Victory for Transparency: Feeding at DOE’s public trough a little less appetizing

March 22, 2013 by Amy · Comments Off
Filed under: Abound Solar, Archive, New Energy Economy 

For the last two and half years, the Independence Institute along with other free market energy policy advocates have pounded the drum of transparency and exposed the federal government’s infamous Department of Energy (DOE) loan guarantee program that rewarded the politically well-connected while costing taxpayers billions of dollars with high profile bankruptcies such as Solyndra and Colorado’s own Abound Solar.

Without the work of the Independence Institute’s investigative reporter Todd Shepherd, the Energy Policy Center, and Michael Sandoval now with the Heritage Foundation, Abound Solar’s history is little more than a footnote in failure in the grand scheme of the DOE. We covered it. The mainstream media did not…until we shamed them into doing so.

Now the Government Accountability Office (GAO) has released a report on its audit of the DOE loan guarantee program that finds negative publicity surrounding the embattled program has left billions of taxpayer dollars untouched in the public trough.

Sandoval reported on the Foundry Blog:

More than $51 billion in unused loan guarantee authority and $4.4 billion in unused credit subsidies…remain available under the DOE’s Loan Guarantee Program (1703) and Advanced Technology Vehicles Manufacturing (ATVM) loan program.

According to the report,

Some applicants noted that the Solyndra default and other problems have created a negative public image and political environment for the program, which has made its future less certain and the DOE more cautious about closing on loan guarantees.

Good news for taxpayers, the DOE has not closed a loan since September 2011, the month that Solyndra shuttered its doors. The GAO conducted the performance audit beginning in June 2012 (the date Abound Solar went bankrupt) to February 2013.

Most impressive is that taxpayers are making their voices heard and companies themselves are feeling the negative public pressure of socializing risk while privatizing profit:

“Most applicants and manufacturers noted that public problems with the Solyndra default and other DOE programs have also tarnished” other programs such as ATVM. They believed the negative publicity makes the DOE more risk-averse or makes companies wary of being associated with government support.”

Good.

We would be remiss if we didn’t mention by name the excellent work of Paul Chesser of the National Legal and Policy Center exposing the DOE’s corporate welfare program for Big Green projects such as electric vehicle manufacturers to the stars Fisker and Tesla and battery maker A123 Systems.

No such thing as a free lunch or free energy

October 30, 2012 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

The Independence Institute’s Todd Shepherd, along with this blog, have spent two years covering, and ultimately exposing, what is now the Abound Solar scandal. Understandably, much of the focus is now on Weld County District Attorney Ken Buck’s criminal investigation as well as a Congressional Oversight Committee inquiry into the bankrupt solar panel manufacturer.

Recently released emails on Complete Colorado indicate that, despite statements to the contrary, the White House politicized the Department of Energy (DOE) loan guarantee process for politically well-connected Abound.

But something else within those emails caught my attention reminding me of free market economist and Nobel Prize winner Milton Friedman’s famous quote, “there is no such thing as a free lunch.” In other words, even things that appear to be free have an associated cost.

This basic economic concept is lost on Colorado State Representative Max Tyler’s (D-Lakewood) who in a March 23, 2010, press release bragged about a government-dictated increase in Colorado’s renewable energy mandate:

With HB 1001 we will manufacture and install panels and turbines all over Colorado to capture free energy….The sun will always shine for free, the winds will always blow for free, and our energy production will be cleaner.  Renewable energy, green jobs, and a cleaner future — what’s not to like?

At roughly the same time that Tyler publicly fantasized about “free energy,” a credit advisor for the Department of Energy (DOE) loan guarantee program James McCrea was concerned about “major issues” with Abound Solar’s marketability. In an email dated April 1, 2010, just seven days after Tyler’s press release, McCrea explained:

Another issue is the very limited supply of telluride, its potential price trajectory and other demands for it. Related to this is a question of the viability of the Abound panels as compared to other panels and whether there is sufficient benefit to allow the panels to be profitable if Te [telluride] prices really increase. If the price really rises will there be alternative uses that can afford it basically turning it into a non available input for Abound?

I don’t believe we have ever worked with an input material that is so limited. We need to think that through carefully.

