Clean Waste

In choosing Nobelist and alternative energy enthusiast Steve Chu as his nominee to head the Department of Energy (DOE), President-elect Barack Obama is saying he is serious about his plan to invest an awful lot of taxpayer money in alternative "clean" energy schemes.

At an international climate summit in November, Obama proposed spending $150 billion over 10 years. Two days later, California Senator Barbara Boxer announced that she will introduce a bill in Congress to spend $15 billion a year "to spur innovations in clean energy."

Obama says huge government investment in wind and solar power and other alternative energy technologies can usher in a "new chapter" of clean energy in America. It’s a nice, sunny notion — really! — but first he ought to acquaint himself with the old chapters of this sad saga.

The problem with most discussions about clean energy is that they take place in an ahistorical, highly naive vacuum. The next big breakthrough is always said to be just around the corner.

Investors are too shortsighted to see it, but if government would just pitch in, why, we’d all be driving a fleet of Prius-like vehicles by 2020 — powered by nothing but our own self-esteem, with emissions that will actually reverse global warming.

Where’s the downside?

The downside is in falling for it. America’s real history of investing in non-nuclear clean energy is a story of waste and harm on a massive scale. Government has demonstrated time and again that it’s a sucker for a good pitch and therefore awful at picking winners in future energy technologies.

The consequences are far greater than just more taxpayer funds flushed down the drain, though in this time of rotten economic circumstances, let’s take a moment to remember that we’re talking about real money.

Fifteen billion dollars could have bought 2.14 billion chili cheese foot long hotdogs this year at Shea Stadium. And one hundred and fifty billion bucks could have bought at least twice that many beers.

Indeed, wastefulness and special pleading have been hallmarks of government alternative energy spending. Remember FutureGen, an ambitious effort aimed at developing a coal-burning power plant in Illinois that uses sophisticated technology to capture carbon dioxide emissions?

Three years ago, FutureGen was trumpeted by Congress as the future of the coal industry. In January the DOE finally pulled the plug on it, because of meager results and skyrocketing costs.

That decision didn’t sit well with Illinois officials who faced the loss of a multi-billion-dollar project in their state. The Illinois government lobbied the federal government to put the project back on track and Illinois Senator Richard Durbin even threatened to block President Bush’s appointments to the department until the state got its boondoggle pork barrel project back. Obama now looks set to reinstate it.

Granted, it’s only natural for members of Congress or presidents-elect to bring home the bacon. But let’s not pretend that more pork-barreling is going to magically fix our environmental problems.

Consider current ethanol mandates, which Obama supports. The consensus of most economists, environmentalists, and international aid experts is that this is a dangerously bad idea. Schemes to turn corn into fuel don’t take into account the tremendous costs, not only to drivers in America but to poor people around the world.

In 2007, Congress passed an energy bill that mandated and subsidized ethanol production, with a goal of 15 billion gallons of annual ethanol production by 2015. This had little effect on oil prices — it takes about 400 pounds of corn to make enough fuel to fill a single gas tank — but food prices worldwide went crazy.

The price of corn trebled, which pushed up prices of foods that are partly composed of, or fed by, corn. Other staples also grew more expensive because farmers planted more corn instead. In the developing world, this produced actual starvation and food riots.

Congress voted for this in spite of past bad experiences with ethanol. In 1992, it tried to establish a fleet of government cars that ran on ethanol-heavy fuel, an endeavor which stalled due to cost and bureaucratic incompetence.

And does anyone now remember the Bush administration’s much vaunted "Freedom Car" that was supposed to usher in an era of hydrogen fuel cell technology?

We didn’t think so.

From solar to wind to biofuels to other supposedly clean technologies, forgetfulness is order of the day. Our elected representatives focus on intentions and refuse to be bothered by the results. No wonder the taxpayer gets taken so often.

William Yeatmen is an analyst at the Competitive Enterprise Institute. Jeremy Lott is an editor at Capital Research Center.

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