John Ransom

If you drew a straight line between the Obama White House, Harvard and Martha’s Vineyard, you’d apparently find no real economists judging by the effluvia created through progressive economics in this country.

But would it be too much to ask if we could have a few people who could just add, subtract, multiply and divide? What exactly is an Ivy League degree worth if you can’t do lower mathematics?

I guess a lot less than Sarah Palin and a University of Idaho bachelor’s degree is worth.

Go Uof I Vandals!   

In a quest for a few more “green” jobs that the administration can brag about, the Department of Energy recently announced that they have awarded a Spanish company, Abegnoa Bioenergy, $134 million in loan guarantees for an experimental biomass plant that will create- count ‘em- only 65 “permanent” jobs in Kansas.

Say what you want but Palin’s career shows she knows how to divide 65 jobs into $134 million. That skill apparently is beyond the ken of the Hallowed-Halls-of-Harvard-and-Princeton crowd. But it certainly seems like a valuable skill for a president to have.   

$134,000,000 /65= $2,061,538.46 per job.

With these kinds of economies of scale, it would make more sense for the administration to make 65 people multimillionaires outright with that money. Just think: 65 more people they could tax at a higher rate.

What’s more fair than that? I mean besides not taxing everyone out of business. But, since that’s not an option....    

Oh, I forgot. That makes too much sense for a liberal. They don’t like millionaires.

They only like Brazilian, Spanish and progressive billionaires.  

“This project is part of the Administration’s commitment to expand our advanced domestic biofuels industry,” said Energy Secretary Chu according to BrightEnergy.org. “Investments like these will create jobs and decrease the nation’s dependency on oil by using a sustainable, home-grown transportation fuel that will help reduce greenhouse gas emissions.”

Not likely.

What it will do is help a company with $5.5 billion dollars cash in the bank, owned by Spanish millionaires and billionaires, keep $134 million in the bank. Abegnoa can then use that money in real projects that require, um, what’s technically known as a “return on investment” (ROI) to be successful. ROI is generally considered to be a good thing in the investment business if you’d like to prevent criminal proceedings. Or alternately, if you can’t produce return on investment, you can try for a government guarantee.   

Obama likes to talk about investing in education, infrastructure, whatever, but if Obama were in charge of your 401k, at retirement you’d not only be broke, but you’d owe a few million. Oops, looks like Mr. Investment put some money into education and infrastructure development that wasn’t just quite as shovel ready as he thought.

That will go down so well at the retirement home when it’s time to take your medicine and eat your peas.      

The problem is that Washington types have been making promises about biomass biofuels for decades now without any real progress- biomass is not shovel ready in other words, unlike the real energy projects proposed by outside Washington types, like- oh, I don’t know- Sarah Palin.

In short, biomass takes feedstock like corn leaves, wood pulp or municipal waste and turns it into a liquid fuel like ethanol or a gas, like hydrogen. It’s kind of a way of speeding up the millions-of-years process that made fossil fuels.    

The clean energy crowd in DC has promised for two decades that biofuels will help break dependence on foreign sources of oil, but they always have to dial back their predictions, says Gigaom.com, a technology website and consultancy that produces green IT research.

“Originally in 2010,” writes Gigaom “the EPA estimated the industry could produce 100 million gallons, but basically it turned out to be zero. For 2011, five companies were estimated to be able to produce about 6 million cellulosic ethanol-equivalent gallons and it’s unclear if they are going to make that estimate.”

Oh, but wait, it’s worse.

“For 2012,” says Gigaom, “the EPA previously estimated that the cellulosic ethanol industry would have a capacity to be able to produce 500 million gallons. But in June the EPA quietly proposed to reduce that volume estimate to 3.5 million to 15.7 million.”

Sounds like the same government guys who estimate jobs creation for the Bureau of Labor Statistics moonlight at the EPA.

So much for the DOE’s investment in Abegnoa, a publicly-traded company with almost $9 billion dollars in sales and 26,128 employees not counting the 65 soon-to-be-hirelings in Kansas.

So much for 65 permanent jobs in Kansas. In the meantime 20,000 real energy jobs Palin created with the Nat Gas pipeline in Alaska are being held hostage to a presidential permit that Obama hasn’t signed in two-and-a-half years.  

If the biomass plant made any sense at all economically the company would be able to get a loan on the strength of its balance sheet, rather than having to rely on guarantees from the Department of Energy. Because in the end, this plant won’t make money, won’t make the rent and certainly won’t make enough “green” fuel to power Kyle Orton’s Prius for a week.

Go Tebow! 

Not only can’t they produce fuel from biomass economically, everyone seems to be unable to produce commercial quantities of fuel from biomass at any price.  

Say what you want about the GOP’s desire to drill in ANWR and Palin’s support of it. But at least it’s bankable, as is the Palin’s Alaska-Canadian natural gas pipeline.

I know this much for sure: On day one any energy plan Palin puts forth will thump the plan the genius from Harvard has followed.  

Let’s just call biomass what it is: the sub-prime market of Obama’s sub-prime “green” energy business.

And let’s call the taxpayers in this scheme what Wall Street and Washington want them to be: Shovel Ready.

 

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John Ransom

John Ransom is the Finance Editor for Townhall Finance.