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Another Renewable Energy Bust: $43 Million of Taxpayer Money Gone

Written by Gary North on April 16, 2012

The stories just keep coming. The Department of Energy offers huge loan guarantees for “renewable energy” projects, and they keep going belly-up.

Not yet two years after the Department of Energy awarded $43 million in loan guarantees for Beacon Power’s energy storage plant, government attorneys are calling the bankrupt solar company and its affiliates little more than “empty shells” benefiting lawyers and other bankruptcy professionals.

The Department of Energy was created by Jimmy Carter in his first year: 1977. It has not led to the creation or discovery of new energy sources. It has provided lifetime employment for career bureaucrats.

Government attorneys also are criticizing what they said were early estimates by the Massachusetts-based company that its New York plant was worth $68 million and its so-called “flywheel intellectual property” held a value of $28 million to $47 million.

“Those representations proved to be wildly off the mark, and today debtors are empty shells with no interest in the disposition of their remaining assets, consisting of a pot of cash woefully insufficient to pay even its administrative claims,” Justice Department attorney Victor W. Zhao wrote in a filing last week in U.S. Bankruptcy Court in Delaware.

How good a job has the Department of Energy done? A Christian Science Monitor article described this in 2010.

In 1980, when the DoJ was fully operational, about 38% of oil consumed in the United States was imported. By 2009, over 50% was imported.

In 1977, the USA produced about 3 billion barrels a year. In 2009, it was under 2 billion.

In 1979, the average price of gasoline in the U.S. was $0.58 per gallon. Adjusted for inflation, that is the equivalent of $1.85 in 2010 dollars. Today, the price is close to $4.

A huge federal bureaucracy was created. The Department of Energy brought together under one Cabinet secretary more than 50 agencies that dealt with energy, including the Atomic Energy Commission. Upon its creation in 1977, according to official estimates, the new DOE employed a total of 20,000 people. Today, the Department of Energy has 16,000 permanent employees and 100,000 contract employees around the nation.

The more energy the nation imports, the more power the Department of Energy gets.

In government, nothing succeeds like failure.

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6 thoughts on “Another Renewable Energy Bust: $43 Million of Taxpayer Money Gone

  1. To keep it in context, the Solyndra fiasco is a a bit bigger than this thing because the Bush Admin deemed that it would fail in a certain month August of 2011 (or thereabouts), and it failed in Sug 2011 or whenever it was… Bush Admin had it spot-on However Obama went into it head first, and hit his head on the bottom of the pool, and is probably trying to blame Bush that the pool is not deep enough to dive.

  2. Carol Goodwin says:

    PEOPLE! Support Ron Paul and this is one of the dept's which has been sucking us dry he will shut down! Of course the bureaucrats who have been benefitting from all this money will lose their jobs! Wouldn't that be a tragedy???? NOT!

  3. Another failed energy company! Has anyone of you, as taxpayers actually questioned where all the money goes that has been paid to these failed companies? Does any one ask WHO was responsible for ensuring that all the documentation for these companies was properly filed and investigated? After all how many taxpayers have purchased a house and had to submit to a HUD or FHA or VA loan application process? As we all know, that have been through that scenario, it is very extensive and if there is a mistake the whole process stops until it is corrected! So, where are all the safeguards for these failed companies that should have been in place before any monies were disbursed?

  4. How is it that these monies were so blatantly handed over without so much as a cursory examination. Since when does the guarantor of a lending institution hand over money without first checking on the physical assets of a company? Are you angry yet? As a taxpayer and home owner I AM DAMN mad that our present government bureaucracy can be so cavalier about dispensing our hard earned tax dollars without any accountability …or is it maybe… shhhh..not so loud..a higher form of corruption in our political system that goes all the way to the top? You can answer that question, you are the taxpayers paying the bills! Where will you be in November 2012?

  5. We need Ron Paul and we need to get rid of all the Rinos and Demacraps in office and clean it out and get all new ones in and take back are country

  6. This would be an intolerable scandal if these companies were good faith attempts to start eco-friendly businesses. But they are not good fatih efforts.

    All these businesses that have gotten loans from the Obama Administration to push green energy were started by personal friends, inlaws, and supporters of Barack Obama, and were shell companies set up a la "The Producers." They were set up to "go broke" so that no one would notice where the money went. It is illegal for business owners to take large sums of money out of businesses that they are planning to file bankruptcy on, but the Obama Adminsitration's key economic slogan is "Too Big to Get Arrested."