Yesterday, the New York Times had an article on the revival of the loan guarantee program in the Department of Energy ("U.S. Revives Aid Program for Clean Energy"). The article foregrounds criticisms of government investment in clean energy, resorting at times to a "he said/she said" frame, and de-emphasizes a more important criticism: the folly of the quest for "clean coal" itself. Also, perhaps more problematic is the implicit conflation of investment in solar and wind with conflation with investment in CCS technology.
Here's how the article begins:
The Obama administration has decided to revive a controversial loan guarantee program at the Energy Department, administration officials said on Thursday, even as the program remains under Congressional scrutiny after losing hundreds of millions in taxpayer money on investments in failed green energy start-ups like the solar module maker Solyndra.
First of all, as Dean Baker, co-director of CEPR, has frequently
highlighted, speaking about budgetary matters in gross numbers rather than percentages exacerbates public confusion. How do these "hundreds of millions" compare to the program as a whole? Well, they count for only
1.4% of DOE's investment in clean energy technologies.
Now, let's also look at the failure of Solyndra and the "controversy" in light of how that ended up after countless hearings by Republicans in Congress. Here's Joshua Green in the Boston Globe (Oct. 23, 2011) in "Solyndra flop stains a good program."
Barack Obama’s presidency has been notably free of scandal, but Republicans think they’ve finally found one in last month’s bankruptcy of the California solar company Solyndra, which received a $535 million loan from the Energy Department under a federal stimulus program meant to speed the development of clean-energy technology. In fact, Solyndra is no scandal — nobody has uncovered any wrongdoing … In the business world, that’s no big deal. It’s assumed some companies will fail, but that enough will prosper to merit the broader portfolio of investments. But in politics, it’s a very big deal — no one considers the broader context and failure is automatically assumed to be the result of incompetence or malfeasance. That’s especially true, and especially damaging, when the opposition party can launch hearings and investigations, as House Republicans are doing now. So far, the investigation has only turned up e-mails showing how eager the White House was to tout the Solyndra deal. Last year, Obama cited the company as an example of “American ingenuity and dynamism.” That’s embarrassing now that Solyndra has gone bust. But it’s the only company of the 28 that received loans to have failed. Meanwhile, the program has funded the world’s largest wind farm, its largest solar thermal plant, and its largest photovoltaic solar array. In other words, it has performed very much as intended.
Since then, one more
loan recipient went bankrupt, but the other 26 have not. That's 2 out of 28--not even a 10% failure rate, and that's doing better than
most venture capitalists do. Additionally, a number of the companies have already started
paying back the loans.
The New York Times could have foregrounded the high success rate of the clean energy loan program. But that would mean emphasizing reality rather than perception.
The New York Times article featured your usual Republican complaints, filled with exaggerations and misleading statements:
A spokeswoman for the House Committee on Energy and Commerce, which is controlled by Republicans, who have been critical of the loans in the past, took a skeptical view of the program.
“The D.O.E. loan guarantee program’s history of mismanagement, bankruptcies and failure to deliver the jobs promised raises significant concerns about risking billions in additional taxpayer dollars,” Charlotte Baker said.
Eventually, the Times manages to mention the high success rate, but only in a "He said/She Said" context and only after citing Solyndra again:
That temporary program, which was responsible for the Solyndra loan, has since expired, but the department still has about $50 billion left that could be lent, with a large chunk earmarked for nuclear projects.
The department points to several successful investments from the loan program. Ernest J. Moniz, the energy secretary, has pointed to Tesla Motors’ early repayment of $465 million as an example. Mr. Davidson said that since his office financed the first six large-scale photovoltaic solar farms in 2010 and 2011, 10 big solar power plants had started or finished construction without any federal money. On a $34 billion loan portfolio, the government has lost about $800 million, he said. That’s about 2.3 percent, and only a small fraction of the $10 billion Congress set aside to cover losses.
Although those numbers are facts, the New York Times feels that they must be balanced with discussion of media-created perceptions.
But the loan office has attracted far more attention for failures like Solyndra, which defaulted on a $535 million loan, and Fisker Automotive, the electric car company whose unpaid $168 million loan the Energy Department put up for auction this week. Many Republicans have seized on these missteps in criticizing the program.
“The Obama administration has gotten into the business of picking winners and losers at a significant cost to taxpayers,” Senator John Thune, Republican of South Dakota, said on Wednesday in calling for legislation to end the part of the program geared toward fuel-efficient cars.
My main critique so far has been the use of a a partisan "he said/she said" frame; however, the article also suffers from a conflation of investment in solar and other renewables with investment in the
chimera of clean coal. The revival of the program is problematic not because of the recent history of the clean energy loan program, but because of the wastefulness of the new focus:
This time, though, the program would devote as much as $8 billion to helping industries like coal and oil make cleaner energy. Although the program, which does not require Congressional approval, would support a wide range of technologies, it could help coal-fired power plants find a way to keep their emissions from escaping into the atmosphere, department officials said.
Officials say the federal subsidies are necessary to support the development of technologies that are too complex, unproven and expensive for investors and private companies to pursue on their own, assertions that have already stirred criticism from opponents who see the program as too risky and a misuse of taxpayer money.
....
Analysts and climate experts also questioned whether the program, which was originally established in 2005 and whose new guidelines will be completed this fall, could make the technologies economically viable on a mass scale. There are currently no ventures in the United States that achieve this, despite years of government-sponsored research and development, according to the Congressional Research Service. An ambitious clean-coal demonstration project called FutureGen, proposed by President George W. Bush in 2003, has yet to advance beyond the early development stages.
The problem is not that the government is investing in the development of new technologies (the complaint Republicans have), but that the investment is in a dead-end project that refuses to acknowledge the need to break from fossil fuels.
I'll let Sierra Club president Michael Brune explain the folly of clean coal:
The biggest challenges of carbon capture for the U.S. coal industry pertain to scale and cost, both of which are huge. Researchers at MIT estimate that if less than two-thirds of the carbon dioxide from U.S. coal plants were captured and compressed for storage, the collective volume to be stored underground "would about equal the total U.S. oil consumption of 20 million barrels per day."
Building an infrastructure to accomplish this would not be cheap. The Department of Energy's National Energy Technology Laboratory found that adding carbon capture to existing coal plants would increase the cost of electricity generation by 81 percent. This includes neither the rising cost of coal, nor the heightened cost of new coal plant construction, which has surged by more than 130 percent since 2000.
Assuming these challenges can be met, then what? Coal will still be dirty. The American Lung Association estimates that pollution from coal-fired power plants triggers 550,000 asthma attacks and 38,000 heart attacks annually, helping to cause an estimated 24,000 Americans to die prematurely each year. Coal combustion is also the country's largest source of mercury poisoning and releases more than five dozen different types of hazardous air pollutants.
And don't tell the residents of Appalachia that coal is clean. Mountaintop removal coal mining has flattened 450 mountains and buried more than 700 miles of rivers and streams in one of the country's most beautiful regions.
The Department of Energy should be investing in technologies that will move us to a clean energy future, but "clean coal" is not part of such a future.