#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.

Headline at MIT Technology Review:

Peabody Energy’s Bankruptcy Shows the Limits of “Clean Coal”

I’m not sure what MIT’s point is here. Peabody’s bankruptcy is the result of unlimited political manipulation. It was the intended result of Federal planning:

So if somebody wants to build a coal power plant, they can. It’s just that it will bankrupt them because they are going to be charged a huge sum for all that greenhouse gas that’s being emitted.
– Barack Obama, January 2008

The real issue is eco-corporatism, not “clean coal,” so it’s worth looking at other energy company bankruptcies that didn’t follow the Fed’s political script.

Solyndra’s bankruptcy was not the government approved plan.

Barack Obama visited Solyndra’s facility on May 25, 2010. Solyndra filed for bankruptcy in September 2011.

On whether he he regretted holding up Solyndra as a model for jobs and clean energy: “No, I don’t, because if you look at the overall portfolio of loan guarantees that have been provided, overall it’s doing well.

And what we always understood was that not every single business is going to succeed in clean energy, but if we want to compete with China, which is pouring hundreds of billions of dollars into this space, if we want to compete with other countries that are heavily subsidizing the industries of the future, we’ve got to make sure that our guys here in the United States of America at least have a shot…

For A123, if the plan was to compete with China, the result was exactly the opposite:

What we want to do is to have energy independence in America, and have control over our own ability to be free of Middle Eastern oil. That means that we want to manufacture the cells and do the assembly, and do the R&D all here in Michigan.
– Jennifer Granholm, January 2009

(While Governor Granholm was fertilizing A123’s bankruptcy seeds, the frackers were actually doing something about our dependence on foreign oil. In spite of government interference.)

This is about the birth of an entire new industry in America — an industry that’s going to be central to the next generation of cars…
– Barack Obama, September 2010, during an event celebrating the opening of the A123 plant in Livonia

A123 was sold to the Chinese at bankruptcy prices. So we heavily subsidized the R&D on behalf of the Chinese.

In sum:

  • Peabody Energy was bankrupted by an administratively engineered avalanche of absurd and unconstitutional Federal regulations.
  • A123 went bankrupt despite $100 million in Michigan tax credits and $255 million in Federal grants.
  • Solyndra failed despite a $536 million Federal loan guarantee and a $25.1 million California tax break.

Yes, MIT, there are limits. So, consider these headlines for a future story:

A123’s Bankruptcy Shows the Limits of Advanced Battery Manufacturing

Solyndra’s Bankruptcy Shows the Limits of Thin Film Solar Cells

Or maybe: Green Bankruptcies Show the Limits of Winner Picking Corporatism

Fueling fascism

Why would any organization continue to pursue practices and policies which have exactly the opposite effects of their stated goals? Why would they double down on an obvious failure??

Ethanol as fuel provides a case study:
Ethanol Fraud and Why You Pay More at the Pump

It starts as mere cronyism, and ends up as Fascism – the ultimate public-private partnership. The partners will beggar consumers (and tax them for the privilege), pollute the air and water, install protectionist tariffs and stifle innovation and competition with arcane and draconian regulation.

When this is rolling along nicely, they create an unnecessary and inefficient market to place rigged bets on trade in the ruination. All the while they whine about the evils of free markets, castigating “greedy people” who are too venal and stupid to behave according to the central plan. The solutions always require more money and more regulation.

Conservatives (who used to be called liberals) believe all people are imperfect and subject to the temptations of power. Therefore, they seek to limit the application of power.

Progressives (who are now called liberals) believe all people, except those in power, are imperfect, and that the temptations of power are trumped by good intentions. They seek to maximize the application of their intentions – no matter the results.

Note: The article linked above repeats itself, so when you reach the part you’ve already read, you can stop.

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.