Friday, September 16, 2011

Solyndra, Solyndra- What this "Scandal" is and isn't

A pair of posts about Solyndra and what this means and doesn't mean.  Stick around and read all of it-- there's a Three Stooges video at the end if make it there.

The first on
Why Solyndra is a Big Deal, just not the Big Deal Republicans are making of it.



California solar energy company Solyndra had its offices raided last week by federal agents as part of an ongoing investigation into their bankruptcy and federal loan guarantees they'd received form the Department of Energy. Some critics have cried foul, trying to show how federal money spent on emerging technology is a waste. Others have tried to disparage solar energy itself, trying to show the industry is not ready for prime time. In fact, these allegations couldn't be further from the truth.

However, it does bring up important questions about the Obama administration, ethics, and the influence of campaign contributions. This is entirely a self-inflicted wound, a bone-headed mistake if not an ethical problem, and is the type of landmine the White House needs to avoid. There is another, similar trap they need to avoid touching in the Keystone XL tar sands pipeline, where Big Oil's big money tendrils and the revolving door are even more frightening than those from Solyndra.

The first charge against Solyndra is the wastefulness of the federal loan guarantees that it received and the loan guarantee program in general. Well, if solar was the only industry getting this aid, that might be something. But given the incredibly large amounts given in federal subsidies to fossil fuels compared to solar, that is not the case. Indeed, direct subsidies for nuclear in recent energy legislation adds up to over 13 billion (that's with a b, kids) and recent loan guarantees for nuclear construction are over $60 billion, $18 billion of which have already been allocated in Georgia. This amounts to a pre-emptive bailout of the nuclear industry, especially since the CBO estimates those loans will have a 50% default rate.

Other critics have gone after Solyndra because they say solar isn't ready for prime time-- while, in fact, it shows the opposite. Solyndra was pioneering a new method of making photovoltaic cells and got buried under the onslaught of cheap solar imports from China. Their process, which you can see below, courtesy BusinessWire, is very different from traditional photvoltaic arrays.


Their technology just didn't get cheap quickly enough compared to traditional PV manufacturing, largely from Chinese imports. But in the silver lining to that otherwise not as nice cloud, those same cheap Chinese imports have meant a huge boon to American manufacturing who provide many of the materials and heavy equipment needed to manufacture PV.

Meanwhile, because of that change, solar has reached grid parity in terms of its costs. Grid parity means that the cost of producing electricity through a pv cell is less than or equal to the average cost of electricity. Other companies are making huge solar breakthroughs. Solyndra, unfortunately, was not one of them. But this is market economics, and this is what we expect, nay, desire from our entrepreneurs.



Meanwhile, the Department of Energy, undeterred, has announced two more loan guarantee programs for solar innovation. Meanwhile, the Department of Defense is getting on the solar train, too, with a Solar City program that will provide clean energy to the homes of 160,000 of our troops and their families. I can't think of a better way to commemorate 9/11 than with true energy independence being given to some of the most deserving among us. Now, let's just do it for all of our military, veterans, firefighters, police officers, teachers, and other public servants. But 160,000 homes to start with is pretty darn nice.

But why Solyndra is troublesome is because it appears undue influence may have been exerted to get them these loan guarantees. One of Solyndra's top investors was also a bundler for the Obama campaign responsible for tens of thousands of dollars in campaign donations. A commitment to the highest ethical standards that the Obama Administration guaranteed when they took office meant they should have done extra due diligence on giving any loan guarantees to anyone with any sort of money connection to the White House. Every i dotted, every t crossed-- special treatment, but special treatment to insure they weren't receiving funds because of political donations. Indeed, they should have been held to a much higher standard than their peers.
This is an entirely self-inflicted wound on the part of the Obama Administration. It should have been avoided, and questions not only the ethics of those in charge but the rationality. Surely they should have seen this coming.