Before going bankrupt this summer, Abound produced cadmium telluride (CdTe) thin-filmed photovoltaic solar panels. Cadmium and tellurium, used in the manufacturing of Abound’s panels, are two of the world’s 17 “rare earth elements” that are needed for everything from smart phones to solar panels to high tech weapons systems. My former colleague Michael Sandoval, now an investigative reporter with the Heritage Foundation, and I have written several columns on general issues with rare earth elements.

This email highlights the problem specific to Abound, and McCrea was right to be concerned. According to the December 2011 DOE Critical Materials Strategy the price of tellurium has been going up since 2007:

The price dropped in 2006, but in 2007 resumed its upward trend owing to increased production of cadmium telluride (CdTe) solar cells.

Furthermore, China controls the vast majority of rare earth elements. In August 2012, the Chinese announced an ambitious plan to increase its stranglehold on the world’s available supply of rare earths. According to China Daily the country:

launched a physical trading platform for rare earth metals as part of its efforts to regulate the sector and strengthen its pricing power for the resources.

As the world’s largest producer of rare earth metals, China now supplies more than 90 percent of the global demand for rare earth metals, although its reserves account for just 23 percent of the world’s total.

The article reiterated what Michael and I have said on numerous occasions, mining rare earths comes with a significant environmental cost that green zealots like Tyler completely ignore when claiming solar energy is free and clean:

Mining the metals greatly damages the environment. In recent years, China has come down heavily on illegal mining and smuggling, cut export quotas and imposed production caps, stricter emissions standards and higher resource taxes to control environmental damage and stave off resource depletion.

However, these measures have irked rare earth importers, who complained about rising prices and strained supplies.

But China did exactly what it said it would do in 2009. It drove up prices with reduced output as global demand increased.

China’s rare earth output fell 36 percent year on year to 40,000 tonnes in the first half of the year. Prices of major rare earth products in July remained twice as high as prices at the beginning of 2011, although down from the beginning of the year.

In July 2009, about a year before President Barack Obama announced a $400 million loan guarantee for Abound, Jack Lifton, an expert on sources and uses of rare minerals, wrote a lengthy article for Resource Investor about the availability of tellurium for First Solar, a global leader in cadmium telluride solar panel manufacturering. Lifton’s conclusion should have served as a prophetic warning for Abound and any hope of profitability:

A company such as First Solar, which is critically dependent on a secure supply of tellurium to exist and on an unsustainable growth in the supply to it of tellurium for it to grow and achieve competitive pricing is a big risk for short-term investors. The maximum supply and production levels attainable of tellurium are quantifiable even if the actual production figures are murky, and they do not bode well for the future of First Solar if it must make profits to survive.

The next time you hear a politician like Max Tyler tout the benefits of “free” and “clean” energy, remember Abound Solar because there is no such thing as a free lunch.

1603: Corporate Welfare by Another Name

April 27, 2012 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

By Molly Sullivan

The 1603 program, part of the American Recovery and Reinvestment Act (ARRA) of 2009 was designated for job creation and job endurance for long-term economic growth in the field of renewable energy sources.

Michael Sandoval’s March 19, article in the Colorado Observer, “Liquor Stores, Fortune 500 Companies among Colorado Stimulus Beneficiaries”, highlighted how the 1603 program was able to slip under the radar allowing companies like Solyndra, funded under a separate section of the ARRA, to take the public heat. The numbers of jobs created is a number so difficult to calculate, all numbers put forth should be taken with a severe grain of salt. The article gives a picture of the types of companies taxpayers covered solar costs for in Colorado including restaurants, mega insurance agency MetLife, and the second largest bank in the US- Wells Fargo.

Looking at the 1603 program from a national scale however, it’s clear that big companies took the biggest holdings they could, with little emphasis on the sustentation of jobs. Some of the top recipients in Colorado also took 1603 tax credits in multiple states. Below is a breakdown of a few of the larger dollar amounts from the May 5, 2011, ARRA report.

SunRun Solar : $31,492,224.00
Based in San Francisco, the self-proclaimed “number one home solar company” in the nation, Sure took a huge chunk of taxpayer money without a whole lot to show for it considering each job opening cost taxpayers $1,499,629.71.

  • Five States: California, Massachusetts, Arizona, Colorado, and New Jersey
  • 21 job openings, 20 of which are in San Francisco, one in New York

SolarCity: $33,371,545.00

“America’s Number One Choice for Solar Power”, SolarCity operates in 14 states. They managed to rack up a hefty amount of tax credits for doing their usual private-sector solar energy work. They did have the most job postings out of these top company takers, still totaling a whopping $119,184 per job listing.

