Filed under: Economy, Energy, Democrat Corruption, Capitalism, Statism | Tags: Electric Vehicle Subsidies, Immature Technology, Public Relations Fail
Holman Jenkins has a great column in the Wall Street Journal this morning. I loved the subhead: “Oh for the day when electric-car enthusiasts didn’t expect the rest of us to subsidize their hobby.” Exactly.
Somebody once asked the late, great British motorcycle journalist Kevin Ash about the electric motorcycles then arriving on the market. After noting that most electricity comes from coal, casting doubt on any eco-benefit, he dug in: “The silly small range and long recharge times make them impractical. . . . An entirely new method of storing electricity is needed to transform practicality, and it must be invented (and then refined in labs) first. Developing electric road vehicles using existing technology is a waste and a deception.”
The latest reason for interest in the EV problem was a PR attempt by Tesla over a road trip from Washington to Boston attempted by a Times reporter in one of the company’s electric cars. Spectacular failure. It ran out of juice. Tesla said that on such an extended trip, priorities A through F should be attending to the battery, rather than keeping up with traffic or enjoying the ride. The New York Times thought the point of the Tesla-designed exercise was to show that the Tesla S can be a worry-free substitute for a gas-powered car on a long trip. No, it can’t.
Green-car advocates said Tesla was crazy to set up such a PR stunt in the first place. If an average driver needs so much hand-holding from the automaker, it’s the wrong car for the trip. And of course the elephant in the room is that the federal government is subsidizing immature technologies that don’t meet the expectations of the marketplace.
The Ash rule applies not just to electric cars, but to wind farms, solar power and other renewable energy projects, all of which may have potential, all of which would be better served if government limited itself to funding basic research until a technology emerges that the marketplace can support on its merits.
Consider the spectacle Germany has been making of itself in this regard. German politicians decided it would be nice if 35% of the country’s electricity came from renewables by 2020. German politicians, after Fukushima, decided it would be nice to phase out the country’s nuclear plants. German politicians decided factories should be protected from any increase in electricity prices. In their home districts, politicians thought “factory” should be extended to cover any large and influential employer.
Now the green future has arrived and German voters are in revolt over rising power prices. “Fuel poverty” has become a buzz term as thousands have been shut off for nonpayment of bills. Politicians have begun trying to claw back subsidies from companies that say the subsidies are the only reason they’re in business. A scandal seems to emerge weekly over some big-name company illicitly benefiting from subsidized electricity rates.
Is Germany the role model for the Obama administration? One hopes that the news will catch up with them before the U.S. economy duplicates the German tragedy. Remember all the ‘driving into a ditch’ metaphors Obama used to use? Looks like we can turn them back on him. It’s a good-looking car, but as always with beauty, it’s what’s under the skin that counts.
Filed under: Politics, Economy, Energy, Democrat Corruption, Capitalism, Junk Science | Tags: Chicago Politics, LG Chem Michigan, Another Battery Flop
President Obama may have learned his ideology from his family and mentors and from his professors, but he learned his politics in Chicago. Chicago has long been the home of extraordinarily corrupt Democrat politics. You give me your financial support and I will see that you get government contracts to make you rich, which you will repay by giving me financial support and electoral support. I will get you a contract to build government sponsored housing, and you will sell me some land at a reduced price. If they don’t get caught, everybody gets rich.
Chicago politics have driven the Obama administration. Union supporters and Environmental supporters must get their payback. Supporting the “battle against climate change” offers the vehicle. The enviros want clean green energy, the unions want union jobs, and the bundlers want to invest in promising green technology, and the government is happy to provide the funding.
Trouble is that the world energy picture has changed while Obama wasn’t paying attention. We have abundant supplies of oil and natural gas, and hundreds of years of supplies of coal. Far greater supplies than Saudi Arabia. The “green” technologies have turned out to be inefficient, not cost-effective, and unable to produce energy is any significant quantities. CO2 is increasing while the climate gets cooler, and there has been no warming for 17 years. The draft IPCC report shows 20 years of overestimated global warming. The enviros are fighting a losing battle.
Obama used his fifth State of the Union address to extol the virtue and job-creating power of federal “investment” in solar, wind, and advanced battery development. Everybody is giving up on electric cars, and the Department of Energy’s Office of the Inspector General has, in a scathing report issued Wednesday, said that LG Chem Michigan Inc. has misused most of the $150 million in federal grants to build a battery cell manufacturing plant in Holland, Michigan. The company used taxpayer dollars to pay employees to volunteer at local nonprofits, play games and watch movies.
Inspector General Gregory H. Friedman said that “even though the facility had produced a large number of test cells, the plant had yet to manufacture battery cells that could actually be used in electric vehicles and sold to the public.”
Barely 200 of the promised 440 jobs expected to be created by the project had, in fact, been created. Production of lithium-ion batteries is not likely to begin anytime soon if sales of GM’s Chevy Volt— whose batteries currently come from LG Chem operations in South Korea — do not accelerate.
LG Chem has spent $142 million of its $150 million federal grant, and the company expects to continue satisfying any U.S. demand for its batteries from plants overseas. Only 3 of the planned 5 production lines have been built.
I.G. Friedman’s report is another searing indictment of the Obama Energy Department’s $2.4 billion Vehicle Technologies Program, an ideologically driven program to back green-energy technology investments with taxpayer dollars and create American jobs.
The way these things are supposed to work is for business to respond to a public need for a product, not for the government to pick winners and losers. They are pretty good at the loser part, but really lousy at the winners. For the taxpayers’ $150 million, you have no batteries, no real jobs, and another business that has squandered the money.
You start with a failing car company that is in deep trouble because of their overpaid union workers, unfunded pensions, and overgenerous work rules. You screw the investors and the taxpayers, and reward the unions— even giving them a big share of the company. Then you order them to make an electric car that is still in the experimental stage and sell it for an outrageous price to a public that doesn’t want it. Obama describes this as an auto industry that has come roaring back.
Electric cars have been a pipe dream since the turn of the 19th century. They just seemed so promising, but nobody could figure out how to make a battery that would compete with the internal combustion engine. Knowledgeable engineers have said that batteries require a breakthrough from a source as yet unknown. Some of the electric cars are sexy looking, but have a nasty habit of catching fire. Costs range from over $40,000 to well over $100,000. Resale value gets a little iffy when replacement batteries cost considerably upwards from $15,000, and the needed grid to support recharging does not exist.
LG Chem is just another in the long list of examples of the risk of allowing federal bureaucrats to use taxpayer dollars to bet on private-sector players in emerging technologies that are considered politically correct. Never works. Isn’t there a song about the Yugo?