Does Anyone Care About Alternative Energy Anymore?

Oil is at $50 per barrel and motorists are filling up at $1.70 per gallon.

The United States is broke.

The Treasury must bail out Detroit, resuscitate a paralyzed financial system, purchase distressed assets with a $700 billion troubled asset relief fund, patch together a solution for a looming social security / health care crisis, reconstruct crumbling infrastructure, and upgrade our failing public schools.

Did we mention that Washington is approximately $1 trillion in hock?

Who cares about alternative energy?

Liberals

I am hopeful that legions of individuals did not install Barack Obama into the White House strictly due to irrational expectations related to a pie-in-the-sky Don Quixote stance upon alternative energy. Yes, the statesman articulated a commitment to diversifying U.S. energy supply and intimated that alternative energy resources would serve as the backbone of his integrated plan.

The rhetoric promised to spend $150 billion over ten years to promote this sector in retaliation against surging commodity prices. The Senator paralleled the proclamations by railing against 'price gouging' Big Oil - threatening to crush the likes of ExxonMobil (XOM) with 'windfall' profit taxes that would apparently finance the Mean Green Machine.

Ha!

Impossible. Alternative energy is a feel-good story that has historically been exposed as penny-wise and pound-foolish. First, wind, solar, and biodegradable power cannot compete with fossil fuels in terms of pricing and efficiency. Secondly, this borrowing from Frank to pay off Bob mentality is a mark of American arrogance that is doomed to fail.

The alternative energy movement has been subsidized with billions of taxpayer dollars. Investors and producers are effectively bribed with Federal cash to promote this vehicle and have distorted the energy market.

Alternative energy is not economically viable. We must speculate that the entire sector would collapse upon itself if government assistance were to be withheld.

Policy implemented to spend $150 billion to create five million alternative energy jobs is illusory - propagating a net-zero effect at-best. Certainly, corporate industry will begin to shed jobs while staring into the abyss of surging energy costs that strangle the economy. The new energy boogeyman will no longer arrive courtesy of Exxon, OPEC, Vladimir Putin, and moneyed Sheiks.

Green energy is the new culprit behind outrageous $300 heating bills.

Environmentalists

We must assume that it is perfectly acceptable for I-55 corn belt farmers to strip the world of billions of bushels of food while reserving this staple for ethanol production. Desperate right-wingers seeking to secure their critical rural base have subsidized corn ethanol. The legislation is indeed comical, considering that agriculture pricing shattered all records throughout 2008.

According to the Energy Information Administration, the ethanol 'boom' powers a scant 3% of gasoline and diesel mileage driven. Corn has provided more fuel to feed the flame of international strife than it has for any automobile.

Subsidized ethanol production wreaks havoc upon the food supply/demand matrix by promoting ramshackle conversion of corn into fuel that leads to rampant food shortages and inflated costs at the expense of the world's hungry. Turmoil consumes the international community from Bangladesh to Haiti as outraged protestors have taken to the streets to rail against a form of government-sanctioned starvation.

Guess what?

Millions of lush Amazon acreage is being destroyed, slashed, and burned - converted into farmland to fill the void right this second.

Detroit

Detroit is beyond finished. The Big Three automakers have descended upon Washington, hat-in-hand with a vague promise to 'do better,' supposedly on the strength of this movement.

Look! General Motors (GM) Chairman Rick Wagoner drives to Washington in a hybrid vehicle!

Spare me the spectacle. Please.

Gasoline costs $1.70 and November hybrid sales have decelerated at a pace that is even more wretched than the automobile industry at-large. (Hybrid sales collapsed by 50% over the past year in comparison to an industry-wide 37% shortfall.) Toyota (TM), featuring its gold standard Prius sold a meager 8,660 units of the vehicle in November 2008 - a shocking 27% downdraft from the 11,804 sold last month.

The debacle shall serve as pure testimony that the hybrid fad was more so based upon economics than any noble tree-hugging sentiment.

