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Another day, another take on alternative energy. Today's slant: Government should be the one to...

Another day, another take on alternative energy. Today's slant: Government should be the one to invest in wind, solar, nuclear, biofuels and other energy souces because free markets allocate capital based on trends and growth, and miss out on investing in energy insurance policies for large oil price spikes and black swan events.
Comments (31)
  • OptionManiac
    , contributor
    Comments (3337) | Send Message
     
    The transcontinental railroad was build by government money and bonds. There were no western companies to speak of.
    11 Jul 2011, 01:10 PM Reply Like
  • Windsun33
    , contributor
    Comments (4277) | Send Message
     
    Not quite true - it was funded by the biggest land give away in US history. 10's of millions of acres were given to railroads, and much of that land is still today in railroad hands. "..while simultaneously chartering a Union Pacific Railroad Company to build west from the Missouri River. The bill grants each enterprise 6,400 acres of land and $48,000 in government bonds per mile built.."
    11 Jul 2011, 01:39 PM Reply Like
  • OptionManiac
    , contributor
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    Quite right, land probably more valuable than the money loaned. Lots of political arm twisting involved.
    11 Jul 2011, 02:03 PM Reply Like
  • The Sane Investor
    , contributor
    Comments (357) | Send Message
     
    *most free market participants

     

    Only fools aren't at least somewhat protected against black swan events
    11 Jul 2011, 01:21 PM Reply Like
  • davidbdc
    , contributor
    Comments (3158) | Send Message
     
    I don't think most people have objections to "investments" in research for any of the above areas. Where I have huge issues is the idea of government subsidizing products and services. Invest a billion in solar panel research - no problem. Decide that you'll subsidize the purchase of solar panels by 50% and I've got a big problem with that. Now your picking who wins and who loses, the subsidy will never die, and private executives have no reason to do anything other than keep lobbying for their subsidy. Why spend time/money improving the product when you can guarantee profits through the government subsidy?

     

    Research - great. Market distortion and government giveaways - Terrible.
    11 Jul 2011, 01:50 PM Reply Like
  • Windsun33
    , contributor
    Comments (4277) | Send Message
     
    davidbc - I agree with that. The government has not only been very very poor at picking winners, it also distorts the market. I would guess at this point that the subsidies have cost a lot more than they have gained for solar. Just a few minutes ago I got a call from a major liquidator that was trying to dump $400k worth of brand new solar equipment that had been abandoned in a warehouse when the company went belly up (and we have been getting more and more of those calls past few months). The drops in stock prices alone probably lost someone hundreds of billions in the past year.
    11 Jul 2011, 03:15 PM Reply Like
  • Scott Pasinski
    , contributor
    Comments (11) | Send Message
     
    go to France if you believe that or maybe China or Russia ... its called a free market ... look it up .... only a fool has any faith in this administration
    11 Jul 2011, 01:51 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3337) | Send Message
     
    China's government investing heavily in solar. They can now produce it cheaper than we can. Germany is number one in solar, despite the weather.
    11 Jul 2011, 02:05 PM Reply Like
  • Windsun33
    , contributor
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    And look at the Chinese solar stocks over the past year. And they are not "producing it cheaper" - they are SELLING it cheaper, due to massive subsidies. Warehouses are packed to the ceiling with unsold product. We have been offered panels at mfg cost during the past couple months just because they are having to rent storage.
    11 Jul 2011, 03:19 PM Reply Like
  • OptionManiac
    , contributor
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    And their dependency on oil will lessen.
    11 Jul 2011, 05:36 PM Reply Like
  • Windsun33
    , contributor
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    Yes, that would explain why they are set to import something like 18 million tons of coal this year.
    11 Jul 2011, 08:50 PM Reply Like
  • Scott Pasinski
    , contributor
    Comments (11) | Send Message
     
    Germany is #1 compared to what, fecal matter? What % of their energy consumption is from solar? Aside from the emotional appeal of saving the environment (which carries many questions in and of itself), it is simply not commercially viable. Transportation typically accounts for 70% of energy consumption in the developed world. What happens to all the green energy cars when they get plugged into the wall? .... Follow the electrical wires, funny thing is they typically (vast majority) go to a facility that is a carbon based producer of energy (coal, gas, etc) .... So instead of emissions from cars, you will just have a higher output of emissions from coal plants, you know, all the additional energy needed to recharge those poisonous lithium thionyl chloride batteries .... Look it, it is not commercially viable and the green energy klan carry many manipulative talking points. I'd like to see non-biased/non-political studies comparing green energy as we know it with carbon based energy sources just to see how green it REALLY is other than all the rosy colored commercials of indoctrination that Barry O has created for all the lemmings called Americans
    12 Jul 2011, 12:55 AM Reply Like
  • sburger
    , contributor
    Comments (49) | Send Message
     
