Another Bankrupt Obama Investment
Beacon Power Corp., an energy- storage company that received $43 million in backing from the U.S. program that supported failed solar-panel maker Solyndra LLC, filed for bankruptcy after struggling to raise private financing.
The money-losing company, which makes flywheels that manage energy moving through a power grid, had sought to avoid the fate of Solyndra, which entered bankruptcy last month after receiving a $535 million loan guarantee from a U.S. Energy Department program designed to spur alternative energy development. Beacon faced delisting of its shares by the Nasdaq Stock Market and warned in an Aug. 9 regulatory filing that it might not remain a “going concern.”...
In addition, Beacon received $29 million in grants from the U.S. and Pennsylvania for a 20-megawatt plant in that state and hired Group Robinson LLC to help raise more funds for the $53 million project. Group Robinson, a Menlo Park, California- based renewable-energy consulting company, also was helping Beacon find customers outside the U.S.
This is not an accident. By definition, the government is investing in companies that every other private lender and investor turned down.
Scott:
Hey, so I watched your climate skeptic video, really good, but are you going to make a blog post response to this new Koch funded study? In your video you talk quite a bit about weather stations being skewed because of urbanization and the study seems to deal directly with that. Would be good to hear your thoughts on the study.
October 31, 2011, 11:16 amLarry Sheldon:
"Obama Investment"?
Just how much Obama money is there in this?
How much Sheldon money?
October 31, 2011, 1:33 pmDan:
Sounds like a bad investment.
At some point, you should devote more space to all the unwise investments the government has made in the fossil fuel industry over the years. You can start with the huge tax deductions for oil companies, which are among the most profitable companies on earth. This may not be like sending them a check, but for all intents and purposes, it costs the country a hell of a lot more than a Solyndra.
October 31, 2011, 1:34 pmMatt:
Dan,
Name one tax deduction that the US oil companies get that isn't a standard tax deduction available to all businesses.
A while back, I don't rember if it was on this blog, I saw a list of proposed oil subsidies that the Democrats in congress wanted to cut. Almost all were standard business deductions.
If there are any tax deductions genuinely available to only the oil industry, by all means let's get rid of them.
October 31, 2011, 3:30 pmTed Rado:
The business world is a well disciplined place. Someone has an idea for a business venture. The idea is wrung out on paper to make sure it is potentially viable. Capital is raised to pursue the idea. If it is successful, the originators become wealthy (Bill Gates, Steve Jobs, etc.). If it fails, the investors go broke. As time passes, if management screws up or a better idea comes along, the enterprise goes under.
This system has worked fine for a couple of hundred years. Now the brilliant minds in the USG see fit to short circuit this proven method and instead make the decisions as to which firms or businesses succeed or fail. Among other things, this messes up the natural economic laws, which no longer apply. Nobody knows what will happen in any given situation. Will the USG hassle, regulate, or demonize a business out of existance? Will the USG try to make a losing idea into a winner? How in the hell can anyone run an R&D program or a business in this environment? And all this at the taxpayers expense. If we were trying to invent a system guaranteed to fail, we woud be hard put to improve on what the USG is doing.
The answer is simple: get the USG out of EVERYTHING that can be done by private free enterprise, then let the chips fall where thay may.
October 31, 2011, 4:00 pmTed Rado:
If you think the flywheel idea is kooky, go to
alternative-energy-news.info
Click on "wind farms" on the right. There is a SERIOUS (???) article about mounting wind farms on kites and flying them high in the sky. By comparison, all other alt energy schems seem brilliant. AGHHH.
October 31, 2011, 4:08 pmTed Rado:
One last comment. The USG is subsidizing intellectual prostitution. Any dumb scheme will get you USG funds, even if the prof asking for the grant can readily see that it is nonsense. Put out the cheese; here come the rats!
October 31, 2011, 4:11 pmel coronado:
I think it's high time the DOE took another look at magic beans. Green technology, self-renewing, and I just happen to have some I'd be willing to part with for a $500MM loan. This loan would of course be safe as can be, being collateralized by - you know - by the beans themselves. And of COURSE I'd want Obama associates on the board! To be sure everything's on the up-and-up.
