News

Reality is starting to set in for President Obama’s plans to radically alter the energy economy. On Sunday, 60 Minutes, which had previously been a cheerleader for subsidized “green” energy, ran a piece titled “The Cleantech Crash.” Meanwhile, the Wall Street Journal ran a story which shows that trucks and SUVs are driving increases in auto sales, not green cars as Obama envisioned. President Obama’s highly-subsidized green energy economy is just not happening.

Since 2009, the administration has funneled billions of taxpayer dollars to politically-connected companies pushing “green” energy chimeras that customers don’t want. After all, if consumers really wanted the products, there would be no need for the government subsidies and handouts. 60 Minutes documents the rise and fall of green energy in a recent segment CBS News Correspondent Leslie Stahl introduces the segment thusly:

About a decade ago, the smart people who funded the Internet turned their attention to the energy sector, rallying tech engineers to invent ways to get us off fossil fuels, devise powerful solar panels, clean cars, and futuristic batteries. The idea got a catchy name: “Cleantech.”

Silicon Valley got Washington excited about it. President Bush was an early supporter, but the federal purse strings truly loosened under President Obama.  Hoping to create innovation and jobs, he committed north of a $100 billion in loans, grants and tax breaks to Cleantech.  But instead of breakthroughs, the sector suffered a string of expensive tax-funded flops. Suddenly Cleantech was a dirty word.

The piece focuses on Vinod Khosla, dubbed “the father of the Cleantech revolution.” Stahl toured of one Khosla’s green energy ventures, KiOR, an advanced biofuel plant in Columbus, Mississippi. Despite Kholsa’s insistence that “there is no downside” to cellulosic biofuel, Stahl correctly points out that “[Khosla’s] clean green gasoline costs much more than what you pay at the pump.  And despite hundreds of millions of dollars invested—including 165 million of Khosla’s own money, KiOR is still in the red, and the manufacturing is so complex, it is riddled with delays.”

As IER has explained on these pages, KiOR’s stock tumbled after the company missed its second quarter production targets for 2013 by a whopping 75 percent. Not long after, a KiOR investor filed a lawsuit accusing the company of issuing “false and misleading statements and omissions,” even as Khosla tried to “reassure investors” that production was on schedule. Khosla’s KiOR plant was one of two cellulosic biofuel facilities on which the Environmental Protection Agency (EPA) based its unrealistic cellulosic biofuel mandate for last year.

For 2013, EPA essentially mandated the production of 4 million gallons of cellulosic ethanol, but cellulosic producers such as KiOR only managed to produce 353,673 “gallons”[1] from January through November of last year.

It is now obvious, as the 60 Minutes piece explored, that the Cleantech revolution is not ready for reality. Spending billions of dollars and creating special mandates for companies like KiOR has been a massive waste of taxpayer dollars.

Another massive waste of taxpayer dollars in the Administration’s attempt to “green” the U.S. automobile fleet. In President Obama’s 2011 State of the Union, he called for America to “become the first country to have a million electric vehicles on the road by 2015.” But according to the recently-released automotive sales data for 2013, sales of trucks and SUVs are leading the way, not “green cars.” In fact, the sales of light trucks (such as the Ford F-series and GMC Sierra) and SUVs outsold passenger cars in 2013. The Wall Street Journal reports:

But as gas prices drifted lower last year, U.S. consumers trading old vehicles for new favored pricey pickup trucks, SUVs and luxury cars. Ford, for example, boosted sales of its F-150 pickup by 8.4% in December over a year ago, while sales of its subcompact Fiesta and compact Focus cars plunged by 20% and 31% respectively.

For the 32nd year in a row, Ford’s F-series was the best-selling model line in the U.S., delivering 763,403 vehicles. By comparison, Ford sold just 35,210 of its C-Max hybrid models last year, while GM sold just 23,094 plug-in hybrid Chevrolet Volts.

The reality is that President Obama’s vision for what cars he thinks Americans should drive is fundamentally different from what Americans actually want to drive. While the full electric and plug-in electric vehicles that President Obama has lavishly subsidized increased in sales in 2013, they only tallied 96,000 vehicles, or 0.6 percent of total sales.

Americans want comfortable, safe, reliable vehicles that provide people with flexibly to take care of their families and work responsibilities. Super fuel efficient or electric cars are much smaller than trucks or SUVs and do not provide the needed flexibly for the vast majority of Americans.

The 60 Minutes piece demonstrates that subsides and mandates of themselves cannot create economically-viable products. The same is true for the automotive market. The American people aren’t dumb. We use the products use we use and drive the cars and trucks we drive for the simple reason that they work best for our lives. We want the best products at the best prices, but sadly Washington bureaucrats have other ideas in mind.