Hybrid vehicle investment is no longer a badge-of-honor strategy based upon economic merit. The commitment will be exposed as yet another albatross liability upon the balance sheet of Detroit.

Conclusion

Alternative Energy policy has degenerated into a Don Quixote-like scheme foist upon our citizenry by business leaders and lawmakers on both sides of the aisle. Perhaps chaotic, unmitigated borrowing from the pocket book of others as a means to pare down our towering debt of prior injustices is the American Way.

Disclosure: Long XOM.

Comments

[calvino:]

This is the worst commentary I have ever seen on SA. If the President says he wants alternative energy, and the Congress is backing him, why would I want to fight them with my investments? Politically, this commentary is just as naive. The pattern of our government following Wall Street's best returns model is finished. This government is going to act like a government and lead, not follow.

2008 Dec 14 11:15 AM

[vpratt:]

I've heard that the passengers on the first steam train, the "Tom Thumb" were terrified when it hit 5 MPH. And really, what a lot of effort to pull so little weight. They should have just dropped that whole silly notion of an Industrial Revolution. Remember, the CEO of IBM at one point said that he thought computers were amazing but there would never be a market for more than a few thousand. Too big. Too expensive.

Yet here I am, a humble store clerk, with the ability to send and receive information ( or pictures of my naked keester ) to sites around the world almost instantly. With such a small investment I can read the opinions of many informed citizens. I'm afraid your article is based on a static world. It does not exist.

2008 Dec 14 12:03 PM

[bonderman:]

Lots to question here. The argument about wind solar, etc. being less efficient is not the driving reason for their implementation. Climate change and energy independence are.

The argument that the Prius generated fewer sales in November could probably have been said about nearly all models.

This author seems very confused.

2008 Dec 14 12:31 PM

[NDCCPA:]

The rules of the road have changed. It seems to me that we are now following the "European" style. You want a bail out? Fine, but now we put in lots of rules. We can easily make gasoline $10 a gallon with taxes as the Europeans do. Our government can easily tax the oil companies big time or nationalize them as many nations have done. That way you could raise $2+ trillion to subsidize transportation infrastructure as the other countries do. I think it is a transformational change that is in the works.

2008 Dec 14 12:35 PM

[Doc 224899:]

BRAVO!! Finally, somebody looks at the numbers, instead of the hype and liberal campaign rhetoric.

Peak oil has forced thousands of very big investors to look carefully at the financial facts about alternative energy investment options, and "the votes have been counted". When casting a vote costs money, the majority of smart votes backed by evidence of success have voted against the probability of alternative energy succeeding any time soon. When casting a vote is free, and any loser can vote (even deceased persons, non-residents, and people apparently voting multiple times because that's how one votes on American Idol and that's all they know about voting), people voted for pie-in-the-sky dreams and fluffy delusions, including alternative energy.

2008 Dec 14 12:54 PM

[Westsider:]

If we keep using fossil fuels at the rate we are using them now and don't develop alternative energy sources there will not be enough energy sources to maintain our lifestyle. Meantime, energy needs grow world-wide while all efforts to put limits on usage are routinely opposed by corporate America. The article doesn't consider the bigger picture environmental concerns. Maybe the whole system just needs to collapse before we can start thinking about a future without fossil fuels?

2008 Dec 14 02:03 PM

[smurphny:]

As occurred after the 1970s oil bubble, alternative energy and technology is dead as long as oil is cheap.

