Juice: Un-Due Diligence

By Published On: October 7, 2011

The energy game’s high stakes in the economy and environment is not for the timid. It appeals to players of every stripe--colorful, bold, passionate, greedy, and altruistic. There are entrepreneurial gamblers for new ventures like renewables and carbon sequestration. There are those betting to keep the status quo, like traditional fossil fuel interests--oil, coal, and gas--because it’s quite a profitable wager. Nuclear too. There are politicians with convictions about where governments and societies should head--along with the political ability to garner financing from those who believe in their influence. There are environmentalists buying the occasional Lotto ticket in order to “save” the earth from projects big and small, at the same time pushing “clean” power. Because energy has such a huge impact on the environment and economy, the thing that most of these players have in common are government subsidies. Fremont-based Solyndra’s $535 million loan guarantee default is fresh meat for some politicians to chew up. Yep, the Department of Energy should’ve held back on doubling bets when it noticed that Solyndra was spending funds on a campus to rival Google’s. (Silicon Valley campus rivalries are far afield from college campus rivalries.) That wasn’t the reason the House Energy & Commerce Subcommittee on Oversight, tried to put Solyndra’s executives under oath. The House Energy Committee majority is passionate about stymieing untraditional values, as well as deriding anything the Obama administration thinks could be successful. The Environmental Protection Agency’s been hamstrung. Its administrator appeared before the committee 12 times--so far. The Solyndra loss was a committee “gotcha” to the Department of Energy for supporting renewables. Rep. Fred Upton (R-MI), committee chair, is a fan of fossil fuels. The oil and gas industry contributed $128,000 to his campaign and his political action committee in 2010, according to Opensecrets.org. The minority ranking member on the committee, Rep. Henry Waxman (D-CA) received $11,650 from oil and gas interests and $16,400 from “miscellaneous energy” concerns during the same time period. Politicians’ personal prosperity pales compared to profits that can be made with a little help from government subsidies. Oil and gas profits for 2007 reached $1.9 trillion, according to the Congressional Research Office. That same year numerous academics attempted to tally total subsidies for the fossil fuel industry. The closest comprehensive estimate I could find came to between $50 billion and $100 billion. Renewable energy subsidies through loan guarantees and conditional commitments under the American Recovery & Reinvestment Act reached $40 billion Sept. 30, which is only a portion of the total subsidies. Of that, according to Department of Energy information, $16.6 billion went to constructing wind, geothermal, and solar projects and to help renewable energy technology manufacturers. Energy in the economy and environment is a big game played by those who don’t take losing stoically--Big Oil. (Also read: King Coal and Sir Shale Gas.) Like old players sucking on cigars and whiskey, the Big Guys’ lungs and livers are dying out. A new group of players raised on weed and Red Bull is elbowing in. One had an original stake provided by Uncle Sam, with an everlasting trust fund. The newbies deserve some chips too--and you can bet they will lose a bunch of them before renewables become established in American manufacturing.

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