Should US Tax Payers Bailout the Electric Car Killer?

Bill Georgevich reporting

Hear the 1 minute show:

While the US Treasury and Congress debate whether to save the Big 3 carmakers, environmentalists and renewable energy activists ponder whether General Motors, the Detroit auto manufacturing giant that killed their electric car 10 years ago, should be given a second chance. Some say that the 100 mile-per-gallon Chevy Volt promised in 2010 is too little, too late.

Tax payers are faced with a real dilemma. Should we support bailing out the Big 3 in Detroit? After all, investment banks got federal money to cover credit default swaps, which are unsecured side-bets on imaginary financial instruments. GM, Ford, and Chrysler are real brick-and-mortar companies that build real goods and employ millions of Americans. The news pundits warn that the challenged economy can't tolerate a shut down this large in the Midwest. Imagine hundreds of thousands of auto workers marching on Washington, with the fierceness and fury of Martin Luther King, demanding that Uncle Sam save the most powerful symbol of American manufacturing from extinction and mass layoff of over a million people.

Patriotism aside, how did GM and the rest get themselves in this mess? We may be quick to assume that like the Dow, Detroit is going down with the sinking ship the banking and mortgage crisis. The timing of the sudden run on government bailouts may suggest that the Big 3 are just another victim of the financial fiasco of Oct 08. No, it's just odd timing. Detroit's demise, if it comes to that, is by it's own doing – decades of poor decisions, culminating in it's most recent choice to continue making low mpg cars and trucks, even as gas prices hit $4+. Folks couldn't unload their SUV's and find enough high mpg cars to replace their daily driver. When they did, most of them were made in Asia.

GM made big cars because their ad consultants told them that big cars made drivers feel powerful. When city folks I know, who only drive in the city, purchased SUV's, their excuse to me was always that in a crash, big cars are safer. Physics would support that until every American seemed to be driving bigger and bigger cars.

Instead of making advances in hybrids and eletric vehicles, GM not only discontinued their only electric car after making only 1100, they decided that even less than a thousand on the road offered too much of a challenge to their gas-guzzing hegemony and actually had them towed away from their clinging lessees -- who offered GM millions just to keep the cars -- and crushed them!

Should we really have sympathy for car company that decided it was better to sue the State of California and overturn it's 10% zero-emission law rather manufacture a constantly improving electric car?

And what about this Volt? This hybrid sounds promising: You plug it in to power the first 40 miles, after which a gasoline powered generator makes just enough electricity to keep you going. 100 mpg or more is predicted for the car. Though GM would have you think it's breakthrough technology, it isn't, really. Every diesel locomotive ever made operates on the same principle: generate electricity to power the electric motors pulling the train. They are the most fuel efficient system in the world. When were they invented? 1920. So the Volt, we discover, is an old technology that GM finally decided the American driver was ready for.

The conclusion we come away with is that there is some kind of collusion between oil companies and domestic Detroit Iron. And somehow the wild and wacky speculation in oil futures (which was solely responsible for the dramatic gasoline price hike earlier this year), threw things out of control and drivers got spooked.

The car companies have known about the threat of high gas prices and shortages since the mid 1970's, but to hear the CEO's of these companies talk today, you would think that this problem suddenly occurred in the last few weeks. In a separate story we will talk about the real purpose of GM's introduction of the Chevy Volt - and it's not about getting good gas mileage or lowering our carbon footprint. Stay tuned.

Is global warming dead?

Bill Georgevich reporting

Hear the 1 minute show:

Many Republicans who already thought carbon cap and trade regulation was bad for the economy, now say that with the growing global economic crisis, American energy companies cannot afford to be green. Like the “Drill, baby, drill!” hysteria promoted by Governor Sarah Palin in the Vice Presidential debate, Republican congressmen and senators are warning that global warming will just have to wait.

The AP reports:

Democratic leaders in the House and the Senate, and both presidential candidates, continue to rank tackling global warming as a chief goal next year.

