Green economy goes bust

Green economy goes bust
Renewable energies fail to produce cost-effective ventures

When President Obama touts the "green economy," the mainstream media bend over backward to give him extensive coverage, but when "green economy" ventures go bust, they bury the story.

One example is Solyndra, Inc., a maker of solar panels headquartered in Fremont, Calif.

In 2009, Solyndra received a $535 million Department of Energy loan guarantee in a ceremony attended by Vice President Joe Biden, Energy Secretary Steven Chu and California Gov. Arnold Schwarzenegger.

Then President Obama and California Sen. Barbara Boxer toured the plant, touting the green economy as the future not only of California but also of the U.S. economy.

This month, Solyndra announced it is scuttling its planned factory expansion in Freemont in a move that will stop the company's plans to hire an additional 1,000 workers.

Moreover, just to survive, Solyndra is eliminating 155 to 175 jobs in Fremont, including 135 contract employees and 20 to 40 full-time workers, the Oakland Tribune reported..

ABC News in Freemont reported that the reason for the downsizing is cheaper foreign competition from China in manufacturing solar panels.

Investors have a different explanation.

Axiom Capital Management's solar power analyst Gordon Johnson told Bloomberg that the supply of photovoltaic panels is expected to climb to almost triple the level of demand in 2011, crashing prices in the industry.

"It could be Armageddon," Johnson said. "Demand is about to fall at a time when you're going to have a significant increase in supply. In a commoditized industry, that is a formula for disaster."

Top leftist altruist goes bust on green-energy investments

One year ago, David Gelbaum, a major donor to the Sierra Club and the American Civil Liberties Issue, plus several military assistance foundations with a leftist bent, announced that after donating $389 million to these groups from 2005 to 2009, he had to cut back because his investments in alternative-energy firms "laced me in a highly liquid position," according to the Wall Street Journal.

He made his fortune as a mathematician working in a Wall Street hedge fund, but now his commitment to renewable energy has cost him dearly.

Gelbaum, also a major donor to the Democratic National Party, indicated that the Quercus Trust, the group he runs, was down almost 57 percent over an 18-month period from 2008-2009.

In November 2008, GreenTechMedia.com identified 34 green technology companies that had received Quercus Trust funding.

"Entrepreneurs who have received money say Gelbaum takes a long term, holistic vies of the market and is patient enough to put money into an investment that might pay off well beyond five years," GreenTechMedia.com noted. "He's also not seeing attention."

In January 2009, GreenTechMedia identified that Guercus Trust investments had been placed in 47 green technology companies.

"Entrepreneurs who have received money from the trust say Gelbaum is not investing in these companies as a way to evangelize green or as a form of charity," GreenTechMedia.com reported in January 2009.

That Gelbaum's fortune has not recovered was made clear by a USA Today article last week that listed the military foundations that had gotten Gelbaum money and ran under the title "Donor's millions for military causes drying up."

Limits of green technologies

Red Alert has consistently argued that "green energies," including biofuels like ethanol and other technologies such as solar power and wind turbines, are ideologically driven enterprises, not profit-generating businesses.

Powering New York City by solar panels would require dedicating a landmass equivalent to the state of New Jersey for the project.

Even then, a solar-power grid would require hydro-electric backup simply because the sun does not shine all of the time in New Jersey.

Another investor who lost big on renewable energy is oilman T. Boone Pickens.

Red Alert has reported repeatedly that T. Boone Pickens abandoned plans to build his $2 billion wind farm in Pampa, Texas, a small town in the Texas panhandle, after deciding to throw in the towel to what has to be described as one of the nation's most expensive alternative energy boondoggles.

In May, 2008, Pickens announced that his oil company, Mesa Power LP, would order 687 wind turbines, or 1,000 megawatts of capacity, from GE, at a cost of about $2 billion, the New York Times reported.

By 2014, Pickens planned to expand the wind farm in west Texas to a gigantic 4,000 megawatts, about four times the output of a typical nuclear power plant.

Now, Pickens has decided the idea was a bust, resolving that at best all that might work are small wind farms in limited geographical locations, perhaps in the Midwest and possibly Texas, though Pickens has yet to say where exactly he now considers that wind turbine power might be an economically successful venture.

In January 2010, Pickens cut his massive order for wind turbines from GE by more than half, according to the Dallas Morning News.

Once Pickens failed to convince the federal government or the state of Texas to spend the hundreds of millions of dollars needed to connect the Pickens-built wind farm to the electrical grid in Dallas, he was left with the prospect of a lot of wind turbines blowing unprofitably in the wind of the dusty Texas panhandle.

11/29/10