October 31, 2011, 4:25 pmMesa Econoguy:
Shocking.
More government investment failure.
October 31, 2011, 4:35 pmNot Sure:
"This may not be like sending them a check, but for all intents and purposes, it costs the country a hell of a lot more than a Solyndra."
Only if you're starting from the position that a company's income is actually owned by the government in the first place, and they just decide how much of it the company gets to keep for itself.
October 31, 2011, 5:42 pmJohn:
There's a saying at the poker table: "if you look around and can't find the sucker, it's you". The same applies to the deal table. The government is the epitome of Dumb Money.
October 31, 2011, 8:21 pmPanzersage:
Dan,
Please refer to the specific Oil only Tax deductions. Like Matt I have seen a list of the "Special" tax breaks Oil Companies get and they are standard business deductions that either all companies get or all manufacturing companies get.
That wouldn't be getting rid of deductions, that would be passing extra taxes, unless you are proposing doing away with the deductions for all businesses.
Also like Matt I support getting rid of any business specific tax breaks that only help a tiny number of targeted businesses.
October 31, 2011, 8:27 pmDoug:
I believe this is Coyote's article about "energy subsidies" that some of you have been alluding to: https://www.coyoteblog.com/coyote_blog/2011/08/wtf-this-is-what-they-mean-by-oil-and-gas-subsidies.html
October 31, 2011, 11:23 pmcaseyboy:
And even if the oil industry were getting some form of tax subsidy which they aren't, at least they are reliably delivering energy that I both want and need. And at a cost per gallon (once you take out the taxes) that is less than the cost of a gallon of milk which is subsidized.
Dan, get off the oil companies. Your friends have changed the target to those evil Wall Street Bankers.
November 1, 2011, 12:00 pmtomw:
El Coronado, I suppose you would take a semi-dry cow for the beans, no?
Dan, I have read in multiple sources that the Federal Government takes more in taxes than the greedy BigOil Companies make in profit. I don't believe they get any subsidies, and compared to the Federal money spent on alternative energy sources, they get the drippings they can scrape together from the floor of the alternative energy trough. In other words, oil gets bupkus, ditto coal and natural gas, leaving the Federal dollar to the wind, solar and biofuels industries.
November 2, 2011, 11:26 amWhat. Ever.
tom
IGotBupkis, Paranomasty Specialist, Level 12:
The fruits of getting ephed by The Great Big 0 and his cronies:
It's ABOI!!
November 2, 2011, 1:14 pmIGotBupkis, Paranomasty Specialist, Level 12:
>>> That wouldn’t be getting rid of deductions, that would be passing extra taxes, unless you are proposing doing away with the deductions for all businesses.
No, that would still be passing extra taxes, that would just not be passing special extra taxes for big oil.
;D
November 2, 2011, 1:16 pmepobirs:
Actually, Dan, the oil companies are not terribly profitable. You might get that idea because of the huge volume they do but the margins they make on a gallon of gas at retail is around 10% on a good day. This has been the case for decades.
There are many other businesses that would look at a 10% margin as disastrous. Apple, for instance.
November 2, 2011, 4:42 pmBarnes:
Has anybody been able to determine what taxes Solyndra paid, or, for that matter, what taxes are collected in general from the "Green Energy" sector? It would be interesting to see a comparison of subsidies vs. taxes paid between the fossil fuel companies and green energy companies.
November 3, 2011, 6:51 amJohn Cunningham:
to Barnes--
November 3, 2011, 9:21 pmI don'tthink Solyndra ever ran a profit in any year, thus they would not have paid any corporate income tax. obviously they would be paying sales taxes, and perhaps some others like excise taxes.
as far as I recall, there are no taxes specifically on the green energy sector. they would, if profitable, by paying standard corp taxes.
ArtD0dger:
Green jobs are like green logs. You can burn all the kindling you want, but they're never going to quite catch fire.
November 5, 2011, 1:36 pm