Even the liberal Washington Post, which hasn’t endorsed a Republican for President since 1952, seems to be souring on the Obama Administration’s failed energy programs, saying they were “infused with politics at every level.” As it noted in discussing the Solyndra scandal: “Obama’s green-technology program was infused with politics at every level, The Washington Post found in an analysis of thousands of memos, company records and internal ­e-mails. Political considerations were raised repeatedly by company investors, Energy Department bureaucrats and White House officials. The records, some previously unreported, show that when warned that financial disaster might lie ahead, the administration remained steadfast in its support for Solyndra,” which was owned by major Obama backers, like George Kaiser.

As law professor Glenn Harlan Reynolds notes, “all the ‘stimulus’ and ‘green energy’ stuff was never anything but a program to put taxpayer money into the hands of cronies and supporters.”

The Obama Administration hastily approved the  taxpayer subsidies for Solyndra despite obvious danger signs and warnings from accountants about the company’s likely collapse, the misgivings of agency officials, and the company’s mismanagement and lousy-quality products. (Solyndra executives are now pleading the 5th Amendment to avoid disclosing incriminating information.) The Obama administration was determined to shovel taxpayer money to its cronies as fast as it could. As an Obama fundraiser and Solyndra stakeholder exulted,  “there’s never been more money shoved out of the government’s door in world history and probably never will be again than in the last few months and the next 18 months. And our selfish parochial goal is to get as much of it . . . as we possibly can.”  “At the time Solyndra received its grant, Vice President Joe Biden declared that the Solyndra investment is ‘exactly what the [the stimulus package] is all about.’”

While diverting taxpayer money away from productive and efficient businesses to corporate-welfare recipients controlled by political cronies, the Obama Administration is busy wiping out jobs through thousands of pages of counterproductive regulations.  Some of these new regulations are designed to spawn lawsuits that will enrich trial lawyers at businesses’  and consumers’ expense.

Obama appointees at the EEOC are busy harassing businesses that hire and fire based on merit, thus discouraging employers from hiring or expanding operations, and the EEOC is bringing costly, unjustified lawsuits against businesses.  The 2010 healthcare law imposes financial burdens — some of them large, and others difficult to calculate — on the nation’s employers, resulting in some business owners deciding not to expand or hire new employees.

Many businesses are also suffering from the effects of the Dodd-Frank financial “reform” law, a 2,315 page monstrosity that makes it harder for small businesses to obtain credit, and also outsources and wipes out jobs in the financial sector. Even one-time Obama supporters in the business community have grown disenchanted: Democratic businessman Steve Wynn called Obama“the greatest wet blanket to business and progress and job creation in my lifetime,” saying that “the business community in this country is frightened to death of the weird political philosophy of the President of the United States. And until he’s gone, everybody’s going to be sitting on their thumbs.”

The Obama administration has sought to temporarily pump up the economy with stimulus spending paid for with massive deficits, but as the Congressional Budget Office has noted, the stimulus package will actually shrink the economy in the long run, so it will not be able to offset the economic drag resulting from all of the Obama administration’s new regulations and red tape.

No net jobs were created in America last month (even as the people needing jobs increased), as the Obama Administration drafted a host of new job-killing regulations and threatened costly lawsuits against employers.  But rather than rethink his failed economic policies, Obama is planning to spend billions more on green-jobs fantasies and boondoggles, in his upcoming “stimulus” proposals.  Forbes describes some of the past green-jobs fiascos promoted by the Obama Administration that cost taxpayers billions while creating no lasting jobs:

even as the president claims he is now laser-focused on job creation, he wants the public to forget all of his previous taxpayer-funded efforts to create those “green jobs” of the future, many of which have been abject failures. Like the $20 million federal grant given to Seattle to weatherize houses.  The promise?  To create “2,000 living-wage jobs in Seattle and retrofitting 2,000 homes in poorer neighborhoods.” . . . The reality a year later: “only three homes had been retrofitted and just 14 new jobs have emerged from the program.”

The much-hyped company Solyndra, which manufactures—um, make that “manufactured”—solar technology, has closed its doors and filed for Chapter 11 bankruptcy.  Only a year ago Obama gave it $535 million in low-cost loan guarantees, touting the company “as a prime example of how green technology could deliver jobs,” according to an NBC-affiliate report.  Now another 1,000 people have become unemployed victims of Obama’s job-creating skills.  And taxpayers have become victims of another half-billion dollars sucked down the Obama job-creating drain. . .

