Wednesday, March 28th, 2012 and is filed under Blog
Do you think Solyndra was the only bad apple in the Department of Energy’s loan guarantee program? Think again. The DOE loan guarantee program, which was actually created by Bush in 2005, has authorized more than $54 billion in loan guarantees, primarily to green energy companies. They are all, of course, backed by taxpayers. Now it turns out that the DOE has realized that many of these loans are risky and prone to corruption. In fact, up to 1/3 of all DOE loans are being monitored for possible violations, according to the Wall Street Journal:
The Department of Energy has placed nearly one-third of its clean-energy loan portfolio on an internal “watch list” for possible violations of terms or other concerns, according to a copy of the list obtained by The Wall Street Journal, highlighting how such concerns have spread beyond the now-bankrupt Solyndra LLC.
The redacted copy, released in response to a Freedom of Information Act request by the Journal, showed that as of Feb. 29 there were 10 projects on the watch list out of 32 loans and loan guarantees made to electric-vehicle and renewable-energy companies.
So what are the reasons for a company to be placed on this list?
Loans get placed on the watch list because they have been “identified as higher risk,” Mr. Allison said in his report. Reasons for making the list include breaching loan terms, falling behind on agreed-upon performance milestones and being part of “an industry or market sector experiencing challenging market conditions,” the report said.
There is a reason why these loans are so risky and those who benefit from them are so prone to corruption and cutting corners. Green energy is not profitable in the free-market, and evidently, even with substantial backing by the government. This should serve as a wake up call to Congress that the entire loan guarantee program must come to an end. If a company cannot obtain a loan in the private sector, that means that their line of work is not profitable. So why should taxpayers pick up the tab for those undesirable ventures that are rejected in real world?
This is yet one more example of why the entire existence of the Department of Energy is counterintuitive. The DOE was created 35 years ago for the purpose of charting a course towards energy independence. Yet, all they have done is encumber reliable energy sources with red tape, while using taxpayer dollars to promote green energy companies that are destined to fail. It’s time to abolish the Department of Energy. Unfortunately, government never learns the lessons of failure. After all, they reserve the power to coerce taxpayers into purveying the failed entity.
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