2008 Dec 14 02:17 PM

[socrateazz:]

Let me see Hmmm mostly beliefs.....I do disagree with a lot of the alternative energy sources touted to replace fossil fuels. The enviormentalist do have a few things right but not the religion of global warming or over protecting some trees. sooner or later the fuel will run out and if the world has no alternative most transportation will be unfeasible. For the future we need to put out some effort to reduce use of fossil fuels. And find replacement sources. saying the price is down today so I do not need to worry about tommorrow is exactly why we are in the mess we are in now. Too many people said everything is OK now so ...don't worry be happy. People believe they know what is going on. Do they really! Take this farmer thing . What appears is not what is! I expect a food shortage will show sometime soon. Why? Producers are not covering their cost. Of course most think farmers are rich. Why? The belief is farmers are making money by putting in little imput. Let me put it this way....The fertilizers alone for a bushel of corn is almost two dollars per bushel produced. Do you have any idea on the fuel cost? What if there is an insect problem? The cost of living is minimal in such a situation . Is that cheap? Do not be fooled. If farmers had to live at the current price of corn at their current costs. they would be bankrupt soon. fortunantly most farmers are smart enough to wait for prices which at least cover their cost and then sell on the futures market. If alternative energy is delusional then I guess the age of fossil fuel will be concidered the height of civilization and selfishness a thousand years from now. If no alternative is found then a dark age having less will decend upon the world. Thinking only of now is very shortsighted. Believing what you believe is fact is no better than throwing a dart at a board and thinking you are right if you hit the board somewhere.

2008 Dec 14 02:18 PM

[James Wilson:]

The large Corporations have too much influnence with the Media. The USA had better devolp all the engery resurces we can or we are right back where we were dependent on the Big Oil for our main engery supplies. Don't let storys like this make you think getting out from under Big Oil and Big Coal is not a good thing.

2008 Dec 14 03:18 PM

[James Wilson:]

Chinesse have devolpled wind generators that start producing power in 2 or 3 mph winds. They are selling them delived in the U.S. for $ 2200.00

Imagine heating or cooling a home mostly by wind power and cutting your electric bill in half. The pay back on the wind generators is 2 1/2 years.

2008 Dec 14 03:23 PM

[Douglas Hvi...:]

Depends on which alternate energy, when, how much, and in what environment. I've dropped my house heating from circa $1,300 per year to under $400/yr, and about $500/yr (after amortization of equipment) of that saving came from properly planned alternate energy.

2008 Dec 14 04:13 PM

[jamesnach:]

Probably the most arrogant and stupid blog I have ever read on this site.

Just limiting the comments to the first paragraphs (I have much better things to do than replying to such a nonsense), dear author, to inform you that the "over-subsidized renewables" are much less subsidized than fossil fuels.
Actually, what happens is that of the 300 B$ that every year are spent on subsidies to energy, only 33 B$ are related to renewables and - guess - about 180 B$ are spent for fossil fuels.

unfccc.int/files/coope...

first get the facts, second start writing.

2008 Dec 14 05:16 PM

[Kofi Bofah:]

Tough crowd in here as always. I know that alternative energy is a feel-good popular story. But I think that supporters of this sector will be disappointed. A lot of promises were made on the campaign trail that will be impossible to execute. I do not think that alternative energy is a priority in the U.S. right now. The movement may very well gain steam in years to come - just not at this moment.

2008 Dec 14 05:27 PM

[MellowGuy:]

It's still very difficult to buy a hybrid vehicle without paying a premium, and if you want a hybrid minivan, it's impossible to buy.

Insulation is one of the most cost effective ways to save energy costs, but it never gets labeled as alternative energy.

2008 Dec 14 08:27 PM

[legodad:]

You have an extremely short memory - switch back to July - how did things look back then? The current situation is a short term one - everybody is working to turn the economy back around and when that happens the thirst for oil will go back up and the price will start its upward spiral again. Now is the time to buy GEX, PBW etc. Buy & wait! It is precisely now that it makes the most sense to invest in alternative enegy - both as a private investor and as the government! Let's revisit your article again in one year from now and see if anything has changed!

2008 Dec 14 10:56 PM

[famos:]

Dear Kofi Bofah,

I agree with your story, but I write the following for a different reason, i.e. I'm not promoting the use of oil for the benefit of the Mideast. On the contrary, I'm promoting it for the salvation of the U.S. right now. We need to solve the immediate problem now, which gives us the time we need to solve our future problem.

