There are three statements in a recent Wall Street Journal news story that tell you what you need to know about various companies’ new-found desire to be part of Washington’s push toward clean energy.
Here’s the first one: “Businesses large and small are repositioning themselves to try to capture some of the tidal wave of government cash from the new law dubbed the Inflation Reduction Act, signed into law last year.”
Note the phrase “tidal wave of government cash.” President Joe Biden couldn’t agree more.
On signing the IRA, Biden said, “The Inflation Reduction Act invests $369 billion to take the most aggressive action ever—ever, ever, ever—in confronting the climate crisis and strengthening our economic—our energy security.”
When the government is handing out wads of cash, there is no shortage of individuals, companies and industries willing to make all kinds of promises and commitments to get a share of the spoils.
The second statement is a quote from an analyst who is discussing the role of green hydrogen: “The big risk is throwing out massive subsidies that don’t do anything.”
It’s not just a risk that billions of dollars in taxpayer-provided subsidies will be “thrown out” without doing anything. It’s a virtual certainty.
As government agencies have been recently reporting, the trillions of taxpayer dollars handed out during the pandemic led to hundreds of billions of dollars being wasted due to fraud, inefficiency and incompetence.
That also happened during President Barack Obama’s generous clean energy subsidies, as numerous companies that received millions in grants and loans shut down. Can you say Solyndra?
It will also happen under Biden’s IRA, though likely on a much larger scale. Taxpayers won’t get anywhere near the clean energy they’re paying for.
Finally, there’s this jewel from the chief executive of a company called Electric Hydrogen: “There’s a lot of self-serving behavior being driven by the availability of a really juicy subsidy.”
No doubt he’s correct, but why would Democrats expect anything different? Clean energy companies don’t have to cater to individual consumers; they have to cater to a much smaller number of elected officials and their staffs who have the ability—and desire—to spend lots of other people’s money.
The point is that there may be a growing market for clean energy, but that market is being invigorated and sustained more by government money than consumer demand. If and when government dollars for clean energy declines, don’t be surprised if demand does also.
February 14, 2023