    New Jersey has done a great job of investing in solar panels on top of its public schools. This should be done across the nation for a number of reasons-
    1- A lot of older public school buildings need some renovation anyway.
    2- School buildings see a lot of high use but are also vacant during vacations and can still produce solar energy then to feed back into grid.
    3. School buildings can serve double duty for disaster recovery/neighborhood emergency centers. Remember, after Katrina, the generators ran out of fuel and pre-existing solar was all that was available for power in New Orleans.
    4. School buildings are in almost every neighborhood nationwide- spread the solar investment and jobs. Putting grid tied solar systems on schools can jumpstart grid modernization.
    5. School buildings are highly visible and can supply great proof of concept for citizens.
    And lastly, but perhaps most importantly- TEACH KIDS ABOUT SOLAR ENERGY.
    11 Jul 2011, 02:01 PM Reply Like
  • Windsun33
    , contributor
    Comments (4277) | Send Message
     
    "..and pre-existing solar was all that was available for power in New Orleans..."

     

    Except that story is only half true. The systems that are installed on buildings are nearly always grid-tie systems, which REQUIRE that the grid be present in order to work. No grid, no solar power. The solar systems that were working in NO were battery based standalone systems.
    11 Jul 2011, 03:21 PM Reply Like
  • Scott Pasinski
    , contributor
    Comments (11) | Send Message
     
    more important facts:
    1) don't you think that if alternative energy was "commercially viable" and affordable we would have, as a free market, done this already? 2) we are sitting on what is believed to be one of the largest oil reserves in the Bakken Shale. now if the govt REALLY had our best interests in mind, they would accelerate the development of that. "An April 2008 USGS report estimated the amount of technically recoverable oil using technology readily available at the end of 2007 within the Bakken Formation at 3.0 to 4.3 billion barrels (680,000,000 m3), with a mean of 3.65 billion" ... I know this and so do most # the DOE, fyi en.wikipedia.org/wiki/...
    3) here is the reality of alternative energy ... www.ddcoil.com/invest-.../
    11 Jul 2011, 02:10 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3337) | Send Message
     
    New technology often is not commercially viable, in the beginning. Yes, given time, solar will be cheaper than oil, maybe in 50, 100 years when the reserves grow lower. But why wait until it is too late? Called insurance, hedging your bets. No company will look that far down the road. Let's protect the human race.
    11 Jul 2011, 02:16 PM Reply Like
  • kmi
    , contributor
    Comments (4030) | Send Message
     
    Renewable energy surpasses nuclear production in the US
    domesticfuel.com/2011/.../

     

    "And in the US, green electricity accounted for more than half of the generation capacity built last year."
    www.bbc.co.uk/news/sci...

     

    World's largest wind producer records 4b in profit
    www.bloomberg.com/news...
    11 Jul 2011, 05:02 PM Reply Like
  • Windsun33
    , contributor
    Comments (4277) | Send Message
     
    "..US, green electricity accounted for more than half of the generation capacity built last year..."

     

    Which is easy to do when you don't build any other generation capacity at all, which is the case.

     

    "..World's largest wind producer records 4b in profit.."

     

    Read that story carefully - most of that was from hydro and natural gas profits. The wind portion was also profitable, but it was installed with up to 80% subsidies, mostly from Spain and the US: " ..#4. Secretaries Geithner and Chu have used $577 million in stimulus money to fund Iberdrola’s bonanza, and Iberdrola is expecting another $430 million..."
    www.masterresource.org.../

     

    There is a lot of hype, scams one "cost shifting" in wind - much more so than solar. You have to dig sometimes to find the real story and see who actually paid for it and who actually made money from it.
    11 Jul 2011, 08:52 PM Reply Like
  • Scott Pasinski
    , contributor
    Comments (11) | Send Message
     
    certainly, that is what the folks who supported ethanol stated ... just give it time
    12 Jul 2011, 12:59 AM Reply Like
  • Scott Pasinski
    , contributor
    Comments (11) | Send Message
     
    Meanwhile back at the ranch, Barry O with his Chicago style politics, has either attacked, or is in the process of attacking every industry other than the green energy industries where he spent $55 quadrillion dollars of our money.

     

    Isn't he dating the CEO from GE now?

     

    "World's largest wind producer records 4b in profit" ... He needs to attack them now, they are making too much money!
    12 Jul 2011, 01:11 AM Reply Like
  • kmi
    , contributor
    Comments (4030) | Send Message
     
    "Which is easy to do when you don't build any other generation capacity at all, which is the case."

     

    And its also easy to claim since US energy consumption is decreasing as are energy imports. In fact it could be proposed that energy imports are declining precisely because of the slow buildout of renewables. I'd also add that I was pointing this out to refute the above poster's comment that nothing is going on in the renewable energy world, which is wrong.

