Obama Wants a Level Playing Field? Not in Energy Sector Solar

Posted January 30, 2012 | folder icon Print this page

President Obama’s State of the Union address has been analyzed by countless pundits from a variety of angles. In this post I will focus on the extreme contrast between Obama’s rhetoric of a level playing field and giving everybody a “fair shake,” and his policies regarding the energy sector. It’s not unusual for political officials to bend the truth, but when it comes to his energy policies the president has done the exact opposite of what he claims to support.

The President Is a Fair Guy

Here are some excerpts from the president’s address to show his general vision for the country:

Think about the America within our reach: a country that leads the world in educating its people; an America that attracts a new generation of high-tech manufacturing and high-paying jobs; a future where we’re in control of our own energy; and our security and prosperity aren’t so tied to unstable parts of the world. An economy built to last, where hard work pays off and responsibility is rewarded.

The defining issue of our time is how to keep that promise alive. No challenge is more urgent. No debate is more important. We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by, or we can restore an economy where everyone gets a fair shot, and everyone does their fair share, and everyone plays by the same set of rules.

Tonight, I want to speak about how we move forward and lay out a blueprint for an economy that’s built to last, an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values. [Bold added.]

For those who have been following IER and other energy watchdog groups, the president’s statements above are simply astounding. It is amazing that such claims made it through the vetting process; the fact that they did, shows how disconnected political talk is from reality.

Everyone Plays By the Same Set of Rules?

The biggest scandal over energy policy of course has been the Solyndra debacle.  Besides the famous last words of Vice President Biden and President Obama himself touting the long-term “jobs of the future” that Solyndra would provide, the episode is rife with charges of serious wrongdoing.

For those who never dug into the details of the story, here’s the quick version: Although Solyndra had applied for federal loan guarantees during the Bush Administration, they had not been formally approved before he left office. The incoming Obama Administration, however, was keen on using Solyndra as Exhibit A in its commitment to a job-creating stimulus package that would simultaneously accelerate the development of renewable energy. In fact, the White House planned to have Obama give a speech on March 19, 2009—just a few months after his inauguration—at the Solyndra plant announcing the bold package.

A week before the planned announcement, government budget analysts sent worried emails back and forth, including the infamous, “This deal is NOT ready for prime time” that has received press coverage. Because of these warnings, the White House backed off, but continued to press for approval of the loan guarantees. For example, a Department of Energy stimulus adviser, Steve Spinner—whose wife happened to work at the law firm representing Solyndra in its application for the loan guarantee—was very eager to get the relevant parties to sign off on the guarantee in time for Biden’s planned speech at Solyndra in September 2009. That’s why, a few days earlier on August 28, Spinner sent an email to an OMB staffer demanding, “How [expletive] hard is this? What is he waiting for? Will we have it by the end of the day?”

Fast forward to December 2010, about 15 months after Solyndra first received the half a billion dollars in loan guarantees. At this point Solyndra was clearly in trouble, and approached the Department of Energy for another loan. The government didn’t itself provide more funding, but it allowed a restructuring of the original package, so that outside investors (including big Obama fundraiser George Kaiser and his venture capital firm) would pump in another $75 million, in exchange for being placed at the head of the line for its assets in case Solyndra went bankrupt.

The only problem with this move was that it was arguably illegal, since it placed taxpayers in a disadvantageous position, as they were now subordinate creditors. That’s what Assistant Treasury Secretary Mary Miller wrote to Jeffrey D. Zients, deputy OMB director, before the restructuring occurred. She advised the DOE to consult with the Justice Department before approving the plan. “To our knowledge that never happened,” Miller wrote to the OMB in August 2011.

Incidentally, we note with irony that even compared to other “green” companies, Solyndra got a sweetheart deal, with interest rates far below those available to other firms that presumably should have been playing on the level field that the president touts.

It’s Not Just the Scandal, It’s the Program Itself

Besides the corruption and inefficiency involved with the specific example of Solyndra—as well as other notorious beneficiaries of US taxpayer support such as Abengoa and Beacon Power—is the fact that the Obama Administration’s sweeping array of incentives and mandates for renewable energy is the opposite of his rhetoric on the American ideal. Here we have the federal government quite consciously picking specific technologies that will be helped, and others that will be actively penalized.

To see just how biased the rules are, consider: When calculating the implicit total federal “subsidies” (via the tax code) in terms of dollars per unit of energy delivered, in fiscal year 2007 they were $23.37 per megawatt hour for wind, compared with $0.44 for conventional coal and $0.25 for natural gas and petroleum liquids. In fiscal year 2010, wind’s subsidies amounted to $56.29 per megawatt hour, while the figures for coal, and natural gas and petroleum liquids, were tied at a mere $0.64.

If that’s not a rigged game, what is?

Job Creation? Developing American Energy? Is This a Joke?

Since it’s more recent in the news cycle, we don’t need to belabor the irony of Obama stressing his desire to wean Americans off of energy from dangerous regions of the world, and to create good jobs at home…when he just scuttled the Keystone XL Pipeline. Despite the Administration’s attempt to portray itself as a champion of domestic drilling, the facts speak otherwise.


Every political leader claims to be in favor of fairness and equal treatment under the law. Yet when it comes to Obama’s energy policies, the opposite is true. The federal government currently places enormous obstacles in the path of oil, natural gas, and coal, while lavishing massive sums on dreamy technologies that can’t get funding on their own merits. This is hardly a sensible strategy for a president who also claims to care about economic growth and creating stable jobs.

Robert Murphy