I hate to tell you, if we couldn't use oil/diesel for transportation and had to wait for "new age green technologies" you'd starve or freeze to death in the process. However, we have enough energy material, that being coal to last 100 years. And we have the "now" technology to convert "dirty" coal to "clean" diesel. In spite of the asinine TV commercial "In Reality, there is no such thing as clean coal," paid for by the Arab's.

I suggest a new commercial: "Clean Diesel Now, to save your a__, butt."

Famos, for the last word.

2008 Dec 15 10:26 AM

[Ferdinand E...:]

Alternative energy can deliver the goods, but unfortunately not as much as the TV audience wants, or needs. The advice that I offer is as follows: use as much alternative energy as makes economic sense, and not a BTU more. The base of the US energy structure should be nuclear of course, but I doubt whether the new president's green team is willing to heed this splendid advice.Too bad. As for alternative energy serving as the backbone of his energy policy, my reaction to that is nonsense on stilts, assuming that we are talking about the coming eight years.

2008 Dec 15 10:40 AM

[Dudley C Pa...:]

As the cost of alternatives continues to decrease while the efficiency increases, we will reach a tipping point where energy alternatives will make sense. Obama's proposal to fund $150 billion for research over the next ten years may move up the tipping point and is therefore worthwhile. Pickens Plan with its windmlls and natural gas trucks is another good idea. See pickensplan.org for more. A national energy infrastructure is another idea whose time has come.

2008 Dec 15 10:50 AM

[mjgila1c:]

When did so many Americans become such syncs? And since when did hard to reach goals, that most other counties don't dare to face, become something this country can't achieve?

This blog represents the real problem in this country, the cowards that would rather point the fingers and laugh then lift one finger to help. If you really looked around and listened to what is being said, what is being done around the world, you might realize how naive your being.

Your plan is to have no plan! Just keep with the status quo, even if it is a mathematical certainty that we will destroy not only our countries economy, but also our planet if we continue. BRILLIANT!!! All the while pointing your "know it all finger" at everyone trying to work together to solve this crises.

Your only part of the problem acting that way. If your interested in seeing real change you should look into Pickens Plan and see what alternative energy can achieve.

2008 Dec 15 11:04 AM

[famos:]

Dear Commentors,

You'd better check were you got your food to eat today. Or how you got to work today (if you have a job), or what keep you from freezing to death last night. The answer, PETRO ENERGY. I am not saying that we quit on alternate energy. I'm saying the food you ate today didn't get here by Picken's sailboat. And you'd better solve your immediate problem or you won't be around to solve your future problem.

Famos, for the last word.

2008 Dec 15 11:31 AM

[LynW:]

The present gas price decrease has already started to increase again. I'm sure that it will go up again soon.

Fact of the matter is that we are dependent on foreign countries for most of our oil. Since most of those countries hate the US, it seems to me that we are walking on thin ice.

The only sensible measure to take to protect our country is to develope alternative energy methods that do work well. Other countries such as Isreal use Solar/Thermal Energy to power their entire area & Holland has been using Wind Power for centuries. There must be some info we can get from them.

There are vast reserves of Natural Gas under the US and Canada, the most reliable wind corridor in the Midwest, almost unlimited amounts of coal under the US, Oil Here can be tapped, Solar capabilities in the Southwest, tons of grease oil from frying foods that can be converted and if we don't utilize or invest in these technologies we are going to be sorry in the near future.

I do agree with most people about using the corn to create fuel instead of food. The next issue I see coming is a food shortage in our country as well as others (Where it has already started). Then, another thing to consider is the Water shortage that will develope - especially from the use of it to grow and manufacture fuel. Natural Gas, Wind and Solar energies use the least amount of water to produce...

I feel that it is important to invest in our country and I hope that our leadership sees that too!