Metropolitan Life Insurance Company:  $20,976,044.00

The insurance giant is clear on their Web site that they believe in environmental projects, currently investing $2.5 billion in “renewable energy projects including solar, wind, and geothermal technologies”. A company has the right to pick and choose their social issues to fund, but not on the taxpayer’s dime. Separately, MetLife is already in hot water over the penalties they will face for faulty underwriting and questionable foreclosure practices after the housing market crash since foreclosure reform recently passed.

  • Five States: California, New Jersey, North Carolina, Arizona, Colorado
  • Recently announced they will be laying off 4,300 people due to a separate issue of mortgage foreclosure reform

The spreadsheet below shows a few other companies who took significant amounts of tax-payer money from multiple states.

Molly Sullivan is an intern with the Independence Institute’s Energy Policy Center for Spring 2012. Currently she is studying political science at Regis University in Denver.

Not much BTU for the buck

April 6, 2012 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

Congressman Cory Gardner was on my radio show this morning defending his plan to first extend and then phase out the production tax credit (PTC) for wind energy. My colleague Michael Sandoval and I are on record as opposing the PTC, and all other energy subsidies. Now we have additional evidence that renewables are so inefficient that without subsidies, its likely no one would use wind or solar as an electric resource on a commercial scale.

Thanks to a blog post from Steven Hayward of the American Enterprise Institute, which explains that the subsidies for non-hydro renewable energy are even more outrageous when measured in BTUs:

Last week’s energy fact looked at a new CBO report which showed that non-hydro renewable energy now receives two-thirds of all federal government tax preferences, while fossil fuels only receive about 15 percent. But the situation is really much worse than it looks if you calculate how much energy is produced per dollar of tax subsidy. While the CBO report didn’t make this calculation, we did, and the results are in the chart below, which displays how much energy is produced for every dollar of tax preference. Every dollar of tax preference for non-hydro renewables produces 407,000 BTUs of energy, while every dollar of tax preference for fossil fuel delivers 66 times as much, 27 million BTUs of energy. Nuclear power subsidies—only 4 percent of total tax preferences—produce almost 26 times more energy per dollar than renewables. This is the reason renewable subsidies are both necessary to the industry, and unsustainable, at least at any scale that the taxpayer would be willing to pay. For renewables to match the output of fossil fuels at the current tax preference rate, the total tax preference would need to be $897 billion. That’s probably real money even to Obama.

Thousand BTUs per Dollar of Tax Preference

Thousand BTUs per Dollar of Tax Preference

What being “green” says about you!

December 18, 2011 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

This may be the best column that Michael Sandoval and I have ever written. First, we use the Environmental Protection Agency’s own report to expose how “green” technology actually is polluting, not saving, the planet. Second, what does the need to be “green” say about those who advance an energy policy that makes no sense economically or environmentally? Please check out our latest for Townhall Finance titled “Green Technology that Pollutes the Planet,” or the text is also provided below.

Eco-evangelicals: Sanctimonious green technology that pollutes the planet

By Amy Oliver Cooke and Michael Sandoval

In previous columns, we’ve exposed that “renewable” technology is neither renewable, nor clean, nor green because it relies upon rare earth elements—it’s also neither cost effective nor efficient but that’s another column. Currently the Chinese have a stranglehold over all phases of rare earth production, including mining, processing, and refining. China accounts for ninety five percent of the world market in rare earth elements (REEs).

With virtually no regulations or concerns over worker safety, the Chinese monopoly has resulted in an ecological disaster.  Sites such as those in Baotou, Inner Mongolia make the Love Canal, the impetus for the Environmental Protection Agency’s “Superfund,” look like Rocky Mountain National Park.

Finally, we’ve been able to quantify the pollution of some green technology sectors in a way that makes sense to the average American family sitting at their kitchen table.

The Math of Pollution

The U.S. Department of Energy, in studying the reductions of REEs available in the world market due to Chinese cutbacks, has identified the seventeen elements as “key” and “critical” to ongoing technological development, including use in electronic components for defense purposes, but also for the “clean” green energy sector.

The DOE’s efforts prompted the Environmental Protection Agency to examine the development of REE resources here in the U.S., paying particular attention to the economic feasibility but also the more important question of—you guessed it—environmental impact.

