Wednesday, March 21, 2012

Let the sun shine in

President Obama visited a solar panel factory today as part of his "it's not my fault gas prices are high" tour.  Here's the inevitable nut graf from Q&O: "More green energy 'winning'":
Construction of the plant involved over 300 part-time jobs, but currently only five full-time employees operate the plant, a Sempra spokeswoman confirmed. That comes out to $10.8 million in tax-dollar subsidies per employee.
But, really, can you put a dollar amount on taxpayer money spent on green energy?

Extra - Ace: "Obama baffled as his "green" investments produce no jobs."


Anonymous said...

Ha, ha! High five! And really, can you put a dollar amount on the United States falling dramatically behind China and Germany in renewable energy investment?

Oh, what's that? You can? Uh oh.

Eric said...

Hmm. How to you quantify this renewable energy gap?

Anonymous said...

It'll be easy. We just sit around squabbling for the next 15 years, using the word "Solyndra" as a rhetorical replacement for "Whitewater." And then we'll wonder why all the money and patents seem to be in Mandarin.

Bram said...

Anonymous may have missed this article. The Europeans have decided to stop wasting their money too.

Anonymous said...

It worked out well in Spain:

Anonymous said...

Anonymous may have missed this article. The Europeans have decided to stop wasting their money too.

Bram may have glossed over the content of that article, in which the cutbacks in energy subsidies are shown to be a small part of across-the-board austerity cutbacks. The pullback has nothing to do with the belated wisdom that they've been wasting their money in this one crackpot area. Or maybe Germany has simultaneously realized that they've been throwing away money on urban development and infrastructure repair, which are taking a bigger proportional funding hit than green energy is.

The unexpected scope and abruptness of the subsidy cutbacks for 2012 are less surprising after one reads this article from Der Spiegel:,1518,820828,00.html

Meanwhile, Asian stocks go up every time the EU imposes another austerity measure, and they're upping their green investments right now, even as the Chinese economy cools... but they'll get theirs!

Here at home, the socialist Obama cronies at General Electric have been making heavy investments in clean technologies for years, and are still doing so. The return from those investments has been twice as profitable as the company's other portfolios.

Three months ago, company VP Marc Vachon said, “Companies that don’t get this [green investment] really risk becoming irrelevant to the marketplace. Whether you believe it for climate change or just the markets that are developing, it is our responsibility as businesses to be responsible to the design signal that the world is telling us.” Hey, why don'tcha go to Beijing, commie?

Eric said...

With both Europe and America I wonder if you can ask yourself this question: can the green industry EVER be self-sustaining. I mean, it's great stuff until the government subsidies are taken away? Is that what you're saying?

Also: are you really so naive to believe that GE - or any other company - doesn't want to burnish it's "green" credentials with show programs underwritten by large federal and state subsidies? C'mon.

Years ago I visited a Mercedes-Benz plant and saw a Smart car parked in their courtyard. I said "wow" and the German guy said to me sotto voce "Yeah, we only make those to bring our fleet MPG to standard. Nobody wants them."

Anonymous said...

Great anecdote, but GE has invested more than $8 billion into renewable energy as of early 2012. That's a pretty pricey P.R. buy.

Google formed a subsidiary, Google Energy, just over one year ago, and increased its clean energy investment 25-fold in 2011. The company intends to store and purchase solar energy, and sell it to consumers.

Nevertheless, let's imagine that GE's and Google's motives are purely image-related. Here's a question for you. Is China "burnishing" its "credentials" with 2% of its GDP?

Eric said...

Was I unclear? General Electric is "making this investment" with taxpayer money. It's a scam.

"The majority of the funding for the $1.9 billion, 845-megawatt Shepherds Flat wind project in Oregon is coming courtesy of federal taxpayers. And that largesse will provide a windfall for General Electric and its partners on the deal who include Google, Sumitomo, and Caithness Energy. Not only is the Energy Department giving GE and its partners a $1.06 billion loan guarantee, but as soon as GE’s 338 turbines start turning at Shepherds Flat, the Treasury Department will send the project developers a cash grant of $490 million."

Anonymous said...

Mmm, the National Review. They sure are opposed to profitable businesses taking advantage of subsidies promoting green technology. Call it a matter of principle.

So Democrats have discovered a new way to stem out-of-control federal spending: “End Big Oil subsidies now!” The position isn’t exactly courageous. Nor is it exactly honest.

In truth, these oil giants are taking advantage of features of the U.S. tax code that are available to most corporations, and of a broad tax break that exists to encourage investments in the manufacturing sector.

