the train in the caboose looking behind …ya know where it has been not where we are going. Talk about asleep at the wheel!!.
      How many times does one see the same failed results before one says this isn’t working. I mean stupid is as stupid does…there is merit in that saying.

    • PBunyan

      What the left seems to not even to being to grasp is the concept that when resources actually do become rare, a free market will create alternatives and they will be affordable at the time are needed.   You simply don’t need the government for that to happen.  You don’t need millions or billions (that we don’t even have) in subsidies. The best thing the government can do is get out of the way.  But the leftist will probably never get it.

      • It’s as Jay Tea posted previously – the left is terrified that someone, somewhere, will make a decision that they think is wrong.  They don’t trust people to figure things out for themselves – because they don’t trust themselves to figure things out – primarily because they’ve carefully schooled themselves to be incompetent in the real world. 

        • PBunyan

          True that.  Yet “scientists and ‘those in the know'”, i.e. the government, are infallable.  Just like corporations, to the left “science” and “the government” are not people.

    • Anonymous

      Is Your Middle Name Marcus?

    • Anonymous

      “You have to understand the difference between cost and value.”

      I think that any project manager can tell you that the cost for the value of of this project was never going to work. Not at the price point they were offering the product, hence them filing for bankruptcy.

  • retired.military

    “How many times does one see the same failed results before one says this isn’t working”
     
    They will worki.  Just throw another $100 trillion at them and we will see them come to fruition and blossom.

    • Anonymous

      This is just an example of green posting – saving all that wasted effort typing something original.  BTW, there is no “u” in Marcus’s Cortney.

      •  Well, if government had been paying for it she  could have afforded a “u”!

        • Anonymous

          This is NOT all about “u”

  • Anonymous

    Every “new” technology has unknown bugs.  Just Google “New York + horse manure + crisis”.  In the late 1800’s, they were having to remove over 6 TONS of manure from Manhattan streets every day.  Then came the wondrous “automobile”.  The streets would be clean!  No one thought about the air!

    Even some of the greenies promoting wind and solar are FINALLY admitting that those will not be primary energy sources in the foreseeable future.  Electrical energy has one nasty drawback.  It has to be used at or about the time of it’s creation.  Oh, you can store some of it, but not a lot of it.  And the cheapest mass storage technology is not what you’d call environmentally friendly.

    High energy costs drive business costs and product costs up.  Yet we have a president who thinks paying $6-8/gallon for gasoline is “reasonable” – without proposing a viable and cheaper alternative – other than some vague ‘rainbow-colored-unicorn’ fart machine.

  • herddog505

    Now many venture-capital firms are going back to their roots. Dozens recently stopped making initial investments in clean technology companies, according to Dow Jones Venture Source.

    This is because they are greedy and probably racist, and should be taxed or even arrested for their failure to pay their fair share and help get Obama reelected the economy moving again!

    /sarc

    Many that continue to invest in clean technology are shifting to areas such as energy efficiency, which includes low-capital projects such as software for monitoring and reducing energy consumption, according to an analysis by the Cleantech Group.

    In other words, they are investing in things that actually work.  Fancy that!

    Some mention was made above about the difference between “value” and “cost”.  All I can add to the various good comments is to note that “value” is subjective; “cost” is objective.  Green energy such as windmills, solar farms, etc. have very high costs; their value to greenies is equally high.  To the rest of us, not so much.

  • Anonymous

    What the new studies say for every Green Job the governments create it losses several jobs in the private sector.  

    Obama plan to help, JOBs, economy, health care, ect just doesn’t work. 

    The Spanish government’s renewable energy initiatives have destroyed
    2.2 jobs for every new “green” job created, concludes a new study by
    economics professor Gabriel Calzada of King Juan Carlos University in
    Madrid.

    Calzada says American jobs will suffer the same fate if the United
    States similarly attempts to promote renewable energy at the expense of
    conventional energy sources.

    What Price Green Jobs?

    Writing in “Study of the Effects on Employment of Public Aid to Renewable Energy Sources,” Calzada reports:

    “As President Obama correctly remarked, Spain provides a reference
    for the establishment of government aid to renewable energy. No other
    country has given such broad support to the construction and production
    of electricity through renewable sources. The arguments for Spain’s and
    Europe’s ‘green jobs’ schemes are the same arguments now made in the
    U.S., principally that massive public support would produce large
    numbers of green jobs. The question that this paper answers is ‘at what
    price?’

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