In its August 2011 study, “Investigating Rare Earth Element Mine Development in EPA Region 8 and Potential Environmental Impacts,” the EPA reported on several sites located in the intermountain West, from Idaho to Colorado, which could become only the second REE mining operation in the entire country.

The study also reported extensively on the possible sources of contaminants and waste byproducts associated with all mining, and especially those concentrated in REE-related extraction.

In the section titled “Potential Risks to Human Health and the Environment,” the EPA reports that:

…every ton of rare earth elements produced generates approximately 8.5 kilograms of fluorine and 13 kilograms of flue dust. Additionally, sulfuric acid refining techniques used to produce one ton of rare earth elements generates 9,600 to 12,000 cubic meters of gas laden with flue dust concentrate, hydrofluoric acid, sulfur dioxide, and sulfuric acid. Not only are large quantities of harmful gas produced, alarming amounts of liquid and solid waste also resulted from Chinese refining processes. They estimate at the completion of refining one ton of rare earth elements, approximately 75 cubic meters of acidic waste water and about one ton of radioactive waste residue are produced. The IAGS reports China produced over 130,000 metric tons of rare earth elements in 2008 alone (IAGS, 2010). Extrapolation of the waste generation estimates over total production yields extreme amounts of waste. With little environmental regulation, stories of environmental pollution and human sickness remain frequent in areas near Chinese rare earth element production facilities.

So for each metric ton of REEs produced, an equal amount of radioactive waste is also produced. At approximately 2,204 lbs, that’s about the weight of an average sedan. As for those 75 cubic meters of acidic waste water, just think of a swimming pool measuring thirty feet long by fifteen feet wide by six feet deep. That’s approximately 20,000 gallons of acid water. Just remember, China produces 95 percent of all REEs in the world—so that’s more than 130,000 swimming pools.

To further the perspective, each 3 MW wind turbine requires two tons of REEs for the permanent magnet that converts wind into electricity. So much for “clean.”

The EPA report continues:

As discussed, mining and refining processes can introduce radionuclides, rare earth elements, metals, and other potential contaminants into the environment at unnaturally high rates. Once introduced into the environment, the potential contaminants can be redistributed through the three ‘environmental mediums.’ These three mediums include air, soil, and water. Living organisms depend on environmental mediums with stable chemical properties for their survival. The release of the possible contaminants from rare earth element production could alter the properties of the three environmental mediums.

The Chinese have labeled areas around rare earth mines, like Baotou, as “cancer villages.” To call the situation a “human sickness” is like calling Hurricane Katrina just another rainstorm. The toxic bi-products literally kill everything – animals, vegetation, and people by contaminating the air, soil, and water.

Toyota Prius and Chevy Volt, crimes against the environment

A hybrid-owning friend labeled Amy’s 2001 Jeep Cherokee “earth cancer.” The assumption that a hybrid is eco-friendly has been one of the greatest propaganda campaigns of our time.

Let’s return to the EPA report:

Permanent magnets represent the staple clean energy technology of future green economies. They constitute main components of lightweight, high powered motors and generators due to their production of a stable magnetic field without the need for an external power source. Permanent magnet motors power contemporary electric, hybrid electric, and plug-in hybrid electric vehicles, while permanent magnet generators produce electricity from wind turbines (USDOE, 2010). The key element derived samarium-cobalt permanent magnets dominate rare earth technology because they produce a magnetic field in a much smaller size. The samarium-cobalt permanent magnet also retains its magnetic strength at high temperatures making it ideal for clean energy and even military applications, including precision guided munitions and aircrafts (IAGS, 2010).

Permanent magnets work in conjunction with high efficiency rare earth based batteries to store energy in electric, hybrid electric, and plug-in hybrid electric vehicles (USDOE, 2010). Current generation hybrid electric vehicles use a battery with a cathode containing a host of rare earths including lanthanum, cerium, neodymium, praseodymium, and cobalt (Kopera, 2004). Each hybrid electric battery may contain several kilograms of rare earth materials (USDOE, 2010). Plug-in hybrid and electric vehicles require even greater storage capacity and higher power ratings than typical hybrid vehicles. In light of this, automakers will likely use the lithium ion battery, increasing demand for yet another key element. Scientists at the Argonne National Laboratory estimated one lithium ion battery contains 3.4-12.7 kilograms of lithium depending on proprietary design (USDOE, 2010).

