Obama’s Bonfire of Green Energy Inanities
By Peter C Glover
President Obama, as his Inauguration Address confirms, is in denial about both the climate and energy realities. Repeating the most alarmist rhetoric of ideologue-turned-salesman to oil interests Al Gore, Obama appeared ignorant of the fact that data shows global warming isn’t happening. The president has re-stated his desire for yet more backing to a green energy industry that is collapsing being wholly reliant on the lifeline of public subsidy. And that can only mean dumping further on the oil, gas and coal industries that made the US the powerhouse it still is.
Obama will be in good company in his ideological crusade in support of the doomed renewable revolution. Not with private investors who have been deserting green energy investments in their droves, but with other bureaucrats in denial – and who have little compunction in squandering someone else’s money.
In a Washington Times article in November Steve Goreham asked whether the green energy “fad” had run its course. His analysis was based on the RENIXX World index, the renewable energy industrial index of the world’s top green energy companies. Goreham further pointed out how the RENIXX index revealed green energy companies had been “on a roll…during the heydays of 2007 and 2008” through massive government funding but had lately hit an all-time low, down 90 percent against its December 2007 peak.. Across the Atlantic, investment flooded in as a result of guaranteed profits via the EU’s Climate Action and Renewable Energy policies. But, as Goreham pointed out, the wave of subsidy-driven green energy suddenly “hit a brick wall of fiscal reality”.
In Europe, hard-hit economies began slashing their subsidy regimes. Spain realized that paying solar producers up to ten times the rate for conventional electricity with a 20-year guaranteed return was not good business. As German’s were told they were paying eight times above the market rate via feed-in tariffs on bills to subsidize a ludicrously generous solar installation program, even bureaucrats were forced to admit the $140 billion over 20 years was unsustainable. In the UK, the split between Conservatives and Lib Dems over the government’s expensive rush to decarbonisation has also contributed to a steep drop in green investment. Between 2009 and 2011 funding for large scale green energy projects in the UK declined by 53 percent to just over $5 billion.
In the United States solar company after solar company has gone belly up even after receiving massive government bailout funding. Over half a billion dollars was wasted attempting to make Solyndra a viable operation. Last year Obama’s administration bailed out BrightSource Energy despite it being $1.8 billion in debt. In recent months two solar companies, Himin Solar and IPO, were in such financial straits that they were suspended from the Stock Exchange. Thousands of ‘permanent’ green jobs were axed at companies like First Solar. Equally the scandal of green company executives making millions of dollars through hiked pay levels and ‘bonuses’ does tend to put investors off. As the Washington Post reported, Al Gore is today “50 times richer than when he left the vice-presidency in 2001” having made “$100 million partly through investing in alternative energy firms subsidized by the Obama administration.” According to the investment boys at Energy and Capital, a scandalous “80 percent of all the green subsidies and loans went to generous donors of President Obama.” And what has all this US taxpayer investment wrought? The whole heavily-subsidized kit and caboodle, from wind, to thermal, still only provides a paltry 9 percent of America’s energy needs.
In November, just over half of the Americans who voted may have re-elected Barack Obama but, according to a survey published at the time of the election, half of Americans can’t even name any renewable energy source into which the president is pouring their money.
But the burgeoning bad news for the renewable industry hasn’t stopped the bureaucrats at the European Investment Bank backing yet more astronomically expensive green energy projects. In 2012 the EIB handed over a cool $2.16 billion in public funds to the renewable energy industry outstripping the total amount dished out by the U.S. Government for wind, solar and other green energy projects. A devastating report in Die Welt in October also revealed how predictions about the expansion and cost for German wind turbines and solar panels have all been catastrophically wrong by “at least a factor of two, sometimes by a factor of five.” Chancellor Merkel had promised consumers that green energy subsidies would be no more than 3.6 cents per KW hour. But when Germany’s power grid operator recently announced the exact figure would raise the cost burden by 50 percent to 5.3 cents per KW hour widespread outrage followed. A spokesman for Germany’s business groups warned that the cost was so high it threatened “the de-industrialization of Germany”.
Earlier in the year, Spiegel Online ran an article showing how the massive subsidization of the German photovoltaics industry together with the cost incurred in upgrading the national grid to cope with variable loading had saddled consumers with a $377 billion bill and was proving “the costliest mistake in the history of German energy policy”. According to a report in Welt am Sonntag that left Germans facing the biggest electricity price increase in decades with 800,000 unable to pay their energy bills.
Just as President Obama re-commits his administration to a renewed assault – code for more massive subsidies – in favour of green energy, the US and European wind and solar industries are in obvious turmoil. Around 30 percent of the green jobs President Obama promised in his first-term have already been lost through bankruptcies. Other green jobs were lost to the Chinese market. Not that there is a shortage of energy investors. It’s just that they prefer to invest their money sensibly in the soaring success of much cheaper forms of energy, including low-cost natural, especially shale, gas and new sources of oil. Only bureaucrats are still fuelling the investment bonfires of green energy inanities.
It seems the naiveté of politicians who believe they can buck the market knows no bounds. By the time President Obama leaves office in 2016 we’ll all be wondering how we could possibly have been so gullible as to allow bureaucrats to sell us a lame duck renewable energy policy that fritters away so much of our money. How could we, for instance, have bought into claims that wind power really is a viable economic alternative to hydrocarbon power? How could we allow ourselves to have our pockets picked by bureaucrats with a vision to reverse the industrial revolution by proving that sailing ships really could be a serious commercial competitor to ‘new-fangled’ steam ships?
But then, if you are raking in the kind of money government bureaucrats make, or the windfall profits guaranteed to green energy entrepreneurs, you can afford to invest your own money in wind power – and buy yourself a yacht. Why should they care that those forced into fuel poverty are paying for it?
The cartoon is courtesy of Phillip McMullen.
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