Solyndra Precedent: Interview on Energy Subsidy Policies Got Me Thinking

I was just interviewed by a reporter from The Deal about my experience as a low level federal energy regulator back in the halcyon days of the Carter administration. She was wondering if the Solyndra mess could be likened to the Synthetic Fuels Corporation fiasco. Short answer: Yes.

Back in the day, I was a member of the regulatory team that oversaw the development of the Great Plains Coal Gasification Plant which was part of a "visionary" $20 billion ($60 billion today) plan to build 22 massive coal gasification plants to overcome the natural gas "shortage" our country was experiencing at the time. The GPCG plant cost $2 billion to build and was bolstered by $1.5 billion ($4 billion today) in Department of Energy loan guarantees to five private gas company "partners." 

The plant came online in 1984, but the natural gas shortage had dissipated because Jimmy Carter had lifted the federal price cap on natural gas. Lo and behold, there was no shortage of gas, only a shortage of price-controlled gas. The natural gas "partners" demanded that the DOE guarantee a higher than market price for the natural gas produced by the plant or they would walk away from the loan guarantees. DOE balked, and the companies left the agency with $1.5 billion in guarantees to paid by the taxpayers. Sound familiar? 

Of course, it does. Solyndra went bankrupt because its technology was supposed to address the silicon shortage for solar panels. When the shortage ended, there was no need for Solyndra's more expensive technology, thus the default on more than $500 million in federal loan guarantees. Other failed federally subsidized energy projects include corn bioethanol, various alternative energy-fueled auto initiatives, and arguably the nuclear power industry. At the end of the conversation, I observed: If one looks back over the decades, the U.S. energy landscape is littered with scores of costly federal energy production failures. Perhaps I exaggerated, but I don't think so. 

For more background, see my 2010 energy tour dispatch, Burning Money to Turn Coal into Gas. 

Comments

[Auric Demonocles]

And who is this "I"?

[Ron Bailey]

AD: It is I.

[Tim]

You?

[Ann Veal]

Her?

[Mexican Ron Bailey]

Si.

[Tim]

I'm aware of several Federally funded projects to turn cow poop into methane for farm fuel, wonder if they've been made irrelevant by shale gas and fracking.

[Scruffy Nerdherder]

Just that you use the word "several" is enough to prove that we are doomed.

[WinningTheFuture_WithSalmon]

They're fracking cow poop?!! That is just wrong.

[Myles]

No worries. I invented a way to turn cow poop into a highly addictive drug called jet.

[Fist of Etiquette]

I had a 1976 Dodge Charger Daytona I converted to run on halycon.

[Episiarch]

You picked the wrong day to stop huffing halcyon.

[Ron Bailey]

FofE: Fixed.

[Almanian]

Tough crowd, eh?

[Fist of Etiquette]

Bailey turned the tables on me, fixing it and making me look the fool!

Doesn't the word "gasification" seem like one of those terms from the early 1900's that Mr. Burns would use?

[Spartacus]

Gasification := what happens to your Taco Bell meal after eating it.

[Gojira]

Only slightly OT:

Apparently, banks are the real villains behind climate change, because they nefariously provide banking services to carbon-producing utilities.

Who knew?

[Almanian]

So, the US gummint has experienced failure intervening in energy markets BEFORE, and learned nothing from it?

Surprise, surprise, surprise...

[drone of the bureaucracy]

It will be different this time!

[Almanian]

Also, I had almost forgotten about this episode in our country's past. I was in high school when Carter was Pres.

Gas prices shooting through the roof, high inflation (I think home loans were 12%), hostages in Iran ("But, but...didn't we used to be friends?"), disco and Pong.

Good times, good times...

[John]

Speaking of green energy, this is stupid even for Slate.

Out in the real world, these experiments suggest a way to help make people reduce their impact on the environment. If information about each of our environmental footprints was made public, concern for maintaining a good reputation could impact behavior. Would you want your neighbors, friends, or colleagues to think of you as a free rider, harming the environment while benefiting from the restraint of others?

The power of reputation is already being harnessed to protect the environment. Hybrid cars such as the Toyota Prius have recognizable designs, advertising their driver's commitment to cleaner energy for all to see. Some energy companies give green flags to customers who choose to pay extra for energy from a more environmentally friendly source, allowing people to openly display their green credentials. Similarly, individuals who volunteer in environmental clean-up days receive T-shirts advertising their participation.