Through November 2011, 237,707 hybrid vehicles were sold in the U.S. with the Toyota Prius leading the pack with 119,459 vehicles sold this year.  Hybrid’s “green, clean” technology requires between 20 -25 pounds of rare earth elements, twice that of regular vehicles.

Thinking electric such as Chevy Volt? So far in 2011, auto manufacturers have sold 15,068 electric vehicles in the U.S., and each one requires 10 pounds of rare earth magnets.

That means that through the end of November, hybrids and electric vehicles sales consumed between 4,904,820 and 6,093,355 pounds of rare earths. That’s somewhere between 2,452 and 3,047 tons.

If processing one ton of rare earth elements produces approximately 75 cubic meters of acidic waste water and about one ton of radioactive waste residue, then hybrid and electric vehicles alone produce between 183,900 and 228,525 cubic meters of acidic waste water and between 2,452 and 3,047 tons of radioactive waste.

A little conversion: one cubic meter is roughly 264 gallons. On the low end, that’s enough to cover nearly 150 football fields with toxic waste water a foot deep. Or put another way, the more than 48,550,000 gallons of fouled water from alternative vehicles is equal to the annual household usage of 445 families of four. That’s just one toxic byproduct. There are many more.

To add insult to ecological injury, these cars are expensive and don’t perform or handle very well.  And owners still need fossil fuels either to run them (oil, gasoline) or for the electricity to charge them (coal). So why on earth would anyone buy one?

In your face

Apparently hybrid vehicles owners don’t really want to save the world, they just want to look like they do.

The New York Times reported in 2007 that the number reason why people buy the Toyota Prius is “it makes a statement about me.”

“‘I really want people to know that I care about the environment,” said Joy Feasley of Philadelphia, owner of a green 2006 Prius. ‘I like that people stop and ask me how I like my car.’”

And Mary Gatch of Charleston, S.C., explained, “’I felt like the Camry Hybrid was too subtle for the message I wanted to put out there…I wanted to have the biggest impact that I could, and the Prius puts out a clearer message.’”

“The Prius allowed you to make a green statement with a car for the first time ever,” said Dan Becker, head of the global warming program at the Sierra Club (and yes, a Prius owner).

Translation—what the fine folks quoted in the Times are really saying is, “My image as an eco-conscious consumer is more important than the actual images of environmental degradation no one ever sees.”

Of course, it also helps when green Kool-Aid drinking Hollywood celebrities like Leonardo DiCaprio, Cameron Diaz, and Bill Maher make their planet-saving statements driving the Pacific Coast Highway in their eco-polluting hybrid.

Conspicuous conservation

It isn’t just hybrid owners that are sanctimonious eco-evangelicals. A study in the Journal of Personality and Social Psychology explains that being green is a status symbol of both wealth and altruism.

Given the relationship between self-sacrifice and status, costly signaling theory suggests that people might engage in costly pro-social behaviors such as environmental conservation particularly when they are motivated to attain status. Because the purchase of green products enables a person to signal that he is both willing and able to buy a product that benefits others at a cost to his personal use, activating a motive for status might lead people to engage in conspicuous conservation—public pro-environmental acts.

It gets worse. Eco-evangelicals want to spend more not less. They simply can’t be trusted on cost effectiveness.

Additional findings showed that status motives increased desirability of green products especially when such products cost more—but not less—relative to non-green products. In line with costly signaling theory, buying inexpensive green products can undermine a person’s ability to signal wealth. This finding suggests that green products such as the Toyota Prius might be selling well not despite their premium price tag but perhaps in part because such products are more expensive. Indeed, 40% of hybrid owners indicate that they bought a green car as an alternative to a traditional luxury car such as a BMW.

They’ll have to be prepared to pay given China’s decision to further reduce the world supply of REEs. The New York Times characterized the jump in prices for just one common “green” technology—compact fluorescent lightbulbs:

General Electric, facing complaints in the United States about rising prices for its compact fluorescent bulbs, recently noted in a statement that if the rate of inflation over the last 12 months on the rare earth element europium oxide had been applied to a $2 cup of coffee, that coffee would now cost $24.55.

In other words, forget reason, forget economics, forget the environment; we’ll pay more for everything – energy, a car, light bulbs, or hair products – if we think the world will know that we can afford to be green.