But the focus on stabilizing the economy probably will make it more difficult to pass a law to reduce carbon dioxide and other greenhouse gases. At the very least, it will push back when the reductions would have to start. As one Republican senator put it, the green bubble has burst.

"Clearly it is somewhere down the totem pole given the economic realities we are facing," said Tom Williams, a spokesman for Duke Energy Corp., an electricity producer that has supported federal mandates on greenhouse gases. Duke is a member of the U.S. Climate Action Partnership, an association of businesses and non-profit groups that has lobbied Congress to act.

Just months ago, chances for legislation passing in the next Congress and becoming law looked promising. The presidential candidates support mandatory cuts and a Democratic majority is ready to act on the problem after years of the Bush administration resistance.

But the most popular remedy for slowing global warming, a mechanism know as cap-and-trade, could put further stress on a teetering economy. Under such a system, the government would establish a market for carbon dioxide by giving or selling credits to companies with operations that emit greenhouse gases. The companies can then choose whether to invest in technologies to reduce emissions to meet targets or instead buy credits from other companies who have already met them.

In an interview with The Associated Press, Representative Rick Boucher (D-Va.), said that in light of the economic downturn, a bill that would give polluters permits free of charge would be preferable. "The first way we can control program costs is by not charging industrial emitters," said Boucher, who released a first draft of a bill this past week with the chairman of the House energy and commerce committee, Representative John Dingell ( D-Mich.). Giving away right-to-pollute permits was one of the options.

Other Democrats, however, see a cap-and-trade bill - and the government revenues it would generate from selling permits - as an engine for economic growth. Democratic presidential nominee Barack Obama supports auctioning off all permits, using the money to help fund alternative energy.

"If you see this as a job creation opportunity for the U.S. to develop the products that are then sold around the world, then you should be optimistic about what the impact of passage would mean for the American economy," said Representative Edward Markey (D-Mass.).

Conservative Republicans, who were never fans of a law to curb greenhouse gases, have used the economic downturn as a rallying cry. Oklahoma Senator James Inhofe, the senior Republican on the Senate environment and public works committee, in a blog entry this month, criticized 152 House members for releasing a set of principles to tackle global warming in the midst of the economic turmoil. "The current economic crisis only reinforces the public's wariness about any climate bill that attempts to increase the costs of energy and jeopardizes jobs," Inhofe said.

Representative Joe Barton (R-Texas) took the argument a step further when he said the Boucher-Dingell bill could lead the country "off the economic cliff." Even supporters of federal regulation of greenhouse gases acknowledge the difficulty given the state of the economy.

Senator John Warner (R-Va.), a lead sponsor of a Senate bill to curb greenhouse gases that failed this year, acknowledged that the economy could delay when reductions in carbon dioxide would start. Warner told The AP that any bill should allow the president to decide. "We must continue to think and devise a piece of legislation that will enable the president of the United States to control timing ... dependent on the president's analysis for the ability of the economy to assume the financial burdens," he said.

The U.S. is not alone. As the economic crisis has spread to markets across the globe, work to curb greenhouse gases elsewhere has stalled.

Earlier this past week, Rajendra Pachauri, head of the UN climate panel, said discussions about global warming solutions were "on the back burner."

Pachauri shared the 2007 Nobel Peace Prize with former U.S. vice-president Al Gore for their work on climate change."I'm absolutely sure that climate change will be the last thing people will think about at this point in time," he said. "Sooner or later, they will come back to it."

The upside is that in hard economic times, and with high energy prices, the amount of pollution in the air tends to decline. But environmentalists say it won't be enough to stop temperatures from rising.

Energy Legislation at Last?

Bill Georgevich reporting

Hear the 1 minute show:

Despite many efforts to pass an energy package, Congress adjourned for summer recess gridlocked and empty-handed. Partisan compromise is essential if we will ever see any real energy legislation. Republicans must give up oil industry tax breaks and Democrats need to budge on the offshore drilling ban. A bi-partisan group of 10 Senators, days before adjourning last month for summer recess, wrote a compromise bill that does just that.

