The DOE’s loan-guarantee program: “What’s there to be defensive about?”, wonders Moniz

posted at 3:21 pm on August 15, 2013 by Erika Johnsen

Yes, what is the problem with a top-down federal program that selects “investments” based off of political choices made by bureaucrats of self-fancied moral nobility rather than consumer preferences manifested in free-market competition? Who cares that the government is thwarting the unbiased and profit-seeking services already available in the private sector? Does it honestly matter that the Obama administration has wasted more than $26 billion on rotten projects and is grossly overstating the number of “green” jobs they have “created”? Really, what’s the big deal? Via The Hill:

Energy Secretary Ernest Moniz is touting federal green energy loans that have drawn strong criticism from Republicans over the collapse of the solar panel company Solyndra.

Moniz, speaking at a green energy summit in Nevada, said that the overall program, which supports low emissions energy projects and automakers, has been a major success.

“My view is, what is there to be defensive about?” Moniz said of the loan and loan guarantee programs.

“A $35 billion portfolio with 2 percent current and projected defaults with many, many, many success stories,” he said at the National Clean Energy Summit 6.0 in Las Vegas. “That is what it means to have a portfolio out there.”

And a bit more on the subject from our new Energy secretary in a ThinkProgress interview out today:

Solyndra will probably remain a talking point, and in many ways it is very unfortunate that the first loan is one of the very few in the portfolio to fail to perform. But it is hard to figure out what any objective measure for an investment portfolio of this type could have better success. Remember, if we take all of the loans which have defaulted or are at risk of defaulting, that’s just two percent of the portfolio. …

I will remain very insistent in the department that our posture on the loan program is not defensive, and in fact what I didn’t mention on the panel earlier, is that as part of the climate action plan, we announced another eight billion dollar loan program on fossil fuel greenhouse gas reduction. As far as we are concerned we are still in business.

One of its supporters biggest arguments in favor of the DOE’s loan guarantee program is that, sure, a handful of the loans have failed, but the majority of companies are still going strong and heck, they have a better success rate than a lot of private-sector investments! …Yes, one does rather tend to have a leg up on the competish when the federal government is awarding you loan guarantees because of their most romanticized notions of what they’ve so augustly deemed are the alternative technologies of the future rather than your economic merits and prospects to appeal to consumers.

The Department of Energy, for instance, lists “one of the world’s largest wind farms to date” and “one of the country’s first commercial-scale cellulosic ethanol plants” on its list of loan-guarantee accomplishments — except that a few loan guarantees here and there are a mere fraction of the special treatment these technologies receive from the feds. Wind energy has an impressively large and aggressive lobby dedicated to keeping their precious tax credits in existence because they are perfectly well aware of how deeply the industry depends on them for survival, and don’t even get me started on the crock that is the government’s support for ethanol.

Again, in the long run, the government is really doing what they call ‘green energy’ a disservice in the long run — all of this extended federal assistance is no way to encourage the price efficiency and competition that could actually help to install new technologies as features of our economy and infrastructure, and they’re squandering resources and furthering our debt burden along the way.


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What freak of nature is this? Did they find him at Willy Wonka’s chocolate factory? Where does Oboobie find these weirdos? The globe laughs.

msupertas on August 15, 2013 at 3:35 PM

In their world, these folks could revitalize the market for buggywhips

Jabberwock on August 15, 2013 at 3:35 PM

A face even a mother can’t love.

Decoski on August 15, 2013 at 3:38 PM

Does 0b00ba go looking for appointees that look like rodeo clowns, or is that just a coincidence?

Akzed on August 15, 2013 at 3:42 PM

— …all of this extended federal assistance is no way to encourage the price efficiency and competition that could actually help to install new technologies as features of our economy and infrastructure, and they’re squandering resources and furthering our debt burden along the way.

