Corporate Welfare Watch: Wind Farm Subsidies
General Electric's CEO Jeff Immelt threw a temper tantrum because the Office of Management and Budget and Treasury Department were holding up tens of millions in subsidies to the company for a wind farm project in Oregon, according to a scathing editorial in today's Wall Street Journal [sub required]. A leaked internal White House memo put together by economic aide Larry Summers and senior policy aides Carol Browner and Ron Klain apparently warns that GE was threatening to seek financing in the private markets for the $1.9 billion project, if the Energy Department subsidies were not quickly forthcoming. Really?
As the WSJ explains:
… OMB and Treasury found severe problems with "the economic integrity of government support for renewables." Developers had almost no "skin in the game," meaning that their equity in projects was well below ordinary standards in the private market. They were also "double dipping," obtaining loan guarantees for projects that "would appear likely to move forward without the credit support" in the stimulus because of
other subsidy programs. The reason for the roadblock was "an insufficient number of financially and technically viable projects."Treasury and OMB singled out an 845-megawatt wind farm that the Energy Department had guaranteed in Oregon called Shepherds Flat, a $1.9 billion installation of 338 General Electric turbines. Combining the stimulus and other federal and state subsidies, the total taxpayer cost is about $1.2 billion, while sponsors GE and Caithness Energy LLC had invested equity of merely about 11%. The memo also notes the wind farm could sell power at "above-market rates" because of Oregon's renewable portfolio standard mandate, which requires utilities to buy a certain annual amount of wind, solar, etc.
But then GE said it was considering "going to the private market for financing out of frustration with the review process." Anything but that. The memo dryly observes that "the alternative of private financing would not make the project financially non-viable."
Oh, and while Shepherds Flat might result in about 18 million fewer tons of carbon through 2033, "reductions would have to be valued at nearly $130 per ton CO2 for the climate benefits to equal the subsidies (more than 6 times the primary estimate used by the government in evaluating rules)."
So here we have the government already paying for 65% of a project that doesn't even meet its normal cost-benefit test, and then the White House has to referee when one of the largest corporations in the world (GE) importunes the Administration to move faster by threatening to find a private financial substitute like any other business. Remind us again why taxpayers should pay for this kind of corporate welfare?
That's a really excellent question.
In my column, "Wind Turbines Are Beautiful," I visit a Montana wind farm and look at how much they cost.
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Cue Chony and the Externality Chorus!
Trolling by proxy.
At least wait for the trolls to post before you start arguing with them.
I’m on the edge of my seat, wondering if the sun will set today.
Fuck you, Immelt. And fuck you, too, Welch, for dumping that worthless piece of shit on the shareholders of GE.
Immelt couldn’t run a goddam lemonade stand without beseeching the government for subsidies. What a worthless cunt.
I’d be okay with GE getting the subsidy…so long as Jeff Immelt agreed to a reduction in total compensation to a level equal with that of a typical welfare recipient.
What good would that do?
It was rhetorical, pointing out the effective status of Jeff Immelt vis a vis the Central State: As a welfare bum.
-from the wind turbine link-
Grasslands Renewable Energy is proposing to build a 350 megawatt closed-loop pumped storage hydro project near Gordon Butte in central Montana. The idea is that water would be pumped to an uphill reservoir when wind electricity is cheap (mostly at night) and then allowed to flow downhill to another reservoir through turbines to produce electricity when the wind falters or demand peaks.
Perpetual motion machine!
From a commercial and engineering point of view, it’s not a bad way to make a project more attractive. I know of at least one utility that does exactly that with a mountain-top reservoir in Missouri.
Still, they don’t need a subsidy to do it.
Actually, it isn’t a ‘perpetual motion machine’, as there is an external input of energy to the process. It’s one of a rather limited number of possible solutions to the biggest drawback to wind sources – constant availability. This comes from the horrendous white elephant design that GE is pushing so hard, and has become iconic with the approach – the big assed, butt ugly, hyper sensitive pinwheels on sticks. Quite simply, they’re fucking doing it wrong. From the basic design concept, to the error of immediately creating electricity with the energy that’s harvested. Pushing water up a hill turns it into potential energy, in storage, which can be released and used on an as needed basis. To either generate electricity, or even to directly mechanically drive a wide variety of mechanical actions via hydraulic means.
What these fuckheads are doing is blatantly obscene.
Pump storage is a valid and existing practice. Its been done in this country for a long time, and is actually a very good fit to counter the variability of wind power. Electricity prices vary quite a bit hour-to-hour, day-to-day, etc. Using power to store energy when its cheap, and then making power when prices spike is sound practice.
That said, wind subsidies are bunk.
Windmills are awesome and they can provide all of our power. Look at China! Sure, their fossil fuel consumption is growing rapidly and they’re replacing us as the main emitter of greenhouse gases, but they’re building a bunch of windmills. CHINA IS GREENER THAN THE US! AAAAAAGH!
Re: Chad,
And bird meat.
Mainly because they’re doing it wrong, with a fucking horrendous design.
I give you a C+ for the Chad spoof.
I give you a C+ for the Chad spoof.
I give you a C+ for the Chad spoof.
Also, you libertardians are a bunch of fundie fucktards. Why don’t you go suck Ron Paul’s dick or something?
Chad, you’re confusing yourself with Max.
Ron Paul’s dick is so big, he uses windmills trim his bush….
Why don’t you go suck Ron Paul’s dick or something?
Because your mom already got a federal subsidy for sucking Ron Paul’s dick. And like GE, if there isn’t a federal subsidy involved, it’s not getting done.