     

    Things are going on constantly, in my area the Governor is proposing to take offline the local nuclear plant, called the U.S.'s most dangerous.

     

    It's capacity will be hard to replace, except that Con Edison, the local utility (ED) - good stock I hold some - is building up its natural gas capacity and deploying alt energy initiatives investor.conedison.com...=

     

    Cuomo plans to expand fracking/drilling in NYS, and Con Ed is incentivizing the hell out of Natural Gas conversions in the area with the most oil based heating systems in the country.

     

    My county is seeing "explosive" growth in solar - multi unit flat roofed apt buildings are also ideal locations for installations.
    www.cleanenergyauthori.../

     

    For every hater there are a half dozen initiatives to switch to renewable sources, the news is chock full of them.

     

    www.physorg.com/news/2...
    12 Jul 2011, 08:34 AM Reply Like
  • kmi
    , contributor
    Comments (4030) | Send Message
     
    Scott - I'm not saying give it time, I'm saying you are uninformed in just how rapidly renewables are expanding.

     

    And the problem with casual observers is the utter lack of knowledge in the business case for renewables, which are a one time capex, with a ROI of as little as 2-4 yrs or at worst 8-9 (current programs), and a productivity boost in perpetuity afterwards.
    12 Jul 2011, 08:41 AM Reply Like
  • OptionManiac
    , contributor
    Comments (3337) | Send Message
     
    Go ahead, give up on renewables. Just let the rest of the world pursue them. Maybe you just don't like the idea of people living off the grid.
    12 Jul 2011, 12:01 PM Reply Like
  • Windsun33
    , contributor
    Comments (4277) | Send Message
     
    ".. the news is chock full of them..."

     

    Yes it is, and that is my problem with the "news". We have been in the solar industry for nearly 30 years, and I could hardly be called a "hater". But I also find it very disturbing that over the past 5 years or so that hundreds of wonder-projects get announced with a lot of hype, but when they fail they never hit the news. And there have been a LOT of failed projects, for one reason or another. The "Green Press" has been very effective in publicising the ups, but very negligent in noting the bads for the most part.

     

    In many of those projects and initiatives, you really have to dig into the fine print for the real story - things like who is actually paying for it, who benefits, who loses. Just reading the headlines might make people feel good, but more and more "green energy" is getting a bad reputation. I do what I can to counter that, but it is a losing battle. People need to be a little more skeptical of exuberant claims - as the old saying goes, Follow the Money and not the hype.
    12 Jul 2011, 12:43 PM Reply Like
  • kmi
    , contributor
    Comments (4030) | Send Message
     
    Wind,

     

    My money is in it. Let me tell you a story. In the 2007-2008 runup in oil, during which I, along with many other landlords in my area, were astonished not that oil broke $140, but that it got higher than $120, higher than $100, I had a personal bet it would never crack $85.

     

    Few, if any, landlords were hedged for the runup in price. Those who could switch over to NG via dual fuel systems, did. A lot of us had to eat the effective doubling of our heating costs in the span of a year.

     

    That took a LOT of money out of the economy - maintenance was deferred, folks defaulted, bills were paid out over the course of an extra 6 months, loans were taken out to fund the debts. Me a few other guys got together to haul our own oil - to save 3 cents/gallon. 3 freaking cents per gallon.

     

    Yes, it was that nasty. I don't know if you know a lot of small businessmen who consume a lot of oil, but I can tell you that was the nastiest part of the '08 recession for us. Vacancies are part of the business, so is turnover, a doubling of our largest expense outside of debt? Never seen it before.

     

    During '08-09, a LOT of landlords hedged their energy. Even now, more landlords are hedging than not. This is one reason the current $96/barl price is so stupid to me. Since '08 I know a ton of folks who, like me, not only hedge their energy far more closely than before, but have rapidly and dramatically diversified and reduced their energy consumption.

     

    One way we've done it is by switching to some extent to natural gas. BTU for BTU NG is crushing oil; right now, since oil is getting gamed hardcore by the investment banks. It's hilarious what's going on in the energy markets from the perspective of an actual consumer.

     

    Another thing many of us have done and are doing is switching to alt sources: solar - hot water, PV. I looked into wind but couldn't make a good case for it. Boiler economizers, waste heat recirculation, greywater, thermoelectric, you name it.

     

    Your experience may be as above stated, but mine is the complete opposite. I'm down over 30% on energy since '08. That's THIRTY FREAKING PERCENT. Guess what though? My costs aren't going down, I'm just staying ahead of the BS in the energy markets.

     

    It's going to be a continuing fight, but my 5 year plan has me dropping energy expenses by 5-10% per year over the next 5 years.