While the sheer amount pf DOE grant funding to renewable energy by this Administration has been an abomination, I don’t have a huge problem with the federal government providing loan guarantees for energy research and development. The success rate, at least in the terms of getting the loans paid back, has been very good, especially compared to other loans the feds guarantee. Providing loan guarantees is not antithetical to the idea of free enterprise. SBA also offers a variety of loan guarantees for new business ventures. One could argue that the federal government should get out of the loan business altogether, but that involves restructuring how we do any sort of financing in the US. I hope we get there someday, but lumping in DOE loan guarantees with DOE energy grants is an oversimplification.

Hostile Gospel on August 15, 2013 at 3:43 PM

it is hard to take an excerpt from Sarah Hoyts blog…but this seems relevant

The “Well educated” are in fact indoctrinated, taught communist propaganda and syllogisms until they’re UNABLE to think. We now have an administration composed of people like this, who are unable to connect to reality. They might be our first Marxist administration, but they suffer from third generation blight, not having come to their opinions from their own mind, but having been browbeaten into them. They are the good kids, trapped in an illusion from which they can’t break out.

But the d*mned ineradicable fact about communism and its cousin “state capitalism” and the hellish hybrid they’re trying out here is that it doesn’t work. IT NEVER WORKS. It doesn’t work even when instituted by very bright psychopaths. It works even less when instituted by people so indoctrinated they can’t SEE reality.

http://accordingtohoyt.com/2013/08/14/occupied/

read the whole thing…it is all truth

r keller on August 15, 2013 at 3:45 PM

What is it with liberal looks???…

PatriotRider on August 15, 2013 at 3:53 PM

All anyone has to do is look at the pic of this man
and realize this Administration is an Effing Loony Bin.

ToddPA on August 15, 2013 at 3:54 PM

Maybe if the DOE had run it more like the “loan result-guarantee program” we wouldn’t be wondering where all the money went.

antipc on August 15, 2013 at 3:55 PM

Nice to see the Quaker Oats guy has a new day job.

Joe Mama on August 15, 2013 at 3:56 PM

When explaining $4 gas, sometimes you only need a picture.

crrr6 on August 15, 2013 at 4:03 PM

Why do we keep getting idiots to run things?

sadatoni on August 15, 2013 at 4:11 PM

Does it honestly matter that the Obama administration has wasted more than $26 billion on rotten projects
========================================

And no BOINKING JOBS,imagine that!!

canopfor on August 15, 2013 at 4:11 PM

Heck, they ARE trying to resurrect the buggy whip industry! If they get their way on fuel prices, there won’t be any choice but to go back to horse power.

Vanceone on August 15, 2013 at 4:13 PM

from that r keller link above

But then there’s the nature of the beast, as it were – most communists in the US were by nature what we’d class as “radical losers”. They were outcasts, for some reason or another, (the ugly women, the little men – no, seriously, in Europe in the seventies this was as good a predictor as any of who would go commie.) And most of them were not very effective.

wow, Sara Hoyt brings it and fast. When you consider the Anita Dunns, Sandra Flukes, Moniz, Sotemeyer and the other Barney Rubble looking gal, and so many more it makes sense. These misfits can’t see the forest for the trees they stand in front of.

DanMan on August 15, 2013 at 4:13 PM

I knowingly break a rule of politeness set down by my mother but I’d fire this guy simply because he’s a laughably goofy looking turd. No good can come from a man that looks like this.

Mason on August 15, 2013 at 4:36 PM

If you turned that sorry looking pelt on his head upside down, he’d look like Dilbert’s boss.

CurtZHP on August 15, 2013 at 4:38 PM

Where does obama find them. She looks ugly.

Schadenfreude on August 15, 2013 at 4:42 PM

A $35 billion portfolio with 2 percent current and projected defaults

Solyndra will probably remain a talking point, and in many ways it is very unfortunate that the first loan is one of the very few in the portfolio to fail to perform.