If they didn't, here's a warning sign for you: Keystone XL. The pipeline, proposed by Canadian company Transcanada, would bring the world's dirtiest oil from the Alberta tar sands to refineries in the Houston area along the Texas Gulf Coast. They are currently doing their best to get the pipeline approved, including a slick PR campaign, push-polling in areas around where the pipeline would be and promising jobs if the pipeline is built, and using Washington's revolving door of lobbyists, staff, and political consultants. Dirty money, dirty campaign, dirty tactics, dirty ethics. In fact, knowing that Secretary of State Hillary Clinton would be the final decider on whether the State Department issues the permit or not, Transcanada hired her former campaign operative Paul Elliot to be their chief lobbyist, among other hires with ties to the Obama campaign and administration.

Clinton and Obama approving Keystone XL would be another avoidable landmine for the White House. Unfortunately, this landmine has much more dire consequences if approved, as it would signal both Business as Usual in Washington with Big Oil getting their way, the end of any veneer of ethics or being serious about campaign finance by the Obama Administration, and. . .oh, "game over" for the planet because of runaway climate change. More on this later.
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I promised more later-- here's the more later:
The Obama Playbook on Energy and Ethics is the worst Three Stooges episode ever

Solyndra was the pie in the face, but Keystone XL is the rake in the yard the White House needs to avoid.

Approval of controversial pipeline is bad for the environment, and bad politics, as it would offend not just environmentalists, but voters of all stripes across America's heartland who would have the pipeline run through their backyards. It is another ethics landmine that would invite more attack from the WH's political enemies about pay to play politics-- this time because of copious amounts of Big Oil influence-peddling.

We've previously talked about Solyndra. It's not a problem with solar or of federal investment, but of questions about campaign finance and due diligence, problems which also exist in the much larger loan program for nuclear, especially when nuclear energy companies have been such big campaign backers of Obama's.

In fact, worth reading is Brad Plummer's Five Myths About Solyndra from the Washington Post, a great take from Climate Progress about the Solyndra timeline showing the and this post from Blue Virginia showing there's plenty of blame to go across the partisan aisle for this mess.

Money in politics will ALWAYS create these problems. You can see here how a wireless company was trying to trade on their big dollar donations to get access to the White House. This is why Obama must champion REAL campaign finance reform, specifically full disclosure of all independent expenditures and public financing options for people running for Congress.

But that is a tough legislative mountain to climb-- and not one that it seems the White House has the intestinal fortitude for, given their willingness to always "compromise" (read: capitulate) to the Powers That Be. But those Powers That Be don't Be without the steady stream of money they pour into campaign coffers, so its unlikely that Obama would rush to reform that system that has, so far at least, worked out better for him than his opponents.

So while it is unlikely Obama can avoid the ethical morass and swampland that is money for access and favors, one landmine he can avoid in approving the Keystone XL pipeline that would bring the world's dirtiest oil from Canada to Texas.
Not only should we be seriously questioning the safety and integrity of our pipeline system after spills from as far afield as downtown Salt Lake City to Kalamazoo to Yellowstone National Park, but this graphic from the New York Times shows the large spills we've had all over the country just from existing pipelines.
The other question is obviously one of addiction. If we are to take seriously the metaphor of an addiction to oil, then Keystone XL is like a new meth dealer moving in next to our heroin dealer. Climate scientist Jim Hansen has called the approval of the pipeline "game over" for the climate.
But besides a discussion of the merits, there is the question of why is this the rake in the yard Obama needs to avoid? It starts with the voters, specifically those who will be affected by this pipeline.

Today at 1:30 pm Texas time, East Texas landowners who made up the group Stop Tarsands Oil Pipelines, or STOP, held a press conference detailing their opposition to this proposed monstrosity. Among their chief complaints were that the State Department had failed to account for the current devastating Texas drought in their environmental impact study. From STOP:

Strike 3: State Dept’s 3rd Pipeline Assessment Ignores Texas Drought

DOS puts Europe/China’s oil supply ahead of water for 12 million Texans and ag lands as wildfires burn