And some of us, believe it or not, aren’t completely grossed out by the notion of profit — even a lot of profit. Strong earnings are good news not only for those dastardly Oil Barons, but for the millions of people who depend on the industry for their employment, as well as the vast number of Americans who rely on investments in oil to bolster their pension funds, retirement funds, college funds, and so on.

Oil is different because. What else irks the National Review?

The federal government has never been good at picking winners and losers.

Bram said...

Ah, the famous "oil subsidies" that I keep hearing about but nobody can explain in detail.

For some reason, GM can write off R&D when they design a new car, but Shell shouldn't be allowed to write off the cost of looking for new oil.

Anonymous said...

I don't like those number proving your point. National Review!

Anonymous said...

Green energy subsidies = windfall!

Oil energy subsidies = incentive!

$29 billion in temporary subsidies for renewable fuels from 2002-2008, which expire as of scheduled dates = waste and largesse on the taxpayers' dime.

$72 billion in subsidies to a fully developed fossil fuel industry over the same period, most of which have been permanently written into the tax code = what this country's all about.

Bram said...

Not seeing specifics here.

Econ 101 said...

Here are two specific data points:

General Motors, founded September 1908
Shell Oil, founded February 1907

Bram understands that smart federal policy gives a hand up to these kinds of struggling companies, while letting "the market" handle emerging industries. That's not partisan politics. It's just common sense.

Eric said...

How about $29 billion to green industries resulting in bankruptcy and laid-off workers versus $72 billion to companies that turn around and send billions to the Treasury in corporate and personal income taxes from employed workers?

Don't worry, Bram, you won't be seeing the itemization of those "subsidies." They're things like equipment depreciation and health care write-offs. You know, "special."

Anonymous said...

It would be an asinine premise: the $29 billion has gone up in smoke, kerpoof, but the $72 billion has been wisely cast upon the water and come back to us a hundredfold. But nobody's confusing it for a sincere claim.

The U.S. is currently running a $2 billion trade surplus in solar power, as opposed to a $250 million trade deficit in petroleum. In 2011, the industry created jobs at a faster rate than the U.S. economy as a whole. The third quarter of the year had more solar power installations than all of 2009. The federal renewable loan program includes insurance, and was designed to fully absorb bankruptcy losses like the failed Solyndra investment without harming taxpayers. Applicant fees have already covered the entire cost of running the loan guarantee scheme. None of which will stop the people who want to keep yelling the word "Solyndra" as if it were "Baba Booey."


A half-dozen subsidies and tax deals for oil companies are described in the following link. These are two of them. They, like all things, will not affect your opinion.

Companies are generally allowed to deduct the costs of an investment over the term of that investment’s useful life. But oil companies get to use a special method for calculating their deductions called “percentage depletion.” Instead of deducting the costs of an oil or gas well as its value declines, oil companies are allowed to deduct a flat percentage of the income they derive from it. Because the deductions are based on revenues, not costs, the subsidy actually increases at times when prices are high, which of course is when oil companies enjoy their greatest profits.
Another special tax rule dating back to 1916 permits independent oil companies (and major integrated oil companies to a lesser but still significant extent) to “expense” certain costs associated with drilling oil wells. This means they can take immediate deductions for these costs rather than spreading the deductions out over the useful life of the wells, which is the normal tax code rule for other types of investments. Taking deductions immediately means the companies lower their tax bill in the first year, in effect getting an interest-free loan from the government.

Bram said...

Oh wow, the "useful life" special tax break!

You know what oil companies pay really low taxes? Kenoil and Mokeen. They pay only 15% capital gains, no income tax in Fiji. I wonder who owns them?

Bram-to-English dictionary said...

"The sleazy Kennedy cabal manipulates government to hide their illicit millions in tax shelters... which the other oil companies do in a totally legal and ethical fashion, and how dare anyone complain?"

By the way, killer comeback to the asked-for specifics: "Oh wow."

Bram said...

I get it, oil companies are evil and shouldn't be allowed to keep any profits from their evil activities. The fact that they can depreciate assets based on their useful life makes them super duper evil.

So make a stand and stop buying their evil products.

Evil! EEEEEvil! said...

BOOM! You totally whupped that unmade claim's ass! Bram 1, Imaginary Dummy 0!

Here's the formula, Straw Killer.

If all industries got these freebies, it might be okay.

If no industries got these freebies, it might be okay.

If new industries got these freebies, while secure and profitable industries of a century's standing didn't get them, that would be okay.

That established industries pay politicians 1 cent on the dollar to keep on getting these now-needless freebies, while the same freebies to new industries are attacked as cronyism and waste... and while our global competitors build their economic futures by doing the opposite...
...that's something only a true chump claps for.