What the hell is this guy smoking!? Does he even know who to read! Here is the list of Bankruptcies and troubled companies to date (2012). And all money included for ‘investing’ in green energy ‘programs’, that price tag comes to over double his figure, $80 billion:

BANKRUPT
1.Solyndra*: Received $535 million DOE loan and $25.1 million in California tax credit. Bankrupt: September 2011

2.Abound Solar*: Received part of a $60 million grant under the Bush administration, and was awarded a $400 million loan under Obama in December of 2010. Abound was awarded a $9.2-million loan from the Export-Import Bank in July 2011. Bankrupt: June 2012

3.Beacon Power*: Received more than $25 million in DOE grants and a DOE loan for $43 million. Bankrupt: October 2011

4.A123 Systems*: Received $390 million, of which $249 million of it was a Recovery Act Grant. Filed for Bankruptcy October 16, 2012, and two companies are seeking to buy A123; Johnson Controls and the Chinese firm Wanxiang Group Corp.

5.Amonix*: Received $6 million in federal tax credits a $15.6 million grant from the DOE for research and development. Bankrupt: July 18, 2012.

6.Azure Dynamics*: Received millions in stimulus funds and over $1.7 million in Michigan state tax credits. Bankrupt: March 27, 2012 –– HF ADDITION: states $120 million

7.Babcock & Brown: Received $178 million in the largest federal (1603) stimulus wind grant in December 2009. Placed into voluntary liquidation: March 13, 2009

8.Energy Conversion Devices Inc./Uni-Solar: Received a $13.3 million Stimulus tax credit. Bankrupt: February 2011.

9.Ener1*: Received a $118.5 million DOE Stimulus grant. Bankrupt: January 26, 2011.

10.Evergreen Solar, Inc.*: Received Stimulus funds, grants, tax-credits, low-interest loans and subsidies. Bankrupt: August 15, 2011

11.Konarka Technologies Inc.: Received $20 million in grants from government agencies such as the DOE and the Pentagon. Bankrupt: June 4, 2012.

12.ADDITION Range Fuels*: Range Fuels: $162.25 million in government commitments since 2007, of which $64 million came from a USDA Biofuel loan in 2010 alone, despite financial and technical difficulties, and opposition inside the USDA.

13.Raser Technologies: Received $33 million Treasury Department Stimulus grant. Bankrupt: May 2, 2011.

14.SpectraWatt*: Received $500,000 grant from the Renewable Energy Lab via the Stimulus. Bankrupt: August 23, 2011

15.Stirling Energy Systems: Received $7 million from a federal renewable-energy grant and was eligible for nearly $10.5 million in manufacturing September 28, 2011.

16.Thompson River Power LLC: Received $6.5 million in Stimulus funds from Section 1603. Bankrupt: July 2, 2012.

17.HF ADDITION: Mountain Plaza, Inc. ($2 million); in our unconfirmed list

18.HF ADDITION: Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million); in our unconfirmed list

19.HF ADDITION: Nordic Windpower* ($16 million)

20.HF ADDITION: Satcon ($3 million) As reported by the Heritage Foundation October 18, 2012, “A solar company that got a multi-million-dollar grant from the Department of Energy earlier this year announced Wednesday that it will file for Chapter 11 bankruptcy protection, making it the second taxpayer-backed green energy company to file for bankruptcy this week.”

21.HF ADDITION: Willard and Kelsey Solar Group ($700,981) ($6 million); in our unconfirmed bankrupt list

22.ADDITION, October 23, 2012: Cardinal Fastener & Specialty Co.: Received $480,000 through the Section 48C Advanced Manufacturing Tax Credit Program. During Obama’s visit to Cardinal Fastener, he took a “green Recovery Act victory lap,” and touted it as means for “Made-In-America Jobs” for Ohio. Yet, just two weeks after the Obama visit, Cardinal laid off 12 percent of its staff, and in June 2011, Cardinal Fastener filed for Chapter 11 bankruptcy protection. Lastly, in January 2012, Cardinal Fastener was acquired by Germany’s Wurth Group for just $3.9 Million.

23.HF ADDITION, December 1, 2012: ReVolt Technology is a Portland-based company, which specialized in developing zinc-air flow battery systems. “ReVolt earned its place in the Graveyard when it declared bankruptcy (October 17, 2012), despite the fact it had been offered a whopping $10 million in funds from federal, state, and local governments. The Advanced Research Projects Agency – Energy offered a $5 million grant in 2010. Oregon matched the federal government’s promise with $5 million worth of loans.”