Tokens such as these serve a dual purpose. First, they allow those who contribute to reap benefits through reputation, helping to compensate them for the costs they incur. Secondly, when people display their commitment to conservation, it reinforces the norm of participation and increases the pressure on free riders. If you know that all of your neighbors are paying extra for green energy or volunteering on a conservation project, that makes you all the more inclined to do so yourself.

http://www.slate.com/articles/.....help_.html

If it wasn't so pathetic, the conformism would be disturbing. When I see a Prius (or Pius as my wife and I call them), I think "wow that dork bought an overpriced horribly ugly car.

[Almanian]

I must admit to an irrational, immature urge to drive into them when I'm in my Ford Super Duty 4x4.

I'm not proud of these feelings, but they're there.

I bet they'd scrunch up real good!

[John]

Me too. And my neighbors doing stupid shit doesn't make me any more inclined to do said stupid shit. I really wonder how these people feed themselves.

[WinningTheFuture_WithSalmon]

Bumper sticker: "For every Prius I see, I go home and burn a tire"

[Episiarch]

The author is just desperately trying to convince him/herself that they aren't a total idiot who got fleeced by a fad.

Expect more of this as all the people who bought in hook, line, and sinker start to realize how fucking stupid they were. They will start to do anything to prove that they weren't retarded suckers.

It's going to be disco and bell bottoms all over again.

[juris imprudent]

You aren't dazzled and humiliated by their glorious cloak of self-righteousness?

Me neither.

Pointing out how alike they are to preachy so-cons is a great way to initiate a gasket blow-out.

[John]

Even the SOCONs are not that bad. Since when do the SOCONS want people to put flags in their yards telling the world they don't drink or go to strip clubs?

[John]

IN the comments. I wonder if this is our Zeb responding to some guy bragging about how he rides his bike everywhere.

Zeb
Hey Mundandasphalt, do you wear tights when you ride your bicycle. I noticed this phenomenon around 2002-- runners and bicyclists where these ridiculous clown suits composed of brightly colored tops and spandex tights. Who told you people to dress like this?

Priceless.

[A Serious Man]

Douchebags of the world, unite? It does pretty much solidify the image of liberals as self-centered egoists with a pathological need for validation.

[mofo]

You needed this to solidify that image?

[mofo]

beats the shit out of govt regulation, doesnt it?

This seems like a market solution to polution, or at least the perception of polution. If preening leftist ass-holes can pat themselves on the back for it, then so what? They were going to do that anyway.

[John]

All true. But what is funny is that these people really seem to think that everyone is like them and there are not millions of people who would just laugh at their neighbors with their green flags and Priuses.

[bendover]

I'm sorry....isn't there some type of government "credit" that comes with this market solution?

[JW]

Hybrid cars such as the Toyota Prius have recognizable designs, advertising their driver's commitment to cleaner energy for all to see. Some energy companies give green flags to customers who choose to pay extra for energy from a more environmentally friendly source, allowing people to openly display their green credentials.

I find this sort of signalling useful for deciding which idiots to avoid contact with.

[Brett L]

So, strip mining China and using toxic leaching to make batteries is good for the environment. Good to know. Ignorant fucking yuppies.

[DesigNate]

The Smug, it's overwhelming.

Fuck me SouthPark was right on the money with these fuckwads.

[My Myself and I]

my experience as a low level federal energy regulator back in the halcyon days of the Carter administration

Just how the hell old are you?

[Canman]

He's transhuman!

[Radioactive]

Lordy, lordy, the gummint is here to saves us all, lordy, lordy.

[A Serious Man]

Just saw on the news how Consumer Reports and Dr. Oz blew the whistle on arsenic in apple juice while the FDA falsely claimed otherwise.

Maybe their is such a thing as private regulation that could exist in the absence of an FDA.

[JW]

OT: The stupid thing doesn't provide any tips on suicide either.

[Mad Scientist]

Hybrid cars such as the Toyota Prius have recognizable designs, advertising their driver's commitment to cleaner energy for all to see.

And all this time I thought the lefties disliked conspicuous consumption.

[Spoonman.]

My BIL owns a Prius but is one of the most conspicuous consumers I know. Owning a Prius doesn't do much for your carbon footprint after you've flown to and around Europe for pleasure.