As soon as you graduate from your parent’s house.
If we simply must waste money, I wish we’d do it on something that might prove eventually useful. Like radical new technologies. Fusion, robot-controlled flying cars, space elevators, etc.
If we simply must waste money, I wish we’d do it on something that might prove eventually useful.
I actually agree with you here, but I was thinking more of developing some sweet-ass new drugs and giving away free breast-augmentations, lipo and face-jobs for ugly chicks. Hell, the physicians are gonna be on the government payroll in a few years if the green and progressive groups get their way.
Well, if we can’t be innovative or dominate science and technology, we might as well be hot.
Some of the research for wind and solar will have broader implications for distributed generation and energy storage, and to the extent that distributed generation is a decentralizing tech, it could be considered useful for the cause of liberty.
The actual installations here are not, of course, since aside from the subsidies, they’re still centralized power plants.
Flying cars? Feh! What have you got against Fembots?
My list was neither exclusive or complete.
Well, all I’m saying is you should start with technology that the porn industry will do all the R&D for.
Now, fembot hookers in flying cars…now you’re getting somewhere.
The Urkobold agrees with your reasoning. He believes that sex/porn drives all technological advance, hence his support of the Lunar Sex Prize.
This is just sickening and shows why the Citizens United decision was a bad one. Finally these Republicans who are beholden to big business interests at the expense of the poor and middle class will be exposed for what they are.
These right-wing big business bootlickers just make me sick. If they cared about regular Americans instead of their fat cat corporate donors like the Democrats do, then we’d all be better off. The fact that GE is in bed with the Republicans shouldn’t suprise anyone. Only a Democrat administration can get us back to where business interests aren’t able to trump those of regular working people like pipefitters, auto workers, cops and firemen.
What? Wrong party? Oops.
Dude, you made me blow hot coffee out my nose. Worth it, though.
You know, we could end unemployment by hiring people to carry water up the hill and dump it in the reservoir, which then runs down the hill through turbines to the waiting bucket brigade…
It
could
WORK!!!
At least this method of burning taxpayer dollars is carbon neutral.
If you think about it, the money is burned before it is printed, causing it to actually be a net positive for the government’s carbon footprint.
Leave it to the Obama admin to come up with out-of-the-box solutions to real world problems. Had they actually printed the money before burning it, there would have been a shit-ton of CO and CO2 put into the atmosphere.
New Obama slogan: Creative Solutions For Simple People.
Unlike this one.
Well if these subsidies don’t work out we’ll still have one big worthless windbag I mean windmill, Olbermann
[bad joke]
But how will MSNBC cover this story?
[/bad joke]
I have returned from my long absence! Who is this impostor who pretends to be me?
I was driving through an otherwise scenic route when I exclaimed, “What are these fucking blights on the landscape.” You can imagine my horror when I quickly realized that I had invested in these atrocities.
What’s worse; the fact that GE was so skeezy as to threaten to NOT TAKE a frickin SUBSIDY in order to squeeze more cheese from Uncle Sam, or the fact that the Government was already paying 65% of the projects costs?
“We Bring Good Things To Life!!!!*
*and make with the cheese fatboy.
Denied the opportunity to use their talents in the service of their country, they began to operate what they called ‘The Operation’… They would select a victim and then threaten to beat him up if he paid the so-called protection money. Four months later they started another operation which the called ‘The Other Operation’. In this racket they selected another victim and threatened not to beat him up if he didn’t pay them. One month later they hit upon ‘The Other Other Operation’. In this the victim was threatened that if he didn’t pay them, they would beat him up. This for the Piranha brothers was the turning point.
Hundreds of years from now, people will believe that a man named Monty Python wrote odd quatrains that predicted the future.
And yet still, even after all their warnings, no one expects the spanish inquisition.
Which will play a major role in world politics in the late 2100s.
The wierdest part is the fact that GE apparently tihnks that threatening to seek private financing will prompt the government to start paying them.
It’s like they think that the Department of Energy prefers it that way.
Even more strangely, the White House gnomes appear to agree. You’d think they’d just go “Oh, great… go ahead and do that then…” But they didn’t. Instead they prepped response memos and worried up and down the chain about the success of their subsidy program.
I woulda sent them a “thank you for your interest” letter and been done with it.
Of course. It’s a huge PR hit for the Dems if it turns out it’s easier to do this through private financing than through Big Daddy Government. Plus, Obama wants credit for building these windmills, which he won’t get if GE takes the project private.
It’s the catch-22 of progressive policy on subsidies. They’re in favor of the government funding projects that wouldn’t be profitable without subsidies. But they’re in favor of the government funding unprofitable projects.
No matter what happens, it looks idiotic. They’re either sinking money in a boondoggle, or funding something publicly that could have found private financing.
I was thinking the same thing. How the fuck is this a position to make demands?
“If you don’t give me that money right now, I won’t hold my breath until I turn blue! Do you hear me? I won’t!!!”
Yeah, we’re going to make you beg us to take your money.
Cue our resident corporate tool, Tony, to explain why this is a good thing.
Newest Soviet Dam is Unqualified Success!
With only 1597 workers dead, and only 23,000 required to bail leaking water around clock, project is universally accepted as Comrade Obama’s finest accomplishment.
No counter-revolutionaries could be reached for comment.
Threatening to get private funding? Threatening? What the fuck? The idea that not accepting a subsidy is a threat is so far outside of my worldview that my brain hurts.
It’s like a grade school bully threatening to not steal your lunch money.
Threaten away! Personally I think GE should threaten not to take ANY government loans. That will teach us! 🙂