Not actually “green,” mind you.

National security versus “green economy”

Pollution aside, the U.S. relies upon these rare minerals for everything, including iPods, laptops, solar panels, windmills, alternative fuel vehicles, and advanced military weaponry.  While the demand and price have gone up, China has strategically limited the supply. It is building it’s own supply while cutting production to roughly 70 percent by 2015.

This situation has the federal government worried. The EPA reports that the Department of Energy is “concerned the rising demand for key elements in electronic and military sectors could hamper the growth of the U.S. ‘green economy,’ or an economy based on renewable energy.”

The real worry should be whether or not the world believes we can afford to waste money on “green” technology. Our reputation is at stake. What will the rest of the world think of us?

Even though estimates put total U.S. reserves around 13 percent of known REE resources worldwide, the first (and only) U.S. mine expected to be anywhere near production of REEs, Mountain Pass, was only just granted permission by the U.S. government this month to begin exploration, with actual extraction not set to begin until 2012. A second possible site located in Wyoming has been identified by the EPA as holding production potential, but is many years away from completing the myriad required impact statements and permit approvals. Among the biggest concerns surrounding the Wyoming site? Airborne radionuclides and waste water associated with the chemical refining process.

So for the next few years at the very least, China will continue to control the REE market while other countries, including the U.S., ramp up exploration and possible production of the elements and their known pollutants and waste material byproducts.

Blasphemy

The age of “conspicuous conservation” will have to compete with more important things such as national security, as much of our high tech weaponry requires rare earth minerals. The demand for “green” will also compete with our love of gadgets such as iPods and computers, and with those civilization-required things like lighting, batteries, and basic electricity.

The new “high efficiency light bulbs” require rare earths while old fluorescents did not—to make them more “visually pleasing.” At least consumers face a temporary reprieve of that particular government mandate, with the ban on “non-green” incandescent light bulbs commuted for at least a little longer.

While alternative vehicle owners, solar panel supporters, and wind turbine advocates may feel better about themselves, they’re actually polluting the planet with their “clean/green” technology. Advancing these policies is beyond irresponsible, especially when the foundation of the “clean” scheme is revealed.

This green hypocrisy has Mother Nature crying out for a separation of earth and state.

Amy Oliver Cooke is the founder of Mothers Against Debt (www. Mothersagainstdebt.com). She is also the director of the Colorado Transparency Project for the Independence Institute and writes on energy policy.  She can be reached at amy@i2i.org. Michael Sandoval is the Managing Editor of People’s Press Collective and a former political reporter for National Review Online.

Making sense of NREL’s budget math and job creation

October 6, 2011 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

The story surrounding NREL’s possible $8 million reduction in 2012 doesn’t make sense. Is it a “savings” or a “cut”? Does NREL “create” green jobs or not? And NREL spokesman Bob Noun’s comments have not helped to clarify. Consider this story from CBS 4 Denver where Noun was questioned about NREL’s funding and stimulus money it received:

Noun said 98 percent of the lab’s funding comes from the federal government, including nearly $300 million in stimulus in 2009. It was money that was meant to create jobs.

That money was supposed to create 219 jobs at a cost of $1,360,540.11 per job as Michael Sandoval documented. When asked about the criticism, Noun had a different take on whether NREL creates green jobs or not:

Noun defends the lab, saying its mission isn’t job creation. “Our role here is to create technology, hand it off to industries so they can create jobs and grow.

President Obama said the stimulus money was supposed to “create” jobs in the green industry. Noun said the money, which NREL received, was supposed to create jobs, but when criticized he said job creation wasn’t the lab’s mission. Which is it?

Something else bothers me.  NREL got $298 million to “create” 219 green jobs, but it takes $8 million in “savings” to cut 100-150 jobs. Since taxpayers originally spent $1,360,540.11 to create one job, theoretically NREL could cut six jobs to achieve $8,163,240.66 in savings. Right?

Then there is the whole issue of whether the $8 million is a “savings” or an actual “cut” in NREL’s 2012 budget. Keep in mind that NREL enjoyed a 63.4 percent funding increase from 2008 to 2010. This is how the Denver Post reported NREL’s voluntary employee buyout:

NREL spokesman Bob Noun said the jobs were a victim of the gridlocked Congress, and that budget forecasts led the lab to look for more than $8 million in savings.