The New Energy Reform Act of 2008 was written in response to the months-long Senate deadlock on energy legislation. The legislation, which could be considered when Congress returns in September, includes limited offshore drilling with increased investment in new energy technologies. A portion of the finding for renewables would come from taking back tax breaks from the oil industry. The bill also sets a goal of fueling 85 percent of the country's automobiles with alternatives to oil within 20 years.

The upside:

• co-sponsored by a bi-partisan group committed to breaking the energy legislation gridlock in Congress
• closes tax loopholes for the oil industry
• maintains the ban on offshore drilling in California
• extends renewable energy tax incentives that will expire in December
• invests $20 billion for the conversion of cars and trucks to non-oil fuel sources
• garnering wide support from liberal democrats, moderates, and Republicans

The downside:

• permits offshore drilling in parts of the Gulf of Mexico and the east coast (by states' consent)
• recycling of spent nuclear fuel

Given the many bones of contention between the two parties, it is imperative to accept that a compromise coming from both sides of the aisle is the only solution to the impasse. Republicans need to give in on oil industry tax loopholes so that the renewable energy tax credits can be paid for. Democrats need to budge on their intractable stance on offshore drilling.

This bill was written just before Congress adjourned in early August. We hope that our Senators give serious attention to this bill when they return on September 4.

Countdown to Energy Reform

Bill Georgevich reporting

Hear the 1 minute show:

This week we begin our Countdown to Energy Reform. While Congress enjoys their August recess, many Americans are wondering, where are the solutions to our energy issues? Despite multiple efforts to pass energy legislation, the Senate has been intractably gridlocked. Time is running out. Essential renewable energy tax credits will expire in December. Join us in our weekly call to action as we contact our vacationing Senators every week until they reconvene in September. This week: send a letter to Senators Obama and McCain.

Congress went on recess in early August without passing any energy legislation. Despite multiple efforts, both the House and Senate danced around the crucial issues of gas prices, offshore drilling, oil-market speculation, and the clean energy tax credits that are expiring in December.

The clean energy tax credits are especially important, because as December draws nearer, more and more investors in various renewable energy projects are getting cold feet. Many have pulled out entirely or are threatening to do so if the extension doesn't happen. Failure to renew these tax credits will be disastrous for our country and the steady momentum towards clean energy that has been taking hold.

Obama and McCain have remained rather detached in Senate activities related to renewable energy legislation. Both were among only a few to abstain on a vote to get a bill that would renew clean energy tax credits on the floor for debate. And both have shown some allegiance to the big oil industry that so handsomely finances their presidential campaigns. In 2005, Obama voted for an energy bill backed by Bush that included billions in subsidies for oil and natural gas production. In June of this year, in the weeks following McCain's embrace of offshore oil drilling, contributions from the oil and gas industry poured in ($1 million, in fact, compared to $116 K in March, $283 K in April and $208 K in May).

When the Senate reconvenes on September 4, they will be greeted with a new, bi-partisan energy bill, the first to offer a compromise to the wide philosophical and political schism that has prevented any passage of renewable energy tax credits. The New Energy Reform Act of 2008 is very promising, and couldn't come a moment too soon.

Obama has shown support of the bill, in recognition of the hope that it will end "partisan gridlock and special interest influence" and bring to the Senate "a good faith effort at a new bipartisan beginning."

McCain has remained very quiet about the bill, but most likely will not support it, for at least 2 reasons: one, the bill will take away subsidies for the oil and gas industry, which McCain adamantly wants to keep in place; and two, the bill allows for very limited offshore oil drilling (none at all off the California coast). Learn more about the bill here.

And if you haven't already, we invite you again to send a letter to Senators Obama and McCain on the very important and timely matter of energy policy.

> COMMENT ON THIS STORY

Tax Credit Tango

Bill Georgevich

Hear the 1 minute show:

The senate last week blocked a vote on the extension of renewable energy tax credits, which expire December 31. These tax incentives make it possible for thousands of homeowners to install solar panels & has inspired big investment in dozens of clean energy power plants. But if Congress fails to extend the credits, most of theses renewable power projects are in danger of being abandoned.

