The federal government has a long history of “green energy” failures. Many states have also foolishly subsidized green energy, including Mississippi.
Ivanpah in California is the world’s largest solar project. The project is owned by Google and NRG Energy, and is heavily subsidized by taxpayers. Ivanpah originally received a $1.6 billion loan from the Department of Energy (DOE) in 2011. Now the company is asking for another government subsidy to pay off its original loan.
For decades, the federal government has struggled with the issue of storing waste from commercial nuclear reactors and defense-related nuclear activities. The government has spent billions of dollars planning for nuclear waste disposal, but the creation of a permanent storage site is years behind schedule due to federal mismanagement and safety concerns. A new report confirms that the current proposed site, Yucca Mountain in Nevada, is safe for use.
In February, I highlighted the Department of Energy’s issuance of a $6.5 billion loan guarantee to build a nuclear power facility in Georgia. At the time, the project was behind schedule with cost overruns, and the project’s owners had already secured private financing. Yet DOE issued the loan guarantee anyway.
The Government Accountability Office’s annual duplication report is out. This year, the report highlights 30 ways that the federal government can save money. One way is to terminate the Advanced Technology Vehicles Manufacturing (ATVM) program, which provides government-subsidized loans to companies that make fuel-efficient cars. The program has been a failure, and it has cost taxpayers millions of dollars.
An op-ed in the Wall Street Journal today indicates that Edwards’ Law of Cost Overruns is an international standard. If a politician says that a project will cost $100 million, it will end up costing $200 million or more.
After Solyndra collapsed, the Department of Energy (DOE) should have learned it lesson. Guaranteeing loans for energy and industrial companies is a bad idea. The failures of Beacon Power and Fisker Automotive should have driven home the message. Now, we have further proof that the DOE isn’t paying attention.
In today’s issue of Nature, scientists from the National Ignition Facility (NIF) in California are trumpeting their advance in achieving fusion ignition. However, the National Ignition Facility is just like so many other projects from the Department of Energy. It’s behind schedule and over budget.
The Department of Energy spends $29 billion per year on various schemes with a disastrous track record, often with bipartisan support. From regulations that destabilize markets, decrease domestic output and harm consumers, to subsidies that pick and choose winners and losers, this department is a perfect example of a white elephant – an expensive project of little to no useful purpose.
If we did a poll of free market economists about federal programs that are the most wasteful and ridiculous, energy subsidies would be near the top of the list. It’s not just that energy subsidies make no sense in economic theory, but also that there are so many news stories highlighting the folly that it’s hard to see why policymakers persist in wasting our money.