BySTEVE TOBAK MONEYWATCH November 15, 2012
(MoneyWatch) COMMENTARY In the business world, when you combine bad management, faulty science and fanatical ideology, it’s a recipe for disaster. Strangely enough, when the federal government does it, the result is the same.
I’m referring to the national green energy policy that is actually costing us jobs, hurting our economy and increasing our dependence on foreign oil — all at a time when we can least afford it. It may even be having an indirect effect on rising gas prices.
Sadly, you didn’t have to be Nostradamus to know that force-feeding an initiative this big against free market forces would end badly. In fact, the renewable energy bubble was evident years ago. Back in 2008, CNET ran an article entitled “The alternative energy bubble,” where today’s situation was indeed foretold:
“What do you get when you mix Al Gore, global warming, whacky environmentalists, skyrocketing oil prices, lots of venture funding, and irrational exuberance? An alternative-energy bubble. What, you don’t believe there’s an alternative-energy bubble? Then you’re just not paying attention. All the signs are there. As bubbles go, I think this one’s going to be big. How big? You got me. But I think that global warming and alternative energy (solar in particular), like Al Gore, are all overblown.”
Yes, I wrote that, and we all know that I’m no medieval seer with an omniscient ability to predict the future. I just pay attention and understand fundamental business concepts like supply and demand and risk management. I also have built-in radar for anything that sounds remotely like fanatical ideology.
Now, that article and others like it were written before our economy melted down. So clearly, the administration saw the renewable energy push as a sort of stimulus. In hindsight, however, it’s now evident that not only didn’t it work, it’s actually had the opposite effect. Here are some examples of how our green energy policy has negatively impacted the jobs picture and our economy.
The solar meltdown
Over the past few years we’ve watched the entire solar industry implode in agonizing slow motion. One solar company after another — Evergreen (ESLR), Solyndra, Abound, and others — bit the dust amid weak demand, a glut of low-cost panels from China and swirling controversy over ill-conceived government loans that have cost taxpayers billions.
Even First Solar (FSLR), America’s biggest solar panel maker and the recipient of $3 billion in government loan guarantees, finds itself in big trouble. The company fired its CEO late last year and recently announced a disastrous quarter as news of its panels failing in desert climates sent an already depressed share price plummeting to multi-year lows.
The electric car fad
Look, I’m just going to come right out and say it: the whole electric car thing is nothing but a crazy fad that makes no logical sense. The Chevy Volt is an expensive mess that nobody’s buying and can barely get you to work and back on a charge. And now, the federal government, which already subsidized the GM (GM) car’s development, wants to hand you another $10,000 of taxpayer money just to get you to buy one.
And don’t even get me started on government loan guarantees made to electric automakers Tesla and Fisker so the latter can make a $100,000 electric sports car in Finland. And just last week, Consumer Reports paid $107,850 for a brand new Fisker Karma that broke down during the check-in process and could not be restarted for an actual road test, “the first time in memory that’s happened,” according to the publication. You can’t make this stuff up.
The real jobs boom: Oil and gas
This is where the story gets out-of-control ridiculous. There’s an energy jobs boom going on in America, but it’s in oil and gas, not green energy. According to a Bureau of Labor Statistics report, oil and gas production now accounts for 440,000 jobs, an increase of 80 percent since 2003.
It’s even plausible to suggest that, with new technology and production methods, if you combine coal, natural gas, off-shore oil drilling and shale oil deposits, we could not only put our unemployed back to work, we can also end our dependence on foreign oil. And that, in turn, would stabilize gas prices at the pump.
And that can all be funded privately, with no Energy Department loan guarantees. If only the federal government would just can its political agenda, quit kowtowing to lobbyists and environmentalists, put the American people first and get the heck out of the way.
Don’t get me wrong; I love green energy. And if the government wants to get involved, I have no problem with it funding some core research, building infrastructure and creating some shovel-ready jobs. But when it comes to funding individual companies, let private industry do its job. And when it comes to energy, our economy and our jobs, let the market decide.
Back in 2008, I wrote, “You don’t want to end up like Icarus, who got a little too exuberant and flew too close to the sun. Wings melt, bubbles burst — same result.” Been there, done that; let’s try something else.