American Elephants

Another of Obama’s Green “Investments” Goes Belly-Up by The Elephant's Child

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?


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