“We don’t see any budget scenario where the lab doesn’t face budget cuts,” Noun said. “We just want to be proactive in managing the budget so we continue our core mission.”

Is it a “savings” or is it a “cut”?  Because they are different.  An $8 million “cut” in the 2012 budget from  2010 funding would mean $528.5 million in funding. Not exactly chump change and still well above its 2008 funding levels of $328.3 million.

The “savings” versus “cut” debate would be academic were it not for a blog post from February 18, 2011 from the Denver University Sturm School of Law where Bob Noun is an adjunct professor in environmental and natural resources law. Noun’s class heard from guest lecturer Drew Willison, Vice President, Public Policy and External Relations for Battelle, a charitable trust and partner in the Alliance for Sustainable Energy that operates NREL. Lawyer/lobbyist Willison, who formerly worked  for U.S. Senator Majority Leader Harry Reid, discussed the budget process and revealed information about the proposed 2012 budget:

In particular, he focused on the proposed budgets for the U.S. Department of Energy, which funds energy efficiency and renewable energy efforts, as well as the appropriations process that actually provides money for measures that have been through the budget process. He noted that the President’s fiscal year 2012 budget, which will begin on October 1, provides a five percent increase from the fiscal year 2010 current appropriation.

As stated in an earlier NREL post, NREL’s funding comes through the DOE. Willison, with his insider information, tells a group of law students and the NREL spokesman that President Obama’s 2012 budget provides the DOE with a 5 percent increase over 2010 funding levels.  Although not guaranteed, it would be reasonable then for NREL to assume it too is receiving a 5 percent increase over 2010 levels.  That would put NREL’s 2012 funding at $563.3 million. Even with $8 million in “cuts” or “savings,” the 2012 anticipated funding would still be $555.3 million, a 3.5 percent increase over 2010 levels.

For the sake of argument, let’s say the $8 million really is a cut; it represents a 1.5 percent reduction in funding that has increased 63.4 percent since 2008. Even if the $8 million cuts really do materialize, they won’t likely threaten the Big Green Empire’s top-secret mission to “built a better future for everyone.”

NREL: Big Green Empire

September 30, 2011 by Amy · Comments Off
Filed under: Archive, New Energy Economy 

The National Renewable Energy Laboratory (NREL) located in beautiful Golden, Colorado, is the federal government’s primary research facility for renewable energy for the Department of Energy (DOE).

According to its Web site, NREL has enjoyed an enormous budget increase over the last two years. As the economy slowed in 2007, NREL saw its budget decrease $50 million, but the decrease didn’t last long. The lab benefited from stimulus money and President Obama’s focus on green jobs. By 2010, NREL’s annual funding was $536.5 million, a 63.4 percent increase over 2007.

Interesting about NREL’s organizational structure is that it is funded by taxpayers, owned by the DOE and managed by a third party, Alliance for Sustainable Energy, LLC, which describes itself as a limited liability company but is also a 501(c)3 according to tax documents. As a non-profit, Alliance is not subject to open records laws.

Update: Michael Sandoval of the People’s Press Collective reveals that this arrangement is quite profitable for ASE:

Alliance for Sustainable Energy assumed operations of NREL in 2008 for $1.1 billion over five years. Nearly $300 million was appropriated for contractual work at NREL (operating as Alliance for Sustainable Energy) through ARRA funding.

Alliance is more than just a management and operating contractor for NREL. Alliance sees itself as a major player in the Big Green Empire with desires to expand renewable energy use throughout the world:

A prime goal of Alliance is to ensure that NREL becomes the catalyst for the creation of a renewable energy epicenter. Initially, it will be centered at the Laboratory, but will eventually expand to help bring about global adoption of clean energy. Alliance wants to create an opportunity for NREL to become the focal point for renewable energy—a “Silicon Valley for renewables.”

One way they are expanding the Big Green Empire is through a massive construction project. Recently, I went to check it out but didn’t get very far. A beefy looking man, stopped my car and inquired as to what I was doing. I said that as a taxpayer I wanted to see what my money was building. Not so fast. NREL has “top secret material” to “build a better future for everyone.” Translation: Get the hell out!

What does Big Green Empire expansion look like? Check out these pictures, after all you paid for it:

How many cranes in this pictures?

How many cranes in this pictures?

NREL Construction Project September 2011

NREL Construction Project September 2011