When I moved to Santa Fe, New Mexico 30 years ago, new home construction was all on fire about passive solar heating, solar waters heaters, & “living off the grid” with batteries & Photovoltaic solar electric panels -- all in response to the first “energy crisis”.

Everywhere there were tromb wall homes that cooled homes during the day & warmed them with stored heat at night. Every house had a solar water heater. My house had a solar water heater with a 90 gallon tank. I had so much hot water from the sun, that even if the daytime temperature was below freezing, I could take a hot bath in my enormous soaking tub. All this was possible because of the federal tax credits that gave home builders the incentive to build renewable.

Now speculators have driven up oil prices to frightening levels again in 2008 & despite broad bipartisan support for renewable energy tax credits, Democrats and Republicans are arguing about how to finance them. There are currently 22 major solar power plants in various stages of planning around the country, but all have been implemented on the assumption Congress would extend the renewable energy tax incentives.

The discontinuation of these tax credits will "result in the loss of billions of dollars in new investments in solar," says Rhone Resch, president of the Solar Energy Industries Association. How can it be that we can’t even keep the old programs that promote renewable energy when we should be implementing additional new ones? If you as outraged as we are, here is what you can do:

Learn about the Energy Independence and Tax Relief Act of 2008, Senate bill #S.3125.

Tell others about it and to take action by calling or emailing your Congressional Representative. Ask them to extend the renewable energy tax credit. You can find your Congressperson's contact information here. You can also reach the office of your Representative and Senator through the Capitol Switchboard at 202-225-3121.

> COMMENT ON THIS STORY

The Arizona Desert Goes Green

Melanie Pahlmann reporting

Hear the 1 minute show:

The Arizona desert is one of the hottest and sunniest places on earth, so it was only a matter of time before solar energy technology would make its way there.

In early 2009, a Spanish solar power company will break ground outside the little town of Gila Bend, southwest of Phoenix, to build what will be the world's largest solar power plant. At maximum capacity, the Solana Power Plant will supply at least 70,000 households.

Abengoa Solar, which has built plants in Spain, northern Africa and other parts of the U.S. – will own and operate the $1 billion plant. Arizona Public Service, the state's largest utility, will pay Abengoa $4 billion over 30 years for the energy produced.

The deal has been forged, but there's one possible glitch: The plant hinges on an extension of the federal solar investment tax credit, due to expire at the end of this year. APS and Abengoa said they're confident that this won't derail the project. Perhaps they know something we don't. To date, we have no news on where Congress currently stands on the issue. New York Times columnist Thomas Friedman, is not feeling particularly positive about it, as he notes in an Op-Ed piece from April 30, 2008:

Few Americans know it, but for almost a year now, Congress has been bickering over whether and how to renew the investment tax credit to stimulate investment in solar energy and the production tax credit to encourage investment in wind energy. The bickering has been so poisonous that when Congress passed the 2007 energy bill last December, it failed to extend any stimulus for wind and solar energy production. Oil and gas kept all their credits, but those for wind and solar have been left to expire this December. I am not making this up. At a time when we should be throwing everything into clean power innovation, we are squabbling over pennies.

If you feel concerned, there is something you can do to help save the federal solar investment tax credit. Call or email your Representative and both Senators and ask them to urge House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid to keep the ITC extension in the Energy Bill.

To locate your Representative and Senators' Washington phone number, go to this web address and type in your zip code:
http://www.congress.org/congressorg/directory/congdir.tt

You can also reach your Representative and Senators' offices through the Capitol Switchboard at 202-225-3121.

To learn more about the ITC, visit:

The Green Counsel Blog
Congress.org - details on Bill # S.3125

And here is a 4 minute video about the Solana Power Plant. Gives you a sense of its immense size. Click on this link to see the video:

Solana Power Plant video

> COMMENT ON THIS STORY