Perhaps the best example of the president’s job-creation failures is his “green car” efforts.  Talk about driving the economy into the ground!  The president has set a goal of 1 million plug-in cars by 2015.  And so he started doling out taxpayer money, announcing a $2.4 billion program in March 2009.  Since the government was a majority stakeholder in GM at the time, the Chevy Volt became a model to be emulated.  Except … well, nobody wants it.  GM only sold 125 Volts in July—and that’s with the government buying some of them.  At that blistering sales pace we could hit, oh, maybe 4,000 on the road by 2015.

Journalist Rich Lowry called the Solyndra debacle and its unemployed workers “Obama’s Enron.” Obama last year predicted that “The true engine of economic growth will always be companies like Solyndra.” But if that were true, it never would have needed half a billion of our tax dollars in the first place — tax dollars now lost due to Solyndra’s bankruptcy.

As The Washington Examiner has noted,

At the time Solyndra received its grant, Vice President Biden said that the Solyndra investment is “exactly what the Recovery Act is all about.” Now that events have proven Biden right — that is, now that Solyndra is a demonstrated failure like the stimulus package as a whole — the Obama administration is wholly unrepentant and plans to continue the waste. “The project that we supported succeeded,” Energy Department spokesman Damien LaVera said Wednesday. So a bankrupt firm lays off all of its workers after blowing through half a billion in private venture capital, then consuming half-a-billion in taxpayer-subsidized loans, and this is a “success?” What would failure look like?

The $800 billion stimulus package was indeed a failure.  It contained ill-conceived provisions that ignited trade wars with foreign countries such as Mexico, wiping out jobs in our export sector and aggravating America’s trade deficit.  The stimulus package’s green jobs funding, nearly 80 percent of which went to foreign firms, effectively outsourced thousands of American jobs to foreign countries, at taxpayer expense.  Two economists concluded that the stimulus wiped out 550,000 jobs.

More corporate welfare for “green energy” will do nothing to fix the overall bad business climate, which is discouraging job creation.  Democratic businessman Steve Wynn called Obama “the greatest wet blanket to business and progress and job creation in my lifetime,” saying that “the business community in this country is frightened to death of the weird political philosophy of the President of the United States. And until he’s gone, everybody’s going to be sitting on their thumbs.”  The Obama Administration has threatened lawsuits against major employers for hiring based on merit.  For example, the Obama Administration is trying to force trucking companies to hire alcoholics as interstate truckers, and to make some businesses hire felons.

Boston business owner Terry Catchpole noted in The New York Times that economic uncertainty due to Obama administration policies has wiped out jobs at companies like his:

Two years ago our executive communications company had 17 employees. Today it has seven . . . like many small businesses, we are dependent on big businesses as customers. And the big businesses that we would ordinarily depend on to become clients are sitting on their cash, because they are deathly afraid of an Obama administration that has been hostile to business . . . They have no idea where the administration’s next attack is coming from, and how much it is going to cost them to defend. So businesses do not spend money; they do not hire my company; and we cannot hire back those 10 good people we had to let go.

Richard Morrison, Jeremy Lott, and Jerry Brito bring you Episode 90 of the LibertyWeek podcast. This week we take a look at Robert Bryce’s work on the myths of green energy. Segment starts approximately 10:25 in.

In these days of corporate scandal, who can argue against full disclosure on financial statements?  But now comes one cockeyed movement that pushes the concept to extremes.  It would require executives to guess potential liabilities from environmental and social problems that just might affect their companies, and list them on balance sheets.

 I can envision, for instance, that an oil company like Royal Dutch/Shell, as supplier of fuels that supposedly contribute to global warming, would have to report the potential environmental liabilities.  How much?  A ready estimate can be derived from the movie The Day After Tomorrow.  As the film ends, half the U.S. population lies frozen beneath a gigantic ice sheet.  So lets say $100 billion.  Or maybe $10 trillion is a better number.

 See how ludicrous this gets?  Remarkably, this movement is drawing support from Wall Street.  In June Goldman Sachs and Morgan Stanley endorsed a report of the United Nations Global Compact that calls upon regulators to require a minimum degree of disclosure and accountability on environmental, social and governance issues from companies, as this will support financial analysis.