East Texas cattle rancher Don Williams has trimmed his herd in half, lost calves to drought, and now faces wildfires burning just 20 miles from his ranch. Even before all of this, Williams was concerned about the impact the proposed Keystone XL tar sands pipeline would have on water supplies in the Carrizo Wilcox aquifer, which most East Texans rely on.
When he learned that the State Department, in their review of the proposed pipeline, had not even looked at what drought conditions meant for the pipeline’s safety, he was outraged.
“We need that aquifer, and that they could just ‘overlook’ what’s happened here in the last year shows we can’t trust what they’re telling us,” said Williams who also serves on the City Council in New Summerfield, a town of just over 1,000 people. “Tar sands oil isn’t like regular crude – they’ve got to pack it with heavy metals and chemicals just to thin it down enough to pump it. The first pipeline they built spilled at least a dozen times in just one year of operation.”
Drought? What Drought?
A report released today by an East Texas group called Stop Tarsands Oil Pipelines corroborates Williams’s story, demonstrating that the historic Texas drought, which has been devastating communities and grabbing headlines all summer long, was overlooked by the US State Department in its third and purportedly final environmental impact statement (FEIS) on the controversial Keystone XL tar sands pipeline.
“Texas is burning, our firefighters have faced 300 consecutive days of wildfire,” said David Daniel, STOP’s Founder and President. “I’ve seen firsthand that a tar sands pipeline spill in Michigan is still contaminating water 14 months later, putting 40 miles of the Kalamazoo River off limits. If we had a similar spill in Texas under conditions like these where could we go for water for our homes, farms, and ranches?”
The report issued by STOP examines the implications for operating the proposed pipeline, which would push the denser and more toxic tar sands oil at higher pressures and temperatures than conventional oil pipelines, during droughts like the one currently scorching Texas. According to STOP, the impacts of a severe drought were ignored by the U.S. State Department in its review of the environmental impacts of the proposal.
STOP also documents that the Texas Commission on Environmental Quality has placed six TransCanada water withdrawal permit applications on hold due to drought.
“If State Department had bothered to talk to any Texans they would have realized that pumping 830,000 barrels a day of tar sands crude through the middle of Texas would be a grave mistake,” said Don Williams, East Texas Cattle rancher and City Councilman, New Summerfield. “We need all the water we have to keep our farms and ranches in business.”
To make matters worse, says David Daniel, the oil being delivered by this pipeline may not be intended for U.S. consumption. He points to a report by oil industry economist Philip K. Verleger, which concludes that the tar sands oil is much more likely to be exported to global markets for consumption in China and Europe.
“They’re selling this pipeline to the public as energy security, but the truth is that U.S. demand for oil has flat-lined whereas China’s demand keeps growing,” says Daniel. “Dr. Verleger is an oil industry economist who just happens to also be honest about what he sees, which is more than I can say for TransCanada after dealing with them the last couple years.”
You should visit their website at stoptarsands.org to listen to the rest of their stories. Their full study on the drought vs. the pipeline can be found here.

Beyond that, with lobbyist ties to the White House, this makes approving the decision for the Keystone XL the biggest affirmation that pay-to-play politics and revolving door between industry and government are alive and well in Washington DC. TransCanada, the owner of the proposed pipeline, hired former Clinton campaign staffer Paul Elliot and several other Obama staffers to lobby the State Department and the White House. Is it any wonder why their analysis would overlook something so obvious as the Texas drought when they are being lobbied to get this out the door as quickly as possible?

It's worth noting this is the third flawed FEIS that the State Department has produced. Three strikes and you're out? Well, if there was any justice in this world, yes, as it would be obvious this is not due diligence, but pure politics and a Potemkin village of looking at impacts to local residents and their water supplies. It is a boneheaded mistake, and makes it look like the Obama administration is full of a bunch of rookies, making obvious mistakes like forgetting drought.

If Obama wants to avoid having his Presidency resemble The Three Stooges any more, he needs to clean the pie off his face from Solyndra, and don't even go close to that rake. He can't afford another similar self-inflicted wound, especially one that is not only so avoidable but also happens to be the right thing to do.

Now where are those three nincompoop chandelier hangers I hired?



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