TROUBLED
1.Fisker Automotive* –– $528.7

2.Tesla Motors* –– $465 million

3.AREVA acquired Ausra Inc.* –– $2 billion

4.ADDITION November 20, 2012: Georgia Power Company –– $8.33 billion via the 1703 DOE LGP for Plant Vogtle, the construction and operation of two new nuclear reactors at a plant in Waynesboro, Georgia. In July 2012, Bloomberg reported the purchase of The Shaw Group Inc., which is connected to the Vogtle project, noting that Southern Co. is the largest investor in the Vogtle project, and they reported delays and cost overruns. Also, in August 2012, “Plant Vogtle’s contractors sue Georgia Power, project’s co-owners,” yet there is more to this story that I will expose in due time.

5.BrightSource Energy* –– $1.6 billion

6.First Solar* –– $3 billion, plus suspicious Export-Import bank funding

7.Nevada Geothermal* –– $78.8 million, plus $69 million in federal stimulus-funded grants

8.NextEra Energy Genesis Solar Project* –– $681.6 million

9.SunPower Corp.* (California Valley Solar Ranch project bought by NRG Energy*) –– $1.2 billion DOE loan guarantee

10.AltaRock* –– $6 million, $25 million, plus $1.45 million

11.Bloom Energy* –– $5 million

12.CH2M Hill* –– $2 billion

13.Chevy Volt* –– $151 million, $105 million, plus other stimulus funds HF ADDITION: GreenVolts ($500,000) – I’m assuming this is the Chevy Volt

14.ECOtality Inc.* –– $126.2 million

15.Johnson Controls –– $299 million

16.Montana Alberta Tie Line –– $152 million of federal financing (some reports say $161 million)

17.National Renewable Energy Lab* –– $200 million

18.Schneider Electric –– $86 million

19.Serious Material (Serious Energy)* –– $548,100

20.Solar World Industries America –– $4.6 million

21.ADDITION: Solar City* –– Got a $275 million conditional guarantee (DOE) that was later rejected. Besides some financial issues, Solar City was subpoenaed in July as part of a federal probe of the Treasury grant program. As reported by The Washington Free Beacon (October 18, 2012), SolarCity, is currently being audited by the Internal Revenue Service and investigated by the Treasury Department’s inspector general amid allegations that the firm misrepresented the value of its investment when applying for stimulus grants. So it looks like Solar City” has applied for approximately $325 million in these stimulus grants, according to the SEC filing.” So, loan rejected, but the grant is larger (as are the political ties) –– we’ll keep an eye on this story.

22.Solar World Industries America –– $4.6 million HF UPDATE, November 16, 2012: Solar World ($82 million credit from the Energy Department’s stimulus-funded Advanced Energy Manufacturing (48C) Tax Credit). According to the Heritage Foundation, “SolarWorld, which announced a 47% revenue decline in the third quarter, blamed a potential 37 layoffs at its Oregon plant on “illegal” Chinese trade practices.”

23.HF ADDITION: Vestas ($50 million)

24.HF ADDITION: LG Chem’s subsidiary Compact Power ($151 million, part of the Recovery Act, and millions worth of special state tax breaks based on job creation of all things) LG Chem is another green company that President Obama touted during his visit at the LG Chem battery cell production site in 2010. This is an amusing story that was recently brought to my attention –– according to Wood TV, Michigan (October 18, 2012), “Workers at LG Chem, a $300 million lithium-ion battery plant heavily funded by taxpayers, tell Target 8 that they have so little work to do that they spend hours playing cards and board games, reading magazines or watching movies.” Now, their story (more scandalous than what I posted here) is under investigation by the Recovery Accountability and Transparency Board –– an oversight agency for the federal stimulus program, what I call the RAT Board –– another huge part of this green corruption scandal.

25.HF ADDITION: Navistar ($10 million)

26.HF ADDITION: Mascoma Corp.* ($100 million)

27.ADDITION, October 22, 2012: MiaSolé*: Received two Advanced Energy Manufacturing tax credits totaling $101.8 million from the Obama Administration in January 2010, see my Summer 2010 report on Kleiner Perkins, yet also a VantagePoint investment. This month (October), “struggling” and “desperate” MiaSole has agreed to be sold to China’s Hanergy Holding Group for $30 Million, which is considered to be dirt cheap.

