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November 4, 2010

The Unheralded Energy Victory in Tuesday's Election

Ed Lasky
There was a lot of good news Tuesday, but one important victory did not get much play: proponents of developing our nation's  vast shale gas reserves scored a victory in Pennsylvania.

The state of Pennsylvania sits atop the giant  Marcellus Shale formation -- an area saturated with gas trapped in shale rocks that can be tapped through a process called "fracking." The technology is safe, despite claims to the contrary. State departments of environmental protection have been satisfied that appropriate safeguards are in place to prevent any contamination to water supplies from the tiny amounts of chemicals used in the process (blasting the underground shale with streams of high-pressure water mixed with sand and a small amount of chemicals). The price of natural gas has been plummeting in America, delivering a huge economic stimulus throughout America. Thank-you, shale gas drillers.

Pennsylvanians have been a huge beneficiary of this wealth-sparking an economic renaissance and tens of thousands of jobs throughout the state. Yet Pennsylvanian  Democratic Senatorial candidate Joe Sestak opposed this development, claiming contamination risks posed a threat to people. He wanted the EPA to first take control of regulating fracking, new taxes imposed, and Congress closing the "Halliburton loophole" ("whatever that is" wrote the Wall Street Journal editorial staff ).  

Pennsylvania's term-limited, outgoing  Democratic Governor, Ed Rendell, wanted to impose high severance taxes on shale gas. When his attempts were derailed by the state legislature Rendell issued an executive order banning new gas leases on state lands This was seemingly done in a fit of pique. But the Democratic candidate for Governor, Dan Onorato, supported Rendell.

The good news: the voters of Pennsylvania denied Sestak the Senate and Onorato the Governor's mansion. The incoming Republican Governor, Tom Corbett, has pledged to lift the ban on leasing of state lands. Pennsylvania citizens will continue to reap the windfall that lies beneath their feet, and the rest of America will be saving billions of dollars that otherwise would have gone to paying for "dirtier" energy, including energy that came from overseas adversaries. Win One for the good guys.

But there is also bad news. Another Green Scheme looks on its way to being another billion dollar boondoggle, courtesy of Barack Obama.

Solyndra is a solar company with a checkered past and cloudy future that recently received 500 million dollars in taxpayer aid. The firm is connected to Democratic Party bigwigs. The latest news? After being showered with hundreds of millions of our dollars, is laying off workers and closing a factory.

From the New York Times:

Solyndra, a Silicon Valley solar-panel maker that won half a billion dollars in federal aid to build a state-of-the-art robotic factory, plans to announce on Wednesday that it will shut down an older plant and lay off workers.

The cost-cutting move, which will reduce the company's previously announced production capacity, is a sign of the notable shift in the prospects for cutting-edge American solar companies, which now face intense price competition from Chinese manufacturers that use more established photovoltaic technologies.

Just seven weeks ago, Solyndra opened Fab 2, a $733 million factory in Fremont, Calif., to make its high-tech solar panels. The new plant was supposed to be the first phase of a rapid expansion of the company.

Instead, Solyndra has decided to shutter the old plant and postpone plans to expand Fab 2, which was built with a $535 million federal loan guarantee.

"Fab 2 is much more efficient and cost-effective than our existing facility," Brian Harrison, Solyndra's chief executive, said in an interview. "We're adjusting our plans to be more in line with where the market is and where our business is at the moment."

When Solyndra filed for an initial public stock offering in December, it estimated it would have a total production capacity of 610 megawatts by 2013 if its two plants were fully built out. The company now expects it have capacity of 285 to 300 megawatts by 2013.

Intense Chinese competition in the solar energy business has been around for years. It cannot be a shock to the company or federal government. This was one of the companies blessed with a Presidential visit where Barack Obama laid his hands upon the company. As he should, since the taxpayers' dollars he gave away  might be related to the ties company officers and investors have to the Democratic Party.

I wrote about Solyndra during the summer and noted the shaky finances and unstable condition of the company (the auditor had to issue a going concern letter, highlighting the risk of possible failure-hence the rush to turn the spigots on to push taxpayer dollars to rescue the company-and its investors). Who might those investors include?
One of the biggest investors in the company was Oklahoma billionaire George Kaiser -- a big bundler for the Obama-Biden campaign. Not to worry for Mr. Kaiser. The administration is looking to extend hundreds of millions of dollars in additional loans (our money) to the venture. Needless to say, where is the major media that was so busy reporting on the Bridge to Nowhere (and that has also been conspicuously silent in the billions of dollars Robert Byrd sent to West Virginia to raise monuments to himself). Throwing good money after bad doesn't really matter when the money is Other People's Money and you are providing a return on investment for a big campaign donor out of the public purse.

From failure to recipient of tax dollars -- hitting pay dirt at the federal trough.

We have two stark choices: use proven technology to tap the vast amount of energy under our feet and bring cheap and plentiful supplies to the surface, or allow Democrats to take our tax dollars to fund pie-in-the-sky green schemes that  all too often benefit donors to Democrats.

Thank you people of Pennsylvania for choosing wisely.

These two stories illuminate the wisdom of giving people more of a say regarding our energy future, and also the foolishness of placing Democrats in charge of the same.

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