2008 Dec 15 11:40 AM

[Surly:]

Reading this blog post reminds me of why if you want to understand anything, you really have to avoid the impulse to simplify it. To promote the idea that oil and gas as sources of energy are more "efficient" and "economical" than alternative energy and that alternative energy is "too costly" and can't possibly replace fossil fuels, one must ignore several facts.

The most obvious fact is that America's military expenditure of around $4-500 billion a year is essentially a subsidy to the oil and gas industry. What have we used our military for OTHER than to help secure the strategic resource of oil and gas?

Another fact is that the impact of burning our fossil fuels for energy at the rate we are has wide-reaching effects on climate and thus the environment and the (mostly poor) people that must live in it. The cost of this impact is simply not included in the author's naive calculations.

Yet another is the fanciful notion that alternative energy has enjoyed greater support and funding from the government than the oil and gas industry. Leaving aside the first fact above, the auto industry has enjoyed many subsidies to produce big, gas-guzzling autos, the oil and gas companies have enjoyed tax loopholes for off-shore production, and even the simple fact of state and federal dollars for road construction exists as a de facto subsidy to the entire oil and gas industry.

The author is stuck in a fantasy land that, unfortunately, has guided much planning and big thinking over the last 30 years. Let's hope there's new global leadership that will prepare society to face the energy challenges ahead.

2008 Dec 15 12:28 PM

[nakedjaybird:]

Wow! Enough! Most of you want to stop beating your wife by beating your neighbors wife, whereas the change called for is to stop beating......period.

Start looking at the end use of the energy: 70% of all crude is used in Transportation and only 20% of that energy is useful; 80% is wasted.

Change Transportation to electric and worry about the generation/distributio... where waste is basically eliminated in using free energy such as wind and solar, geothermal (even hydro). But certainly stop spending oddles to find, process, transport, etc. to then burn what certainly is not free and readily available to make 80% wastel be it coal, oil, nat. gas, shale, sand, etc. Change. Stop looking for alternative wives to beat. Change what really needs to be changed.

2008 Dec 15 12:51 PM

[Kofi Bofah:]

Let's make a deal:

We will revisit this issue at $150 oil, or when the U.S. isn't buried beneath a $483 billion budget deficit and a credit market / financial sector that has been completely shut down.

Sound good?

Cool.

2008 Dec 15 01:21 PM

[nakedjaybird:]

Kofi - that cop-out is exactly what we did following the 1973 embargo: we didn't do it.

2008 Dec 15 01:46 PM

[Fred W:]

Wow, this guy really can't see past the next quarter. I suggest that the author attempt to remove this "piece" from the web...in a few months, hindsight will make it look like it was written by a 5th grader.

2008 Dec 15 02:07 PM

[Kofi Bofah:]

Well - can somebody tell me where the money is going to come from?

What is going to be cut from the budget package?

How much money do you believe should be printed?

How many more billions of dollars more in tax credits should be applied?

Is this realistic?

And are we on S.A. for investment ideas or to play politics?

If you are on S.A. seeking investment ideas, compare B.P. a super major that has embraced alt. energy with Exxon an oil company that has scoffed at the idea.

Let me know what you find on that one.

2008 Dec 15 02:44 PM

[nakedjaybird:]

Kofi - well, let's start by reducing the first years consumption of crude on Uncle Sam; after that, not sending that money to the middle east will pay for each following year's investment; at the end, put that first years costs plus interest back into the kitty from the payments not sent offshore. And walla - we're at 6 billion barrels of crude a day, total; and our additction to crude was in remission from year 2. If you want to do it in 2 year chucks, fine; 5 year chucks fine. But get crude down from 21 million barrels/day to 6 million and heading for 0 - stopping short of where we just have to use some natural crude where synthetics don't/won't work.

2008 Dec 15 05:09 PM

[nakedjaybird:]

PS - it beats giving it to wall street, aig, or all the horrible executives and goverment failures still employed.