 The Rockefeller Family Fund, the Turner Foundation and the United Steelworkers have also signed on to the balance-sheet responsibility movement. California Treasurer Phil Angelides wants his states public pension funds to push for accurate corporate environmental accounting.  The Rose Foundation for Communities & the Environment, in Oakland, Calif., has already asked the SEC to mandate disclosure of financially significant environmental liabilities.  These activists arent trying to improve the reliability of Moodys bond ratings.  They are out to influence corporate behavior.

 Yes, environmental and social liabilities can be hugewitness Superfund, asbestos and breast-implant costs.  In todays world of strict, joint and several liability, where almost anyone can be assigned fiscal responsibility for almost anything, conservative accounting would seem to require the disclosure of all the future damage that could be done by tort lawyers, The problem is coming up with a number.

 A federal judge in California just gave a green light to a class action on behalf of 1.6 million women who worked at Wal-Mart anytime since December 1998.  The plaintiffs accuse the retailer of denying women equal pay and opportunities for promotion.  Should Wal-Mart have anticipated this suit?  Should its 2004 balance sheet have included a liability of, say, $104 million (the amount Home Depot paid in 1997 to settle similar suits) or maybe $176 million (what Texaco agreed to pay out in 1996 to settle a race-discrimination class action)?  Wal-Marts bigger, though.  How about a few billion dollars?

 Note that American and United Airlines, Boeing and the owners of the World Trade Center are all being sued (by families who opted out of the September 11th Victim Compensation Fund) for failing to take measures to prevent the attacks.  Maybe juries will size up damages in the billions.  Should AMR, UAL, and Boeing be listing massive conditional liabilities on their quarterly reports?

 There are an infinite number of possible futures and thus an infinite number of possible asset/liability estimates.  Which of the myriad low-probability (but possibly high-cost) risks should be incorporated on companies balance sheets?  At what point does the noise introduced by adding more and more low-accuracy valuations destroy the informational value of accounting itself?  In mandating the disclosure of information about less-likely risks, dont we run the risk of omitting information about more-likely risks?

 Assets and liabilities that cant be connected to historical transactions or tradable contracts have no assignable market value.  Goodwill is like that.  If it isnt from an arms-length acquisition, the number you might put on this asset is entirely arbitrary.  So investors are better off if the asset is not counted.  So, too, for liabilities that are to be plucked from the air.  Accounting is not a field in which we want to encourage fanciful thinking.

Glenn Schleede, the intrepid energy analyst, has done another bang-up job of identifying the weaknesses of yet another wind power project. This time his sights are set on West Virginia, and the prognosis is bleak.

One wind farm is already in operation in West Virginia, another has been approved by the Public Service Commission, and a third application is still pending. The amount of power produced from the three plants, assuming a generous 30 percent capacity factor, would equal a little over 1.6 billion kWh of electricity per year. The plants would occupy 30 to 40 square miles, yet only produce an amount of energy equal to 1.7 percent of the total amount of electricity produced in West Virginia in 2000. A new 265 MW gas-fired combined-cycle generating plant, on the other hand, would produce slightly more electricity on just a few acres.

Not only will these wind farms produce paltry amounts of electricity, the electricity produced will be of lower value due to the intermittent, volatile, and unpredictable nature of wind-generated electricity. To offset these characteristics and maintain the reliability of the grid, they will have to be backed up with dispatchable generating units. “Units serving this backup role must be on line (connected to the grid and producing electricity) and running below their peak capacity and efficiency, or in a spinning reserve mode (i.e., connected to the grid and synchronized but not putting electricity into the grid),” according to Schleede.

Electricity from wind farms also increases the cost of electricity by adding to the burden of keeping the grid in balance and makes it difficult to keep transmission lines from being overloaded. Moreover, mountaintop wind farms require additional transmission capacity, which will only be used between 25 to 35 percent of the time due to wind powers low capacity factors. All of these costs are part of the true cost of wind power, but are usually ignored when the projects are being sold.

Wind power receives generous subsidies from both federal and state governments. The subsidies available to the West Virginia wind farms include federal accelerated depreciation (5 years as opposed to 20 years for other electric generating facilities), production tax credits, a reduction in the West Virginia Corporate Net Income Tax (due to accelerated depreciation), an 87.5 to 93.75 percent reduction in West Virginias Business and Occupation Tax, and a 91.67 percent reduction in West Virginia property taxes.

These subsidies shift the tax burden to other taxpayers and electric customers. As Schleede notes, “The total of $69.7 million in tax liability that could be avoided by the wind farm in the first year, as well as the liability avoided in subsequent years represents a tax burden that would be shifted to remaining taxpayers.”

