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.