     

    I'm one freaking guy, and I guarantee you I'm not the only one doing this. that's why US energy consumption is down, oil imports are down, and why they will continue to go down.

     

    I don't need to dig into any fine print when I post my experience, I just look at my bottom line.
    12 Jul 2011, 01:01 PM Reply Like
  • Windsun33
    , contributor
    Comments (4277) | Send Message
     
    We are talking about two different issues here. You are talking about the individual and small businesses, I am talking about over-hyped mega-projects. They are two different animals.

     

    And just for the record, YTD the total electrical power costs for our main sales office and warehouse are a negative $43, due to a 16KW solar system we installed in 2008, and upgraded insulation.
    12 Jul 2011, 01:08 PM Reply Like
  • Scott Pasinski
    , contributor
    Comments (11) | Send Message
     
    kmi, you are rather presumptuous to assume you understand my base of knowledge within this posts. In doing so, it publicly makes you look rather foolish.

     

    It is also painfully obvious you have over simplify the issues. If the government gave me an infinite amount of capital and tax credits, my business would grow as fast as the alternative markets as well.

     

    If this is true, "World's largest wind producer records 4b in profit", then why does alternative energy need all the government money and tax credits? OR maybe that is why they are so profitable .... So read on ...

     

    Clean tech crashes are nothing new. "As part of its effort to combat the economic recession, the federal government pumped nearly $80 billion in direct investment and tax credits into the clean energy sector, catalyzing an unprecedented industry expansion. Solar energy, for example, grew 67% in the United States in 2010. The U.S. wind energy industry also experienced unprecedented growth as a result of the generous Section 1603 clean energy stimulus program. The industry grew by 40% and added 10 GW of new turbines in 2009. Yet many of the federal subsidies that have driven such rapid growth are set to expire in the next few years, and clean energy remains unable to compete without them. If U.S. and European clean energy markets collapse while investment continues to ramp up in China, the short-term consequences will likely be a migration of much of the industry to Asia "Rising Tigers, Sleeping Giant," this would have significant economic consequences for the United States, as the jobs, revenues and other benefits of clean tech growth accrue overseas." This would have dire consequences on the American middle class, just like the real estate bubble did.

     

    kmi, just because you are a left wing green fanatic, this does not mean I need to be one as well

     

    12 Jul 2011, 07:38 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3337) | Send Message
     
    Why do small oil producers need the gov't tax breaks? To keep it cheap!!
    12 Jul 2011, 08:35 PM Reply Like
  • kmi
    , contributor
    Comments (4030) | Send Message
     
    Here Scott let me present it to you in a basic fashion. Your comments present an implicit image of your knowledge. Or lack thereof.

     

    Oil and gas also get subsidies. Everything gets subsidies. There is no honest comaprison between what the honest to goodness actual cost effectiveness of each energy source is, but I know PRECISELY what my costs are and what I can do and with what.

     

    And by the way I'm not green (I hold BTU and CHK) and I could care less if anyone else is - I don't mind if people have opinions even when it doesn't agree with my own - or leftist, I'm a businessman with extensive experience in my field. You are just another uninformed fascist commentator who thinks everyone should do things your way with 2 shares in (USO) who thinks he learned something by reading two pages over at www.EIA.gov
    12 Jul 2011, 09:08 PM Reply Like
  • Windsun33
    , contributor
    Comments (4277) | Send Message
     
    kmi - My problem is not with the products, whether it be oil or solar, but with the massive misinformation and ignorance about energy in general. I personally do not think that there should be any subsidies for any industry or corp other than normal business expenses like every business gets.

     

    But over the past 30 years, I have seen a few boom-n-bust cycles in renewables as the government tries to pick winners (that never win). Our company has been around for 32 years, and 95% of our business is solar electric - we have never taken a subsidy, government grant, or even a loan. But in the last bust cycle, we were buying bankruptcy liquidation solar panels for 20 cents on the dollar. We saw dozens of businesses that leapt on the bandwagon go under, and I am seeing signs of that now yet once again.

     

    The basic problem with those big subsidies is that it distorts the market so much, making a future crash almost a sure thing. I have no problem with government money for pure research, I have a lot of problems with the government artificially propping up industries, whether it is housing or solar. The housing bust may well be repeated in the solar and wind sector in the near future.

     

    Just as a sidenote - it was so bad in Germany back in 2007 with the super high subsidies that people were actually selling fake solar panels that people could buy to put on their roof just to get the $7 per "rebate". Others were renting solar panels that you could stick up long enough to get inspected, get approval for the rebate, and then moved to the next house.
    12 Jul 2011, 11:18 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3337) | Send Message
     
    Yes, same thing happened in the 1800's with the railroad bubble. As you said, pump it up too much and everyone wants in. When too many people are in............
    13 Jul 2011, 05:23 PM Reply Like
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