28.ADDITION, October 23, 2012: Smith Electric Vehicles: Received $32 million in federal grants from the American Recovery Act. Smith Electric Vehicles was another Obama touted green investment, however, since 2009 they have “racked up $128 million in losses.” In February 2011, Smith Electric Vehicles announced a potential partnership with Wanxiang Group (one of the largest non-government-owned companies in China that is on a “green USA buying spree” –– Smith Electric, A123 Systems and Ener1), and in September 2012, struggling (and “short on cash”) Smith Electric scrapped its IPO to “pursue private financing opportunities.”

29.HF ADDITION, November 16, 2012: SunTech ($2.1 million credit from the Energy Department’s stimulus-funded Advanced Energy Manufacturing (48C) Tax Credit). According to the Heritage Foundation, “SunTech said the U.S. International Trade Commission’s 35.95% tariff on Chinese solar panels was partially responsible for the 50 impending layoffs at its Arizona production facilities.”

And I thought the last guy was a real winner….

Patriot Vet on August 15, 2013 at 4:46 PM

Always with the jazz hands. Enough already!

Ward Cleaver on August 15, 2013 at 4:48 PM

Nice to see the Quaker Oats guy has a new day job.

Joe Mama on August 15, 2013 at 3:56 PM

Winner!

chewmeister on August 15, 2013 at 4:48 PM

And I thought the last guy was a real winner….

Patriot Vet on August 15, 2013 at 4:46 PM

RWM level quality response there. 2%, 200% merely a rounding error for this Einstein. Thanks for that list PV

DanMan on August 15, 2013 at 5:03 PM

with many, many, many success stories

Really? Can Dipshit name ONE that would survive without ongoing federal subsidies?

……………………….crickets………………….

GarandFan on August 15, 2013 at 5:15 PM

Looks like Terry Jones of Monty Python.

“Department of Education”…makes me ill just thinking about what it means.
Gee, where has national level education ever gone wrong?
Germany? China? Cambodia?

connertown on August 15, 2013 at 5:25 PM

Is Austin Powers really that hard-up that he’s doing gigs on Capitol Hill now?

“That policy is totally not my bag, baby!”

VekTor on August 15, 2013 at 5:31 PM

Mozart in drag, without the harpsichord.

Kissmygrits on August 15, 2013 at 6:06 PM

GET A NEW WIG!!!!

avagreen on August 15, 2013 at 6:59 PM

Yes, what is the problem with a top-down federal program that selects “investments” based off of political choices made by bureaucrats of self-fancied moral nobility rather than consumer preferences manifested in free-market competition?

Wait, are we talking about the DOE loan program, or the student loan program?

There Goes the Neighborhood on August 15, 2013 at 7:33 PM

Looks like Terry Jones of Monty Python.

connertown on August 15, 2013 at 5:25 PM

Closer to Melvin Belli as “Gorgan the Friendly Angel”, who was in reality neither one;

http://images3.wikia.nocookie.net/__cb20090306195106/memoryalpha/en/images/2/25/Gorgan.jpg

I think he was trying to look like Ray Bradbury. If so, he blew it.

cheers

eon

eon on August 15, 2013 at 7:47 PM

In his 2nd (wretch!) term, O’Bozo — the Clown President — has arranged a cabinet of such clownish characters that his administration looks like a freakshow. Doofus David Brooks declared the first O’Bozo troupe “the valedictorian administration”; that didn’t work out so good, so in the second act we get the kids from the high school drama club who couldn’t get parts in the school play.

Call this the freak-nerd administration.

Jaibones on August 15, 2013 at 8:10 PM

Give Obama credit. He has a genius for hiring people who also look the part of being an idiot.

bluesdoc70 on August 15, 2013 at 10:08 PM

Is that Thing 1 or Thing 2 in that picture?

OxyCon on August 15, 2013 at 10:26 PM