This Week in Energy: Solyndra, Solyndra, Solyndra
For the past few months, the normal schedule on R-Squared Energy has been altered in order to ease Robert’s load so he can devote more time to writing chapters for his book on energy, slated to be published sometime next year. Instead of the customary twice-weekly essays written by Robert, we accepted guest articles once per week to keep the blog filled with fresh content while Robert published one essay (and sometimes two) of his own per week.
While we still welcome guest post submissions, our plans moving forward are to cut down on how often we publish them.
What we’re kicking off now is a weekly segment that will cover the stories of the week making headlines — and even those that aren’t — in the world of energy. Primarily, stories will be pulled from headlines that have been posted throughout the week to our Energy Ticker page. This compilation of stories will be called “This Week in Energy” … unless one of our visitors suggest a catchier name.
The purpose is to stimulate discussion on energy issues, and community members should feel free to turn these into open thread energy discussions. Suggestions and news tips are welcome. I (Sam) can be reached at editor [at] consumerenergyreport [dot] com .
The story dominating headlines this week — and not just in the world of energy news — is the Solyndra bankruptcy. So we’ll lead off with a quick roundup of the coverage on the bankruptcy and its aftermath:
- In a Washington Post article, former Solyndra employees pointed to waste and mismanagement at the company as soon as the loan was approved. In fact, one employee practically blamed the loan guarantee for causing the company to go under: “After we got the loan guarantee, they were just spending money left and right,” said former Solyndra engineer Lindsey Eastburn. “Because we were doing well, nobody cared. Because of that infusion of money, it made people sloppy.” A comprehensive article from the Wall Street Journal (may require subscription) struck a similar tone, quoting investors that consider the loan –for various reasons– to be the company’s undoing: One Solyndra investor said that, in retrospect, “the worst thing that happened to Solyndra was the loan.”
- Pundits are pointing to Solyndra as a case study of the shakiness of subsidizing renewable energy technologies.
- Rep. Darrell Issa (R-CA) pledged to investigate the motivations of Obama “and his cronies” in picking winners and losers.
- The Obama administration restructured the loan in such a way that private investors — including a fundraiser for President Barack Obama — moved ahead of taxpayers for repayment in case of a default, according to government records.
- Solyndra executives will “plead the fifth” when they appear before a House hearing on Friday. Republican leaders are not too happy about that, especially after they originally agreed to answer questions from lawmakers.
- Despite the ongoing Solyndra saga, the DOE is set to guarantee $9.3B more in loans before the loan program expires at the end of the month. But the House Energy and Commerce committee is asking for detailed financial information on the deals and the due diligence done by the government. They also sent a letter to Energy Secretary Steven Chu, stating that “We are concerned that another rush to meet stimulus deadlines will result in DOE closing these deals before they are ready.”
- E-mail communications between Solyndra, White House and other federal officials were released to the public [PDF link]. Articles covering the e-mails pointed to a media-fixated company and a White House worried that the possible timing of a Solyndra default would coincide with the 2012 election season heating up.
- Some GOP senators were caught playing both sides of the game: criticizing the Obama Administration for the loan program while seeking to win funds from the DOE for projects in their home states.
Energy News Roundup
Now on to the next block of stories. Global energy use, EPA, oil and gas tax breaks, ethanol mandates, and more:
- Global energy use is expected to jump 53% by the year 2035, — most of it coming from fossil fuels — according to International Energy Outlook 2011, a report from the U.S. Energy Information Administration. China and India are expected to account for more than half of the growth, while energy use in OECD countries will remain relatively flat during that time (see graph at right).
- The White House threatened to veto a GOP bill aimed at blocking pollution regulations. EPA administrator Lisa Jackson recently threatened to quit after President Barack Obama pulled back proposed smog standards.
- Obama is going after oil and gas industry tax breaks to help fund his proposed deficit plan.
- Livestock producers asked Congress to weaken the government’s ethanol mandates, blaming it for pushing up the cost of feed and threatening to cause poultry farms to go out of business. The ethanol mandates are also raising the ire of car buffs. Meanwhile, the USDA projected that for the first time in history more corn will be consumed by automobiles than by livestock and poultry.
- Earlier in the week, Robert posted a link on the Energy Ticker to an interesting Barron’s piece: Why There Are Two Prices for Oil. The article explains why U.S. and European prices have diverged by record amounts, and discusses the likelihood of a return to parity in the future.
- Paypal co-founder Peter Thiel and venture capitalist Vinod Khosla disagreed on the success of CleanTech. Thiel called it a disaster, while Khosla disputed that by pointing to his successful CleanTech IPOs. Robert Rapier asked “Who is Right?“, and ultimately concluded that by using the metric that matters, CleanTech has yet to deliver.
- The New York Times took a look at the water-energy nexus. According to the article, Sandia National Laboratories discovered that, in the U.S., “4 percent of all fresh water is consumed in the energy sector, and 3 percent of all electricity used daily goes toward water and wastewater pumping, distribution, and treatment.”
- Daniel Yergin wrote an opinion piece in the Wall Street Journal: There Will Be Oil. Robert Rapier thought James Hamilton’s response to Yergin was pretty good. Michael Levi, of the Council on Foreign Relations, reviews some of the opinions on Yergin’s piece and shares his own thoughts on the subject.
- The IEA ended its emergency release of oil from the reserves of member nations prompted by a cutoff in Libyan oil supply. Robert was against the SPR releases, and explained his reasoning here and here.
- KiOR is constructing a $200 million biofuels plant.
- Trouble is brewing in the South China Sea as the Philippines and China dispute over offshore energy. A similar story is taking shape between Turkey and Greek Cypriots in the eastern Mediterranean.