Offshore Wind Farm Poses Significant Economic and Environmental Costs

Another Southwestern state is making a big splash in the renewable energy market. New Mexicos largest utility company, Public Service Company of New Mexico (PNM), announced on October 22 that it will team up with Florida-based FPL Energy to build the nations third-largest wind generation facility.

The project, known as the New Mexico Wind Energy Center, will be located in Quay and De Baca counties 20 miles northeast of Fort Sumner. It will cost $200 million dollars and will include 136 wind turbines that will reach 240 feet into the sky. The turbines will be the tallest structures in the state and will sprawl across 9,600 acres.

It is estimated that the 204-MW plant will provide electricity for about 94,000 average-sized New Mexico homes, or about 4 percent of PNMs total power production. PNM readily admits, however, that wind is an intermittent energy source and that the project will not provide a steady source of electricity. In fact, the facility will operate mostly during the spring months when wind conditions are optimal, or about 30 percent of the time.

“The scale of this project will put New Mexico on the map as one of the nations leading producers of renewable energy,” said PNM Chairman, President and CEO Jeff Sterba. “As renewable technology continues to improve, and costs come down, it is clearer than ever that smart business decisions and environmental stewardship can successfully coexist. PNM is thrilled to play a role in making renewable energy an everyday reality in New Mexico.”

Despite Sterbas rosy outlook, the project will rely on a “green tariff,” a small monthly premium paid by participating customers, to cover its costs. It is still unknown how much the wind-generated electricity will cost New Mexicans. Charles Bensinger of the Coalition for Clean and Affordable Energy joined Sterba at the press conference to praise PNM and to encourage New Mexicans to participate in the project. “PNM has really challenged us to put our money where our mouth is,” said Bensinger. “We want to make that 200 megawatts go really fast.”

New York Wind Farms a Bad Decision

In August, New York Governor George Pataki announced a $17 million aid package to four private companies to develop wind farms in various parts of the state. But, according to Glenn Schleede, president of Energy Market & Policy Analysis, New Yorkers should be wary of the environmental claims of wind power.

The New York Energy Plan estimates that the eight wind farms, with a combined 250 wind turbines, would produce approximately 900,000 kilo-watt hours (kWh) of electricity per year. But this is a drop in the bucket compared to the states total electricity demand. For example, this amount equals 58/100 of 1 percent of the total electricity imported into New York in 2000. It is only 15 percent of the energy that will be produced from a single gas-fired combined cycle plant that is scheduled to come online in Athens, NY in 2003.

The wind power industry often claims that “electricity generated by the wind turbines will displace on a kWh for kWh basis electricity that would be generated by fossil-fuel generating units and any associated emissions.” But that simply is not true, says Schleede. “Such claims are generally exaggerated. For example, they do not take into account that any fossil-fueled generating unit that is kept available to back up the intermittent electricity from the wind farm will be giving off emissions while it is running at less than peak efficiency or in spinning reserve mode. Nor do they take into account the fact that other alternatives for reducing emissions are likely to be far more cost-effective.”

New Yorkers should also be aware that there is growing opposition to wind farms wherever they are proposed, in Europe, Australia and in nearly every state in the U.S., says Schleede. “Opposition is due to a variety of reasons including scenic and property value impairment, noise, bird kills, flicker effects of spinning blades after sunrise and before sunset, potential safety hazards from blade and ice throws, interference with telecommunications, and higher costs of electricity.”

The British government keeps raising taxes on energy, and businesses are feeling the pinch. Industrial gas prices rose 20 percent last year, due in large part to Britains climate change levy. As noted by Reuters (January 7, 2002), higher taxes exacerbate an already turbulent energy market in Britain. “UK prices have doubled over the last two years, partly because the opening of the UK/Belgium interconnector pipeline linked British prices to European gas prices which are indexed to oil prices.”

“Gas demand in Britain,” said Reuters, “has doubled over the last 10 years. Industrial, commercial and domestic use has risen 16 percent but usage in power generation has grown from virtually nil in 1990 to around 30 percent last year.”

Several German utilities have announced hikes in household power prices effective January 1, reflecting higher taxes and fees, reports Reuters (January 3, 2002). Customers served by the utilities will see their monthly power bill increase by about 5 percent, although some will see their rates go up by as much as 10 percent. Two thirds of the rate hikes are due to higher taxes, according to one industry spokesman.