Jeff Johnson has a two-page article entitled "Uncertainties Slows Energy Investments", with a subtitle, "House-led DOE investigation is likely to reduce US clean energy investments, growth", in the November 21 issue of C&E News. The essence of the article is that the investigation of the Solyndra bankruptcy could involve shutdown of other solar energy companies and cost the American taxpayers.
Johnson makes the point that the Solyndra investigation has put the kabosh on private investments for solar energy development. I judge that to be a good thing. The only reason private investors would possibly be interested in solar energy is because of the complete absence of risk for their investment through government loan guarantees and the possibility of greater profits through government subsidies, if at project is successful.
The Senate is not following a similar Solyndra investigation. Bill Wicker, the Communications Director, of the Senate Energy and Natural Resources Committee said, "A more thoughtful look at the financial gap for advanced energy technologies between the US and its international competitors, like China, does make sense". I completely disagree. The implication that solar energy is an advanced technology is completely unjustified in the present economy. In addition, the Chinese government has contributed only a pittance in the support of its solar energy equipment producers. It has done so, not because it is a strong believer in the economics of solar energy, but that because the US is a good potential market for this equipment.
Cliff Stearns, Chairman of the House Committee on Energy and Commerce Oversight And Investigations Subcommittee, hit the nail on the head, when he said, "Even with oil at $140 a barrel, the idea that solar energy will be breakeven is questionable." As a reminder, the present price of oil is about $100 per barrel, and this has been artificially propped up by the Obama Administration by refusing drilling leases to oil production companies in the US. The latest situation is Obama's refusal to allow construction of an oil pipeline from Canada to the Gulf Coast. The Obama Administration is doing everything it can through DOE Secretary Chu to prop up the price of oil and gasoline, in order to justify taxpayer expenditures for solar energy. This is an ideological consideration unjustified by the economics of present reality. The problem is that we have too many eggheads confusing the situation.
One is Frank Laird, a professor at the University of Denver. He says, "The size of credit matters less than keeping it in place long enough to provide consistency for investors". He apparently doesn't understand money. As an example, suppose we allocate $1 trillion of taxpayer money for solar energy development each year for the next 10 years. Is this going to attract private investment? The answer is obviously yes. Private investment will have no risk for its own money, because of loan guarantees with taxpayer money. In addition, if by slight chance there is a profit to be made, it will become significant through further government subsidies. While this tends to support Laird's statement, consider the fact that an equal amount of energy could probably have been produced at significantly less cost through the oil and gas route and without the use of taxpayer money.
Another egghead is David Goldston, who is the Director of Government Affairs for the Natural Resources Defense Council, an environmental group. He says, "To develop energy sources beyond the current mix of coal, oil and petroleum takes government support." I could possibly agree with that, but then I have to ask the question, why would we want to do that? Coal, oil, and petroleum are already doing the job even with the inhibitions placed on it by the Obama Administration. Even the most ardent supporters of solar energy, when caught in a rational state of mind, will admit that solar energy can not compete economically. We should not be dumping taxpayer money down this rat hole.
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