2008 Dec 15 05:10 PM

[GMBiofuelsGuy:]

Hey Kofi,

I work for General Motors and that wasn't a hybrid that Rick Wagoner drove to his public flogging in Washington, DC. It was an Extended Range Electric Vehice - the technology base of the Chevrolet Volt. I would respond to some of the other Debbie Downer stuff in here, but it is too depressing.

2008 Dec 15 05:45 PM

[Old Wizard:]

Generalty always sounds good to some listeners. 150b will not get us independent of imported oil in 8yrs or 10. The way to drive down the cost of alternative energy is to create significant pilot projects that will focus technology and efficiencies. That requires a significantly higher investment, but given the strategic and economic implications of not enabling this path, it seems to me that responsible gov. should proceed. Had we heeded the wake up call in the seventies or the earlier 90's we'd be there now. We cannot continue to have a negative 1 trillion current account balance for the next ten years and prosper. Many of the systems and products developed in the Appollo program were not cost-effective at the time, but are taken for granted now. I doubt we would be talking on this blog if real time teleprocessing was not jump-started by that program. As I've said before, man-made global warming is not the primary driver in my mind for the need for alternate to foreign oil energy sources, but if it motivates us to drive a comprehensive energy plan with short and long term specific goals, great. I suggest that we set a goal of importing 4m/ barrels/day less iin 5 years and 10m less in 8. Setting specific goals will force a plan that is implementable at realistic costs. I f we could get to the the moon in 8+ years in the 60's with technology nowhere near as mature, we can achieve the above goals today. Oh by the way, demand destruction as the result of recession or imposed high taxes doesn't count.

2008 Dec 15 08:49 PM

[indwelling3:]

Who is this jackass? Must be a flak for Big Oil. Thank goodness the day is coming when carbon stays in the ground and civilization as we around the world know it survives in some livable form. Economic arguments like this jerk's are not going to cut it when there is a moral imperative staring at all of us right between the eyes. Capitalist greed shall rule no more if we are to pass on to our children and grandchildren that we can be proud of.

2008 Dec 15 09:26 PM

[Kofi Bofah:]

Interesting article in today's Wall Street Journal. Front page of marketplace. Page B1 I think.

Toyota is shutting down plans to build the Prius at its Tupelo, MS plant amidst slumping sales.

Have a nice day.

2008 Dec 16 08:28 AM

[Chance Deve...:]

Indeed this is true. Also, this Kofi guy likes to bombard people's message boxes if you disagree with him. This article was also posted on Associated Content and he's acting like a maniac over there.

This is not a person one would want to do business with.


On Dec 14 12:03 PM vpratt wrote:

> I've heard that the passengers on the first steam train, the "Tom
> Thumb" were terrified when it hit 5 MPH. And really, what a lot
> of effort to pull so little weight. They should have just dropped
> that whole silly notion of an Industrial Revolution. Remember, the
> CEO of IBM at one point said that he thought computers were amazing
> but there would never be a market for more than a few thousand.
> Too big. Too expensive.
>
> Yet here I am, a humble store clerk, with the ability to send and
> receive information ( or pictures of my naked keester ) to sites
> around the world almost instantly. With such a small investment
> I can read the opinions of many informed citizens. I'm afraid your
> article is based on a static world. It does not exist.

2008 Dec 29 05:16 PM

[MountainJay:]

It seems to me that US military actions are 'subsidizing' American oil interests - by trying to secure mideast supplies.

On so many levels, if the US were independent of foriegn oil, we'd have a lot more wealth AND security.

How bad must it get before we really do something different?

Jan 05 12:21 AM

[Chance Deve...:]

My article shows a clear path for America to beat its addiction to fossil fuels with the proper deployment of alternative energy: it's not just about electric cars, but how we use existing infrastructure to support electric cars:

www.associatedcontent....

Jan 11 02:26 AM