Rod Meloni: Green energy in the red
Weaning the U.S. off of oil [with the hope the rest of the world will follow] has considerable appeal.
It would change the global dynamic and the seismic wealth shift from the West to the Middle East. It would cut pollution. The Chevy Volt is sold on this notion. While Chevy Volt owners are among the most loyal car owners anywhere, the pollution cutting angle gets a little shaky when you consider they’re charging their cars with electricity made mostly from coal.
The argument gets shakier still when you consider the economics. How many Volts has Chevy sold? Roughly 31,000 in two years and a mere fraction of the number originally estimated. The $40,000 Chevy is heavily subsidized by the federal government to get people to buy them, and unlike that fabled movie baseball diamond, if you build it they don’t always come.
Related: Report: LG Chem wasted $150 million grant for battery cells
The promise of the Chevy Volt is the same promise President Obama along with former Michigan Governor Jennifer Granholm heartily sold as Michigan’s 21st century manufacturing renaissance. I was there when the President broke ground on the LG Chem plant in Holland in 2010 touting the batteries that were to be made there as the next best thing and hope for Michigan’s economic future. Two years later and that plant has not turned out a single battery but managed to burn through a quarter of a billion federal tax dollars. The Department of Energy rightfully criticized this in a report put out yesterday.
I was in the atrium at A123 in Livonia the next summer when President Obama himself interrupted Governor Granholm on the speaker phone during a news conference, taking time out of his busy schedule in the Oval Office to sing the praises of yet another $100 million in investment in an alternative energy battery plant destined to bring hundreds of new, good paying, green jobs. The plant built batteries and then went fins up last year. It wasn’t bad enough a mountain of tax payer dollars were lost, but the Chinese were allowed to buy the company and all of its high technology out of bankruptcy. This track record is abysmal at best and the promise of green jobs is looking like a promise broken.
Watch: Monroe wind turbine maker wastes tax money
With those disastrous forays into green energy making headlines we became curious about other projects. We turned our gaze downriver today and took a closer look at VenTower Industries. The company was born in the Stimulus Package of 2009. It was built on an old landfill with the promise of a non-polluting product; massive wind turbines. VenTower received roughly thirty million dollars in federal, state and local funding and a lot of praise from the White House and Lansing for offering those great green jobs. The company expected a quick ramp-up in production based on anticipated high demand. It expected [and in fact projected in numerous press releases] to employ 150 employees in its first phase with room to expand when demand increased. It also proclaimed it would make 25 of its four story towers a month or 300 a year.
Well, after some digging today we found some very Volt-like results. The company has hired 54 employees, two thirds of them production workers; NOT 150. The company has built 15 wind turbines TOTAL! The demand simply is not there. The last wind turbine built by the company came last August. A second grader could do the math that it cost taxpayers two million dollars for each turbine built. The company will no doubt cry foul at that math, pointing out private equity money was also used to build and operate the plant. One has to wonder how high the cost per turbine would be if the company had provided us with that number. We are also left to wonder how long the company can continue operating without infusions of cash or a loaded order pipeline. The company told Local Four News today it had three customers in the building today and it expects to build more towers soon. There was movement and steel delivery at the plant as well. Whether that is make work or real work is anyone’s guess. We can only hope that demand is picking up as a way to get some return on the tax dollars poured into the facility.
If these projects were our children’s report cards they would be filled with F’s and we would ground them until they got those grades up. But these aren’t report cards; these are egregious misuses of taxpayer dollars on highly risky projects with the foolish notion somehow the federal government can force market demand for anything, much less green energy. Someone at the White House missed the memo that markets have minds of their own. The memo probably also included a paragraph on how not understanding the market you are entering can be like playing three card Monte on a New York street corner. This goes beyond wasteful government spending and leaves burned taxpayers wondering what other good that tax money might have been used for. That pesky federal deficit comes first to mind. In the end we are left to wonder how many other sinkholes of this kind have been filled with federal tax dollars. We’re going to keep looking.