Promoting freedom, innovation, and growth

Connect with IPI

Receive news, research, and updates

April 22, 2016

Celebrate Earth Day By Protecting The Planet - And Taxpayers

  Rare

As America celebrates Earth Day and Secretary of State John Kerry signs the Paris climate agreement at the United Nations in the presence of 100 countries—most of which are eagerly awaiting billions of dollars in handouts—it might be a good time to recall just how much Obama’s desire for a green legacy is costing taxpayers.

Solar industry giant SunEdison just filed for bankruptcy protection after losing $9.2 billion in equity. Bloomberg explains, “The world’s biggest developer of clean-energy projects sought protection from creditors after racking up $16.1 billion of liabilities following a $3.1 billion expansion spree that spooked investors and industry partners.”

U.S. taxpayers spent about $1.5 billion subsidizing SunEdison’s bad business decisions. One could reasonably ask whether Washington’s largesse encouraged the company’s reckless expansion efforts. Gambling is a lot easier when you’re betting other people’s money.

Nor is SunEdison an anomaly. In March, the Spanish solar technology company Abengoa S.A. filed for bankruptcy in the U.S. and is now trying to restructure its debt of about $16.5 billion. The New York Times says the Spanish company “received a combined $2.9 billion in loan guarantees from the United States.”

Part of that money supported Abengoa S.A.’s projects in Arizona and California, and the company says its bankruptcy won’t affect its U.S. operations. Maybe, but money is fungible and you have to wonder how much U.S. taxpayer money made it to Spain.

How about wind energy? The Obama administration thought it had a winner in Cape Wind, which would have been the first major offshore commercial wind project.

The Department of Energy handed over a $150 million loan guarantee for construction, and that’s after the company scrambled to sign a contract with foreign turbine-maker Siemens in the last days of 2013 in order to qualify for a $780 million Production Tax Credit (a federal subsidy that lowers the effective cost of wind energy).

But Cape Wind essentially shut down last year after utilities balked at paying twice the normal rate for electricity. As the Boston Globe explains, “Developers promised cheap, clean energy, and then planned to sell 77.5 percent of the power they were going to produce to NStar and National Grid for some two times the average cost of power generated by US suppliers.”

Even so, Congress recently restored the Production Tax Credit, which had expired, as part of its budget deal in December, so taxpayers will be subsidizing more wind energy projects in the future.

Just as the Obama administration dismisses news that most of the major health insurers are losing millions of dollars in the Obamacare exchanges, it ignores the billions of wasted taxpayer dollars spent on President Obama’s green energy projects.

Just last February, Vice President Joe Biden was out commemorating the seventh anniversary of the $800 billion stimulus package Obama signed after one month in office. Biden says that package included $90 billion for renewable power, biofuels, and other green projects.

The veep forgot to mention the numerous failures. Most people remember bankrupt Solyndra, the failed solar panel company that received $535 million in federal grants and loans. There was also bankrupt Abound Solar that received $400 million, and bankrupt A123 Systems with $279 million, and Ener1 with $118.5 million. That’s just to name a few.

And let’s not forget Fisker Automotive—even though the administration might want to—a Danish company that wanted to produce high-end electric cars for the wealthy. It went into bankruptcy and a Chinese company bought it for $149 million: a bargain given that U.S. taxpayers put up $529 million.

Obama’s green energy boondoggles have squandered so much money that we ought to create a Bernie Madoff Award and make him the inaugural recipient.

By all means, let’s commemorate Earth Day by doing a better job of protecting our planet, but let’s also do a better job of protecting taxpayers.


 

  • TaxBytes-New

Copyright Institute for Policy Innovation 2017. All Rights Reserved Privacy Policy Contact IPI.

e-resources e-resources