#Cleanfail

Since I posted Headline at MIT Technology Review: (April 15, just below), it has been nagging at the back of my mind that “clean coal” projects probably were not exempt from the crony capitalist excesses of the eco-industrial complex. So there was likely more to the Peabody Energy bankruptcy story than simply deploring all the failed wind/solar/battery #Greenfail projects we’ve funded. I had some time this morning to check.

Turns out, the Feds spent $2.5 billion between 1978 and 2008 on “clean coal.”

In 2002, the Bush administration picked up the baton and allocated almost $2 billion (of which $200 million was actually spent) over 10 years to the idea. They killed it in 2008.

It was revived in the Obama administration’s 2009 stimulus package before being killed again in 2015.

So, “clean coal,” even though industry had to pay 50% of project costs, is another example of the government promoting failed environmental projects. In this case, deciding to go the additional mile to make sure the entire coal industry disappears.

All that money could have resulted in quite a bit of carbon-emissionless nuclear power, and it would have been financed entirely by industry – if they’d been allowed to.

And the winner the statists picked is… China

China just bought the battery manufacturing darling of the US DoE and the Granholm adminstration.

A company that two years ago was one of the most promising U.S. innovators in the clean-fuel auto industry was rescued from collapse Wednesday. Its buyer: A Chinese auto-parts company.

Wanxiang Group Corp., one of China’s biggest parts makers, offered a $450 million lifeline to A123 Systems Inc., a maker of advanced batteries for electric vehicles that received U.S.-government backing. The deal would put the firm’s lithium-ion technology and its U.S.-funded manufacturing plant into the hands of a company that has slowly acquired a passel of auto assets across the Midwest.

A123 has ripped off the American taxpayer for $249 million in grants from the U.S. Department of Energy. It was one of former governor Granholm’s favorite picks, to the tune of $100 million. The Chinese are grateful, I suppose, for taxpayer assistance while A123’s stock dropped from $26.00 to $0.82. Without said assistance, A123 might have been gone before they could buy it. Worse yet, from Obama’s point of view, Bain Capital might have turned it around.

TOC has mentioned A123 as an excellent example of government “investment” failure.

So. Is anyone wondering why the Chinese didn’t buy Solyndra? My guess is that they, unlike the Obama administration, sometimes know a hopeless investment when they see one. And the fact that Obama himself deigned to appear at, and specifically cite Solyndra, while leaving A123 to the likes of Debbie Stabenow, does tell you that the more money government uses to tilt the market the higher the political profile, and the worse the results. A123’s jobs may be going to China now, but at least there are still jobs.

"Advanced Default and Battery Capital of North America"

Here is a local #Greenfail noted by the Mackinac Center.

Our former Governor’s big bet on big batteries didn’t work out: A123 Systems stock is trading at $0.82, down from $26.00. Click the link above at #Greenfail if you are not familiar with this corporatist morality tale. And, click the link below: This is not the first time I’ve mentioned A123, but it could well be the last.

I wonder what the press conference will look like when A123 hits $0.00?

Watch Jennifer Granholm predict 63,000 jobs would be generated by her consummate central planning winner picking. Watch as the president, Mr. “Electricity rates would necessarily skyrocket,” calls in to support the faithful. See the SecEng, Mr. “I want $10 per gallon gasoline” support her wisdom. Carl and Debbie are just along for the ride; on your back.

Jennifer? Carl? Debbie? mr. president? … Lithicus? (For an explanation of that last reference, you’ll have to go here.)

Naive hubris

Greg Main, the retiring head of the MEDC looks back on his accomplishments. This is his second term (his first stint was in the 1980s) as Michigan’s chief economic planner, and it appears he has learned little from the experiences.

“When I came back (in 2009), it was apparent that there was a good plan in place (at the MEDC) already,” Main said. “It is just a matter of executing it.”

…”It became real clear to me that it was one thing to create plans, and another thing to get them implemented,” Main said.

Well, yes, it is. Unfortunately, the plan executed during his second term is not what rational people would describe as “good.” So it is just as well it was not easy to do. In any case, no government has ever successfully executed an activist economic plan, so Main is not to be faulted for that failure. Only for the attempt, and continuing faith in it. (Note: the LSJ seems to have disappeared this next part in the online version. It was there this morning, online and in print.)

The strategies are paying off, Main said. Since he came to the MEDC, the state has captured six new manufacturing plants for advanced battery technologies.

“We are going to be the epicenter of that industry, and it didn’t even exist in the U.S. two years ago,” Main said.

Manufacturers of products needed by the solar and wind energy industries also have invested in Michigan.

Other campaigns and incentives – such as a tax credit for filmmakers who hire state residents and film in Michigan, and the state’s Pure Michigan travel ads – have elevated the state’s profile.

Windmill manufacture, battery plants that will be obsolete before they are fully operational, solar panel subsidies for India, and movie subsides(!)? Since he didn’t mention it, I guess ethanol was before his time.

This all makes me even more nervous about Rick Snyder, first head of MEDC, and his “public/private partnership” “plans.” If the “plan” requires public funding because private capital sees it as too risky, then it probably is too risky. Maybe a good test would be whether Union pension plans would provide the venture capital – with a no bailout clause.

This fascination with mini-Manhattan Projects needs to cease.

Taxation in spite of representation

FERC YOU!
From the Wall Street Journal (requires registration):
The Midwest Wind Surtax

You’d think poor Michigan has enough economic troubles without the Federal Energy Regulatory Commission placing a $300 million to $500 million annual surtax on the state’s electric utility bills. But on December 16 FERC Chairman Jon Wellinghoff announced new rules that would essentially socialize the cost of transmission lines across 13 states in the Midwest…

Let’s be very clear on what’s happening here: Mr. Wellinghoff and FERC are trying to establish by regulatory fiat a national energy policy that Congress has refused to endorse. Last summer Congress rejected the Obama Administration’s renewable energy standard law because it would have inflated power costs. So the fiefdom at FERC is unilaterally moving ahead to require that industries and homeowners pay a surtax on their utility bills for a nonexistent renewable energy policy. This is similar to the EPA’s initiatives to regulate carbon even after Congress rejected cap and trade.

Because Iowa and the Dakotas want to build windmills, you (and taxpayers in Illinois, Indiana, Minnesota and Wisconsin) are going to pay to build new power lines to distribute the intermittent windmill electricity. This should become known as the “Dumb Grid.”

Without billions of dollars in new power line infrastructure, the windmills are uneconomic. However, like the health care individual mandate, I’m sure we will hear a defense of this based on the Commerce Clause: Michiganders must pay for windmill transmission lines they neither need nor want, because not to do so is a restraint of interstate commerce.

Imminently-former-Governor Granholm’s desire to manufacture windmills now moves from merely stupid to surreal. You are subsidizing the manufacture of windmills so they may be sold to people who have just arranged to tax you in order to enable distribution of electricity from the windmills. That electricity will charge the batteries Ms Granholm has also subsidized, in cars the Feds have forced you to pay for, built by a company whose union you were made to bail-out. All with no law being passed.

FERC may, justifiably, have assumed Michigan would be happy to cough up half a billion annually to subsidize other States’ crackpot energy schemes. “Green” – the hue of Frankenstein’s monster – “jobs.”

Fred Upton, call your office. And don’t return to this state unless you spike this taxation by the unelected of people they do not represent.